Oil be back

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Slick Dick

With the eyes of the world fixed on Arnold Schwarzenegger’s muscles, the Diary forgets for a moment about the future leaders of the free world, and focuses on the present lot.

And so to Iraq – where freedom, remember, is all about doing the wrong thing.

The business pages of the western press, particularly those concerned with investment opportunities in the Middle East, make interesting reading these days – not as interesting as Arnie, of course, but you can’t have everything.

The Diary reads in the New York Times how the Bechtel Group has pulled out of the running for a contract to restore its share value by rebuilding the beleaguered Iraqi oil industry. Bechtel is one of the world’s major league engineering and contract firms. Like Arnie, it wields considerable muscle. Its decision to turn its back on newly-liberated Iraq comes as a bit of a surprise.

However, it has good reason. According to the NYT, “competitors have begun to conclude that the bidding process favors the one company already working in Iraq, Halliburton.”

The Diary has been here before. Halliburton, of course, used to be headed by Vice President Dick Cheney.

So, the question arises: to what extent is the company cashing-in on its political connections?

Not at all, say the White House and Halliburton – assuming one can distinguish between the two.

Cheap jokes aside, here’s how it works:

A new reconstruction contract is up for grabs, worth $1 billion. Halliburton got in early. Back in the spring, the US army Corps of Engineers selected Halliburton to start some preliminary work on Iraq’s oil fields. There was no competitive bidding. Then, in the last few weeks, a new timetable emerged which conveniently reduced the value of any contract winnable by any company other than Cheney’s Halliburton to a measly $176 million. Bechtel are not interested in this kind of small change. In a signal of what a stitch-up the company seems to think the situation is, Bechtel announced that from now on it will only deal directly with the Iraqi oil ministry. The White House and the US army cannot be trusted.

The Corps of Engineers promise there ain’t no foul play. It claims all companies have received the same information in order to “eliminate any competitive advantage” Halliburton might have due to their few months in Iraq. Of course, having your ex-CEO as Vice-Prez doesn’t hurt.

The rest of the oil industry wants its Chairmen in the White House too.

The NYT reports that “Working in Iraq has turned around Halliburton’s financial performance”. Last year, Halliburton made a loss of $498 million in the same quarter. This year, it made a profit of $26 million. That’s revenue of $3.6 billion, $324 million of which came from its preliminary work in Iraq.

All this comes as The Economist suggests that “oil exports are unlikely to cover the costs of getting Iraq back on its feet.”

The Iraqi oil industry is currently producing about one million barrels a day, less than half its pre-war output. Export is said to be sporadic.

Occupation is costing the US an estimated $1 billion a week.

Fizz tizz

From oil to cola.

Another report in The Economist tells the strange story of how India is losing its taste for Pepsi and Coca-Cola.

It all stems from a report issued by the NGO the Centre for Science and Environment (CSE). The CSE has already gone after bottled water this year, after its tests showed that certain brands were laced with pesticide residue.

Now Pepsi and Coke, symbols of multinational globalisation, are in their sights.

According to the CSE, bottles of Pepsi bought in Delhi contain thirty-six times the amount of pesticide residue that the EU has declared normal. Bottles of Coke in Delhi contained thirty times the EU norm.

The CSE says that sample bottles taken from stores in America contained no traces of the pesticide.

The Economist article is accompanied by a photograph of protestors in Delhi burning a cardboard Coke bottle.

Both firms rejected the accusations and hinted at an anti-corporate witch-hunt.

But the CSE stands by its claims that both Pepsi and Coke contain lindane, DDT, malathion, and chlorpyforis – none of which are enjoyable or good for a new generation.

The Indian political class appears to have sided with the NGO.

The Indian parliament banned Coke and Pepsi from its cafeterias, and, according to the BBC, “the defence ministry issued a circular ordering all its clubs to stop selling the drinks.”

The Delhi High Court ordered the Indian government to conduct independent tests, which both companies have called for.

The BBC says that Coke and Pepsi account for more than 90% of the carbonated drinks market in India. More than 500 million bottles of the soft drinks are sold each year.

Expect that figure to drop somewhat for 2003.

You must be joking

Last year – yes, it’s been that long - the Diary reported the story of Jesse Bogdonoff, the US back-pain magnet salesman who landed a job as court jester to King Taufa’ahau Tupou IV of Tonga, after which $24 million disappeared from the Tonganese state coffers.

Nobody was laughing.

Bogdonoff offered the King some top investment advice. The King took his jester at his word, and stuck some money in Millennium Asset Management, a US corporation, from where, so says the Tongan government, the money evaporated.

Well, finally, the Bogdonoff case is coming to trial – albeit on 1 March 2004.

The case will be heard in the San Francisco District Court. Witnesses have been slow to come forward.

Bogdonoff claims he has no idea how the money ended up in a current account in San Francisco.

Looks like all the entertainment is in California these days, but can you ever really trust a court jester?

Dumkopf Dosh

OK, so California may be getting an Austro-American Hollywood star as its new Governor, but Hollywood may be about to lose a ton of German support.

Apparently, German investors invest about €2 billion a year in the US motion-picture industry. Under German law, investors get 100% tax break if they dump their funds in certain media.

This amounts to a whopping 20% of Hollywood’s production budget.

But the German finance ministry, desperate for tax revenue, has decided to tighten the rules on media investment. Hollywood will have to do without the Germans.

The Mitteleuropa investors are described by the BBC as “passive partners” as they have little involvement in what goes into your favourite Tinseltown blockbusters.

In Hollywood, the dosh is known as “stupid German money”.

Ironically, stupid German money was prominent in the funding of Terminator 3, the latest Arnie action bonanza which has just conquered the French box office.

Is this new finance law revenge for the war in Iraq, the Diary wonders?

Gassing on the radio

Last week’s Diary focused on North Korea, everyone’s worst nightmare.

Reports this week suggested that the government’s grip on the media may be under threat.

Activists in South Korea plan to launch 600 helium balloons over the 38th Parallel with radios attached that will broadcast details of North Korea’s human rights record.

That ought to keep “Dear Leader” Kim Jong Il quiet.

As the BBC pointed out this week, listening to foreign broadcasts is illegal in North Korea. North Koreans, as the Diary has been saying for a long time now, would be wise to put their fingers in their ears.

Meanwhile, officials from the US, Japan and South Korea are meeting in Washington to prepare for the six-nation talks on the North Korean nuclear crisis that will kick off in Beijing on August 26 or 27.

By George, he’s plastic!

Finally, readers eager to get their hands on George W. Bush and do with him what they will, may be about to get their wish.

The Washington Post reports, not without a hint of glee, that Blue Box Toys, a company based in Hong Kong, has produced a G.I. George doll.

The foot-high replica is based on Bush’s Top Gun-style landing on the USS Abraham Lincoln three months back. The doll is known as “Elite Force Aviator: George W. Bush – US President and Naval Aviator”.

The promotion reads so: “Exacting in detail and fully equipped with authentic gear, this limited-edition action figure is a meticulous 1:6 scale recreation of the Commander-in-Chief’s appearance during his historic Aircraft Carrier landing.”

The doll costs $39.99 and is described as an “adult collectible item”, for use by those of 14 years and over.

Says Lauri Aibel, spokeswoman for Blue Box Toys, “We don’t condone or endorse the president, but he fit the criteria of our Elite Force collection ... It would have to be somebody in uniform, a military hero of some kind, or depicting a military uniform.”

Start placing your orders, folks!

Figures of the week

52.4%
The number of Italians who are unhappy with Silvio Berlusconi’s government, according to a poll by Corriere della Sera.

53%
The number of Americans who support George W. Bush, according to the latest poll by the Pew Research Center (that’s down from 58% in July)

Quotes of the week (California dreamin’)

“Hasta la vista, baby!”
Arnold Schwarzenegger, announcing his candidacy in the elections for Governor of California.

“It’s like the famous Muscle Beach scene where the scrawny guy is getting sand kicked in his face by a bodybuilder. But in this case, everyone’s cheering on the bodybuilder, because the scrawny guy is the mean, nasty reprehensible one.”
One of Arnie’s advisors, describing in sophisticated terms the contest between Gray Davis, Governor of California, and Arnie, Davis’s opponent.

“Arnold has managed to avoid any stigmata from having identified himself as a Republican – he’s very deft at that.”
Lionel Chetwynd, Hollywood writer-director, and Republican.

“He reminds me very much of Clinton.”
Lou Pitt, Schwarzenegger’s former agent.

“I honestly think that Californians wouldn’t mind having a smut peddler who cares as governor.”
Larry Flynt, porn publisher, announcing his candidacy in the elections for Governor of California.

“I’m a follower of American politics.”
George W. Bush, 43rd President of the United States of America, with a candidate for quote of the year.

“It’s slightly strange for me, of course. I am writing freely. I am not used to this. Everyone is writing what they want. It’s good.”
Ishtar el Yassiri editor of Habaz Booz, Baghdad’s only satirical magazine.

“If the victims of the bombs were Indonesians and Muslims, I’m sorry. But if the victims came from countries which are allies of the United States, then I’m pleased.”
Amrozi, who was sentenced to death this week for his part in the Bali bombings which killed 202 people.

“The great risk of great powers is overstretching.”
Romano Prodi, president of the European Commission, on US power.

“I want to be the sacrificial lamb. I am the whipping boy ... I leave with these parting words. God willing, I will be back.”
Former Liberian President Charles Taylor, who stepped down this week, using one of The Terminator’s catchphrases.

Contact the Diary Editor: Dominic.Hilton@openDemocracy.net