May 4, 2007

COMPLEX 2030: The Costs and Consequences of the Plan to Build a New Generation of Nuclear Weapons

A Special Report By
William D. Hartung and Frida Berrigan

April 2007

Arms Trade Resource Center
World Policy Institute at the New School
66 Fifth Avenue, 9th Floor
New York, NY 10011

[This excerpt was submitted by one of our blog's readers. The entire report can be downloaded as a PDF here.]

Bechtel

“We are not in the construction and engineering business. We are in the business of
making money.”[70]

In December 2005, construction giant Bechtel was part of the consortium that won a $553 million seven-year management contract to run the Los Alamos National Laboratory. That may have been the first time many Americans heard the two words “Bechtel” and “nuclear weapons” in the same sentence, but the company has been profiting from nuclear weapons and power for generations.

The company is involved in work at a number of other facilities in the nuclear weapons complex, including the Pantex plant, the Y-12 plant at Oak Ridge National Laboratories, the Savannah River Site, and the Nevada Test Site. In FY 2005, Bechtel received over $1 billion in prime contracts for nuclear-related work at the Nevada Test Site and Oak Ridge National Laboratories. It was also involved in partnerships at Oak Ridge and the test site that generated an additional $1.1 billion in prime contracts (see Table III, page 16). The privately-held, San Francisco-based company has been involved in some of the world’s largest and most ambitious construction projects– the Hoover Dam, the first oil pipeline in Saudi Arabia, the Alaskan oil pipeline, and the nation’s first nuclear power plants.

Bechtel has helped design and/or build 45 nuclear power plants in 22 states.[71] The company also manages the missile test range on Kwajalein Atoll in the South Pacific, and is building the launch complex in Alaska for the Ground-based Midcourse Defense system.[72] But the company is currently most known- or most infamous- for its work in Iraq. The company has reaped tens of millions of dollars in contracts to repair Iraq’s schools, for example, but an independent report found that many of the schools Bechtel claimed to have completed, “haven’t been touched,” and a number of schools remained “in shambles.” One “repaired” school was overflowing with “unflushed sewage.”

In 1951, Bechtel built the “world’s first nuclear reactor designed to generate electrical power” in Idaho.[73] Far from America’s heartland, the company planted the seeds for today’s South Asian arms race, building India’s first nuclear plant at Tarapur which produced the plutonium used in the country’s 1998 atomic bomb test.[74]

Not only did Bechtel’s activities help catalyze the nuclear arms race in South Asia, their plant created serious health risks—it experienced major leaks, causing severe radiation exposure in the area. This toxic phenomenon affected many of Bechtel’s nuclear power stations. In fact, by the 1970s, the entire generation of reactor plants Bechtel began building in the late 1950s were not in compliance with minimum Atomic Energy Commission safety requirements. When Bechtel employees complained that the company used “substandard building techniques and faulty welding techniques in the construction of nuclear power plants,” they were ignored. [75]

In the face of these challenges, Bechtel transferred its business emphasis from nuclear construction to nuclear cleanup—a lucrative switch. The company has been awarded numerous contracts for cleanup in past decades at some of DOE’s largest former weapons productions sites. At the Hanford Waste Treatment Plant, for example, Bechtel is working on technology to turn nuclear waste into glass. But, the estimated costs of the plant doubled in one year to about $10 billion while the completion date slipped from 2011 to 2017. Members of Congress have proposed that the Nuclear Regulatory Commission take over Bechtel’s management because of these cost overruns and delays.[76]

Bechtel president Steve Bechtel is not ashamed to talk about his company’s use of influence peddling to promote its business interest: “In this business, you get to know people, sit on their boards and one day when something comes up, they ask you to take on a project. One thing leads to another.”[77]

Bechtel alumni include former Reagan administration Secretary of State George Shultz, who served as the company’s president and director from 1974-1982, right before being tapped President Ronald Reagan’s Secretary of State.[78] Former Bechtel President, and current Bechtel board member W. Kenneth Davis served as President Reagan’s deputy secretary of Energy and head of the Atomic Energy Commission.[79]

Bechtel spent $1.3 million in political contributions between 1998 and 2006. Its lobbying expenditures for 2006 totaled $620,000.[80]

Notes

70 Laton McCartney, Friends in High Places The Bechtel Story: The Most Secret Corporation and how it Engineered the World, Simon & Schuster, 1998, p.96.
71 Jim Riccio, “Incompetence, Wheeling and Dealing: The Real Bechtel” Multinational Monitor, October, 1989.
72 Bechtel Annual Report, 2005.
73 Pratap Chatterjee, “The Earth Wrecker,” San Francisco Bay Guardian, May 31, 2000.
74 Bechtel: Profiting from Destruction, Public Citizen, June 2003, p. 18.
75 Public Citizen, June 2003, p. 19.
76 Pratap Chatterjee, “Bechtel’s Nuclear Nightmares,” CorpWatch, May 1, 2003.
77 McCartney, 1998, p.96.
78 Hoover Institute biography of George P. Shultz, http://www.hoover.org/bios/shultz/.
79 Richard A. Oppel Jr. and Diana B. Henriques, “Bechtel Has Ties in Washington, and to Iraq,” New York Times, April 18, 2003.
80 Data on political contributions and lobbying expenditures were calculated by the authors based on information provided on the “Open Secrets” data base of the Center for Responsive Politics.

10 comments:

Eric said...

A very interesting document especially when coupled with Joe Masco's book "Nuclear Borderlands."

Thanks

Anonymous said...

While it's certainly true that a non-publicly-traded corporatation should not be "operating" a federally-owned nuclear weapons laboratory, one should be a bit wary when reading this material. For example, "In fact, by the 1970s, the entire generation of reactor plants Bechtel began building in the late 1950s were not in compliance with minimum Atomic Energy Commission safety requirements." is probably due primarily to the fact that the safety requirements had changed.

Anonymous said...

"In December 2005, construction giant Bechtel was part of the consortium that won a $553 million seven-year management contract to run the Los Alamos National Laboratory."

Under the old contract UC would have gotten just $42 million for seven years...

For half a billion dollars more, I hope Bechtel, BWXT and WGI are worth it to the idiots at DOE/NNSA HQ!

I wonder how many new science and research projects could have been funded with that $500 million.

Anonymous said...

Where was Marquez in all this?

Anonymous said...

Ahhh, now MC-FOD makes a whole lot of sense - they are not in the business of fixing things either!

Anonymous said...

Doesn't take a rocket scientist to figure out Marquez' role. He was the head contracting official with the DOE in Albuquerque. He himself has bragged in public that he was the person who had the final say on whether UC got the contract (non competitively in the past) to run Los Alamos. In a similar fashion he had the final say in awarding other contracts administered out of the DOE's Albuquerque office. In that role you're in a key position to score points with powerful politicians (like Uncle Pete) and powerful companies (like big brother Bechtel). Somebody like Marquez could have easily ended his DOE career with lots of low friends in high places (as the song goes). Ineed, his current place at the right hand of King Mikey of LANS is evidence enough that this is precisely what occurred.

Alice in Blunderland said...

Curiouser and Curiouser!

Anonymous said...

I understand Marquez now has signature authority for external hires...delegated by Mikey.

Anonymous said...

And here I thought that LANS was just giving him a free ride until he got to 5 years.

Didn't know he was thought so highly of....

Shows where the rest of us stand.

Anonymous said...

If you haven't figured out where you stand yet, now might be time to get started.