The Bush administration has awarded the Bechtel Group the first major contract for Iraq’s reconstruction.

The contract could be worth up to $680 million dollars over the next year and a half for the rebuilding of Iraq’s electrical, water and sewage systems.

Bechtel has a long history of doing business in Iraq. In the early 80s, Bechtel negotiated to build an oil pipeline from Iraq to Jordan. Defense Secretary Donald Rumsfeld traveled to Baghdad 1983 for a private meeting with Saddam Hussein. Officially, Rusmfeld was acting as then-President Reagan’s “peace envoy” and was supposed to discus the Iran-Iraq war. But a secret State Department cable obtained by the National Security Archives, reveals Rusmfeld appears to have made little or no mention of the war, and instead discussed the pipeline proposal.

The 20-year-old memo was from Rumsfeld to George Schultz who was Secretary of State. Currently, Schultz is on Bechtel’s board of directors and chairs the advisory board of the pro-war Committee for the Liberation of Iraq.

Bechtel’s senior vice-president is Jack Sheehan, who is also a member of the Defense Policy Board.

US taxpayers will foot the initial costs of the contract. Iraqi oil is then supposed to pay for much of the reconstruction.

• Jim Vallette, research director for the Sustainable Energy and Economy Network and author of “Crude Vision: How Oil Interests Obscured US Government Focus On Chemical Weapons Use by Saddam Hussein.”