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Profile: BearingPoint

BearingPoint was a participant or observer in the following events:

The US Agency for International Development asks BearingPoint, Inc to bid on a sole-sourced contract for “economic governance” work in Iraq. The contract document, which USAID says will eventually be opened up to a select pool of additional companies, was written by Treasury Department officials and reviewed by financial consultants. The confidential 100-page request, titled “Moving The Iraqi Economy From Recovery to Sustainable Growth,” states that the contractor will help support “private sector involvement in strategic sectors, including privatization, asset sales, concessions, leases and management contracts, especially in the oil and supporting industries.” The bid request lays out a plan to, among other things, rapidly replace Iraq’s currency; identify industries for consolidation, liquidation, and privatization; “rationalize” and “modernize” Iraqi banking and financial sectors; develop taxation, legal, and regulatory regimes to compliment a new market-based economy; devise a plan to turn Iraq’s rudimentary stock market into a “world-class exchange” for trading the shares of newly privatized companies; and create a public relations campaign to promote these changes to the public. Summarizing US objectives for the economic reorganization, the document states, “It should be clearly understood that the efforts undertaken will be designed to establish the basic legal framework for a functioning market economy; taking appropriate advantages of the unique opportunity for rapid progress in this area presented by the current configuration of political circumstances.” [Wall Street Journal, 5/1/2003]

Entity Tags: US Department of State, BearingPoint

Timeline Tags: Iraq under US Occupation

Rob McKee, chief advisor to Iraq’s oil ministry, commissions a new plan for Iraq’s oil industry, which is intended to replace the Pentagon’s original plan for privatization. The plan is written by State Department Contractor BearingPoint, but significant input comes from oil industry consultants and executives. BearingPoint’s work is overseen by Amy Jaffe of the James A. Baker III Institute for Public Policy of Rice University. [Democracy Now!, 3/21/2005; Harper's, 4/2005, pp. 75]

Entity Tags: Rob McKee, Amy Myers Jaffe, BearingPoint

Timeline Tags: Events Leading to Iraq Invasion, Iraq under US Occupation

BearingPoint and Amy Jaffe complete the State Department-commissioned plan for Iraq’s oil industry (see November 2003). The 323-page document, titled Options for Developing a Long Term Sustainable Iraqi Oil Industry, lays out seven possible models for Iraq’s oil industry, none of which is privatization. “The seven options [range] from the Saudi Aramco model, in which the government owns the whole operation from reserves to pipelines, to the Azerbaijan model, in which the state-owned assets are operated almost entirely by ‘OICs’ (International Oil Companies),” Greg Palast reports. The plan seems to favor the production-sharing agreement (PSA) model, in which oil reserves are owned by the state but operated and controlled by foreign oil companies that earn a percentage of oil sales. [Harper's, 4/2005, pp. 75] “Using some form of [production sharing agreements] with a competitive rate of return has proved the most successful way to attract [international oil company] investment to expand oil productive capacity significantly and quickly,” the report says. [United States Agency for International Development, 12/19/2005, pp. 50 pdf file] The document makes it clear that in order to secure sufficient investment, the Iraqi government will have to offer OICs a generous portion of the oil proceeds. “Countries that do not offer risk-adjusted rates of return equal to or above other nations will be unlikely to achieve significant levels of investment, regardless of the richness of their geology,” the plan states flatly. As a case in point, the plan highlights the Azerbaijan system which it notes has “been able to partially overcome their risk profile and attract billions of dollars of investment but offering a contractual balance of commercial interests within the risk contract.” [BBC Newsnight, 3/17/2005; Democracy Now!, 3/21/2005; Harper's, 4/2005, pp. 75; United States Agency for International Development, 12/19/2005 pdf file] Jaffe later explains to reporter Greg Palast that the oil industry prefers state ownership of Iraq’s oil over privatization because it fears a repeat of Russia’s energy privatization, which barred US oil companies from bidding on its reserves. Furthermore, another reason the oil companies oppose the neoconservatives’ privatization scheme is because they have no desire to undermine OPEC as they have no problem with high oil prices. “I’m not sure that if I’m the chair of an American company, and you put me on a lie detector test, I would say high oil prices are bad for me or my company,” she acknowledges to Palast. Similarly, a former Shell oil boss tells Palast that the interests of the neoconservatives, who were calling for total privatization, and the oil companies are “absolutely poles apart.” He says: “Many neoconservatives are people who have certain ideological beliefs about markets, about democracy, about this, that and the other. International oil companies, without exception, are very pragmatic commercial organizations. They don’t have a theology.… They are going to do what is in the best interest of their shareholders.” [Democracy Now!, 3/21/2005; Harper's, 4/2005, pp. 75] The State Department will deny the existence of this oil plan “for months,” according to Palast, who will only obtain it after identifying its title and threatening legal action against the government. [Democracy Now!, 3/21/2005; Harper's, 4/2005, pp. 75]

Entity Tags: Amy Myers Jaffe, BearingPoint

Timeline Tags: Events Leading to Iraq Invasion, Iraq under US Occupation

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