IRAQ UPDATE
rich pickings for vultures

Baghdad is without telephones. Everyone needs telephones - as the 10, 000 ‘reconstruction officials’ and aid workers currently unable to make dinner arrangements via text message will attest. So it was with great pleasure that the US defence department recently announced that it had found someone to help. In fact, it was so sure of this someone that it didn’t feel the need to invite anyone else to bid for the $30m contract.
Eyebrows were understandably raised when this ‘someone’ turned out to be MCI (the new name for WorldCom). This is the company that recently agreed to pay US financial watchdog, the Securities and Exchange Commisson (SEC), a record $500m fine after filing for bankruptcy last year due to a $11bn accounting scandal. In addition to not currently providing any mobile phone services in the US, ‘the last time I looked, MCI’s never built a wireless network,’ said Len Lauer, head of Sprint Corp’s wireless division.
Minor details like this don’t matter in the world of MCI. Unlike other contracts for the reconstructon of Iraq which were issued by USAID, this came straight from the US defence department. Other questions as to why a company which caused the loss of $3 billion in pension funds, investor losses exceeding $176 billion, and the lay-off of tens of thousands of employees should only be fined the ‘equivalent of about one week of revenue’ also remain unanswered.
Indeed, that it still continues to exist is a source of bewilderment for many. Ex-employee and founder of www.boycottMCI.com, Mitch Marcus, wonders why, when the SEC had the opportunity to recommend that WorldCom/MCI be liquidated through Chapter 7, it allowed it instead to ‘smoothly run the gauntlet via Chapter 11 and fail to recommend that the Department of Justice commence criminal proceedings’.
All in all, the contract ‘confirms the worst suspicions’ of European mobile operators hoping to gain work in Iraq said telecoms analyst, Lars Godell, of Forrester Research in Amsterdam. ‘We don’t understand why MCI would be awarded this business given its status as having committed the largest corporate fraud in history,’ complained AT&T Corp. spokesman Jim McGann. ‘There are many qualified, financially stable companies that could have been awarded that business, including us.’
In what has been taken by many as a rare display of American irony, MCI defended its ethics and claimed not to have received any special consideration in winning government bids. ‘I don’t see in that [federal bidding] process, as rigorous as it is, how MCI could be shown any favouritism,’ insisted Jerry Edgerton, senior vice president of MCI government markets. ‘We won this stuff fair and square’.
The US government claims the much larger contract to rebuild Iraq’s telecoms infrastructure, believed to be worth around $900m, will be awarded by an incoming Iraqi administration. Somewhat expectedly, an MCI spokeswoman said it would ‘not necessarily rule out’ bidding for it.

From B52s to BA
In a possible attempt to replenish the dwindling occupation force, British Airways (BA) is planning to resume passenger flights to Baghdad. The carrier sent a team to the Iraqi capital earlier this month and concluded the airport was serviceable, with damage patched up following firefights during the war. The airline will require permission from the Iraqi government (aka US military authorities) but, luckily for BA, as most of the flights will be servicing employees from US construction firms, refusal is doubtful.
BA was recently outraged when leading rating agency, Standard & Poor, cut its credit worthiness to a humiliating ‘junk’ status. It judged that BA could no longer command an ‘investment-grade’ rating. The downgrade resulted in a sell-off in the airline’s shares which promptly fell 5%.
During the attack on Iraq, BA went out of its way to reassure people that, despite the death and destruction, it was OK. ‘The industry has been feeling the effects of war for some weeks now,’ it said. ‘However, we are in good shape with more than £2 billion in cash and committed facilities available and we will survive this conflict.’ This dubious assertion was in stark contrast to the reported loss of £200 million between January and March and the £1.2 billion deficit in its pension fund. Furthermore, BA has implemented a restructuring program aiming for a 13, 000 reduction in the work force by September 2003 and the extension of its unpaid leave scheme for staff. It has already sacked 10,000 since September 11th.
BA hopes to secure the three-times a week flight by dusting off a 1951 government treaty under which it is Britain’s nominated airline to fly between the two countries. Despite this, the winged beast of Virgin Atlantic is also circling. It hopes to challenge the deal under a 1970s air transport agreement with Iraq allowing for open skies, with any UK airline allowed to land in the country. If successful, BA, who haven’t operated in the city for 13 years, will be the first western airline to fly passenger services into post-war Baghdad.

Health care
Meanwhile, Medact, the UK charity for global health, has launched its campaign to prevent Iraqi hospitals being privatised (www.medact.org); just as Labour sees the biggest rebellion yet in the House of Commons over plans to do precisely the same thing with the NHS (see feature on the Health and Social Care Bill). US healthcare giants like Kaiser, whose market share has almost halved in the US over the last two decades, are waiting to pounce....Elsewhere in Iraq, AstraZeneca, the US transnational pharmaceutical, are already hard at work, despite the fact that they’ve just pleaded guilty to health care fraud in the US. Prosecutors have decided not to charge any of the employees who, since 1991, had been bribing doctors to prescribe the company drug Zoladex, offering them financial inducements, free travel and “entertainment”. Instead AstraZeneca agreed to pay a settlement of $355 million; one of the largest settlements in a health care fraud case ever. Still, they’ll easily be able to make the money up in Iraq – and never mind passing it back to the Iraqi people. It’s been reported they’re already importing even cheaper labour from Asia into the country... As the US belatedly wakes up to a semblance of the truth (“Did Bush mislead US into War?” - The Nation) suggestions are that in fact the whole Iraq business was nothing but a giant corporate take-over. Or rather, according to Investorlearning, a hostile take-over bid. “When one company decide to buy another, that’s a takeover. If the management, board of directors or a group of shareholders decide they don’t want to be taken over, it’s called a hostile takeover bid”. Can’t get much more hostile than Gulf War 2...

For further news (until the next Corporate Watch update) www.baghdadbulletin.com is an excellent site/paper covering everything from “development” in the country to human rights issues. And indymedia Iraq is also up and running, in English and Arabic on www.almuajaha.com.