THE PROFITEERS
Bechtel and the Men Who Built the World
Sally Denton
Simon & Schuster
436 pages; $30
When James Madison discussed the relationship between corporations and government, he sounded as if he were knocking on doors for Bernie Sanders. "The stockjobbers," he wrote, "will become the pretorian band of the Government, at once its tool and its tyrant." But stop right there. You might recognise Madison's worry about corporations being government's "tyrant," but "its tool"?
In Madison's day, legislatures chartered corporations through special Acts, one by one, to channel private money into public projects. Alexander Hamilton, the corporation's champion, saw it as a vessel for public policy, the consequences of which Madison feared as much as public corruption.
I thought of this as I read Sally Denton's book, The Profiteers, a history of the Bechtel Corporation, one of the world's largest construction companies. She targets Bechtel's decades of extraordinary influence in Washington, detailing how the company has thrived and perhaps even set the terms of the relationship. But her account left me thinking: Hasn't the federal government benefited as well?
Ms Denton rolls ahead with all the energy of the company's founder, Warren Bechtel. Born in 1872, he worked his way from a farm in Illinois to a construction firm in California, "a natural engineer," as one boss said. In 1906, he "was ready to strike out on his own," Ms Denton writes. He built railroads, pipelines, highways and finally the Hoover Dam.
The Profiteers shows how the dam set a pattern. Warren Bechtel made alliances with other businesses and federal officials, and obtained the contract for his consortium in 1931, through the influence of a former government insider in his employ. Ms Denton uses the term "revolving door" more than once to describe Bechtel's personnel exchanges with Washington.
Warren Bechtel's mysterious death in Moscow in 1933, from an apparent insulin overdose, ignites a theme of political manoeuvring and intrigue. The corporation went global after World War II, seeking contracts in the Soviet Union, Indonesia, Libya.
But who or what is Bechtel? Ms Denton says little about Bechtel's internal culture; despite her extensive research, she writes, she confronted a privately held company with a "longstanding tradition of privacy and secrecy," and her freedom of information requests for Bechtel contracts with the Department of Energy "were denied in their entirety." She focuses on the top, populated by Warren Bechtel's descendants. "The Bechtelians were a colorless, sober bunch," she writes.
Fortunately, more vivid characters appear. John Alex McCone, for example, joined Bechtel in 1937. He helped invent the "cost-plus" contract, in which the government guarantees a profit. Eisenhower named him chairman of the Atomic Energy Commission in 1957, and Kennedy appointed him director of the CIA in 1961. McCone used his posts to help the company. Steve Bechtel Jr wove ties to Richard Nixon that proved lucrative after Nixon won the White House in 1968.
Ms Denton carries Bechtel's story into the George W Bush and Obama administrations, but her argument reaches a climax with George Shultz and Caspar Weinberger. Both of them left their posts in the Nixon administration for Bechtel, and then returned to serve under Reagan.
Reagan's administration went far to help Bechtel, Ms Denton writes, promoting the company's plans for a pipeline and a chemical plant in Iraq. It's troubling stuff - yet this is also where the dam begins to crack. Shultz was not so much planning but "plotting," and Weinberger was not firm in his convictions but "fanatical." She darkly describes meetings at the Bohemian Grove, a two-week, all-male summer retreat on California's Russian River. (Disclosure: I was invited to speak there last summer.) But the atmospherics carry a whiff of conspiracy theory.
That aside, Ms Denton strikes at the very conundrum that worried Madison - the relationship between corporate power and government in a political democracy. Corporations are useful; they concentrate capital, undertake publicly beneficial works and create wealth. They also concentrate power, in service of private gain. They deserve healthy scepticism, not deference, and intelligent oversight. Private enterprise is a critical part of our national power and still plays a role in public policy.
Here is where I wish the author had placed more stress. Cronyism and wealth have helped Bechtel a great deal, but cannot explain its long ties to Washington. Apple's $233.7 billion in revenue in 2015 dwarfs Bechtel's $37.2 billion, yet it is currently battling the government. But Bechtel has played a central role in American foreign policy over the last century. We should not leap to the conclusion that Bechtel has been only a tyrant rather than a tool.
But this is a long conversation, one that goes well beyond the scope of The Profiteers. Ms Denton begins it with a bang, itemising amoral investments, environmental damage, exploitation of labour and chummy relationships with policymakers. Whether she persuades on all points or not, she shows that it's a conversation we must have.
Bechtel and the Men Who Built the World
Sally Denton
Simon & Schuster
436 pages; $30
When James Madison discussed the relationship between corporations and government, he sounded as if he were knocking on doors for Bernie Sanders. "The stockjobbers," he wrote, "will become the pretorian band of the Government, at once its tool and its tyrant." But stop right there. You might recognise Madison's worry about corporations being government's "tyrant," but "its tool"?
In Madison's day, legislatures chartered corporations through special Acts, one by one, to channel private money into public projects. Alexander Hamilton, the corporation's champion, saw it as a vessel for public policy, the consequences of which Madison feared as much as public corruption.
I thought of this as I read Sally Denton's book, The Profiteers, a history of the Bechtel Corporation, one of the world's largest construction companies. She targets Bechtel's decades of extraordinary influence in Washington, detailing how the company has thrived and perhaps even set the terms of the relationship. But her account left me thinking: Hasn't the federal government benefited as well?
Ms Denton rolls ahead with all the energy of the company's founder, Warren Bechtel. Born in 1872, he worked his way from a farm in Illinois to a construction firm in California, "a natural engineer," as one boss said. In 1906, he "was ready to strike out on his own," Ms Denton writes. He built railroads, pipelines, highways and finally the Hoover Dam.
The Profiteers shows how the dam set a pattern. Warren Bechtel made alliances with other businesses and federal officials, and obtained the contract for his consortium in 1931, through the influence of a former government insider in his employ. Ms Denton uses the term "revolving door" more than once to describe Bechtel's personnel exchanges with Washington.
Warren Bechtel's mysterious death in Moscow in 1933, from an apparent insulin overdose, ignites a theme of political manoeuvring and intrigue. The corporation went global after World War II, seeking contracts in the Soviet Union, Indonesia, Libya.
But who or what is Bechtel? Ms Denton says little about Bechtel's internal culture; despite her extensive research, she writes, she confronted a privately held company with a "longstanding tradition of privacy and secrecy," and her freedom of information requests for Bechtel contracts with the Department of Energy "were denied in their entirety." She focuses on the top, populated by Warren Bechtel's descendants. "The Bechtelians were a colorless, sober bunch," she writes.
Fortunately, more vivid characters appear. John Alex McCone, for example, joined Bechtel in 1937. He helped invent the "cost-plus" contract, in which the government guarantees a profit. Eisenhower named him chairman of the Atomic Energy Commission in 1957, and Kennedy appointed him director of the CIA in 1961. McCone used his posts to help the company. Steve Bechtel Jr wove ties to Richard Nixon that proved lucrative after Nixon won the White House in 1968.
Ms Denton carries Bechtel's story into the George W Bush and Obama administrations, but her argument reaches a climax with George Shultz and Caspar Weinberger. Both of them left their posts in the Nixon administration for Bechtel, and then returned to serve under Reagan.
Reagan's administration went far to help Bechtel, Ms Denton writes, promoting the company's plans for a pipeline and a chemical plant in Iraq. It's troubling stuff - yet this is also where the dam begins to crack. Shultz was not so much planning but "plotting," and Weinberger was not firm in his convictions but "fanatical." She darkly describes meetings at the Bohemian Grove, a two-week, all-male summer retreat on California's Russian River. (Disclosure: I was invited to speak there last summer.) But the atmospherics carry a whiff of conspiracy theory.
That aside, Ms Denton strikes at the very conundrum that worried Madison - the relationship between corporate power and government in a political democracy. Corporations are useful; they concentrate capital, undertake publicly beneficial works and create wealth. They also concentrate power, in service of private gain. They deserve healthy scepticism, not deference, and intelligent oversight. Private enterprise is a critical part of our national power and still plays a role in public policy.
Here is where I wish the author had placed more stress. Cronyism and wealth have helped Bechtel a great deal, but cannot explain its long ties to Washington. Apple's $233.7 billion in revenue in 2015 dwarfs Bechtel's $37.2 billion, yet it is currently battling the government. But Bechtel has played a central role in American foreign policy over the last century. We should not leap to the conclusion that Bechtel has been only a tyrant rather than a tool.
But this is a long conversation, one that goes well beyond the scope of The Profiteers. Ms Denton begins it with a bang, itemising amoral investments, environmental damage, exploitation of labour and chummy relationships with policymakers. Whether she persuades on all points or not, she shows that it's a conversation we must have.
© 2016 The New York Times