When President Eisenhower concluded his term, he warned the nation in a parting message about the rapid growth of the "military industrial complex". The American people did not know what he was talking about. As a military man, Eisenhower had seen firsthand the growing political and economic power of two giant construction firms, Brown & Root of Houston, Texas, and the Bechtel Group of San Francisco. Brown & Root put its man in the White House, Lyndon B. Johnson. The Bechtel Group has put its own man in the White House, Ronald Reagan, whose presidential campaign in 1980 was run by George Pratt Shultz, president of Bechtel, and Caspar Weinberger, vice president and general counsel of Bechtel. They were appointed Secretary of State and Secretary of Defense. The New York Times reports July 15, 1982, "Shultz is the fourth member of Bechtel Group serving in Reagan's cabinet. Treasury Secretary Donald T. Regan was chairman of Merrill Lynch, whose White Weld unit is investment advisor to the Saudi Arabian Monetary Authority. Atty. Gen. William French Smith's California law firm, Gibson, Dunn & Crutcher, has branch offices in Washington and Riyadh (capital of Saudi Arabia) and represents the Saudi Ministry of Finance and National Economy."

On Dec. 5, 1980, the New York Times noted in a headline story, Business Section, "Mr. Bechtel, a reclusive 55 year old engineer, informed his subordinates that ‘we encourage and applaud the active participation of our employees in the democratic process'. Bechtel, a privately held concern at work on 130 projects in 21 countries, all of them budgeted at more than $25 million, has for decades struggled to keep a low profile and the affairs of its management private... Also working for Bechtel as consultant are Richard Helms, the former Director of Central Intelligence, and former Ambassador to Iran, and Frank Jungers, former Chmn of Arabian American Oil Co. On the basis of its $6.9 billion revenues last year, the company ranked as the third largest engineering and construction concern in the U.S., after Brown & Root Inc. and the Fluor Corp. Bechtel's contracts are largely in huge industrial and energy-related projects that Larry Thomas, a Bechtel spokesman, refers to as ‘mega-Projects'. At present, the company is under a 25 year contract for construction of a city for more than 3,000 people and an industrial complex at Jubail, Saudi Arabia, and to engineer a hydroelectric project at James Bay in Canada that would include a network of dams and earth-filled dikes large enough to substitute for 10 conventional power plants. Bechtel is also the country's leading builder of nuclear power plants."

Many Bechtel projects have been characterized as huge boondoggles. Many nuclear power projects have either failed to come "online" or have been abandoned, causing billion dollar writeoffs and shaky financial markets. Bechtel has built such problem-plagued ventures as BART (Bay Area Rapid Transit System) in San Francisco, METRO, the Washington D.C. subway system (the Washington Post recently noted it was already $200 million in the red and will ultimately cost $12 billion), and Jubail, called "the biggest boondoggle in history".

Time, July 12, 1982, wrote of Jubail, "Bechtel has spent $35 billion and plans to spend $100 billion more. Bechtel's original contract had been for a modest $9 billion."  Jubail is described as lying 324 miles northeast of the Saudi Arabian capital, Riyadh, with 100 plus temperatures most of the year, a desolate area of salt flats washed by the Persian Gulf. 1600 Bechtel employees live on the site in 3 bedroom ranch houses built for $300,000 each, directing the activities of 39,000 construction workers. Time says, "The infant city could wind up being and enormously expensive ghost town, as marching dunes are expected to cover it by the year 2000."

Christopher Reid, who worked for Bechtel, says "Jubail is a massive WPA project, the biggest boondoggle in history."  He predicts that the sands of the Dahana Desert will shift and cover Jubail before the end of this century. Saudi officials have stated they do not know who will live in Jubail, because of the hot temperatures, the isolation of the area, and the desolate surroundings. Historically, the dunes of the Dahana Desert shift massively every few years. Engineers expect the Jubail area to be completely covered by the year 2000. Future archeologists will be puzzled by this strange ruin, not realizing that the entire project resulted from the huge oil price increases inflicted upon the American people, and pressures compelling the Saudi Arabian leaders to return much of their profit to wealthy entrepreneurs such as the Bechtel Group.

The New York Times reported July 26, 1982, "Pres. Reagan's special Middle East envoy, Philip C. Habib, is also serving as a private consultant to Bechtel Group, Inc. He had been hired by George P. Shultz while Shultz was president of Bechtel. State Dept. spokesman Dean Fischer said Mr. Habib's retention by Bechtel did not compromise U.S. diplomatic efforts in the Middle East. ‘It doesn't strike me as a problem any more for Habib than it would be for Weinberger or Shultz,' Mr. Fischer said. "Who's Who shows Philip C. Habib has been a career State Dept. official since the 1950s, receiving a Rockefeller public service award in 1969, senior adviser to the Sec. of State, 1979-80, resident fellow Hoover Institution from 1980 to present. Hoover Institution, Stanford, and the Bohemian Club are an interlocking power structure dominating the Washington political scene.

On July 27, 1982, the New York Times noted further praise for Habib from the White House and State Dept. Senator Alan Cranston and other luminaries. "A spokesman for the Israeli lobby voiced confidence today in Pres. Reagan's Special Envoy to the Middle East Philip C. Habib;  Thomas A. Dine, executive director of American Israel Political Action Committee, said he had the highest regard for Ambassador Habib's integrity."

A letter to the Times July 27, 1982 from Gen. F.P. Henderson noted that when Count Bernadotte raised support for Palestine refugees in 1948, the largest contributors were Arabian American Oil Co. $200,000, and Bechtel International, $100,000. (UN Records No. 11 A 648).

The revelation of Habib's connection with Bechtel alarmed some Israeli leaders, because of Bechtel's contracts with the Arabs, and Sen. Larry Pressler, R., So. D. called for his resignation. The New York Times reported "British officials offered no immediate reaction to the news of 'Habib's departure' nor would they comment on his replacement by George Pratt Shultz, whose reputation as an economist is well known here. Lord Carrington said. ‘Mr. Shultz is known to every one, and I am sure they will work with him.'  Israeli Foreign Ministry spokesman said, ‘Israel deeply regrets the resignation. Israel respected Mr. Habib as an outstanding statesman and faithful friend of the State of Israel !'."  The Times failed to get the comments of any Arabs about Mr. Habib.

On July 10, 1982, Shultz a member of the Standard Oil Pratts, was reported by the New York Times to have promised he would "divest" himself of his Bechtel holdings by putting them in a blind trust. Bechtel is a privately held company, 40% of the stock held by the family, the rest by its executives, who sign an agreement that when they leave the firm or die, the company has first option to repurchase their stock, which option is always exercised. The New York Times reported Jan. 18, 1979, "Increasingly sensitive to accusations of secretiveness, the privately held Bechtel group of companies took a new step in implementing a policy of disclosure today when it issued for the first time something approaching an annual report. Since all stock is held by top executives and members of the Bechtel family, this took the form of a report to the 30,000 employees around the world rather than a report to stockholders."  The Times commented in 1982 that "Bechtel does not disclose its earnings". Informed estimates are that Bechtel earned 5% net profit on its $11.6 billion revenues in 1982. Stephen D. Bechtel Sr., now in his eighties, is said to be worth $750 million. His son, Stephen Jr. now head of the firm, is said to be worth $250 million. When his father dies, the younger Bechtel is expected to become a billionaire.

Newsweek reported Dec. 29, 1975, "The Bechtel group of companies is hardly a household word. As a privately held corporation, it has operated for 77 years behind a wall of secrecy that is considered unequally impenetrable in the competitive world of heavy construction. Its revenues are estimated at $2 billion a year, equal to General Mills or Standard Oil of Ohio. Bechtel got that way by wheeling and dealing not only in private operations but with governments themselves. The company is building a new 34 story building on Fremont St. in San Francisco. The company, says one Federal energy official, is putting together a modern version of a military industrial complex machine, and they have an inside track on the growth market of the future. It will be called the new General Motors before the century is out."

Bechtel began in 1898 when a Midwestern farm boy, Warren (Dad) Bechtel, came to California to seek his fortune. He began with a mule team hauling dirt on small construction projects. In 1918, with war prosperity, his income increased. His first important project was building a railroad for Hutchinson Lumber Co. at Orotillo, Cal. His three sons, Warren, Steve and Ken joined him in the growing business. In 1928, he was elected president of Associated General Contractors of America, a powerful lobbying group. In 1931, Dad Bechtel became president of Six Companies, a consortium formed to build the $49 million Boulder Dam. It was incorporated in Delaware in Feb. 1931 by H.J. Kaiser Sr. and Jr.;  Felix Kahn of MacDonald and Kahn;  Henry W. Morrison of Morrison-Knudsen;  W.A. Bechtel Co.;  J.F. Shea of Los Angeles, which built the Pacific Bridge at Portland, and General Construction Co., Seattle. MacDonald and Kahn had built the Mark Hopkins Hotel;  Morrison was a trustee of Stanford and close friend of Herbert Hoover and Leland Cutler.

Between 1931 and 1936, the consortium built the Bonneville Dam, the San Francisco Bay Bridge, and other projects. During the construction of Hoover (Boulder) Dam, a steel salesman, John McCone, called on Bechtel. He had been a friend of Steve Bechtel at the Univ. of California in 1922. Steve was now head of the firm, due to the mysterious death of Warren Bechtel in Moscow August 29, 1933. Dad Bechtel, 61, had come to Russia to inspect the Magnitogorsk Dam, on a 3 day tour which also included the Dnieperstroy Dam. He had been instructed by the Soviet authorities to come alone, and he left his wife in Vienna. While staying at the National Hotel in Moscow, before leaving on the tour, Dad Bechtel died suddenly of "an overdose of medicine". There was no autopsy. Someone in the Kremlin, perhaps Stalin, had changed his mind about allowing Bechtel to inspect the dam.

Stephen Bechtel found a ready ally in the aggressive business acumen of John McCone. They formed a separate company, Bechtel-McCone, in the nick of time before World War II broke out. In Dec. 1940, they got an order of $210 million for sixty British freighters, to be built in alliance with Admiral Vickery of Bath Iron Works. McCone and partners later made 844 million profit on Liberty ships built at their Sausalito plant. They also owned California Shipbuilding, a Los Angeles yard which turned out 967 ships during the war, as well as Marinship, the Oregon Shipbuilding Co. They owned Joshua Hendy Corp. an ironmonger which built the engines for Liberty ships. By Sept., 1943, they had more than $3 billion in shipbuilding orders. The crews of Liberty ships made wry jokes about the propensity of these hastily flung together productions to break in two during high seas. Many of them were torpedoed before they could fall apart. Time noted that "Marinship turned out 460 freighters and 90 tankers at breakneck speed."

The partners also built the colossal Army modification center at Birmingham Ala. to handle the B-29 output from Willow Run;  they built the Alaskan Military Highway, and other projects. During this defense activity, Bechtel and McCone prudently remained in the background, allowing their proteges, the Kaisers, to be publicized as the important figures. Fortune pointed out that Kaiser was never more than a standin for Bechtel. Kaiser, after having been snubbed by AGC, became president of Associated General Contractors after the Bechtels recommended him. At the end of World War II, Bechtel Group held 20% of Kaiser Permanente Metals, which owned Richmond Shipbuilding, the Kaiser firm. The youngest son, Ken Bechtel, ran the Marin Shipyard.

Bechtel's rush program of building Liberty ships considerably antedated Pearl Harbor. Roosevelt (Dr. Win the War) issued his emergency shipbuilding order in January 1941;  by Sept. 27, the first Liberty ships were being launched. FDR, as Asst. Sec. of the Navy in 1916, had done the same thing, awarding Navy contracts long before we entered World War I. "Preparedness". The Bechtel-McCone alliance, being short of capital, invented the ingenious "cost-plus" contract arrangement. Under this generous stipulation, the government guaranteed war contractors all costs of production, plus a guaranteed 10% profit. The more the contractor spent, the greater his profit. It was the greatest boondoggle for the fortunate few since the Federal Reserve System started printing paper money with no backing except paper bonds.