The Merchants of Blood War Profiteering from Vietnam to Iraq
War Profiteering from Vietnam to Iraq
by JAMES M. CARTER (a PhD candidate in 2003)
DECEMBER 11, 2003
EXCERPT...
The project failed. Ordinary Vietnamese in concert with northern Viet Minh cadre began to openly resist the whole campaign. By the early 1960s, the United States came to rely almost exclusively on military solutions to put down the growing opposition, soon a broad-based and popular insurgency opposed to continued occupation and Diem’s rule, now referred to as My-Diem or American Diem. John Kennedy increased direct American involvement from around 680 to over 16,000 troops as "advisors" who, despite their title, participated in combat. The administration, at the same time, vastly expanded the military forces built earlier to defend Diem and insure he remained in power. Opposition to the occupation grew at a steady pace. The whole project continued to unravel. By late 1963, a coup de tat finally removed Diem and his influential family from power.
From 1964 into 1965, the experiment was vastly militarized. From around 23,000 troops in Vietnam by the end of 1964, the next year there were 185,000, and the next there were over 385,000. American force levels peaked at around 542,000. By all accounts a traditional society, southern Vietnam needed an infrastructure to receive this influx of military aid. Responsibility for building that necessary infrastructure was given over to the largest construction entity ever, the RMK-BRJ (Raymond International, Morrison-Knudsen, Brown & Root, and J.A. Jones Construction). Calling itself "The Vietnam Builders" and receiving highly lucrative "no bid" contracts, this consortium of private corporations was to turn southern Vietnam into a modern, integrated military installation that would enable the United States to properly defend its client. The Vietnam Builders entered into a contract with the federal government, via the U.S. Navy, as the exclusive contractor for the huge military buildup that was to come; there would be no open bidding or otherwise competitive process.
Brushing aside the messy reality that the nation of "South" Vietnam had yet to be created, U.S. officials ordered a staggering volume of military projects be begun immediately. The congress granted to the administration of Lyndon Baines Johnson for 1965 $700 million for the expected ramping up of a direct American military role. Of that sum, $100 million was earmarked for the Defense Department’s construction projects already begun. Soon, the figures ballooned far beyond anyone’s expectation. Initially contracted for around $15 million prior to 1965, the lead corporation, MK, was shocked by the magnitude of orders for rapid construction. As one MK executive said early in 1965, "all we knew was that they wanted a lotta roads, a lotta airfields, a lotta bridges, and a lotta ports, and that they probably would want it all finished by yesterday." (Fortune, Sept., 1966)
These demands outstripped the capacity of any one of the corporations. Equipment requirements alone for the Vietnam project far exceeded all equipment owned by MK for all of its worldwide operations and all subsidiary companies. The value of the project leapt from its 1964 starting point of $15 million of work in place per month to over $67 million of work in place per month within two years. The Builders could hardly keep pace with the demand for more projects, which numbered over one hundred concurrently at the peak of construction. Suppliers in the US could hardly keep up either and backlogs of three to six months became commonplace. Caterpillar Tractor Company’s annual report to shareholders intoned, "1965 was another recording-breaking year and only the physical limitations of production capacity kept sales and profits from being higher." (ENR, Feb., 17, 1966; ENR, May, 19, 1966) Three of the four firms making up the Vietnam Builders ranked in the top ten of four hundred U.S. corporation doing business abroad for 1966. Collectively, and individually, they gobbled up hundreds of millions in profits for their efforts. In the process, Vietnam Builders employed 8,600 Americans and over 51,000 Vietnamese. They built six ports with 29 deep-draft berths, six naval bases, eight jet airstrips 10,000 feet in length, twelve airfields, just under twenty hospitals, fourteen million square feet of covered storage, and twenty base camps including housing for 450,000 servicemen and family. In short, they put on the ground in southern Vietnam nearly $2 billion in construction of various kinds of facilities and infrastructure. Military commanders called it the "construction miracle of the decade." (Jones Construction Centennial)
In deciding to go to war rather than withdraw from Vietnam, the Johnson administration had stepped onto a slippery slope where foreign policy crises meet domestic politics. At home just as in Vietnam, Johnson fought to control inflationary pressures. Now, those pressures mounted as the war in Southeast increased in scope and intensity. The soaring demands on the construction industry certainly meant rising profits, but it also threatened rising prices. Republicans in congress began to criticize Johnson’s handling of the Vietnam situation, warning his policies threatened to over-heat the domestic economy and drive prices up. Some also specifically criticized the way in which aid, both construction/military and economic, was being sent to Vietnam. In 1966, Illinois Representative Donald H. Rumsfeld went perhaps further than most when he charged the administration with letting contracts which "are illegal by statute." He urged investigation into the relationship between the private consortium working in Vietnam and the Johnson administration, in particular the infamous "President’s Club," to which Brown & Root, one of the principle Vietnam contractors, had given tens of thousands of dollars in campaign contributions. Rumsfeld argued on behalf of serious inquiry into the whole affair saying, "under one contract, between the U.S. Government and this combine, [RMK-BRJ] it is officially estimated that obligations will reach at least $900 million by November 1967…why this huge contract has not been and is not now being adequately audited is beyond me. The potential for waste and profiteering under such a contract is substantial." (Cong. Rec., August 30, 1966) Rumsfeld’s alarm was echoed by others in the congress and in the press as well, although will little affect. All the while, the war in southern Vietnam continued to spiral out of control despite the dramatic increases in firepower and troops and military construction. The government’s contract with the Vietnam Builders ended only in 1972 shortly before the Nixon administration itself quit the commitment to the long failed project.
CONTINUED...
http://www.counterpunch.org/2003/12/11/war-profiteering-from-vietnam-to-iraq/ 
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