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Corporate Profiteering in the Wake of 9/11/01

It is widely known that the profits of oil and gas companies and of weapons manufacturers soared in the years immediately after 9/11/01, largely as a consequence of the invasions and occupations of Afghanistan and Iraq, both of which were predicated on the myth that al Qaeda perpetrated the attack.

e x c e r p t
title: Waking Up From Our Nightmare
authors: Don Paul and Jim Hoffman
company 2002 2003
Royal Dutch/Shell 4.5 8.2
ExxonMobil 4.7 17.2
British Petroleum 3.4 5.9
Chevron Texaco 1.1 3.5
Net income of major oil companies for first six months in billions of dollars. USA Today, 8/28/03

Many of us already know that the quarterly earnings of the biggest oil-and-gas corporations surged after the U.S./U.K. invasions of Afghanistan and Iraq. Business Week of 2/23/04 reported that 2003 U.S. corporate profits were the largest in 31 years, led by ‘Big Oil’: ‘ The group's earnings more than doubled, to $45.2 billion. Exxon Mobil Corp. accounted for the bulk of the industry's gain and ranked No. 1 in total profits: Earnings rose 90%, to $21.5 billion, on a 22% increase in sales, to $222.9 billion. ’ We also know that profits by sub-contractors to the largest oil-and-gas corporations, such as Halliburton and Schlumberger, have surged. All these corporations share in the flow of oil and gas from war-torn Iraq. ChevronTexaco showed a record quarterly profit in the first three months of 2004, $2.56 billion, as the price of gas in the U.S. rose despite the output of oil from Iraq also rising toward its pre-invasion level of 2.4 million barrels a day. 1  

In 1972, long before the enormous corporate mergers of the past decade, the then Chase Manhattan Bank held 5.2% of the voting stock of Mobil Oil and 4.5% of Atlantic Richfield (now Arco). Through ownership of shares or membership on Boards of Directors, the Rothschild, Rockefeller, and Morgan families also controlled the largest U.S. insurance, pharmaceutical and food corporations in 1972. 2  

company 2001 2002 2003
Lockheed Martin 14.7 17.0 21.9
Boeing 13.3 16.6 17.3
Northrop Grumman 5.2 8.7 11.1
General Dynamics 4.7 7.0 8.2
Raytheon 5.6 7.0 7.9
totals 43.5 56.3 66.4
Department of Defense contract awards to top five corporations in billions of dollars.

Many of us also know that profits have surged since 9/11/01 for corporations which manufacture weapons. Department of Defense awards for the top five weapons contractors grew from $43.5 billion in 2001 to $66.4 billion in 2003. 3   During the first 24 hours of the 2003 war on Iraq the U.S. fired 500 of Raytheon's Tomahawk missiles at a cost of $600,000 per missile. 4  

Less well known than the profiteering by the oil and armaments industries is that by the insurance industry.

e x c e r p t
title: Insurance Company Profits
authors: Don Paul
Berkshire Hathaway
year sales profits
2000 24,028 1,557
2001 33,976 3,328
2002 37,668 795
2003 42,353 4,286
AIG
year sales profits
2000 40,656 5,055
2001 45,972 5,636
2002 62,402 5,499
2003 69,923 5,518
[Sales and profits are in millions of dollars.]

Wall Street Journal November 15, 2001:
Moreover, in response to Sept. 11, insurers are already raising prices by 100 percent or more on some lines of commercial and industrial insurance. ... For much of the 1990s, carriers had engaged in a price war, keeping premiums relatively low. The prospect of large payouts related to the attacks gave the industry grounds for demanding substantial increases....

In speech to Berkshire Hathaway stockholders, Buffet warned that a dirty nuclear bomb attack in the U.S. was "inevitable".

Note that while sales soared following the attack, profits remained relatively flat. Further research would be required to discover why the soaring sales were not reflected in the profits.


References

1. , San Francisco Chronicle, May 1 and May 9, 2004
2. Power, Inc, The Viking Press, 1976
3. Procurement Statistics, Directorate for Information Operations and Reports,
4. Corporate Research E-Letter, April 2003

page last modified: 2007-01-31
Copyright 2004 - 2011,911Review.com / revision 1.08 site last modified: 12/21/2012
New weapons systems like the F-22 cost hundreds of millions of dollars per copy.
Unknown investors "made a bundle" by anticipating the crash of stocks of companies whose assets were targeted by the attacks: American Airlines and United Airlines were targeted with huge surges in put options in the days before the attack. source