New Internationalist

Worldbeaters… Riley Bechtel

Issue 344

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Worldbeaters...

'The Bechtel corporation has reportedly completed 19,000 projects in 140 countries. "If only the Pharaohs could have hired the Bechtel Group," mused one press commentator.'

Riley Bechtel
Riley Bechtel, Chair and Chief Executive of Bechtel Enterprises, is a very wealthy man. According to Forbes magazine he had a net worth last year of more than $3.5 billion and was number 51 on the list of the richest people in the US.

The San Francisco-based Bechtel Group, a private corporation which the same family has controlled for four generations, has reportedly completed 19,000 projects in 140 countries: 80,000 kilometres of gas pipeline, 15 telecommunications systems, 350 chemical projects, 200 factories, 2,000 office buildings, 75 airports, 80 ports, 125 kilometres of bridges and tunnels and 27,000 kilometres of highway. ‘If only the Pharaohs could have hired the Bechtel Group,’ mused one press commentator. Over the years, former Bechtel employees and officers have included a director of the CIA (John McCone) and heavyweight Federal officials like George Shultz and Caspar Weinberger.

Riley Bechtel himself boasts membership of the shadowy Trilateral Commission and now wants to expand his fortune just a little more – on the backs of some of South America’s poorest families.

The city of Cochabamba, in the Bolivian Andes, has become something of a poster-child symbolizing the struggle for global economic justice. Two years ago, under direct orders from the World Bank, the Bolivian Government privatized Cochabamba’s public water system. Behind closed doors, it was handed over to a Bechtel subsidiary formed just for that purpose.

Bechtel Within weeks, the Aguas del Tunari company had doubled or trebled water bills for some of the city’s poorest families. Mothers living on a minimum wage of less than $60 per month were ordered to pay $15 or more just to keep water running out of the tap. Faced, quite literally, with a choice between water and food, people took to the streets. The Bolivian Government called out soldiers to protect the contract. One 17-year-old, Victor Hugo Daza, was shot in the face and killed. More than a hundred others were seriously wounded.

As Bechtel’s emissaries hid in a local five-star hotel, the residents of Cochabamba staged a general strike that paralyzed the city. Finally, in April 2000, the company quit the city, taking with it computer hard-drives, all the cash in the company’s accounts, and sensitive personnel files. They left behind an unpaid electric bill for $90,000.

Now Riley Bechtel is coming back for seconds. In November his company filed a $25-million legal demand against Bolivia, under the auspices of the little-known International Centre for Settlement of Investment Disputes (ICSID), the arbitration arm of the World Bank. The same institution that pressured the Bolivian Government into privatizing its water system in the first place will now judge whether Bolivians have to pay Bechtel once more.

One of his public-relations flaks says that the company intends to recover its ‘expropriated assets’. To be clear, Bechtel’s company never invested anything close to $25 million in Cochabamba. Corporate officials paid for their expensive rental cars out of the money collected from water bills. Their demand is, rather, for all the profits they expected to make but weren’t allowed to – if only the holders of worthless Enron stock could make the same demand.

For Bechtel Enterprises, with revenues of more than $14,000 million annually, $25 million is about what the company takes in before lunch on an average workday. For the people of Bolivia, $25 million is what it costs to hire 3,000 rural doctors or 12,000 schoolteachers for a year, or to hook up 125,000 families to public water supplies.

‘For the poorest people in Cochabamba, rates went up little, barely 10 per cent,’ wrote another of Bechtel’s PR agents last January. ‘Unfortunately, water bills sometimes went up a lot more than rates. That’s because as Aguas del Tunari improved service, increasing the hours of water service and the pressure at which it was delivered, people used a lot more water.’

Perhaps the poor, who live in adobe houses, ran amok with automatic dishwashers. Hard evidence, however, proves otherwise. Copies of ‘before-and-after’ water bills for the poorest show increases not of 10 per cent but of 60 per cent and higher; families who used less water still suffered price hikes of 50 per cent and higher. The Pharaohs themselves might have admired Riley Bechtel’s method of extracting blood from stone.

By Jim Shultz, who is executive director
of The Democracy Center (www.democracyctr.org),
lives in Cochabamba, Bolivia and is author of the
forthcoming The Democracy Owners' Manual
(Rutgers University Press).

sense of humour

Robert M White, president of the National Academy of Engineering in the US, told a dinner held in the company's honour that few private corporations could match the global impact of Bechtel. 'From the United States to Saudi Arabia and from Europe to China,' he said, 'the planet bears the marks of a truly great corporation.' Riley Bechtel replied that the tributes were 'almost too much for a simple builder'.

When Mr Bechtel first formed his Bolivian water affiliate the company registered in the Cayman Islands, a notorious tax haven. In December 1999, just as it was taking over Cochabamba's water, it shifted to a tiny abandoned office in Holland. Why go Dutch? It turns out that Holland - unlike the US or Britain - has a treaty with Bolivia which binds the Bolivian Government to World Bank arbitration.

low cunning

If infamous or not-so-famous big shots are beating up
on you, let us know at worldbeaters@newint.org

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