Well-connected and wealthy: Bechtel wins from Saddam's demise

Few companies represent the corporate face of the Bush administration quite like Bechtel of San Francisco. And few - Vice-President Dick Cheney's old company, Halliburton, is the only possible competitor - were quite so identified with the drive to overthrow Saddam Hussein, starting months before the US-led invasion began.

The point man from the earliest stages was George Schultz, a Bechtel board member and former secretary of state from the Reagan era. As chairman of the so-called Committee to Liberate Iraq, Mr Schultz was one of the biggest cheerleaders for war who argued both for the removal of Saddam Hussein and also the benefits of rebuilding Iraq after Saddam was gone. He never explicitly said his own company should be in charge of the reconstruction, but nobody much doubted that was what he meant.

Indeed, last month, Bechtel was awarded the primary contract - worth as much as $680m (£415m) in the first instance, but potentially much more lucrative given total reconstruction estimates as high as $100bn - to rebuild Iraq's water and electricity supplies, roads, schools, sewers and hospitals.

It was a closed-door process, with just six companies, all American, invited to put in bids. The man who picked Bechtel, Andrew Natsios of the US Agency for International Development, was well acquainted with the company: in his previous job, as head of the Massachusetts Turnpike Authority, he had worked with Bechtel on the so-called Big Dig - a massive project to bury a freeway in a tunnel beneath downtown Boston. In theory, the Big Dig should have been a reason to steer well clear of Bechtel. The project has dragged on for 18 years, and its cost has mushroomed from an initial $3.5bn to almost $15bn.

But political juice was clearly the deciding factor. Bechtel's chairman and chief executive, Riley Bechtel, was recently appointed to President Bush's export council. Jack Sheehan, a senior vice-president, is a member of the Defence Policy Board, the secretive Pentagon advisory council that lobbied hard for war in Iraq. Bechtel has made $1.3m in political donations over the past four years, 60 per cent to Republicans, according to the Centre for Responsive Politics, a Washington campaign watchdog.

Bechtel's political and military links go way back to the days when it was invited to build the Hoover Dam outside Las Vegas in conjunction with a leading defence contractor, and took a leading role in preparing the shipyards of San Francisco Bay for the Second World War.

The Reagan administration could almost have been subtitled "Bechtel Goes to Washington", with Mr Shultz as Secretary of State and another alumnus, Caspar Weinberger, as Secretary of Defence.

When Donald Rumsfeld, now the Pentagon supremo, went on his now-notorious trips to Baghdad in the early 1980s to cosy up to Saddam Hussein, one of his tasks was to promote a Bechtel project to build an oil pipeline from Iraq to Aqaba on the Red Sea. As revealed by recently declassified government documents, Saddam eventually said no to the pipeline - but the Rumsfeld-Bechtel relationship was firmly established and has now, clearly, been revived.

The choice of Bechtel to lead reconstruction efforts also points to the Bush administration's preference for private enterprise in public works projects, with taxpayers picking up the tab.