ETERAZ

‘It’s like a huge pot of honey that’s attracting a lot of flies’[1] – Sen. John McCain

The effort to rebuild Iraq has been riddled with problems since the US-led invasion of March 2003. Corruption on all sides, US and Iraqi government incompetence, wanton acts of destruction and terrorism, the ongoing sectarian conflict and Iraqi insurgence’s sabotage of oil pipelines and essential utilities have all ensured a protracted and irascible situation whereby the most basic of services either remain unavailable or function for only a limited duration each day. One particularly worrying example is that only one in three Iraqis has access to drinking water.[2]

Despite there being well over 100,000 contractors operating in the country,[3] not including subcontractors; progress appears to be moving at a sluggish pace while the patience of many Iraqis is waning and for most may well have been abraded into oblivion. Moreover, and to the chagrin of US officials, many Iraqis have pointed to the fact that in the aftermath of the first Gulf War, which decimated much of the country’s infrastructure; Saddam, within a matter of months, was able to restore electricity to most if not all of Iraq’s major cities and population centers.

What of the War Profiteers?

It has been well-publicized that many of those individuals who had been unrelenting advocates of the war have consequently benefited greatly in course of Iraq’s reconstruction.[4] The shenanigans of a number of individuals with ties to the White House can hardly be called news.

Prominent advocates of the war who have benefited either directly or indirectly since the invasion of 2003 include: Richard Perle, former chairman to the Defense Policy Board; Dick Cheney, the current US vice-president and former CEO to Halliburton; R. James Woolsey, former CIA Director and founding member of the Committee for the Liberation of Iraq;[5] Joe Allbaugh, Bush’s 2000 campaign manager, and George P. Shultz, former Secretary of State, member of the board of directors at Bechtel and prominent member of the Committee for the Liberation of Iraq. The question demands to be asked: is the mutual symbiosis between these powerful individuals’ political lobbying and business interests merely fortuitous and what is the significance of such a symbiosis for Iraq’s post-invasion reconstruction?

There seems to be a clear link between a clique of likeminded individuals in the incestuous milieu that is Washington where former government and defense officials who have since moved to the private sector have come to equate the US or even the world’s best interests with those of a relatively miniscule, albeit incredibly powerful number of corporations in the defense and homeland security industries.

This issue is very much germane to the reconstruction efforts since contracts were dispensed for the most part to firms with close ties to the Bush Administration by means of a closed bidding procedure whereby companies were simply given the bid without as much as a raised eyebrow. Some 80 percent of defense contracting revenues were allocated to a meager one percent of the biggest contractors.[6] The rebuilding of Iraq has been a monopolistic enterprise rather than a matter of the free market’s invisible hand minimizing costs while maximizing efficiency.

The market for companies such as RTI; Blackwater; Parsons; Bechtel; Halliburton, and its subsidiary Kellogg, Brown and Root (KBR) has been effectively created by war; a war which influential parties associated with them staunchly advocated. In addition, they have had their competition robustly excluded from competing, while contracts operate under a cost-plus scheme, whereby all costs as well as a tidy profit are vouchsafed by the federal government all courtesy of the American taxpayer. And it is because of policies such as these that there is little incentive for contractors to do the job competently if at all.

Lack of Accountability

There is a great deal of evidence that major contractors like Bechtel have displayed astounding levels of incompetence and horror stories abound as relayed in the reports of the Special Inspector General for Iraq Reconstruction (SIGIR) and independent observers. Raw sewage flooding police departments, shoddily refurbished elevators causing hospital staff to plummet to their deaths, several poorly constructed health clinics as opposed to the original tender for 150.

Moreover, the practice of outsourcing to subcontractor upon subcontractor upon subcontractor has meant that a tender originally calling for an air conditioning unit in every school classroom can dwindle away to an $11 ceiling fan, after the primary contractor and each successive subcontractor has taken his piece of the pie.[7] It is of course the people on the ground who feel the brunt of this practice where there is little, if any accountability.

The US agency USAID which publishes Iraq Reconstruction Weekly Update: Reporting Progress and Good News has been proven by independent auditors on many occasions to either have greatly exaggerated or even fabricated whole-cloth some of the claims made in their reports.[i] Furthermore, when asked by the Government Accountability Office (GAO) auditors the US State Department couldn’t even provide a list of completed projects.[ii] And when the Development Fund of Iraq (DFI) was audited by external accountants KPMG and later Ernest & Young, hired by the UN International Advisory Monitoring Board, its December 2004 report observed that there were ‘hundreds of irregularities’ in the CPA’s contract information; a great deal of contract information was noticeably absent and many contract payments were unsupervised.[iii]

This is only the tip of the iceberg. SIGIR most recently reported that eight of 11 Parsons Corporation rebuilding projects were canceled by the US before they were even completed.[iv] Little has been done to counteract this dire trend and so it has continued unabated. Furthermore, it appears that attempts are currently being made by the President’s Council on Integrity and Efficiency to discredit SIGIR, which has caused some major embarrassments regarding the Bush Administration’s handling of Iraq’s reconstruction.[v]

The paucity of international involvement and regulation is itself highly significant and also finds its provenance in the origins and rationale governing the invasion in the first instance: unilateralism and the quest to guarantee the preponderance of unrivalled American influence in the region. Before and after the invasion, a whole host of comparisons and analogies were made claiming that Iraq’s reconstruction would be the Marshall Plan for the 21st century. Instead, it appears that the Iraqi people have been landed with the Marshall Plan’s dystopian alter-ego.

The Cost of Security

The other side of the story, according to US contractors, is that the security situation is far too volatile and violent than anyone had originally anticipated and so has greatly prolonged many reconstruction projects. For example, the US embassy was forced to cut its budget for rebuilding the water and sanitation system by more than $2 billion to pay for security and repair the damage inflicted by the insurgents and US marines.[8] Security costs often take up as much as 25 percent of the allocated budget for commissioned projects, which leaves less money for development. This is arguably a significant reason why Iraq’s electric supply is presently at about 5,000 megawatts almost five years on, barely exceeding pre-invasion levels and still massively short of the 8,000 megawatts required, even after the US has spent some $4.7 billion.[9]

Some contractors claim furthermore that the vast majority of Iraqis are unqualified to run and manage the newly-installed technologies and so are largely to blame for the fact that many of the new facilities remain defunct or poorly operated. The issue is however, more complicated.

Rather than repair existing machinery that could draw on the skills of Iraqi technicians and engineers, Coalition firms have chosen to import expensive machinery from abroad since costs are underwritten by the US federal government in any case.[10] Consequently, Iraqis who could have otherwise been working have been made redundant and left to join the ranks of the unemployed, which is at about 50 percent of those able to work.[11]

Official Iraqi Corruption

Another reason for the poor progress of reconstruction is Iraqi official corruption, which is said to be rampant. A recently leaked report argues that within the vast majority of Iraqi government ministries, the ethos is such that corruption rather than being the exception has emerged as something more akin to standard practice. The report, which reviews the work of the Commission on Public Integrity (CPI), an independent Iraqi body and other anti-corruption agencies, has concluded that the Iraqi government is replete with corrupt and shady characters who continue with impunity to indulge in illicit activities.[12]

The Ministry of Trade alone has had some 196 corruption claims made against it, and only a paltry eight cases have since made it to court.[13] Unfortunately, for the average Iraqi, many government ministries have been consumed by a culture of bribery, nepotism, cronyism and intimidation. This in turn, undermines public support for the American-backed government and consequently fuels malcontent, resulting in an insurgency whose prime objective is to drive American forces out of Iraq. As a result, reconstruction efforts are slowed even further, which itself only goes to perpetuate the Iraqi public’s legitimate anger and frustration.

[1] Lobbyist Set Sights on Money-Making Opportunities in Iraq, Thomas B. Edsall & Juliet Eilperin, The Washington Post, October 2, 2003
[2] Iraq's Water Woes, CBS News, August 3, 2007
[3] Census Counts 100,000 Contractors in Iraq, Renae Merle, The Washington Post, December 5, 2006
[4] Advocates of War Now Profit From Iraq’s Reconstruction, Walter F. Roche Jr. and Ken Silverstein, Los Angeles Times, July 14, 2004
[5] The Committee for the Liberation of Iraq was a pressure group formed at the behest of the Bush White House in 2002. Its most prominent members included Senator John McCain, Donald Rumsfeld, Eliot Cohen, William Kristol, Bernard Lewis, Newt Gingrich, Joseph Lieberman, Richard Perle, George P. Shultz, R. James Woolsey.
[6] The Profits of Escalation, Ismael Hossein-Zadeh, Counterpunch, January 10, 2007
[7] Newsweek cited in The Money Trail, Faiza Rady, Al-Ahram Weekly Online, November 13-19, 2003
[8] Cronyism and Kickbacks, Ed Harriman, London Review of Books, January 26, 2006
[9] The Iraqi Electricity Crisis, Tiare Rath, Institute for War and Peace Reporting, November 11, 2007; Iraqis Cope With Life Without Lights, IIene R. Prusher and Charles Levinson, Christian Science Monitor, February 10, 2006
[10] Cronyism and Kickbacks, Ed Harriman
[11] For more details see The Occupation: War and Resistance in Iraq, Patrick Cockburn, Verso Books, 2006, p5
[12] Secret Report: Corruption is the ‘Norm’ Within the Iraqi Government, David Corn, The Nation, August 30, 2007
[13] Ibid
[i] Iraq: Follow the Money, Joy Gordon, Le Monde Diplomatique, April 2007
[ii] Ibid
[iii] Ibid
[iv] An American Builder’s Failures in Iraq are Found to Have Been More Widespread, James Glanz, The New York Times, January 29, 2008
[v] Ibid

© Sadegh Kabeer