TMN speaks with author Sally Denton about how the construction giant devised a gray area between government service and the private sector.
Washington (Talk Media News) – The Bechtel Corporation is an internationally recognized force in construction, having a hand in developing America’s infrastructure from its early days overseeing the creation of the Hoover dam to a major role today maintaining the U.S. nuclear stockpile.
However, with foreign policy luminaries like former Secretary of State Charles Schultz and former Defense Secretary Caspar Weinberger floating between its ranks and prominent positions in the U.S. government, it also proved to be the creator of a revolving door between public service and the private sector.
Investigative journalist Sally Denton recently authored the new book The Profiteers: Bechtel and the Men Who Built the World. Denton spoke with Talk Media News about how this phenomenon came to be.
TMN: Is Bechtel still on the rise?
SD: They’re still one of the largest defense and energy contractors in America. This is a company that certainly didn’t reach its apogee during the Iraq war. It’s been steadily rising through five generations led by five Bechtel men since the 1930s.
It’s very much involved in national and foreign policy today as far as it’s managing the entire nuclear weapons complex, so it’s very much at the forefront of the nation’s energy and military complex. Because it’s privately held, it doesn’t have the same ring to it as Halliburton or Lockheed Martin or Boeing or various contractors, military or government contractors, but it’s for good reason that most people haven’t heard of them. They are among the top privately held corporations in America and they’ve always been a very secretive and private company, not just privately held, but private in nature. They’ve gone through great lengths to stay off the radar.
In your book you summarize how Bechtel went from the company that was behind the Hoover Dam to the absolute giant it later became. Give us a little background on how this transformation took place.
Warren Bechtel, the founder of the company, was the lead contractor on the Hoover Dam in the 1930s, which was really considered the 8th wonder of the world at the time, which made the whole American Southwest possible. It was the first mega-company from the American West.
Not only did Hoover Dam really make the Southwest possible economically and change the landscape forever, but it made cities such as Phoenix and Los Angeles and Las Vegas possible that were not even a glimmer at the time.
It went from there to defense contracting in the run up to World War II. First building military cargo ships, then military bases throughout the world and post-war reconstruction and then onto energy, first into the Middle East and oil pipelines and transport. It was the largest, other than the oil companies, American company to have a major Middle East presence dating back to the 30s and then the 40s. It went from there to nuclear energy, when it became the world’s largest provider of nuclear energy as well as the nation’s largest builder of nuclear reactors. It’s just always been at the forefront.
I really thought when I started this book that it would kind of reach its climax in the Reagan administration when Ronald Reagan picked two of its executives: George Schultz, the president of the company and Caspar Weinberger as Secretary of State and Secretary of Defense respectively.
That was really what I thought would be the climax of the revolving door that they really initiated, but in fact that was only the beginning still and it went all the way through, from Iraq reconstruction, and then all the way into the nuclear enterprise.
How extensive is this revolving door in which we see either people who have served in government going to Bechtel or people leaving Bechtel to serve in, as you’ve mentioned, some very high ranking positions within the United States government throughout the years?
For a while the company was called Bechtel-McCone and John McCone left the company to be head of the Atomic Energy Commission and then ultimately to become director of the CIA.
It’s important to note that Bechtel is not aberrant. This is not the only company in America that uses a revolving door between government and industry, but I argue in my book that Bechtel is the company that began it in the 40s and made it a prototype that is so pro-forma now that you would be hard pressed to find any American company that didn’t rely on government expertise, with people within government that they bring it to high levels in their corporate structure.
But basically on the revolving door, there are rules against it, there’s a cooling off period that’s required, but basically it’s become something that’s just the way of doing business in modern America that at the time when it first started raised eyebrows in Congress and among journalists and columnists. This cozy relationship between government and private industry did not always exist and I make the argument that Bechtel was at the forefront of devising this symbiosis.
How did it get to this point? Bechtel was the innovator for a lot of these controversial aspects of the modern day system we have, but was there any dissent along the way?
They forged so closely with American foreign policy at a time when everybody was essentially on board here. This was the beginning of the Cold War, the leading philosophy at the time that it was important to contain Soviet expansionism and to contain Communism especially in regions that were of strategic interests to the United States, like the Middle East where there we vast resources and fossil fuels.
So for decades there, the Bechtel principles were in lock-step with the Truman administration, the Eisenhower administration, into the Kennedy and Johnson administrations and certainly into Nixon, also a Californian, up until Reagan then through George H.W. Bush and by the time you start entering the 21st century, the symbiosis between the company and the U.S. government was so solid that it almost seemed like business as usual.
During the Reagan era of deregulation it really did elude and avoid much scrutiny. Then with the private nature of the corporation- the lack of transparency with no government oversight and no public shareholders. It was so far off the radar for so long that by the time anybody even began to look at it, it was enormously entrenched.
You mentioned earlier figures like George Schultz who served in the Nixon administration, then the Reagan administration as Secretary of State. Do you think these individuals essentially rejoin government knowing they’re going to be trying to help their former businesses’ interests?
I don’t think it’s coincidental. I think their relationship is so symbiotic that they didn’t see the U.S. government as being any different, that the interests of the U.S. government would be any different from the interests of Bechtel. I certainly think this during the Cold War and beyond that they thought they were the construction and business arm of the U.S. government and I think they were in lock-step philosophically and politically.
As governments change and politics change, there are times when Bechtel’s interests in the Middle East, for instance, or in South America diverge from America’s interests as the American political interests are changing during the 60s and 70s and then back into the 80s with a more reactionary impulse that they fit in more closely with.
But it’s not that it’s illegal or that they thought they were doing anything wrong or that it was after gross profits at the extent of taxpayers as much as this is a political ideology that American business knows best about what America needs to do in the world. It’s an ideology that is forged deeply and held strongly.
Transcript edited for length and clarity.