The Paranoid Style in American Diplomacy
Oil and Arab Nationalism in Iraq
Brandon Wolfe-Hunnicutt



AROUND MIDNIGHT ON JULY 14, 1958, THE AMERICAN STATE DEPARTMENT received a telegram from the US embassy in Iraq explaining that earlier that day Iraqi soldiers had arrested a number of Americans staying at the New Baghdad Hotel.1 One of those arrested was Eugene Burns of Sausalito, California. Burns was a Moscow-born AP reporter and nature writer in Baghdad promoting the Holy Land Foundation, a nonprofit group with the stated purpose of improving US–Middle East relations.2 Burns was also rumored to be the CIA station chief in Baghdad.3 Another of those arrested was George Colley, Jr., of San Francisco. Colley, president of the overseas division of the Bechtel Corporation, was in the country to “inspect oil company projects.”4 A third was Robert Alcock, an industrial engineer from Los Angeles, who was in the country meeting with Colley without the official knowledge of either the State Department or the government of Iraq.5 The fourth was Jose Carabia, a Cuban-born “collector of orchids for the New York and Missouri botanical gardens, in Iraq as an ‘expert on plants of the Bible.’6 After being arrested at the hotel, the Americans, with about ten other foreigners, were loaded onto military vehicles that were headed for the Ministry of Defense. En route to their destination, an angry mob surrounded the vehicle and dragged the Americans into the street. Burns, Colley, and Alcock were beaten and stabbed to death. Carabia escaped to tell the tale.7 Despite a determined search by Iraqi authorities, the bodies of the dead Americans were never recovered. Most likely they had been buried in a “common grave” with about fifteen Iraqi casualties of the revolution.8

The three dead Americans were among the estimated thirty people who were killed in what became known as Iraq’s Free Officers’ Revolution.9 The revolution had begun in the early morning hours when a column of rebel tanks burst through the gates of the Royal Palace and seized King Faysal II, along with several of his family members, advisers, servants, and guards. The group was immediately dragged into the courtyard and executed by firing squad. A second unit of rebel soldiers deployed to the residence of Prime Minister Nuri al-Said. The prime minister momentarily escaped, but was captured the next day while trying to flee the country dressed as a woman. Nuri was immediately shot dead and buried, only to have his corpse disinterred by an angry mob so that it could be dragged through the streets of Baghdad, hung from a lamppost, burned and mutilated, and ultimately, repeatedly run over by municipal buses until, according to a Western observer, “it resembled bastrouma, an Iraqi sausage meat.”10

American newspapers represented the three Americans killed in Iraq as tragic victims of a senseless mob. Tragic as their individual fates might have been, the history recounted in this book suggests that something more was at work in the streets of Baghdad in July 1958 than simply the random violence of an Iraqi crowd. Bechtel was not just any international firm—it occupied a central node in the structure of the world economy.11 Bechtel had been founded by Warren A. Bechtel and George Colley in 1906 to construct a thirty-six-mile rail link connecting Sunol to Oakland, California.12 By 1912, the firm had landed its “first big job”—a 106-mile rail line through the rugged Eel River Canyon, in northern California’s Mendocino County.13 By the 1920s, it would be one of the country’s largest construction and engineering firms. In 1937, it merged with the Consolidated Steel Corporation to form the Bechtel-McCone Corporation, which expanded beyond pipe and rail construction to engage in petrochemical processing and the construction of oil refineries. During World War II, it moved into shipbuilding and soon became one of the country’s largest defense contractors and a leader in the field of nuclear energy production. By 1950, company co-founder John McCone was undersecretary of the US Air Force. At the time that George Colley’s son George Jr. was slain in the streets of Baghdad in July 1958, McCone headed the US Atomic Energy Commission (AEC), which regulated the production of civilian nuclear energy. Three years later, McCone was made director of the Central Intelligence Agency.

To disentangle the various strands that came together in the New Baghdad Hotel in July 1958, this book examines the history of one of the firms with which Bechtel did business—the Iraq Petroleum Company (IPC). The history of this consortium of international oil companies offers a unique lens through which we can view a number of social and political processes of world historical significance. By examining the history of the Iraqi effort to nationalize the IPC, from the beginning of that effort in the 1920s through its successful conclusion in the 1970s, we gain an understanding of the relationship between business and government as the system of imperial rule fell into a terminal crisis. We get a sense of how the Americans sought to prop up and defend the IPC and other imperial structures built by the British. And we learn of the political and economic strategies employed by Iraqi nationalists to overcome the legacies of colonialism.

I examine the history of the IPC nationalization from three distinct perspectives: the oil company officials who sought to defend their business interests in Iraq, the Iraqi state-building class that carried out the nationalization, and the American diplomats who sought to mediate between the two contending sides. To access oil company perspectives, I utilize the private archives of the Iraq Petroleum Company—a consortium of multi national firms that was formed in the immediate aftermath of World War I. To access the perspectives of the Iraqi state-building class, I read US and oil company records “against the grain,” and supplement these documents with Iraqi memoirs and oral history interviews with Khair el-Din Haseeb, of one of the key players in the drama. To access US diplomatic perspectives, I engage with the official records of the State Department.14

Drawing on these sources, I advance three main arguments. First, I contend that the unique features of the IPC consortium rendered it particularly vulnerable to eventual nationalization. I show that this consortium, composed of firms registered in Germany (for a time), Britain, France, the Netherlands, Portugal, and the United States, was largely the creation of a dying British Empire. It was the very weakness of the British Empire that accounted for the consortium’s heterogeneous origins and the business rivalries among its constituent firms. At the end of World War I, the British were not, on their own, able to exercise sole control over the Iraqi oil industry, and so they had to allow other interested parties to share in the country’s production. But this mix of corporate interests created political vulnerabilities that Iraqi oil nationalists were able to exploit in their own drive to gain control over the industry.

Second, I assert that Iraq’s state-building class, over the course of roughly three generations, overcame tremendous obstacles to marshal the force necessary to expropriate the property of some of the world’s richest and most powerful corporations. These obstacles arose from a variety of sources. When the consortium first began to take shape, “Iraq” did not yet exist as an independent nation-state. At the time, on the eve of World War I, Iraq was still under Ottoman rule, divided into three distinct vilayets (provinces). After the war, Iraq was integrated into the structure of British imperialism as a League of Nations’ “mandate state”—a kind of halfway house between direct colonial administration and full national sovereignty. Iraqi state-builders had to overcome this lack of administrative capacity and construct national institutions and establish global relationships that would allow the government to operate a wholly nationalized industry. The key turning point in the history of this state-building process was the 1958 Iraqi Free Officers’ Revolution, which swept away the vestiges of the semi-sovereign monarchy and replaced it with an independent republic.

Third, I show how the Iraqi oil nationalization effort, and especially the 1958 revolution, exposed critical contradictions and vulnerabilities in the logic and structure of American power. In seeking to mediate between the largely British-run oil company and Iraqi nationalists, American policymakers found themselves trying to serve several masters at once. The United States had long championed the right of national self-determination over colonial rule—at least rhetorically. And so the US owed a measure of support to Iraqi nationalists. The United States was also in a close geopolitical alliance with the British, first against Germany in the two World Wars, and then against the Soviet Union in the Cold War. And so the US owed a measure of support to British imperialists. The United States was also the corporate headquarters of the world’s largest energy companies—companies that wanted to make money in the Middle East. And so the US owed a measure of support to American oil giants that were invested in the IPC. But as the decades wore on, still more claimants appeared. By the end of the 1960s, new actors were in a position to make compelling demands on the American state. Domestic American oil and gas companies, the Israel lobby, and major defense contractors all developed interests in Iraq that ran counter to the preferences of the IPC. In seeking to satisfy all of these constituencies, the US government satisfied none.

Business rivalries within the oil industry, Iraqi nationalism, and American diplomatic equivocation all fused in the early 1970s to produce a successful nationalization that would have major repercussions for the region and the world. The US government, rent by competing demands and preoccupied with a world full of trouble—from Vietnam to Berkeley—stood paralyzed as Iraqi oil nationalists advanced methodically toward their goal of nationalizing the industry. The IPC, which had long depended on diplomatic and political support—first British and then American—was suddenly left to contend with the Iraqi nationalists on its own. The Iraqi Baʿth Party—an Arab socialist party that conspired to seize power in the late 1960s—skillfully took advantage of favorable world trends to bring to fruition what had been building for nearly a century. In the wake of Iraq’s bold action, producer-state control would become the industry norm by the end of the 1970s. In the pages that follow, I trace this grand arc as it circumscribed some of the most significant developments in the global history of the twentieth century: the decolonization of Asia and Africa, the US Cold War with the Soviet Union, and the rise of sovereign petrostates in the Middle East.

In developing the above arguments I contribute to three broad fields of knowledge. With respect to international political economy, this book adds to the ongoing critique of what is sometimes called the “oil scarcity myth.” In short, the oil scarcity myth holds that oil supplies are scarce and access to them is insecure, and that to secure necessary supplies of a vital resource, the US government must support the operations of private American oil companies operating in the Middle East. According to this view, private oil companies serve as a kind of public policy instrument securing a public good. Recent scholarship by Robert Vitalis, Timothy Mitchell, and Roger Stern turns this long-familiar story on its head.15 The core proposition of this new scholarship is that oil supplies (from the Middle East or elsewhere) are neither scarce nor insecure. On the contrary, the major problem afflicting the industry from its inception has not been scarcity but superabundance, due to the vast quantity of naturally occurring oil deposits and the economic tendency toward industrial overproduction.16 When a large number of firms compete to meet a finite demand, prices and profits fall. In extremis, prices fall below the cost of production and some firms are ruined.

New histories of oil, recognizing this tendency toward overproduction, focus on the actions of states, and the US state above all others, to stabilize prices and profits by “producing scarcity.”17 In the strong version of this argument, it is the state that serves the firm (not the other way around) in the firm’s ceaseless quest for private accumulation. While this book demonstrates the extent to which the US state helped the IPC to hold down production in Iraq so as to stem the tide of overproduction that riddled the industry in the 1950s and 1960s, it also shows that the US state was not the “unified and coherent” actor that political scientists might theorize.18 Rather, the US state was an arena of competition in which different interest groups vied for influence over the policymaking process.19

The second broad field to which this book contributes is Iraqi history. Empirically, it documents the virtually unknown history of the “Al-Haseeb group,” which engaged in a broad struggle to defend what historian Christopher Dietrich describes as the principle of “natural resource sovereignty.”20 This group sought international recognition, through the United Nations and other agencies of global governance, of the permanent right of postcolonial states to unilaterally expropriate private property and abrogate existing contracts—such as the oil concession agreements in force in Iraq and across the broader region.

At the heart of the struggle for natural resource sovereignty was the “unequal exchange thesis.” This thesis, intellectually rooted in the developmental economics of Raúl Prebisch’s groundbreaking The Economic Development of Latin America and Its Principal Problems (1949), introduced the concepts of core, periphery, and underdevelopment.21 According to this thesis, the oil concession agreements of the early twentieth century were concluded among parties of unequal power and served to enshrine the advantages of the powerful over the powerless. The agreements were structured in such a way that the value of the raw materials exported from former colonies declined faster than the value of finished goods imported into those former colonies. The only way to break the pattern of underdevelopment and equalize the terms of trade was to abrogate existing contracts and bring the country’s natural resources under public control.

In seeking to redress the economic injustice of the existing oil concession in Iraq, Iraqi nationalists were also engaged in a process of imagining a secular, democratic, and multiethnic conception of national identity. Scholars have long noted the “resource curse” of oil—the ways in which the existence of an oil industry in a postcolonial society undermines secular and democratic values and institutions. Clearly, IPC management and hiring practices hardened ethnic and sectarian identities in Iraq, but sometimes overlooked is the extent to which oil nationalism offered a unifying theme in Iraqi history. I show that oil concerns, and specifically the imperative of confronting foreign-owned companies, played an important role in bringing about moments of broad national reconciliation and multiethnic and multireligious harmony among Iraqis. In so doing, this book helps to illuminate the material analog to what historian Orit Bashkin describes as “the other Iraq.”22

American diplomatic history represents the third broad field to which this book contributes, building on the long and venerable tradition of critique in the spirit of William Appleman Williams.23 In the 1950s, Williams, a former naval officer turned diplomatic historian at the University of Wisconsin–Madison, offered a broad conceptual framework, not only to make sense of American diplomatic history but also to synthesize a great many disparate strands of American historiography.24 Central to this concept was the idea of American empire as a “way of life”—something more closely approximating a religion than a mere political and economic system.25 At the heart of this spirit of American imperialism was the idea that an “open door” to the markets and resources of the world represented a kind of Balm of Gilead to cure any and all ailments afflicting American society.

For Williams, it was not the practical necessity of capital expansion that best explained the history of American imperialism but rather a larger weltanschauung that located the sources of and solutions to American social problems in the world at large.26 The value of this interpretive framework is its emphasis on economic themes, including the more spiritual dimensions of the private enterprise system.27 By viewing US-Iraqi relations through this economic lens we are able to see a number of relations that might otherwise remain out of sight. We see economic interests nestling within the rhetoric of national security. We see pronouncements about human rights and democracy as swords of empire cutting down actual Middle Eastern democrats. And we see multinational oil corporations exercising a certain “business privilege” to unduly influence American foreign policy.28 But we also see these oil majors as just one set of interests vying for influence over US foreign policy. Other concentrations of economic power—from the oil majors’ domestic and international competitors, to defense contractors, to the Israel lobby—all were jockeying for position within the arena of struggle that is the American state. In this pursuit of power, government offices and budget shares are the prizes. The policy outcomes that emerge from this process cannot be rationally deduced from a priori principles (about democracy, or Communism, or the Anglo-Saxon race, or whatever else), but rather reflect the larger balance of political forces at any given time. In offering this more dialectical approach to the study of American foreign policy, this book adds to the ongoing effort to transcend what are sometimes called “the myths of empire.”29

To transcend these myths of empire and arrive at a more complete understanding of America’s role in Iraq, it is necessary to step back and situate the 1958 Free Officers’ Revolution within a broader regional historical context. This in turn will allow us to make sense of two crucial, inter related developments: the political movements that led to the overthrow of the Hashemite monarchy, and the American perception that this overthrow represented a grave threat to US interests in the region.


1. Details of what transpired at the New Baghdad Hotel remain sketchy. The relevant volume of Foreign Relations of the United States, the State Department’s official documentary history of American foreign policy, only mentions the incident in a brief footnote. See Baghdad to State, July 14, 1958, Foreign Relations of the United States [FRUS], 1958–1960, v. 12, doc. 112, n. 1 [hereafter, for example, FRUS, 1958–1960, 12, 112n1]. All FRUS documents are available here: https://history.state. gov/historicaldocuments. For additional details see Elizabeth Bishop, “‘Blown Away by the Winds Like Ashes’: Biopower in Egypt’s #25 Jan. and Iraq’s 14 Tammuz,” Alternatives: Turkish Journal of International Relations 12, no. 3 (Fall 2013): 53–57; Sally Denton, The Profiteers: Bechtel and the Men Who Built the World (New York: Simon & Schuster, 2016), 76; Laton McCartney, Friends in High Places: The Bechtel Story—The Most Secretive Corporation and How It Engineered the World (New York: Ballantine Books, 1998), 70, 79, 117; “Baghdad Reports Americans Slain; Californians Believed to Be Iraq Mob Victims, State Department Says,” New York Times, July 16, 1958, 15; “Eugene Burns Reported Victim of Iraq Mob,” Bend Bulletin (Bend, Ore.), July 16, 1958; Stan Carter, “How Iraq Mob Slew Americans,” Associated Press, July 22, 1958; “In One Swift Hour,” Time, July 28, 1958; “After the Bloodbath,” Time, August 4, 1958.

2. “Eugene Burns Reported Victim of Iraq Mob,” Bend Bulletin.

3. Leonard Mosley, Dulles: A Biography of Eleanor, Allen and John Foster Dulles and Their Family Network (New York: Dial Press, 1978), 469.

4. Bishop, “‘Blown Away,” 56.

5. The initial embassy reporting only listed two missing Americans (Colley and Burns); Alcock was not reported missing until much later. “In its formal note, Iraq’s Ministry of Foreign Affairs stated no documentation had been found of Alcock’s entry.” See Bishop, “Blown Away,” 57.

6. Bishop, “Blown Away,” 56.

7. Bishop, “Blown Away,” 56–57.

8. Bishop, “Blown Away,” 57.

9. Bishop, “Blown Away,” 57.

10. Geoff Simons, Iraq: From Sumer to Saddam (New York: Palgrave Macmillan, 2004), 252.

11. Denton, The Profiteers, chaps. 1–12; McCartney, Friends in High Places, chaps. 1–12.

12. “Bechtel—History,” about-us/history/.

13. “Warren A. Bechtel,” warren-a-bechtel/.

14. In deriving meaning from these records, I draw on the methodology described in Frank Costigliola, “Reading for Meaning: Theory, Language, and Metaphor,” in Explaining the History of American Foreign Relations, ed. Michael J. Hogan and Thomas G. Patterson, 2nd ed. (Cambridge: Cambridge University Press, 2004), 279–303. I also draw methodological insight from Michel-Rolph Trouillot, Silencing the Past: Power and the Production of History (Boston: Beacon Press, 1995).

15. Robert Vitalis, America’s Kingdom: Mythmaking on the Saudi Oil Frontier (Stanford: Stanford University Press, 2007); Timothy Mitchell, Carbon Democracy: Political Power in the Age of Oil (London: Verso, 2011); Roger J. Stern, “Oil Scarcity Ideology in US Foreign Policy, 1908–97,” Security Studies 25, no. 2 (2016): 222–27; Robert Vitalis, Oilcraft: The Myths of Scarcity and Security That Haunt U.S. Energy Policy (Stanford: Stanford University Press, 2020).

16. This problem was first identified and analyzed by Karl Marx, Capital, vol. III, chap. 13.

17. Mitchell, Carbon Democracy, 39–42.

18. On the state as a “unitary actor,” see Ole R. Holsti, “Theories of International Relations,” in Explaining the History of American Foreign Relations, ed. Michael J. Hogan and Thomas G. Patterson, 2nd ed. (Cambridge: Cambridge University Press, 2004), 54.

19. See Timothy Mitchell, “The Limits of the State: Beyond Statist Approaches and Their Critics,” American Political Science Review 85, no. 1 (March 1991): 77–96.

20. Christopher R. W. Dietrich, Oil Revolution: Anti-Colonial Elites, Sovereign Rights, and the Economic Culture of Decolonization (New York: Cambridge University Press, 2017).

21. See Dietrich, Oil Revolution, 42–46.

22. Orit Baskhin, The Other Iraq: Pluralism and Culture in Hashemite Iraq (Stanford: Stanford University Press, 2009). See also Ussama Makdisi, Age of Coexistence: The Ecumenical Frame and the Making of the Modern Arab World (Oakland: University of California Press, 2019).

23. For a more traditional or “orthodox” interpretation of US-Iraqi relations in this same period (1958–75), see Bryan Gibson’s Sold Out? US Foreign Policy, Iraq, the Kurds, and the Cold War (New York: Palgrave Macmillan, 2015). Gibson rejects the notion that American foreign policy was driven by economic motives. He argues that American foreign policy in Iraq, including US covert operations, constituted a rational and coherent strategy of Soviet containment. In Gibson’s analysis, “US decisions and actions were based on a single unifying perception: the Soviet Union posed a threat to Iraq’s sovereignty” (xxii). In contrast to this traditional interpretation, I argue that the Soviet danger was systematically overstated for rhetorical purposes throughout the period under analysis. Rather than seeing American foreign policy as part of a rational and coherent strategy, I focus on the ad hoc nature of American foreign policy-making and the ways in which the rhetoric of national security was used as a cover for ulterior, often economic, motives.

24. William Appleman Williams, The Tragedy of American Diplomacy, 50th Anniversary Edition (New York: W.W. Norton, 2009). On the significance of Williams’s epistemological synthesis, see Peter Novick, That Noble Dream: The “Objectivity Question” and the American Historical Profession (Cambridge: Cambridge University Press, 1988), 446–48.

25. William Appleman Williams, Empire as a Way of Life: An Essay on the Causes and Character of America’s Present Predicament, along with a Few Thoughts about an Alternative (New York: Ig, 2007 [first published 1980]).

26. Williams, Tragedy of American Diplomacy, 37–38.

27. On American imperialism as sublimated theology, see Anders Stephanson, Manifest Destiny: American Expansion and the Empire of Right (New York: Hill and Wang, 1995); Eugene McCarraher, “The Heavenly City of Business,” in The Short American Century: A Postmortem, ed. Andrew J. Bacevich (Cambridge, MA: Harvard University Press, 2012), 187–230; Edward Rhodes, “Onward, Liberal Soldiers? The Crusading Logic of Bush’s Grand Strategy and What Is Wrong with It,” in The New American Empire: A 21st Century Teach-In on U.S. Foreign Policy, ed. Lloyd C. Gardner and Marilyn B. Young (New York: New Press, 2005), 227–52. For a broader theoretical discussion of the sublimation of theology, see Talal Asad, Formations of the Secular: Christianity, Islam, and Modernity (Stanford: Stanford University Press, 2003).

28. On “business privilege,” see David S. Painter, Oil and the American Century: The Political Economy of U.S. Foreign Oil Policy, 1941–1954 (Baltimore: Johns Hopkins University Press, 1986), 209.

29. Jack Snyder, Myths of Empire: Domestic Politics and International Ambition (Ithaca, NY: Cornell University Press, 2013).