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Iraq under US Occupation

Economic Reconstruction

Project: Iraq Under US Occupation
Open-Content project managed by AJB, KJF, mtuck

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Shabbir Khan, an executive for the Saudi conglomerate Tamimi Global Co, throws a lavish birthday party for KBR procurement manager Stephen Seamans at a Tamimi “party house” near Camp Arifjan, a Kuwaiti base near the border. Khan gives Seamans the use of a prostitute as one of his birthday presents. Driving Seamans back home, Khan offers Seamans $130,000 in kickbacks. Five days after the party, with Seamans and Khan driving the deal, KBR awards Tamimi a $14.4 million mess hall subcontract for the upcoming invasion of Iraq. This and other information about KBR war profiteering in Iraq comes from a federal investigation that will begin in late 2007 (see October 2006 and Beyond). [Chicago Tribune, 2/20/2008; Chicago Tribune, 2/21/2008]

Entity Tags: Kellogg, Brown and Root, Stephen Seamans, Tamimi Global Co, Shabbir Khan

Category Tags: Economic Reconstruction, Political Administration, Military Privatization, Oversight and Transparency

Ahmad al Mukhtar is appointed as director of foreign relations in Iraq’s Ministry of Trade. One of his tasks will be to push for Iraq’s inclusion into the World Trade Organization. Al Mukhtar, who has no background in economics and whose previous job was reading the English-language news on television, shares Washington’s view that Iraq needs a market-based economy and that Iraqis need to be weaned from their dependence on the state. According to Al Mukhtar, Iraqis “are lazy. The Iraqis by nature, they are very dependent…. They will have to depend on themselves, it is the only way to survive in the world today.” [Harper's, 9/24/2004]

Entity Tags: Ahmad al Mukhtar

Category Tags: Economic Reconstruction

The US State Department’s Bureau of International Narcotics and Law Enforcement Affairs awards DynCorp International a sole-sourced (no competitive bidding) $22 million contract to “re-establish police, justice, and prison functions in post conflict Iraq.” The contract will be bid out to competitors after one year. The contract raises a few eyebrows. The Reston, Virginia-based company has donated more than $160,000 to the Republican Party and its employees have been involved in a number of serious scandals. [Insight Magazine, 4/11/2003; New York Times, 10/4/2003] In Bosnia, for example, employees of the company were accused of operating a sex-slave ring of young women, keeping under-aged girls as concubines, and videotaping a DynCorp supervisor having sex with two girls. Although they were fired from their jobs, they were never prosecuted. [Los Angeles Times, 4/14/2002; New York Times, 10/13/2002; Insight Magazine, 4/11/2003] One of the whistle-blowers, Ben Johnston, told Congress in April 2002: “DynCorp employees were living off post and owning these children and these women and girls as slaves. Well, that makes all Americans look bad. I believe DynCorp is the worst diplomat our country could ever want overseas.” [New York Times, 10/13/2002] In Ecuador, DynCorp has been accused of allowing herbicides applied in Colombia to drift across the border killing legitimate crops, causing illness, and killing children. [New York Times, 10/13/2002] Commenting on the contract, an unnamed congressional aid tells Insight Magazine: “There are some strange things about how this contract was issued. [B]ecause why would CSC use an offshore subsidiary? Is it so they won’t have to pay taxes on this money? Also, why wasn’t this contract put up for bid? Why was DynCorp the chosen recipient?” [New York Times, 10/13/2002]

Entity Tags: Bureau of International Narcotics and Law Enforcement Affairs, DynCorp International

Category Tags: Economic Reconstruction

Bechtel wins a second contract from USAID to work on rebuilding Iraq’s infrastructure. Work will include the “repair of power generation facilities, electrical grids, municipal water systems and sewage systems; continued rehabilitation or repair of airport facilities; and additional dredging, repair and upgrading of the seaport at Umm Qasr.” The company will also “repair and build government and public facilities such as schools, selected ministry buildings and major irrigation structures, as well as restore essential transport links.” The contract has the potential to be worth as much as $1.8 billion. [US Agency for International Development, 1/6/2004; Financial Times, 1/7/2004]

Entity Tags: Bechtel, USAID

Category Tags: Economic Reconstruction, Bechtel

The US Army Corps of Engineers awards Halliburton subsidiary, Kellogg, Brown & Root (KBR), a sole-source monopoly contract to repair and operate Iraq’s oil infrastructure. The contract is awarded in secrecy without any competing bids from other qualified companies. Halliburton will eventually charge the government $2.4 billion for its work. The Defense Contract Audit Agency will find that about $263 million of these costs are either questionable or unsupported. Despite this, the US Army will pay Halliburton all but $10.1 million, or 3.8 percent, of the disputed costs. [New York Times, 2/27/2006; US Congress, 3/28/2006, pp. 3-4 pdf file]

Entity Tags: Defense Contract Audit Agency, Halliburton, Inc., US Army Corps of Engineers

Category Tags: Economic Reconstruction, Halliburton

General Jay Garner, the head of the Office of Reconstruction and Humanitarian Assistance (ORHA—see January 2003), admits to reporters, “We started very slowly” in preparing for handling the reconstruction of post-Saddam Iraq. [Roberts, 2008, pp. 126]
Garner Knew Problems Would Arise - Garner will later say: “When I went to see [Defense Secretary] Rumsfeld at the end of January [2003], I said, OK, I’ll do this for the next few months for you. I said, you know, Let me tell you something, Mr. Secretary. George Marshall started in 1942 working on a 1945 problem. You’re starting in February working on what’s probably a March or April problem. And he said, I know, but we have to do the best with the time that we have. So that kind of frames everything.”
'Never Recovered' - Sir Jeremy Greenstock, currently Britain’s special representative to Iraq, will add: “The administration of Iraq never recovered [from the failure to plan]. It was a vacuum in security that became irremediable, at least until the surge of 2007. And to that extent, four years were not only wasted but allowed to take on the most terrible cost because of that lack of planning, lack of resources put in on the ground. And I see that lack of planning as residing in the responsibility of the Pentagon, which had taken charge, the office of the secretary of defense, with the authority of the vice president and the president, obviously, standing over that department of government.” [Vanity Fair, 2/2009]

Entity Tags: Office of Reconstruction and Humanitarian Assistance, Donald Rumsfeld, Jay Garner, US Department of Defense

Category Tags: Economic Reconstruction, Political Administration

President George Bush issues an executive order transferring frozen Iraqi assets held in US banks to a US Treasury Special Purpose Account (TSPA) that has been established at the Federal Reserve Bank of New York. The secretary of the treasury, currently John W. Snow, is given authority over the funds. [US President, 3/20/2003 pdf file]

Entity Tags: John W. Snow, George W. Bush

Category Tags: Economic Reconstruction, Political Administration

Trade between Iraq and Iran grows at an estimated annual rate of 30 percent after the US and British invasion. “The economies of Iraq and Iran, the largest Shiite-majority countries in the world, are becoming closely integrated, with Iranian goods flooding Iraqi markets and Iraqi cities looking to Iran for basic services,” the New York Times will report in early 2007. After the invasion, Iraq begins importing electricity and a wide variety of consumer items like Peugeot sedans, carpets, construction materials, fish, and spices. Iraqis are also going to Iran to obtain medical services. Trade between the two nations grows the fastest in the Shiite-dominated south. By 2007, Basra is importing $45 million worth of goods from Iran each year with some 100 to 150 commercial trucks crossing into Iraq from Iran each day. The trend causes concern in the White House, which accuses Iran of having a nuclear weapons program and claims that the Iranians are fueling the insurgency. According to Asaad Abu Galal, the governor of Najaf, “the Americans don’t want to bring Iranians to Najaf. The Americans want to control the sky.” Iranians are also vying for a market in the financial sector, with at least one bank applying for a license to open a branch in Baghdad. [New York Times, 3/17/2007]

Entity Tags: Asaad Abu Galal, Iran

Timeline Tags: US confrontation with Iran

Category Tags: Economic Reconstruction

Halliburton issues a press release declaring that it has won a contract from the US Army Corps of Engineers to extinguish oil well fires and do emergency repairs to Iraq’s oil infrastructure in post-invasion Iraq. The firefighting work will be subcontracted to Houston-based companies Boots & Coots International Well Control, Inc. and Wild Well Control, Inc. [Halliburton, 3/24/2003]

Entity Tags: Halliburton, Inc.

Category Tags: Economic Reconstruction, Halliburton

British Attorney General Lord Goldsmith warns Prime Minister Tony Blair in a memo that any measures taken in Iraq by the occupying powers not related to the issue of security would be unlawful without an additional security council resolution. “My view is that a further security council resolution is needed to authorize imposing reform and restructuring of Iraq and its government,” Lord Goldsmith writes. “The government has concluded that the removal of the current Iraqi regime from power is necessary to secure disarmament, but the longer the occupation of Iraq continues, and the more the tasks undertaken by an interim administration depart from the main objective, the more difficult it will be to justify the lawfulness of the occupation.” He says that attempts to implement “wide-ranging reforms of governmental and administrative structures,” change the status of public officials or judges except in exceptional cases, or “the imposition of major structural economic reforms would not be authorized by international law.” Goldsmith also expressed this opinion orally during a cabinet meeting. [Guardian, 5/22/2003] The basis for Goldsmith’s position is likely the Hague regulations of 1907 (see October 18, 1907), which requires that an occupying power respect the laws of the country it occupies. [New York Times, 1/10/2004; FPIF Policy Report, 7/2004]

Entity Tags: Tony Blair, Peter Henry Goldsmith

Category Tags: Economic Reconstruction, Political Administration

Defense Secretary Donald Rumsfeld says during a Senate hearing, “When it comes to reconstruction, before we turn to the American taxpayer, we will turn first to the resources of the Iraqi government and the international community.” [Financial Times, 1/16/2004] Rumsfeld says that the US would most likely convene an “international donors’ conference” to put together reconstruction financing. [Rich, 2006, pp. 85]

Entity Tags: Donald Rumsfeld

Timeline Tags: Events Leading to Iraq Invasion

Category Tags: Economic Reconstruction

Deputy Secretary of State Richard Armitage tells the House Committee on Appropriations during a hearing on a supplemental war regulation: “This is not Afghanistan… When we approach the question of Iraq, we realize here is a country which has a resource. And it’s obvious, it’s oil. And it can bring in and does bring in a certain amount of revenue each year… $10, $15, even $18 billion… this is not a broke country.” [US Congress, 9/30/2003]

Entity Tags: Richard Armitage

Timeline Tags: Events Leading to Iraq Invasion

Category Tags: Economic Reconstruction

Deputy Defense Secretary Paul Wolfowitz tells the House of Representatives Appropriations Committee that Iraq’s oil wealth will help fund post-war reconstruction. “There’s a lot of money to pay for this that doesn’t have to be US taxpayer money, and it starts with the assets of the Iraqi people,” he says. “On a rough recollection, the oil revenues of that country could bring between $50 billion and $100 billion over the course of the next two or three years.” [St. Petersburg Times, 4/2/2003; Financial Times, 1/16/2004] He adds, “We’re dealing with a country that can really finance its own reconstruction, and relatively soon.” [New York Times, 10/5/2003; CNN, 4/15/2004]

Entity Tags: Paul Wolfowitz

Timeline Tags: Events Leading to Iraq Invasion

Category Tags: Economic Reconstruction, The Oil Law

According to an unnamed US businessman interviewed by the New York Times, the Coalition Provisional Authority in Iraq has been issuing contracts worth hundreds of thousands of dollars by simply telephoning favored companies and informing them, “I have a contract for you.” [New York Times, 10/4/2003]

Entity Tags: Coalition Provisional Authority

Category Tags: Economic Reconstruction

Shortly after the March invasion and occupation of Iraq, Iraqis become increasingly concerned about US plans for reconstruction. Iraqis fear the US will contract American companies to rebuild the country’s infrastructure instead of using native skill and labor. The former regime’s Ministry of Housing and Construction has a staff of some 4,000 employees who have been showing up to work daily since mid-April. Akkel Ansari, a ministry engineer, tells the Washington Post that he and other engineers have already begun drawing up plans to rebuild the country’s bombed-out buildings, bridges, and roads. The engineers are ready “to start repairing their damaged country as they did after the 1991 Persian Gulf War,” the Post reports. Iraqis say they are fully capable of rebuilding their country. According to Ansari, the damage is far less severe than that of the First Gulf War. Ansari tells the Washington Post, “The damage was much greater in 1991. More than 150 bridges in Iraq were destroyed in that war, and we rebuilt them all in one year.… But in this war, theft and burning caused more destruction than the bombing. We can put the pieces together again, in less time than 1991. We are ready to start.” Ministry employees say the only help they need from the US is money for salaries and help recovering equipment that was stolen during the mass looting (see April 9, 2003) that accompanied the fall of Saddam Hussein’s government. The amount needed to pay the monthly salaries of most ministry employees would be well under $100. But the US refuses to meet with the engineers. When Ansari goes to a hotel where US Army civil affairs officers are located to request funding for their work, US soldiers guarding the facility point a gun at his face and tell him to leave. Laith Amir, a chief engineer with 24 years of experience testing soil before buildings are constructed or rebuilt, tells the Post: “This is our life’s work. I love my job, and I would like to do something for my country. But we need help and financing. There is no government, no ministries. People have to be sure they will be paid.” [Washington Post, 4/26/2003]

Entity Tags: Laith Amir, Akkel Ansari

Category Tags: Economic Reconstruction

KBR procurement manager Stephen Seamans gives his crony Shabbir Khan (see October 2002), of the Saudi conglomerate Tamimi Global Co, inside information that allows Tamimi to secure a $2 million KBR subcontract to establish a mess hall at a Baghdad palace. Seamans subsequently puts through change orders that inflate the subcontract to $4.7 million. This and other information about KBR war profiteering in Iraq comes from a federal investigation that will begin in late 2007 (see October 2006 and Beyond). [Chicago Tribune, 2/20/2008; Chicago Tribune, 2/21/2008]

Entity Tags: Kellogg, Brown and Root, Stephen Seamans, Tamimi Global Co, Shabbir Khan

Category Tags: Economic Reconstruction, Political Administration, Military Privatization, Oversight and Transparency

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $20 million in $1, $5, and $10 bills. The money is drawn from the Development Fund for Iraq (DFI) and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. This is the first of several shipments, totaling some $12 billion, that will be made over the next 14 months. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

The US Agency for International Development asks BearingPoint, Inc to bid on a sole-sourced contract for “economic governance” work in Iraq. The contract document, which USAID says will eventually be opened up to a select pool of additional companies, was written by Treasury Department officials and reviewed by financial consultants. The confidential 100-page request, titled “Moving The Iraqi Economy From Recovery to Sustainable Growth,” states that the contractor will help support “private sector involvement in strategic sectors, including privatization, asset sales, concessions, leases and management contracts, especially in the oil and supporting industries.” The bid request lays out a plan to, among other things, rapidly replace Iraq’s currency; identify industries for consolidation, liquidation, and privatization; “rationalize” and “modernize” Iraqi banking and financial sectors; develop taxation, legal, and regulatory regimes to compliment a new market-based economy; devise a plan to turn Iraq’s rudimentary stock market into a “world-class exchange” for trading the shares of newly privatized companies; and create a public relations campaign to promote these changes to the public. Summarizing US objectives for the economic reorganization, the document states, “It should be clearly understood that the efforts undertaken will be designed to establish the basic legal framework for a functioning market economy; taking appropriate advantages of the unique opportunity for rapid progress in this area presented by the current configuration of political circumstances.” [Wall Street Journal, 5/1/2003]

Entity Tags: US Department of State, BearingPoint

Category Tags: Economic Reconstruction

The US sends hundreds of economic advisers to Iraq to serve in the new government’s ministries. The advisers reportedly have a decisive say on most matters. [Inter Press Service, 12/24/2004]

Entity Tags: United States

Category Tags: Economic Reconstruction, Political Administration, The Oil Law

Jay Hallen, a 24-year old Yale graduate, is bored with his job at a real-estate firm. He is fascinated with the Middle East, and has taken some Arabic classes and read some history books about the region. He contacts Reuben Jeffrey, an adviser to CPA head L. Paul Bremer whom Hallen had met in 2002 when trying to land a job at the White House, and asks if there is a job for him in Baghdad.
'I Don't Have a Finance Background' - Three weeks later, Hallen is in Baghdad, and meets with Thomas Foley, the CPA official in charge of privatizing Iraq’s state-owned enterprises. Foley, a former classmate of President Bush and a major Republican donor, says he is putting Hallen in charge of Baghdad’s stock exchange. Hallen is shocked. “Are you sure?” Hallen asks. “I don’t have a finance background.” No problem, Foley responds. He will be the project manager; his subordinates will do the actual work. Before the invasion, Baghdad’s stock exchange was primitive by American standards; author Rajiv Chandrasekaran will describe it as loud, boisterous, and, despite all appearances, quite functional. After the invasion it was looted to the bare walls and ignored by the first wave of US economic reconstruction specialists. But Iraqi brokers and businessmen want it reopened, so the CPA acquiesces.
Revamping the Exchange - Hallen launches an ambitious, if almost entirely ignorant, plan to modernize and upgrade the stock exchange to make it the most technologically sophisticated exchange in the Arab world. He also wants to implement a new securities law that would make the exchange independent of the Finance Ministry. The Iraqi brokers and businessmen who clamored for the exchange to reopen are horrified at Hallen’s plans. “People are broke and bewildered,” broker Talib Tabatabai—a graduate of Florida State’s business department—tells Hallen. “Why do you want to create enemies? Let us open the way we were.” Tabatabai, like other brokers, believes Hallen’s plan is ludicrously grandiose. “It was something so fancy, so great, that it couldn’t be accomplished,” he will later recall. But Hallen is unmoved.
Hallen's View - “Their laws and regulations were completely out of step with the modern world,” Hallen will later say. “There was just no transparency in anything. It was more of a place for Saddam and his friends to buy up private companies that they otherwise didn’t have a stake in.” To just reopen the exchange the way it was, Hallen will insist, “would have been irresponsible and short-sighted.” Hallen recruits a team of American volunteers, most with no more experience or knowledge of finance than he has, to rewrite the securities laws, train the brokers, and purchase the necessary computers. By the spring of 2004, CPA head Bremer approves the new laws and appoints nine Iraqis hand-picked by Hallen to become the exchange’s board of governors.
No CPA Role - The new exchange board names Tabatabai as its chairman. The new laws have no place for a CPA adviser as a decision-maker; immediately a conflict between Hallen and the board arises. Hallen wants to wait several more months for the new computer system to arrive and be installed; unwilling to wait, Tabatabai and the board members buy dozens of dry-erase boards for the exchange floor, and two days after Hallen’s tour ends, the exchange is open for business. Without CPA oversight, the exchange quickly begins functioning more or less as it did before the invasion. When asked what would have happened had Hallen not been assigned to reopen the exchange, Tabatabai will answer: “We would have opened months earlier. He had grand ideas, but those ideas did not materialize.… Those CPA people reminded me of Lawrence of Arabia.” [Washington Post, 9/17/2006]

Entity Tags: Rajiv Chandrasekaran, Reuben Jeffrey, Talib Tabatabai, Thomas Foley, Iraq Finance Ministry, Coalition Provisional Authority, Jay Hallen, L. Paul Bremer

Category Tags: Economic Reconstruction, Political Administration, Neoliberal Reforms, Oversight and Transparency

James Haveman, a 60-year old social worker and the director of a faith-based international relief organization, is recommended by the former Republican governor of Michigan, John Engler, to run Iraq’s health care system. Haveman earned Engler’s approval by running a large Christian adoption agency in Michigan that pushed pregnant women not to have abortions. Engler recommends Haveman to Paul Wolfowitz, the deputy secretary of defense; Haveman is soon dispatched to Baghdad to oversee the rebuilding of Iraq’s health-care system.
Replacing the Expert with the 'Loyalist' - Wolfowitz orders the immediate firing of Dr. Frederick Burkle, who worked the issue during the invasion. Unlike Haveman, Burkle has extensive experience in such areas: he has multiple degrees in public health, taught disaster-response issues at Johns Hopkins University, and is currently a deputy assistant administrator for the US Agency for International Development (USAID), who sent him to Baghdad in the days after the invasion. Burkle has extensive experience working in postwar climates such as Kosovo, Somalia, and Iraq after the 1991 Persian Gulf War. A USAID colleague will call him the “single most talented and experienced post-conflict health specialist working for the United States government.” However, Burkle lacks the Republican political connections. A USAID official tells Burkle that the White House wants a “loyalist” in the job, and Haveman fits the bill.
Anti-Smoking Campaigns, Fee-Based Care - Haveman’s tenure is marked by voluble recitations of how well the reconstruction is going: he tells anyone who will listen about how many Iraqi hospitals have reopened and about the pay raises Iraqi doctors have received. He refuses to discuss how decrepit most Iraqi hospitals still are, or the fact that many of Iraq’s best doctors are fleeing the country. Haveman mounts an aggressive anti-smoking campaign (and appoints a closet smoker to head it), ignoring comments that Iraqis have far bigger dangers in their lives than tobacco and recommendations that CPA funds might better be spent trying to combat fatal maladies running rampant through Iraqi populations. Haveman, a conservative ideologue, is offended by the idea that health care in Iraq is free. He institutes a fee-based health care system instead. Most importantly, he allocates almost all of the Health Ministry’s share of US reconstruction funds—some $793 million—to renovating Iraqi maternity hospitals and building community medical clinics. He later explains that his goal is “to shift the mind-set of the Iraqis that you don’t get health care unless you go to a hospital.” Unfortunately, his decision means that no funds are available to reconstruct emergency rooms and operating theaters in Iraqi hospitals, which are being overrun with injuries from insurgent attacks.
Privatizing the Drug Supply Distribution Process - Haveman opposes the idea of state-based drug and medical supply distribution on ideological grounds. Instead, he decides to privatize the dysfunctional government firm that imports and distributes drugs and medical supplies to Iraqi hospitals. When he served as Michigan’s director of community health, he dramatically cut the amount of money Michigan spent on prescription drugs for poor citizens by limiting the medications doctors could prescribe to Medicaid patients. He instituted a short list of cheaper drugs that poor patients were limited to using. Haveman decides that the same approach will work in Iraq. Currently, Iraq has around 4,500 drugs on its formulary, and Haveman decides the list is much too long. Any private firm who wants to bid on the job of supplying drugs and medical supplies will not want to deal with such a long list. Haveman also wants to restrict the firm to buying American-made drugs and supplies—no more medicines from Iran, Syria, or Russia. The Pentagon sends Haveman three formulary experts to help him implement his plan, including Lieutenant Commander Theodore Briski, a Navy pharmacist. Haveman’s order, as Briski later recalls, is “Build us a formulary in two weeks and then go home.” Two days into his position, Briski decides that Haveman’s plan is untenable. The existing formulary works well enough, he believes. Haveman wants to redesign “the entire Iraqi pharmaceutical procurement and delivery system, and that was a complete change of scope—on a grand scale.” Most importantly, Briski recalls, Haveman and his advisers “really didn’t know what they were doing.” Others agree, including many on Haveman’s team. Rewriting the formulary is a major distraction, they argue, as is privatizing the pharmaceutical distribution process. Haveman ignores the immediate needs of the populace for his grandiose, ill-considered plans.
No Progress - When Haveman leaves Iraq, the hospitals are as decrepit and dysfunctional as they were when he arrived. Baghdad’s largest medical facility, Yarmouk Hospital, lacks basic equipment to monitor blood pressure and heart rate. Operating rooms lack essential surgical tools and sterilizers. Pharmacy shelves are bare. The Health Ministry estimates that of the 900 drugs it deems essential, hospitals lack 40 percent of them. Of the 32 medicines used in combating chronic diseases, 26 are unavailable. Health Minister Aladin Alwan asks the United Nations for help, asks neighboring nations for emergency donations, and throws out Haveman’s idea for a new formulary. “We didn’t need a new formulary,” he later says. “We needed drugs. But the Americans did not understand that.” [Washington Post, 9/17/2006]

Entity Tags: US Agency for International Development, Iraqi Health Ministry, Frederick Burkle, Bush administration (43), Aladin Alwan, James Haveman, John Engler, Paul Wolfowitz, Theodore Briski, United Nations, Yarmouk Hospital

Category Tags: Economic Reconstruction, Political Administration, Neoliberal Reforms, Oversight and Transparency

Author Rajiv Chandrasekaran, holding a copy of his 2006 book, ‘Imperial Life in the Emerald City.’Author Rajiv Chandrasekaran, holding a copy of his 2006 book, ‘Imperial Life in the Emerald City.’ [Source: Daylife (.com)]Americans who want to work for the Coalition Provisional Authority (CPA) in the so-called “Green Zone,” the fenced-off area of Baghdad also called “Little America” and the hub of US governmental and corporate activities, are routed through Jim O’Beirne, a political functionary in the Pentagon whose wife is prominent conservative columnist Kate O’Beirne.
Focus on Ideology, Not Experience or Expertise - O’Beirne is less interested in an applicant’s expertise in Middle Eastern affairs or in post-conflict resolution than he is in an applicant’s loyalty to the Bush administration. Some of the questions asked by his staff to applicants: Did you vote for George W. Bush in 2000? Do you support the way the president is fighting the war on terror? According to author Rajiv Chandrasekaran, two applicants were even grilled about their views on abortion and Roe v. Wade (see January 22, 1973). While such questions about political beliefs are technically illegal, O’Beirne uses an obscure provision in federal law to hire most staffers as “temporary political appointees,” thus allowing him and his staff to skirt employment regulations that prohibit such questioning. The few Democrats who are hired are Foreign Service employees or active-duty soldiers, and thus protected from being questioned about their politics.
Unskilled Applicants - The applicants chosen by O’Beirne and his staff often lack the most fundamental skills and experience. The applicant chosen to reopen Baghdad’s stock exchange is a 24-year old with no experience in finance, but who had submitted an impressively loyalist White House job application (see April 2003 and After). The person brought in to revamp Iraq’s health care system is chosen for his work with a faith-based relief agency (see April 2003 and After). The man chosen to retool Iraq’s police forces is a “hero of 9/11” who completely ignores his main task in favor of taking part in midnight raids on supposed criminal hangouts in and around Baghdad (see May 2003 - July 2003). And the manager of Iraq’s $13 billion budget is the daughter of a prominent neoconservative commentator who has no accounting experience, but graduated from a favored evangelical university for home-schooled children.
Selection Process - O’Beirne seeks resumes from the offices of Republican congressmen, conservative think tanks, and Republican activists. He thoroughly weeds out resumes from anyone he deems ideologically suspect, even if those applicants speak Arabic or Farsi, or possess useful postwar rebuilding experience. Frederick Smith, currently the deputy director of the CPA, will later recall O’Beirne pointing to one young man’s resume and pronouncing him “an ideal candidate.” The applicant’s only real qualification is his job working for the Republican Party in Florida during the 2000 presidential recount.
Comment by Employee - A CPA employee writes a friend about the recruitment process: “I watched resumes of immensely talented individuals who had sought out CPA to help the country thrown in the trash because their adherence to ‘the president’s vision for Iraq’ (a frequently heard phrase at CPA) was ‘uncertain.’ I saw senior civil servants from agencies like Treasury, Energy… and Commerce denied advisory positions in Baghdad that were instead handed to prominent RNC (Republican National Committee) contributors.”
Result: Little Reconstruction, Billions Wasted or Disappeared - In 2006, Chandrasekaran will write: “The decision to send the loyal and the willing instead of the best and the brightest is now regarded by many people involved in the 3 1/2-year effort to stabilize and rebuild Iraq as one of the Bush administration’s gravest errors. Many of those selected because of their political fidelity spent their time trying to impose a conservative agenda on the postwar occupation, which sidetracked more important reconstruction efforts and squandered goodwill among the Iraqi people, according to many people who participated in the reconstruction effort.” Smith will later say: “We didn’t tap—and it should have started from the White House on down—just didn’t tap the right people to do this job. It was a tough, tough job. Instead we got people who went out there because of their political leanings.” The conservative ideologues in the CPA will squander much of the $18 billion in US taxpayer dollars allocated for reconstruction, some on pet projects that suit their conservative agenda but do nothing for Iraqi society, and some never to be traced at all. “Many of the basic tasks Americans struggle to accomplish today in Iraq—training the army, vetting the police, increasing electricity generation—could have been performed far more effectively in 2003 by the CPA,” Chandrasekaran will write.
Projects - Instead of helping rebuild Iraq—and perhaps heading off the incipient insurgency—CPA ideologues will spend billions on, among other things, rewriting Iraqi tax law to incorporate the so-called “flat tax,” selling off billions of dollars’ worth of government assets, terminating food ration distribution, and other programs.
Life in Green Zone - Most spend almost all of their time “cloistered” in the Green Zone, never interacting with real Iraqi society, where they create what Chandrasekaran later calls “a campaign war room” environment. “Bush-Cheney 2004” stickers, T-shirts, and office desk furnishings are prominently displayed. “I’m not here for the Iraqis,” one staffer tells a reporter. “I’m here for George Bush.” Gordon Robison, then an employee in the Strategic Communications office, will later recall opening a package from his mother containing a book by liberal economist Paul Krugman. The reaction among his colleagues is striking. “It was like I had just unwrapped a radioactive brick,” he will recall. [Washington Post, 9/17/2006]

Entity Tags: Gordon Robison, Bush administration (43), Coalition Provisional Authority, Frederick Smith, US Department of Defense, Republican National Committee, Rajiv Chandrasekaran, Kate O’Beirne, Jim O’Beirne

Category Tags: Economic Reconstruction, Political Administration, Oversight and Transparency

The House and Senate Appropriations Committees both vote to take control of Iraq’s reconstruction away from the Pentagon and give it to the State Department. Both committees vote to give the State Department and other agencies authority over the $2.5 billion in post-invasion aid sought for the Pentagon by the Bush administration. “The secretary of state is the appropriate manager of foreign assistance,” says House committee member James Kolbe (R-AZ). “Bottom line: reconstruction is a civilian role.” [New York Times, 4/2/2003]

Entity Tags: House Committee on Appropriations, Bush administration (43), US Department of Defense, US Department of State, Senate Appropriations Committee, James Kolbe

Category Tags: Economic Reconstruction, Political Administration

Sabah Asaad, managing director of a refrigerator factory outside Baghdad, later tells journalist Naomi Klein that when he goes to a nearby US Army base begging the soldiers to help stop the looters who are destroying the factory, they refuse. “I asked one of the officers to send two soldiers and a vehicle to help me kick out the looters. I was crying. The officer said, ‘Sorry, we can’t do anything, we need an order from President Bush.’” [Harper's, 9/24/2004]

Category Tags: Economic Reconstruction, Post-Invasion Looting

Following the model of Hamas and Hezbollah, various Shiite Islamist factions exploit the lack of security and basic services in post-invasion Iraq by policing neighborhoods and providing social services to the impoverished Shiite population. Moqtada Al-Sadr’s organization, for example, sets up administrative offices around the country and pays the salaries of civil servants. The Supreme Council for Islamic Revolution in Iraq (SCIRI) turns its militia members into aid workers that distribute food and set up clinics. [New York Times, 4/23/2003; Christian Science Monitor, 6/9/2003]

Entity Tags: Supreme Council for the Islamic Revolution in Iraq, Moqtada al-Sadr

Category Tags: Economic Reconstruction

The World Bank and the International Monetary Fund announce that they will send their economists to Iraq to assess needs for reconstruction as soon as it is safe to do so. The decision was made “with strong pressure from the United States,” the New York Times reports. [New York Times, 4/14/2004]

Entity Tags: International Monetary Fund, World Bank

Category Tags: Economic Reconstruction

During this period, the Coalition Provisional Authority purchases concrete blast walls from foreign companies for as much as $1,000 a piece. There are seventeen state-owned cement companies in Iraq that could have produced the walls for around $100 each. None of these businesses are contracted by the CPA to build the walls, or participate in any other projects. Minister of Industry Mohamad Tofiq later says the US refused to work with Iraq’s cement companies because “no one believes in the public sector.” However, Tofiq notes, there were several offers from US companies to purchase the state-owned firms during this period. According to journalist Naomi Klein, the CPA’s refusal to work with the cement companies supports the theory that the CPA was engaged in “a deliberate strategy to neglect the state firms so that they can be sold more cheaply—a practice known as ‘starve then sell.’” [Harper's, 9/24/2004]

Entity Tags: Mohamad Tofiq

Category Tags: Economic Reconstruction

The US Agency for International Development (AID) announces that it has contracted California-based engineering firm Bechtel Corp to repair and rebuild Iraq’s infrastructure. The contract is worth $34.6 million initially, and up to $680 million over 18 months. Specifically, Bechtel will assess and repair power generation facilities, electrical grids, municipal water and sewage systems, and airport facilities. The company will also dredge, repair, and upgrade the Umm Qasr seaport. Additional projects may include rebuilding hospitals, schools, ministry buildings, major irrigation structures, and the country’s transportation infrastructure. [US Agency for International Development, 4/17/2003] Some experts believe that Bechtel’s contract could ultimately be worth as much as $20 billion. [New York Times, 5/21/2003] The bidding process draws criticism from various congressional Democrats and British companies who say that the process was overly secretive and limited. Only a small number of US-based construction companies were allowed to take part in the bidding. [New York Times, 4/18/2003] The company’s connections to the US government also brings about allegations of cronyism.
bullet Bechtel’s CEO, Riley P. Bechtel, currently serves on the President’s Export Council, which advises the White House on how to create markets for American companies abroad. [New York Times, 4/18/2003]
bullet The company’s senior vice president, Jack Sheehan, is a member of a Pentagon advisory group called the Defense Policy Board, whose members are directly approved by the Defense Secretary. [Guardian, 4/18/2003]
bullet One of its board members is George Shultz, who served as secretary of state under the Reagan administration and who currently leads the advisory board of a pro-war group called the Committee for the Liberation of Iraq. [San Francisco Chronicle, 4/18/2003; Guardian, 4/18/2003]
bullet Daniel Chao, a Bechtel senior vice president, serves on the advisory board of the US Export-Import Bank. [CorpWatch, 4/24/2003]

Entity Tags: Bechtel, USAID

Category Tags: Bechtel, Economic Reconstruction

US military Central Command (CENTCOM) commander General Tommy Franks issues an order formally recognizing the creation of the Coalition Provisional Authority (CPA - see January 2003), an ad hoc, improvised organization to be headed by former diplomat and business executive L. Paul Bremer. A 2006 report by the Special Inspector General for Iraq Reconstruction will call the CPA the “de facto government of Iraq.” But for all its power, its legal status will remain unclear throughout its existence. A 2005 Congressional report will note: “Whether the CPA was a federal agency was unclear. Competing explanations for how it was established contribute to the uncertainty.… Some executive branch documents supported the notion that it was created by the president, possibly as a result of a National Security Presidential Directive. This document, if it exists, has not been made available.” Whether the legal ambiguity is deliberate is unclear, but it will be exploited. The Defense Department will not allow federal auditors to investigate CPA spending because, the department says, it is not a federal agency. Contractors are warned that if the CPA breaks contracts, they might not have recourse in federal courts. Employees who suspect contractor fraud are told they cannot pursue any possible criminal actions under American law. [Roberts, 2008, pp. 127]

Entity Tags: Office of the Special Inspector General for Iraq Reconstruction, Coalition Provisional Authority, US Central Command, US Department of Defense, Thomas Franks, L. Paul Bremer

Category Tags: Custer Battles, Economic Reconstruction, Political Administration, Security

Many Iraqi civil servants are angry about being unpaid for weeks. Workers in the electricity and water sectors have reportedly been told to expect a one-time payment of $20 from the Americans that is supposed to hold them over in the short term. [Christian Science Monitor, 4/28/2003]

Category Tags: Economic Reconstruction

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $179.3 million in cash during this month. The money is drawn from the Development Fund for Iraq (DFI) and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

An alliance of Republican lobbyists form the company New Bridge Strategies to seek rights for major US companies to distribute their products in Iraq. The website states the company has been “created specifically with the aim of assisting clients to evaluate and take advantage of business opportunities in the Middle East following the conclusion of the US-led war in Iraq.” As one unnamed partner at New Bridge will explain to the Washington Post in the fall of 2003, “Getting the rights to distribute Procter & Gamble products would be a gold mine. One well-stocked 7-Eleven could knock out 30 Iraqi stores; a Wal-Mart could take over the country.” Another person involved in the company will note that an order signed by Paul Bremer in September (see September 19, 2003) allowing foreign companies to establish 100 percent ownership of firms in Iraq increases the attraction of doing business in Iraq. [Washington Post, 9/12/2003; New York Times, 9/30/2003; Washington Post, 10/2/2003] New Bridge has close connections to the Bush administration and highlights these ties on its website noting that its chairman, Joe Allbaugh, was “chief of staff to then-Gov. Bush of Texas and was the national campaign manager for the Bush-Cheney 2000 presidential campaign.” The site also says, “The opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq.” [New York Times, 9/30/2003] Allbaugh dismisses criticisms that he is using his connections to profit from the war. “The stories I’ve seen have been couched as if people are trying to game the system, and that’s not what we’re about,” Allbaugh tells the New York Times. “We are trying to help Iraq become a capitalist country, and a leader throughout the Middle East. Iraqis themselves are asking for help…. We fought a war, we displaced a horrible, horrible regime, and as a part of that we have an obligation to help Iraqis. We can’t just leave in the middle of the night.” [New York Times, 10/6/2003] Individuals involved in the company include:
bullet Joe M. Allbaugh, chairman. The majority of Allbaugh’s career was spent in Texas politics. He was chief of staff to Governor Bush; later became his 2000 presidential campaign manager, and then was appointed by Bush as director of the Federal Emergency Management Agency (FEMA). Allbaugh currently runs his own consulting firm, the Allbaugh Company. [Allbaugh Company, 3/17/2007]
bullet John Howland, president. He is currently a principal of Crest Investment in Houston and formerly headed the company American Rice, which was once a major exporter to Iraq. [New York Times, 9/30/2003]
bullet Edward M. Rogers, vice chairman. Rogers served as a deputy assistant to President Bush Sr. and as an executive assistant to the White House chief of staff. In addition to his involvement in New Bridge Strategies, he is also vice chairman of Barbour Griffith & Rogers, an extremely well-connected Republican lobbying firm. Rogers’s wife, Edwina, is an associate director of the White House National Economic Council. [New York Times, 9/30/2003]
bullet Lanny Griffith, a director. He is chief operating officer of Barbour Griffith & Rogers. He served under the first President Bush as special assistant for intergovernmental affairs and then worked under him again as an assistant secretary of education. [New York Times, 9/30/2003]
bullet Jamal Daniel, a principal. Daniel has been an associate of George Bush’s younger brother, Niel, for more than a decade. An investigation by the Financial Times will find that Daniel, along with John Howland, has “attempted to exploit their association with the president’s brother to help win business and investors” on several occasions. “Three people contacted by the FT have seen letters written by Neil Bush recommending business ventures promoted by Mr Howland, Mr Daniel and his family in the Middle East. Mr Daniel has also had his photograph taken with the elder Mr Bush. Such letters and photographs can be valuable props when doing business in the Middle East.” Daniel is also involved in the investment fund, Crest Investment Corporation, of which Howland is also a member. The firm, which employs Neil Bush as its co-chairman, helped fund Neil Bush’s educational software company, Ignite. And according to one Middle Eastern businessman, Daniel sometimes introduces himself to potential investors as a founding backer of the Ignite. [Financial Times, 12/11/2003] Daniel, from a Christian Syrian family, also has links to Saddam Hussein’s Baathist party. The Financial Times reports he “is said to have been involved in the founding of the Baath Party and sustained links with it in both Syria and Iraq even after being expelled from Syria in about 1966 after Hafez al-Assad came to power. Mr Daniel has told friends that when he was young Tariq Aziz, later foreign minister of Iraq, was a visitor to the family home.” [Financial Times, 12/12/2003]

Entity Tags: Lanny Griffith, New Bridge Strategies, Jamal Daniels, Edward M. Rogers, John Howland, Joseph M. Allbaugh

Category Tags: Economic Reconstruction

In a letter to US Congressman Henry A. Waxman, the Commanding Lieutenant General of the US Army, Robert B. Flowers, says that the contract awarded to Halliburton subsidiary Kellogg, Brown & Root (KBR) also includes work concerning the “operation” of Iraqi oil facilities and “distribution” of Iraqi oil products. [Flowers, 5/2/2003 pdf file]

Entity Tags: Henry A. Waxman, Halliburton, Inc.

Category Tags: Economic Reconstruction

President Bush, in a commencement address at the University of South Carolina, says: “Soon, Iraqis from every ethnic group will choose members of an interim authority. The people of Iraq are building a free society from the ground up, and they are able to do so because the dictator and his regime are no more…. Across the globe, free markets and trade have helped defeat poverty, and taught men and women the habits of liberty. So I propose the establishment of a US-Middle East free trade area within a decade, to bring the Middle East into an expanding circle of opportunity, to provide hope for the people who live in that region. We will work with our partners to ensure that small and mid-sized businesses have access to capital, and support efforts in the region to develop central laws on property rights and good business practices. By replacing corruption and self-dealing, with free markets and fair laws, the people of the Middle East will grow in prosperity and freedom.” [US President, 5/12/2003]

Entity Tags: George W. Bush

Timeline Tags: Events Leading to Iraq Invasion

Category Tags: Economic Reconstruction, Neoliberal Reforms

The US and Britain submit a proposed resolution to the UN Security Council that would declare the two countries to be “occupying powers” in Iraq. Under international law, occupying powers must meet certain legal obligations. The proposed resolution would also give the US and Britain full control of Iraq’s oil revenues. [Guardian, 5/10/2003] The resolution will be approved in its final form on May 22 (see May 22, 2003).

Entity Tags: United Nations Security Council

Category Tags: Economic Reconstruction

Jay Garner, a retired general selected by the Pentagon a month before to direct reconstruction efforts in Iraq, is replaced by diplomat Paul Bremer III as head of the Coalition Provisional Authority (CPA). Bremer is thought more capable of dealing with the increasing rebellion and lawlessness in Iraq. [CNN, 5/11/2003]

Entity Tags: Jay Garner, L. Paul Bremer

Category Tags: Economic Reconstruction, Political Administration, Oversight and Transparency

Mohammed al-Ani, an Iraqi telecommunications engineer, complains to the London Telegraph that he cannot return to work to repair Iraq’s phone system until the US-led Office for Reconstruction and Humanitarian Assistance decides what to do. “We could repair a lot of the phone network, but we are not allowed to do anything. The sanctions may be gone, but we are under occupation. It will be an American company which restores the phones.” [Daily Telegraph, 5/23/2003]

Entity Tags: Mohammed al-Ani

Category Tags: Economic Reconstruction

Bush signs Executive Order 13303, which declares: “Unless licensed or otherwise authorized pursuant to this order, any attachment, judgment, decree, lien, execution, garnishment, or other judicial process is prohibited, and shall be deemed null and void, with respect to the following: the Development Fund for Iraq, and all Iraqi petroleum and petroleum products, and interests therein, and proceeds, obligations, or any financial instruments of any nature whatsoever arising from or related to the sale or marketing thereof, and interests therein, in which any foreign country or a national thereof has any interest, that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of United States persons.” Watchdog groups interpret this as a way of granting a sweeping legal immunity from lawsuits and criminal charges to US oil firms that do business with Iraqi oil. [US President, 5/26/2003 pdf file; Los Angeles Times, 8/7/2003]

Entity Tags: George W. Bush

Category Tags: Neoliberal Reforms, Economic Reconstruction

The UN Security Council unanimously passes Resolution 1483, which lifts sanctions on Iraq, legitimizes the occupation by coalition forces, and gives the occupying powers control over Iraq’s natural resources. The resolution also states that coalition authorities must “comply fully with their obligations under international law including in particular the Geneva Conventions of 1949 and the Hague Regulations of 1907.” The Hague Regulations require that occupying powers respect the laws of the country it occupies. Additionally, the resolution creates the Development Fund for Iraq (DFI), which is to be funded with Iraqi oil revenues, frozen Iraqi assets being held outside the US, and $8.1 billion in funds transferred from the UN-administered Oil-for-Food program. The resolution mandates that Iraq’s DFI funds be “in a transparent manner to meet the humanitarian needs of the Iraqi people… and for other purposes benefiting the people of Iraq.” It requires that management of the funds “be audited by independent public accountants approved by the International Advisory and Monitoring Board of the Development Fund for Iraq.” [UN Security Council, 5/22/2003, pp. 4 pdf file; Guardian, 5/23/2003]

Entity Tags: Development Fund for Iraq, United Nations Security Council

Category Tags: Economic Reconstruction, Oversight and Transparency

US administrator in Iraq Paul Bremer announces that Iraq’s economy will be revived through “free trade.” “A free economy and a free people go hand in hand,” he says, adding that the occupation powers “would like to see market prices brought into the economy… [and the] privatization of key elements.” State subsidies—which up until now have supplied ordinary Iraqis with affordable food, gasoline, and other essentials—will eventually be eliminated. According to Bremer, “history tells us that substantial and broadly held resources, protected by private property, private rights, are the best protection of political freedom. Building such prosperity in Iraq will be a key measure of our success here.” The Washington Post notes that “Iraqis would most likely not be deciding for themselves what kind of economy will replace the state-planned system that functioned under deposed president Saddam Hussein.” The paper also warns that “dismantling Iraq’s state-managed system holds big risks for the occupation authority at a time when most Iraqis are struggling to get by.” [Agence France-Presse, 5/26/2003; Washington Post, 5/27/2003; Sydney Morning Herald, 5/28/2003] Bremer also announces the creation of a trade-credit authority that would extend generous lines of credit to Iraq’s ministries, government-owned factories, and private companies so they can import needed goods and equipment (much of which had disappeared during the initial period of mass looting, see April 9, 2003). [New York Times, 5/26/2003; Agence France-Presse, 5/26/2003; Washington Post, 5/27/2003] “It will be a substantial credit facility that first symbolically indicates to the world that Iraq is open for business and also provides a practical incentive to people who want to trade with Iraq,” Bremer says. The agency will be funded by private banks and the Central Bank of Iraq [Agence France-Presse, 5/26/2003] , which is being overseen by Peter McPherson, a former deputy Treasury secretary and a Bank of America executive. [Washington Post, 5/9/2003] Bremer says that American and British companies will be among the first to benefit from these lines of credit. [New York Times, 5/26/2003]

Entity Tags: L. Paul Bremer, Peter McPherson

Category Tags: Economic Reconstruction

Coalition Provisional Authority administrator Paul Bremer (see May 1, 2003) meets with Iraqi Communications Minister Haider al-Abadi and Minister of Industry Mohamad Tofiq for the first time. Al-Abadi will later recall in an interview with journalist Naomi Klein that he told Bremer he would not support a policy of privatization. “I said, ‘Look, we don’t have the mandate to sell any of this. Privatization is a big thing. We have to wait until there is an Iraqi government.’” Tofiq likewise tells Bremer, “I am not going to do something that is not legal, so that’s it.” [Harper's, 9/24/2004]

Entity Tags: Haider al-Abadi, Mohamad Tofiq, L. Paul Bremer

Category Tags: Economic Reconstruction, Neoliberal Reforms

Within months of the invasion of Iraq, the International Tax and Investment Centre, a Washington-based lobby group for the oil industry, solicits financial contributions from oil companies, including BP and Shell, for a special “Iraq project.” [Observer, 3/4/2007]

Entity Tags: International Tax and Investment Centre

Category Tags: Economic Reconstruction, The Oil Law

KBR procurement managers Stephen Seamans and Jeff Mazon, who have between them already executed logistics subcontracts for the US military in Iraq worth $321 million, put together yet another deal for their business crony Shabbir Khan, of the Saudi conglomerate Tamimi Global Co (see October 2005, October 2002, and April 2003). However, this deal puts US soldiers at risk. According to KBR’s enormous LOGCAP contract with the Army, KBR is required to medically screen the thousands of kitchen workers subcontractors such as Tamimi import from poor villages in countries like Nepal, Pakistan, India, and Bangladesh. Instead of performing the required medical screenings, Khan gives falsified files on 550 Tamimi kitchen workers to the US Defense Department. KBR retests those 550 workers at a Kuwait City clinic and finds that 172 test positive for exposure to the hepatitis A virus. Khan tries to suppress the test results, telling the clinic that Tamimi would do no more business with his clinic if it informs KBR about the results. Further retests show that none of the 172 have contagious hepatitis A, and Khan’s attorneys will claim during a subsequent investigation (see October 2006 and Beyond) that no soldiers caught any diseases from any of Tamimi’s workers. Other firms besides Tamimi show similar problems, causing KBR to begin vaccinating the employees for a variety of diseases at the job sites. [Chicago Tribune, 2/20/2008; Chicago Tribune, 2/21/2008]

Entity Tags: Shabbir Khan, Jeff Mazon, Kellogg, Brown and Root, US Department of the Army, US Department of Defense, Tamimi Global Co, Stephen Seamans

Category Tags: Economic Reconstruction, Political Administration, Poor Treatment of US Troops, Military Privatization, Oversight and Transparency

Rubar Sandi, chief executive of the Washington-based CorporateBank Business Group, complains to the Washington Times that the Coalition Provision Authority (CPA), formerly known as Pentagon’s Office of Reconstruction and Humanitarian Affairs, is an obstacle to those trying to do business in Iraq. “In 10 days, I managed to do more than ORHA has done in two months. ORHA is a stumbling block,” he tells the newspaper. Sandi, an Iraqi exile, adds that the CPA blocked his efforts to start a telecommunications business in Iraq. [Washington Times, 6/17/2003]

Entity Tags: Rubar Sandi, Coalition Provisional Authority

Category Tags: Economic Reconstruction

A team of economists and officials from the World Bank, IMF, and UN meet in Iraq to consider a new economic policy for the country. Nicholas Krafft, one of the economists with the World Bank, says that Iraq’s economy would be more accurately described as a “socialist command economy” than a “post-conflict economy.” He says “a macro-economic framework for Iraq including budget, fiscal, and monetary issues” needs to be established as part of the country’s transition to a market economy. “The issues of subsidies, prices, and state enterprises will have to be dealt with,” he adds. Kraft also says “it is important to involve Iraqis in this decision and the coalition is increasingly doing that.” [Agence France-Presse, 6/10/2003]

Entity Tags: Nicholas Krafft, International Monetary Fund, World Bank, United Nations

Category Tags: Economic Reconstruction, Neoliberal Reforms

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $465.9 million in cash during this month. The money is drawn from the Development Fund for Iraq (DFI) and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

Paul Bremer, US administrator for Iraq, signs Order 12, suspending all trade restrictions such as tariffs and customs duties until December 31, 2003. [Coalition Provisional Authority, 6/7/2003 pdf file] The policy is expected to have a negative impact on Iraq’s economy. In 2002, the gross domestic product (GDP) of Iraq was $25 billion. In 2003, it is expected to be $15 billion. Iraqi manufacturers complain that after 12 years of strangulation by UN sanctions they are nowhere near ready to compete with cheap foreign imports. A month after Bremer’s order, the San Francisco Chronicle will report that textile plants and clothing factories are being devastated by clothing from China. And chicken legs dumped on the Iraqi market by the American company Tyson will force Al-Helli Chicken Co., a former major chicken butcher, to lay off all but 20 of the firm’s 140 workers. [San Francisco Chronicle, 7/10/2003] The move also reportedly leads disgruntled Iraqi businessmen and manufacturers to begin funding the insurgency. [Harper's, 9/24/2004]

Entity Tags: L. Paul Bremer, Al-Helli Chicken Co., Tyson Foods, Inc.

Category Tags: Economic Reconstruction, Neoliberal Reforms

Administrator for Iraq Paul Bremer issues Regulation Number 2, which governs how the Coalition Provisional Authority (CPA) will manage the Development Fund for Iraq. The regulation states that the funds will be “managed in a transparent manner for and on behalf of the Iraqi people, consistent with [UN Security Council] Resolution 1483 (see May 22, 2003), and that all disbursements from the Fund are for purposes benefiting the people of Iraq.” It also says that the CPA will “obtain the services of an independent, certified public accounting firm” to audit the fund’s management. [Coalition Provisional Authority, 6/10/2003 pdf file]

Entity Tags: L. Paul Bremer, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

The US occupation begins a program called the Commander’s Emergency Response Program (CERP). CERP utilizes seized funds from the regime of Saddam Hussein to initiate rapid, small-scale reconstruction projects. It contrasts with the massive design-build reconstruction projects being done by large firms such as Bechtel because it results in immediate, visible improvements that create grassroots support for the US military. The program involves having US military commanders meet with local Iraqi leaders to assess potential projects aimed at alleviating community problems. One of the most welcomed contributions of the CERP are the thousands of jobs that it creates. Military commanders will later say that the “benefit received from CERP funds far outweighs the amount [of funds] provided” and that “funding minor efforts such as repairs to houses and buildings are helping to stabilize areas in Iraq.” The Iraq reconstruction inspector general will later claim in a recommendation for smaller scale reconstruction projects that CERP “and similar initiatives in Iraq proved the value of relatively small, rapidly executable projects that meet immediate local needs and thereby have the salutary effect of enhancing relations with local communities.” As of September 30, 2005, it will only have received about $1.4 billion in funding. [Bowen, 7/2006, pp. 82-88, 94 pdf file] Analysts will later find that time periods when the CERP ran out of funds were fraught with surges in violence and US troop deaths. Bremer and the CPA will be criticized by nation-building experts for their neglect of the program and for putting free market ideology and a large-scale construction projects over simpler efforts to restore basic services to Iraqis at a quick pace. [Christian Science Monitor, 1/29/2004]

Entity Tags: US Department of Defense

Category Tags: Economic Reconstruction

In an op-ed piece published by the Wall Street Journal, Paul Bremer argues that if Iraqis are to enjoy higher living standards and political freedom, the country will need to adopt a market-based economic reform policy. He says that economic growth in Iraq will “require the wholesale reallocation of resources and people from state control to private enterprise, the promotion of foreign trade, and the mobilization of domestic and foreign capital.” [Wall Street Journal, 6/20/2003]

Entity Tags: L. Paul Bremer

Category Tags: Neoliberal Reforms, Economic Reconstruction

Paul Bremer travels to the shores of Jordan on the Dead Sea to attend the World Economic Forum and promote US reconstruction efforts in Iraq. Here, he states his goal of privatizing state-owned firms. He says that the US-led occupation will “set in motion policies which will have the effect of reallocating people and resources from state enterprises to the more-productive private firms.” [Agence France-Presse, 6/17/2003; State Department, 6/23/2003]

Entity Tags: L. Paul Bremer

Category Tags: Neoliberal Reforms, Economic Reconstruction

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $391.2 million in cash during this month. The money is drawn from the Development Fund for Iraq (DFI) and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

At a press briefing in Baghdad, Paul Bremer says that Iraq should consider privatizing its state-owned sectors and allowing foreign investment into its oil industry soon, even if that means doing so before Iraq has an elected government. He says that the soon-to-be-appointed Iraq Governing Council will need to reassure private investors by taking a friendly stance toward foreign capital. “Privatization is obviously something we have been giving a lot of thought to,” he says. “When we sit down with the governing council… it is going to be on the table. The governing council will be able to make statements that could be seen as more binding and the trick will be to figure out how we do this. Everybody knows we cannot wait until there is an elected government here to start economic reform.” [Reuters, 7/8/2003]

Entity Tags: L. Paul Bremer, Iraqi Governing Council

Category Tags: Economic Reconstruction, Neoliberal Reforms

A senior Coalition Provisional Authority (CPA) official announces plans to waive an existing Iraqi law requiring foreign investors in the telecommunications industry to subcontract at least 51 percent of their work to Iraqi companies. The CPA justifies the move saying that the waiver would encourage investment by reducing the risk for foreign telecom companies. The waiver will expire in two years. [Revenue Watch Institute, 2003, pp. 4 pdf file; Financial Times, 7/18/2003]

Entity Tags: Coalition Provisional Authority

Category Tags: Neoliberal Reforms, Economic Reconstruction

Deputy Defense Secretary Paul Wolfowitz, in Iraq as part of what the New York Times calls a “carefully choreographed visit” to that country to point up the record of brutality compiled by former dictator Saddam Hussein, tells reporters that Iraqi WMD are no longer the “core reason” why the US invaded Iraq, or why it occupies that country. “I’m not concerned about weapons of mass destruction,” he says. “I’m concerned about getting Iraq on its feet.” With the US’s help, Wolfowitz says, Iraq can build a “magnificent” democracy. And apparently without a sense of irony, Wolfowitz says foreign nations should not meddle in Iraq’s business. “I think all foreigners should stop interfering in the internal affairs of Iraq,” he says. “Those who want to come and help are welcome. Those who come to interfere and destroy are not.” [New York Times, 7/20/2003]

Entity Tags: Paul Wolfowitz, New York Times

Category Tags: Economic Reconstruction, Political Administration, Public Opinion, Search for WMDs

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $808.2 million in cash during this month. The money is drawn from the Development Fund for Iraq (DFI) and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

President Bush appoints Thomas Foley to the new position of director of private-sector development for the interim US authority in Iraq. Foley, a corporate turnaround expert and multi-millionaire investor, attended Harvard Business School with President Bush and served as the Connecticut finance chairman for Bush’s 2000 campaign. Foley’s task will be to help open Iraq up to foreign investment and to privatize more than 200 state-owned industries, including mining, chemical, cement, and tobacco companies. Excluded from the privatization plan will be Iraq’s oil, utility, and insurance industries. [Financial Times, 8/8/2003; Washington Post, 10/2/2003] The targeted industries currently employ close to 500,000 workers, or three to four percent of the country’s total workforce. Many Iraqis are unhappy with the plan. They say only an elected Iraqi government should make such decisions. According to Fareed Yasseen, adviser to Governing Council member Adnan Pachachi, the assets will probably be sold off to foreign firms and Iraqi merchants who grew wealthy off their connections to Saddam Hussein’s regime, since they are the only ones who will be able to afford to make the purchases. He warns, “If you have a situation where state assets are sold to foreigners or result in large layoffs, this will lead to popular unrest.” [USA Today, 8/9/2007]

Entity Tags: Thomas Foley, George W. Bush, Fareed Yasseen

Category Tags: Economic Reconstruction

In an op-ed piece published by the Guardian of London, Ghazi Sabir-Ali, the former chairman and managing director of Iraq’s North Oil Company in Kirkuk, describes how Iraqis brought the country’s oil industry back to life within weeks of the First Gulf War ending. He compares this to the current situation where Iraq is “now importing petrol for the first time in 60 years.” He says the Iraqis who helped rebuild Iraq after the first Gulf War are “capable, as they were in 1991, of planning and executing the necessary repairs to our battered country, if they are given a free hand.” He notes also, “There is no need for foreign companies to take control. Iraqi oil revenue should go to Iraqis, who should then be left in peace to set their country to rights.” [Guardian, 8/1/2003]

Entity Tags: Ghazi Sabir-Ali

Category Tags: Economic Reconstruction

Members of the US House Committee on Government Reform travel to Mosul, Iraq and talk with Major General David Petraeus, commander of the US Army 101st Airborne Division. Petraeus tells them how he was responsible for fixing a cement plant in northern Iraq. US engineers told him it would cost $15 million to restore the plant. Instead, he gave the job to Iraqis, who managed to fix the plant with only $80,000. [US Congress, 9/30/2003, pp. 2, 4-5 pdf file]

Entity Tags: House Committee on Government Reform, David Petraeus

Category Tags: Economic Reconstruction

Iraqi Prime Minister Iyad Allawi provides the Supreme Council for Oil Policy with a set of guidelines upon which the council is to base its petroleum policy. According to the guidelines, fields currently in production should continue to be developed by the Iraq National Oil Company (INOC), but development of all other fields should be contracted to private oil firms through production sharing agreements (PSAs). Eighty oilfields are known to exist in Iraq, but only 17 of them are currently being developed. Under the policy advocated by Allawi, the remaining 63 would be operated by the oil companies. New fields, according to Allawi, should be developed exclusively by the private sector. [Deutsche Presse-Agentur (Hamburg), 9/13/2003; Agence France-Presse, 9/26/2003; Muttitt, 2005] One critic of this proposed policy will later note that since Iraq’s 17 known fields “represent only 40 billion of Iraq’s 115 billion barrels of known oil reserves, the policy to allocate undeveloped fields to foreign companies would give those companies control of 64 percent of known reserves. If a further 100 billion barrels are found, as is widely predicted, the foreign companies could control as much as 81 percent of Iraq’s oil; if 200 billion are found, as the Oil Ministry predicts, the foreign company share would be 87 percent. Given that oil accounts for over 95 percent of Iraq’s government revenues, the impact of this policy on Iraq’s economy would be enormous.” [Muttitt, 2005] Another one of Allawi’s recommendations is that the INOC should be partially privatized. Allawi also feels that Iraqis should avoid spending time negotiating with the oil companies, and instead agree to whatever terms the companies will accept, with a possibility of renegotiating the contracts at a later date. [Deutsche Presse-Agentur (Hamburg), 9/13/2003; Agence France-Presse, 9/26/2003; Muttitt, 2005]

Entity Tags: Iyad Allawi

Category Tags: Economic Reconstruction, Neoliberal Reforms, The Oil Law, Production Sharing Agreements

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $400.0 million in cash during this month. The money is drawn from the Development Fund for Iraq (DFI) and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

The Republican-connected firm New Bridge Strategies partners up with Diligence-Iraq to provide security for companies wanting to do business in Iraq. Diligence vets local employees and partners, reviews potential investments, provides daily intelligence briefs, and supplies security for company personnel and assets. Its fees are based on the level of risk involved. Diligence was formed in 2000 by two former intelligence officers, Nick Day and Mike Baker. Day, an expert in Islamic militant groups, is a former MI5 agent, and Baker was a CIA covert field operations officer specializing in “counterterrorism, counternarcotics, and counterinsurgency operations.” The company employs about 200 people—mainly former members of the US Special Forces, New Zealand’s equivalent of the Green Berets, and the Iraqi military—and has offices in London, the US, Geneva, and the Middle East. Its annual gross revenue is around $10 million. The company works hand-in-hand with New Bridge Strategies, whose chairman, Joe M. Allbaugh, formerly served as director of FEMA under President Bush. In addition to being Diligence-Iraq’s chief executive officer, Baker also serves on New Bridge’s advisory board member. Diligence received its initial financial backing from the Republican-connected lobbying firm Barbour, Griffith & Rogers (BGR). Like New Bridge, Diligence shares office space at BGR’s office in Washington DC. BGR also provided Diligence with its well-connected chairman Richard Burt, former US ambassador to Berlin, as well as its impressive advisory board. One of the advisers is Ed Mathias of the Carlyle Group. [New York Times, 9/30/2003; Washington Post, 10/2/2003; New York Times, 10/6/2003; Financial Times, 12/12/2003; Independent, 2/8/2004]

Entity Tags: Richard Burt, Diligence-Iraq, Ed Mathias, Barbour Griffith & Rogers, Mike Baker, Nick Day

Category Tags: Economic Reconstruction, Political Administration

Coalition Provisional Authority (CPA) administrator L. Paul Bremer is under pressure to explain how he intends to transfer power in Iraq from the CPA and the hand-picked Iraqi Governing Council (IGC—see July 13, 2003), especially in light of Bremer’s recent, unilateral cancellation of national elections (see June 28, 2003). Bremer chooses an unusual venue to respond: the op-ed pages of the Washington Post. In a column entitled “Iraq’s Path to Sovereignty,” Bremer writes that national elections are “simply… not possible” at this time. Instead, the IGC will develop a plan for drafting and ratifying a new constitution. [Washington Post, 9/8/2003; Roberts, 2008, pp. 129-130] This will be followed by elections and, finally, complete transfer of the CPA’s powers to the new Iraqi government. Bremer gives no hint of a timetable, and implies that the process will not end quickly. Influential Iraqis, and US allies such as France and Germany, are disturbed by the prospect of an essentially indefinite occupation. Senior Bush officials, particularly National Security Adviser Condoleezza Rice, will later claim to have been blindsided by Bremer’s plan. New York Times columnist David Brooks, a conservative with excellent sources within the White House, will later write that Bremer “hadn’t cleared the [Post] piece with his higher-ups in the Pentagon or the White House” (see December 2003 and After). However, Bremer’s column is consistent with a Bush statement on Iraqi governance the day before, and with the text of a resolution the administration will try to push through the UN Security Council in October. It is unclear what, if any, authorization Bremer has for his decision, but there are manifest disagreements in the top ranks of White House officials as to the wisdom of Bremer’s planning (see November 15, 2003). [Roberts, 2008, pp. 129-130]

Entity Tags: United Nations Security Council, Coalition Provisional Authority, Bush administration (43), Condoleezza Rice, David Brooks, Iraqi Governing Council, L. Paul Bremer, Washington Post

Category Tags: Economic Reconstruction, Political Administration, Oversight and Transparency

The Coalition Provisional Authority provides US Congress with a justification for a request of $20.3 billion for reconstruction projects in Iraq. The report—which leaves many questions unanswered—describes 115 projects. Less than 25 of them mention employing Iraqis or using Iraqi resources. [US Congress, 9/30/2003, pp. 2, 4-5 pdf file]

Entity Tags: US Congress, Coalition Provisional Authority

Category Tags: Economic Reconstruction

Paul Bremer signs Order 37, titled “Tax Strategy for 2003,” reducing the tax rate on corporations from a high of 40 percent to a flat rate of 15 percent. The income tax rate is also capped at 15 percent. “The highest individual and corporate income tax rates for 2004 and subsequent years shall not exceed 15 percent,” the order says. [Coalition Provisional Authority, 9/19/2003 pdf file] The flat tax has long been a goal of economic conservatives and was planned for Iraq in pre-war planning sessions with Iraqi exiles. According to one Middle East expert interviewed by the Washington Post, the new tax system “has almost no support from other members of the US-appointed Iraqi Governing Council.” The new tax law will take effect in January. In the meantime, reports the Post, “Bremer has abolished all taxes except for real estate, car sales, gasoline and the pleasantly named ‘excellent and first class hotel and restaurant tax.’ Even while leaving these Hussein-era levies in place, Bremer exempted his coalition authority, the armed forces, their contractors, and humanitarian organizations. Exempting occupation personnel leaves only the Iraqis to pay taxes, as well as journalists, business people, and other foreigners.” [Washington Post, 11/2/2003]

Entity Tags: L. Paul Bremer

Category Tags: Economic Reconstruction, Neoliberal Reforms

US administrator for Iraq Paul Bremer signs Order 40, the “Bank Law,” allowing foreign banks to acquire stakes in formerly state-owned banks. Six foreign companies are permitted to fully take over Iraqi banks, while other banking firms can purchase up to a 50 percent stake in local banks. [Coalition Provision Authority, 9/19/2003 pdf file; Washington Post, 9/21/2003]

Entity Tags: L. Paul Bremer

Category Tags: Economic Reconstruction

At the annual World Bank/IMF meeting in Dubai, Iraq’s nominal finance minister Kamel al-Gailani announces Bremer’s shock therapy program of economic reforms. The announcement comes two days after Bremer signed a number of orders opening up Iraq’s economy to foreign investment (see September 19, 2003, September 19, 2003, and September 19, 2003). Collectively, the orders allow foreign investors to acquire 100 percent ownership of Iraqi assets in any sector except oil production and refining, give foreign investors equal legal standing with local firms, and allow them to repatriate all profits made in Iraq without any requirements for local re-investment. The laws also cap income and corporate taxes at 15 percent and slash tariffs down to 5 percent, with the exception of tariffs on food, drugs, books, and other humanitarian imports, which can be imported duty-free. Al-Gailani says these “measures will be implemented in the near future and represent important steps in advancing Iraq’s reconstruction effort.” As an article in Economist magazine will note, the changes, which “bear the signature of Paul Bremer… and the imprimatur of the American consultants it has hired to frame economic policies,” represent “a radical departure for Iraq.” The article—titled “Let’s all go to the yard sale”—calls these reforms “the kind of wish-list that foreign investors and donor agencies dream of for developing markets.” The caption of an image accompanying the article reads, “If it all works out, Iraq will be a capitalist’s dream.” But the magazine also acknowledges that there will be resistance to these reforms. “Given the shock and awe expressed by many Baghdad businessmen at the scale of the changes, it is not clear that such a future regime would be able to resist pressures to reimpose protectionism.” It also predicts that the rapid overlay of this legal framework over Iraq’s existing economic system will create disparities. “The instant discarding of 40 years of national-socialist commercial culture is likely to create serious distortions,” the magazine says. [New York Times, 9/21/2003; Daily Telegraph, 9/22/2003; Economist, 9/27/2003]

Entity Tags: Kamel al-Gailani

Category Tags: Economic Reconstruction, Neoliberal Reforms

Members of Congressman Henry A. Waxman’s staff interview two members of the Iraqi Governing Council. They state that Iraqi firms could be hired for reconstruction projects at one-tenth the amount being charged by US firms. Their claim is corroborated by the Coalition Provisional Authority’s (CPA) own justification (see September 17, 2003) for the $20 billion reconstruction supplemental. The CPA states that when work is done by Iraqi companies the “cost of construction is 1/10th of US standard per sq. ft. in general construction.” [US Congress, 9/30/2003, pp. 3-4 pdf file]

Entity Tags: Iraqi Governing Council, Henry A. Waxman

Category Tags: Economic Reconstruction

National Security Adviser Condoleezza Rice, frustrated with Coalition Provisional Authority (CPA) administrator L. Paul Bremer’s lack of cooperation and coordination with her office (see September 8, 2003 and December 2003 and After), forms the Iraq Stabilization Group (ISG) to oversee Bremer and settle disputes between the Defense and State Departments in governing Iraq. [Roberts, 2008, pp. 130] According to unnamed White House officials, the ISG originated with President Bush’s frustration at the lack of progress in both Iraq and Afghanistan. “The president knows his legacy, and maybe his re-election, depends on getting this right,” says an administration official. “This is as close as anyone will come to acknowledging that it’s not working.” Defense Department officials deny that the ISG is designed to take power away from Defense Secretary Donald Rumsfeld: “Don recognizes this is not what the Pentagon does best, and he is, in some ways, relieved to give up some of the authority here,” says one senior Pentagon official. In reality, both Rumsfeld and Secretary of State Colin Powell are giving up some control over the reconstruction efforts to the White House, specifically to the National Security Council. Rice will oversee four coordinating committees, on counterterrorism efforts, economic development, political affairs in Iraq and media messaging. One of her deputies will run each committee, assisted by undersecretaries from State, Defense, and the Treasury Department, as well as representatives from the CIA. The counterterrorism committee will be run by Frances Fragos Townsend; the economic committee by Gary Edson; the political affairs committee by Robert Blackwill; and the communications committee by Anna Perez. [New York Times, 10/6/2003] In May 2004, the Washington Post will report that the ISG is dysfunctional and ineffective almost from the outset; within months, all but Blackwill have been reassigned (Perez will leave Washington for a job with NBC), and a search of the White House Web site will find no mention of the ISG later than October 2003. [Washington Post, 5/18/2004]

Entity Tags: Iraq Stabilization Group, Donald Rumsfeld, Condoleezza Rice, Colin Powell, Coalition Provisional Authority, Anna Perez, Frances Townsend, George W. Bush, US Department of Defense, US Department of State, Robert Blackwill, National Security Council, L. Paul Bremer, US Department of the Treasury, Gary Edson

Category Tags: Economic Reconstruction, Political Administration, Oversight and Transparency

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $464.0 million in cash during this month. The money is drawn from the Development Fund for Iraq (DFI)and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

San Diego Business Address of North Star Consultants, Inc.San Diego Business Address of North Star Consultants, Inc. [Source: NBC News]North Star Consultants, Inc. wins a $1.4 million contract to review the Coalition Provisional Authority’s internal controls for managing Iraq’s funds and provide the CPA with a written evaluation. The small firm is not a certified public accounting firm as is required by both UN Security Council Resolution 1483 (see May 22, 2003) and the CPA’s Regulation Number 2 (see June 10, 2003). [US Congress, 2/6/2007 pdf file] The firm is so small that it operates out of a private home near San Diego. [MSNBC, 2/17/2005] A 2004 audit performed by the Special Inspector General for Iraq Reconstruction will find that “North Star Consultants did not perform a review of internal controls as required by the contract. Consequently, internal controls over DFI disbursements were not evaluated. In addition, the Comptroller verbally modified the contract and employed the contractor to primarily perform accounting tasks in the Comptroller’s officer.” [Special Inspector General for Iraq Reconstruction, 7/28/2006, pp. 7 pdf file] A single Northstar employee will reportedly use spreadsheets, not accounting software, to track the $20 billion that the CPA will spend on Iraq’s behalf between April 2003 and June 28, 2004. Of that amount, $12 billion is in cash (see June 25, 2004). [MSNBC, 2/17/2005]

Entity Tags: North Star Consultants, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

As part of a White House media campaign to promote “good news” from Iraq (see Mid-October 2003), Commerce Secretary Donald Evans goes on a brief visit to selected areas in Baghdad and comes back to Washington with stories of the “thousands” of new businesses that have cropped up since the “liberation” of that country. Asked for an example, Evans cites two boys’ roadside soft drink stand. [Associated Press, 10/17/2003]

Entity Tags: Donald L. Evans, Bush administration (43)

Category Tags: Economic Reconstruction, Public Opinion, Other Propaganda / Psyops

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $500 million in cash during this month. The money is drawn from the Development Fund for Iraq (DFI)and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

The International Tax & Investment Centre (ITIC), a corporate lobby group that advocates for pro-business investment and tax reform, has a series of board of directors’ and sponsors’ meetings on the theme “Strategic Questions For Our Future.” A paper summarizing the views expressed during those meetings says that the ITIC’s work in Iraq “should be continued and considered as a ‘beachhead’ for possible further expansion in the Middle East.” Included in the group’s board of directors are representatives from Shell, BP, ConocoPhillips, ExxonMobil, and ChevronTexaco. [International Tax & Investment Centre, n.d. pdf file; Muttitt, 2005]

Entity Tags: International Tax and Investment Centre, Royal Dutch/Shell, Chevron, British Petroleum, ConocoPhillips, ExxonMobil

Category Tags: Economic Reconstruction

Coalition Provisional Authority administrator L. Paul Bremer (see May 1, 2003) asserts his independence from US government oversight, a stance assisted by Defense Secretary Donald Rumsfeld. Bremer is formally slated to report to Rumsfeld, but says Rumsfeld has no direct authority over him. Instead, Bremer insists, he reports directly to the White House. Rumsfeld, usually jealously protective of his bureaucratic prerogatives, tells National Security Adviser Condoleezza Rice: “He doesn’t work for me. He works for you” (see Late September, 2003). But Bremer is not willing to report to either Rice or the National Security Council (NSC) either. The White House had already announced that it had no intention of playing a large role in guiding the reconstruction of Iraq, and the NSC’s Executive Steering Group, set up in 2002 to coordinate war efforts, has been dissolved. Finally, Bremer flatly refuses to submit to Rice’s oversight. As a result, Bremer has already made fundamental policy shifts on his own authority that are at odds with what Pentagon planners had intended (see May 16, 2003 and May 23, 2003), with what many feel will be—or already have caused—disastrous consequences. [Roberts, 2008, pp. 128-129]

Entity Tags: Coalition Provisional Authority, Bush administration (43), National Security Council, L. Paul Bremer, Donald Rumsfeld, Condoleezza Rice

Category Tags: Economic Reconstruction, Political Administration, Oversight and Transparency

The American Academy of Arts and Sciences publishes a study, titled “War with Iraq: Costs, Consequences, and Alternatives,” in which one of its authors, D. Nordhaus of Yale University, writes that the Bush administration’s planned invasion of Iraq and post-invasion occupation could cost anywhere from $99 billion to more than $1.9 trillion over a decade. The study notes that the macroeconomic cost of such a military operation could be as high as $400 billion as a result of a disruption in oil markets and an ensuing recession. [Kaysen et al., 12/2002 pdf file; Associated Press, 12/6/2002]

Timeline Tags: Events Leading to Iraq Invasion

Category Tags: Economic Reconstruction, Other

Deputy Defense Secretary Paul D. Wolfowitz issues a directive that limits potential bidders for 26 Iraq reconstruction contracts worth $18.6 billion to companies from the US, Iraq, and some 61 other “coalition partners.” Among those excluded from the bidding process are France, Russia, and Germany. The move is largely seen as retaliation against nations that opposed the invasion. [New York Times, 12/10/2003]

Entity Tags: Paul Wolfowitz

Category Tags: Economic Reconstruction

The Pentagon’s Defense Contract Audit Agency sends a draft audit report to Halliburton subsidiary Kellogg, Brown, & Root (KBR) claiming that the firm overcharged the US military as much as $61 million for fuel deliveries into Iraq. The report says that KBR charged an average of $2.64 per gallon, more than twice the price others were paying. The DCAA also says the company has been slow to provide cost estimates for its projects in Iraq. KBR has given the US government estimates for only 12 orders. As of this date, 69 are overdue. [New York Times, 12/12/2003]

Entity Tags: Defense Contract Audit Agency, Halliburton, Inc.

Category Tags: Economic Reconstruction, Oversight and Transparency, Halliburton

Coalition troops raid the Baghdad headquarters of the Iraqi Federation of Trade Unions (IFTU). They pillage its offices and arrest eight union workers, who are then released the next day. The offices will remain closed for several months. The detained workers later accuse the US of using intelligence from a former member of Saddam’s regime by the name of Abdullah Murad Ghny. Ghny owns a large private transport company and his workers have begun to organize. According to the workers, an American commander told them: “Iraq has no sovereignty and no political parties or trade unions. We do not want you to organize in either the north or south transport stations. You can organize only after June 2004; for now, you have an American governor.” [United Press International, 12/12/2003; Washington Monthly, 4/2005]

Entity Tags: Iraqi Federation of Trade Unions, Abdullah Murad Ghny

Category Tags: Economic Reconstruction, Human Rights Violations, Neoliberal Reforms

“Brick” of $400,000 in U.S. Currency (4,000 $100 bills)“Brick” of $400,000 in U.S. Currency (4,000 $100 bills) [Source: Federal Reserve Bank of New York] (click image to enlarge)At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $1.5 billion in cash. The money is drawn from the Development Fund for Iraq (DFI) and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file; Reuters, 2/7/2007]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction

The US Army Corps of Engineers (US ACE) issues a waiver relieving Halliburton of the obligation to provide the government with “cost and pricing data” for the fuel it sells to the US military. The company was recently accused of overcharging the military as much as $61 million for fuel deliveries into Iraq (see December 5, 2003). The waiver will make it difficult for auditors to determine whether Halliburton or its Kuwaiti subcontractor overcharged the US government. [US Congress, 1/6/2004 pdf file]

Entity Tags: Halliburton, Inc., US Army Corps of Engineers

Category Tags: Economic Reconstruction, Oversight and Transparency, Halliburton

$774,300 in cash being managed by the Coalition Provisional Authority is reported missing from a vault. [Bahrain, 9/2004 pdf file]

Entity Tags: Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

In an opinion piece published by Middle East Economic Survey, Helmut Merklein, a former US assistant secretary of international energy affairs (1984 to 1990), argues that “the concept that Iraqi oil production should remain under exclusive Iraqi control should be anchored in the Iraqi constitution.” He reasons that because oil production accrues “huge rents,” those rents, “like all rents, belong in principle to the resource owner, the people of Iraq.” He says the best way for Iraqis to capture those rents is to leave the Iraq National Oil Company (INOC) in public hands and use utility contracts as the model for any agreements with the private sector. In utility-type agreements, the host governments, instead of the oil companies are the ones to benefit when profits exceed an agreed-upon rate of return. Merklein disputes the notion that Iraq would be unable to jump start the oil sector on its own. He says very little new development is needed and that the funds needed for investment “are dwarfed by the wealth represented by already proven but undeveloped reserves.… They certainly don’t need $10 billion, as projected by the Council of Foreign Relations, or $38 billion for ‘green field development’ (Deutsche Bank)…. If their objective were to restore production to their pre-Gulf-War quota of 3.14 million barrels per day, they would need a capital infusion of less than $1.0 billion. And they categorically do not need the multinationals to get access to that kind of investment. $1.0 billion is less than 0.1 percent of the value of Iraq’s currently proved reserve base. That would be like securing a $300 loan by pledging a fully paid-for $300,000 residence as collateral. With that kind of collateral, there will be no shortage of commercial or governmental (bilateral or multilateral) credit institutions eager to supply the required capital needed to rehabilitate oil production in Iraq.” The Iraqis do not need help from the international oil companies, he says, “The Iraqis have been producing oil for the last 31 years…. They are quite capable of boosting production without the help from international oil companies. They have the experience, they have a lot of practical know-how, and they are known to be inventive and flexible. Whatever they don’t have by way of technological advances, they can acquire through outsourcing in the open market, much like the multinationals do when they turn to seismic firms for exploration, drilling firms for drilling, logging firms for reserve definition, and reservoir engineering firms for production optimization.” Merklein also takes issue with claims that Iraq would be unable to produce more than three million barrels per day. “Just how ridiculous that claim is can be seen from a comparison of the US and Iraqi reserve bases and the production these bases are able to maintain. The US has at present 22.4 billion barrels of proved crude oil reserves; Iraq has 112 billion. The US produces 5.3 million barrels per day from that base. At five times our proven reserve base, Iraq can produce five times the US daily production rate, or some 23 million barrels per day. Without any additional exploration. These are proved reserves. The Iraqis have some 73 oil fields, 58 of them idle. All they have to do is drill them up.” [Middle East Economic Survey, 1/12/2005]

Entity Tags: Helmut Merklein

Category Tags: Economic Reconstruction, The Oil Law

The International Advisory and Monitoring Board for Iraq (IAMB), an independent agency formed to oversee the Development Fund for Iraq (DFI) and Iraq’s oil exports, notes in briefings to the CPA that the production of crude oil is going unmetered. It will later say in a report that such practices could result in the diversion of Iraq’s oil resources. It recommends that the CPA properly install metering equipment as soon as possible. [International Advisory and Monitoring Board for Iraq, 12/2004, pp. 2, 4 pdf file]

Entity Tags: Coalition Provisional Authority, International Advisory and Monitoring Board for Iraq

Category Tags: Economic Reconstruction, Oversight and Transparency

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $750.4 million in cash during this month. Payments in the same amount will be made in March (see March 2004) and April (see April 2004). The money is drawn from the Development Fund for Iraq (DFI) and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

Mike Stinson of ConocoPhillips and Bob Morgan of BP replace Rob McKee and Terry Adams as advisers to Iraq’s oil ministry. The British government pays them £147,700 for their work. [Muttitt, 2005]

Entity Tags: Bob Morgan, Terry Adams, Rob McKee, Mike Stinson

Category Tags: Economic Reconstruction, Political Administration, The Oil Law

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $750.4 million in cash during this month. Payments in the same amount are made in February (see February 2004) and April (see April 2004). The money is drawn from the Development Fund for Iraq (DFI)and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

Joseph Stiglitz, Nobel laureate and former chief economist at the World Bank, warns in an op-ed piece that US plans to submit Iraq’s economy to shock therapy—i.e., the rapid implementation of market reforms such as privatization and deregulation—will fail in Iraq. He advises the international community to “direct its money to humanitarian causes, such as hospitals and schools, rather than backing American designs.” He writes: “When the Berlin Wall fell, the countries of Eastern Europe and the former Soviet Union began transitions to a market economy, with heated debates over how this should be accomplished. One choice was shock therapy… while the other was gradual market liberalization to allow for the rule of law to be established at the same time. Today, there is a broad consensus that shock therapy, at least at the level of microeconomic reforms, failed, and that countries (Hungary, Poland, and Slovenia) that took the gradualist approach to privatization and the reconstruction of institutional infrastructure managed their transitions far better than those that tried to leapfrog into a laissez-faire economy…. But the Bush administration, backed by a few handpicked Iraqis, is pushing Iraq towards an even more radical form of shock therapy than was pursued in the former Soviet world. Indeed, shock therapy’s advocates argue that its failures were due not to excessive speed—too much shock and not enough therapy—but to insufficient shock.” But it won’t work, he says, because instability will deter investment and those who do purchase state assets “may then be reluctant to invest in them; instead, as happened elsewhere, their efforts may be directed more at asset stripping than at wealth creation.” He adds that providing Iraq with loans will only exacerbate the country’s difficulties. He concludes: “America’s economic program for reconstructing Iraq is laying the foundations for poverty and chaos.” [ZNet, 3/17/2004]

Entity Tags: Joseph Stiglitz

Category Tags: Economic Reconstruction, Oversight and Transparency

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $750.4 million in cash during this month. Payments in the same amount were made in February (see February 2004) and March (see March 2004). The money is drawn from the Development Fund for Iraq (DFI)and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

Paul Bremer, the US administrator for Iraq, issues Order 81 rewriting Iraq’s 1970 patent law. The order extends intellectual property right protections to plants, making it illegal for Iraqi farmers to save, share, or replant seeds harvested from new varieties registered under the law. The order was written with the help of Linda Lourie, an attorney-advisor in the US Patent Office’s Office of External Affairs. She was invited to Iraq to help draft laws that would ensure Iraq’s eligibility into the World Trade Organization (WTO). Bremer’s order, however, makes Iraq’s patent law stricter even than the WTO-compliant 1991 International Convention for the Protection of New Varieties of Plants (see March 19, 1991), which allows its member-states to exempt farmers from the prohibition against seed saving. Lourie claims these changes were sanctioned by the Iraqi governing council, which she says wants Iraq to have the strongest intellectual property rules in the region in order to attract private investment. [Administrator of the Coalition Provisional Authority of Iraq, 4/4/2004 pdf file; GRAIN, 10/2004; National Public Radio, 11/24/2004]

Entity Tags: L. Paul Bremer, Linda Lourie

Timeline Tags: Seeds

Category Tags: Economic Reconstruction, Neoliberal Reforms

An official with the Coalition Provisional Authority reports that the “CPA did not obtain the services of a certified public accounting firm as it was determined that these services were not those required.” UN Security Council Resolution 1483 (see May 22, 2003) required that the management of Iraq’s funds be “audited by independent public accountants approved by the International Advisory and Monitoring Board of the Development Fund for Iraq.” Similarly, the CPA’s Regulation Number 2 (see June 10, 2003) stated that it had to “obtain the services of an independent, certified public accounting firm.” Instead, the CPA hired North Star Consultants, Inc. (see October 2003), an obscure consulting firm, “to promote the effective administration of DFI Funds in a transparent manner for the benefit of the Iraqi people.” [US Congress, 2/6/2007 pdf file]

Entity Tags: Coalition Provisional Authority, North Star Consultants

Category Tags: Economic Reconstruction, Political Administration

Former ambassador Joseph Wilson gives an interview to the liberal news Web site Buzzflash about his newly published book, The Politics of Truth. In the interview and the book, Wilson notes that the invasion and occupation of Iraq have left many Iraqis with few choices advantageous to their American occupiers. As long as the US fails to provide reliable electricity, water, and security services for Iraqi citizens, Wilson writes, “they will see no option but to seek protection from within their traditional family and clan structures. We are fighting two wars in Iraq right now: the war against the insurgency and the war to restore public safety and services. If we cannot win the latter, then the ranks of the former will continue to swell daily with bitter citizens.” [Wilson, 2004, pp. 429; Buzzflash (.com), 4/30/2004]

Entity Tags: Joseph C. Wilson, Buzzflash (.com)

Category Tags: Economic Reconstruction, Military Operations, Political Administration, Security

At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $1 billion in cash during this month. The money is drawn from the Development Fund for Iraq (DFI) and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

The Program Review Board—a panel of US, allied, and Iraqi officials responsible for allocating Iraqi budgetary resources under control of the Coalition Provisional Authority—approves the distribution of $2 billion for reconstruction projects in Iraq. It is one of the largest disbursements recorded. But the only record of how the funds are disbursed are the minutes of the meeting which list and describe which reconstruction sector the funds are being allocated to. They do not include any information about the actual recipients of the funds. The minutes show that a “[r]epresentative from [Britain] noted there was insufficient detail on some of the requests and there was no reference to recurring costs for operations and maintenance.” [Coalition Provisional Authority, 5/15/2004; US Congress, 2/6/2007, pp. 15 pdf file]

Entity Tags: Program Review Board

Category Tags: Economic Reconstruction, Political Administration

CBS graphic illustrating interview with General Anthony Zinni.CBS graphic illustrating interview with General Anthony Zinni. [Source: CBS News]Retired Marine General Anthony Zinni was the chief of the US Central Command until 2000, and, until just before the invasion of Iraq, the Bush administration’s special envoy to the Middle East. Now he has become an outspoken critic of the administration’s war efforts in Iraq. Zinni gives an interview to CBS’s 60 Minutes, in part to promote his new biography, Battle Ready, co-authored by famed war novelist Tom Clancy.
'Dereliction of Duty' among Senior Pentagon Officials - Zinni says that senior officials at the Pentagon, from Defense Secretary Donald Rumsfeld on down, are guilty of what he calls dereliction of duty, and he believes it is time for “heads to roll.” Zinni tells correspondent Steve Kroft: “There has been poor strategic thinking in this. There has been poor operational planning and execution on the ground. And to think that we are going to ‘stay the course,’ the course is headed over Niagara Falls. I think it’s time to change course a little bit, or at least hold somebody responsible for putting you on this course. Because it’s been a failure.” In his book, Zinni writes: “In the lead up to the Iraq war and its later conduct, I saw at a minimum, true dereliction, negligence, and irresponsibility, at worse, lying, incompetence, and corruption.… I think there was dereliction in insufficient forces being put on the ground and fully understanding the military dimensions of the plan. I think there was dereliction in lack of planning.”
'The Wrong War at the Wrong Time' - Zinni calls Iraq “the wrong war at the wrong time,” and with the wrong strategy. Before the invasion, Zinni told Congress (see October 31, 2002): “This is, in my view, the worst time to take this on. And I don’t feel it needs to be done now.” The generals never wanted this war, Zinni says, but the civilians in the Pentagon and the White House did. “I can’t speak for all generals, certainly,” he says. “But I know we felt that this situation was contained (see Summer 2002-2003). Saddam was effectively contained.… And I think most of the generals felt, let’s deal with this one at a time. Let’s deal with this threat from terrorism, from al-Qaeda.”
Much Larger Force Required - Zinni was heavily involved in planning for any invasion of Iraq, going back to at least 1999 (see April-July 1999). Zinni always envisioned any such invasion as being implemented with enough ground forces to get the job done quickly and cleanly. Rumsfeld had different ideas—the invasion could be carried off with fewer troops and more high-tech weaponry. Zinni wanted around 300,000 troops: “We were much in line with General Shinseki’s view. We were talking about, you know, 300,000, in that neighborhood.” Would a larger force have made a difference? Kroft asks. Zinni replies, “I think it’s critical in the aftermath, if you’re gonna go to resolve a conflict through the use of force, and then to rebuild the country.” Rumsfeld should have anticipated the level and ferocity of violence that erupted in the aftermath of the toppling of the Hussein government, but, Zinni says, he did not, and worse, he ignored or belittled those such as Shinseki and a number of foreign allies who warned him of the possible consequences. Instead, Zinni notes, Rumsfeld relied on, among other sources, fabricated intelligence from Ahmed Chalabi and his Iraqi National Congress (see September 19-20, 2001).
'Seat of the Pants Operation' - The entire reconstruction effort was, in Zinni’s mind, a seat-of-the-pants affair. “As best I could see, I saw a pickup team, very small, insufficient in the Pentagon with no detailed plans that walked onto the battlefield after the major fighting stopped and tried to work it out in the huddle,” he says, “in effect to create a seat-of-the-pants operation on reconstructing a country.” Coalition Provisional Authority head L. Paul Bremer is “a great American who’s serving his country, I think, with all the kind of sacrifice and spirit you could expect. But he has made mistake after mistake after mistake.” Bremer’s mistakes include “Disbanding the army (see May 23, 2003). De-Baathifying (see May 16, 2003), down to a level where we removed people that were competent and didn’t have blood on their hands that you needed in the aftermath of reconstruction—alienating certain elements of that society.” Zinni reserves most of the blame for the Pentagon: “I blame the civilian leadership of the Pentagon directly.”
Heads Should Roll, Beginning with Rumsfeld's - Zinni continues: “But regardless of whose responsibility I think it is, somebody has screwed up. And at this level and at this stage, it should be evident to everybody that they’ve screwed up. And whose heads are rolling on this? That’s what bothers me most.” The first one to go, Zinni says, is Rumsfeld: “Well, it starts with at the top. If you’re the secretary of defense and you’re responsible for that.”
Neoconservatives at Fault - Next up are Rumsfeld’s advisers, whom Kroft identifies as the cadre of neoconservatives “who saw the invasion of Iraq as a way to stabilize American interests in the region and strengthen the position of Israel.” Zinni says: “Certainly those in your ranks that foisted this strategy on us that is flawed. Certainly they ought to be gone and replaced.” Kroft identifies that group as including Deputy Defense Secretary Paul Wolfowitz; Undersecretary of Defense Douglas Feith; former Defense Policy Board member Richard Perle; National Security Council member Elliott Abrams; and Vice President Cheney’s chief of staff, Lewis “Scooter” Libby. Zinni calls them political ideologues who have hijacked US policy in Iraq: “I think it’s the worst-kept secret in Washington. That everybody—everybody I talk to in Washington has known and fully knows what their agenda was and what they were trying to do.” Like so many others who criticized them, Zinni recalls, he was targeted for personal counterattacks. After publishing one article, he says: “I was called anti-Semitic. I mean, you know, unbelievable that that’s the kind of personal attacks that are run when you criticize a strategy and those who propose it.”
Fundamental Conceptual Flaws - Zinni says the neoconservatives believed they could remake the Middle East through the use of American military might, beginning with Iraq. Instead, the US is viewed in the region as “the modern crusaders, as the modern colonial power in this part of the world.”
Changing Course - Zinni has a number of recommendations. He advises President Bush and his senior officials to reach out much more strongly to the United Nations, and to US allies, and secure the UN’s backing. Do these other countries “want a say in political reconstruction? Do they want a piece of the pie economically? If that’s the cost, fine. What they’re gonna pay for up front is boots on the ground and involvement in sharing the burden.” Many more troops are needed on the ground, and not just American troops, he says, enough to seal off the borders, protect the road networks.
Exit Strategy - Zinni says that planning for an exit is necessary because it is inevitable that the US will want to withdraw, and that time will come sooner rather than later. “There is a limit,” he says. “I think it’s important to understand what the limit is. Now do I think we are there yet?”
Speaking Out - He is speaking out, he says, because it is his duty to do so: “It is part of your duty. Look, there is one statement that bothers me more than anything else. And that’s the idea that when the troops are in combat, everybody has to shut up. Imagine if we put troops in combat with a faulty rifle, and that rifle was malfunctioning, and troops were dying as a result. I can’t think anyone would allow that to happen, that would not speak up. Well, what’s the difference between a faulty plan and strategy that’s getting just as many troops killed?” [CBS News, 5/21/2004]

Entity Tags: Iraqi National Congress, Douglas Feith, Donald Rumsfeld, CBS News, Bush administration (43), Anthony Zinni, Eric Shinseki, Ahmed Chalabi, Al-Qaeda, US Department of the Army, Steve Kroft, Paul Wolfowitz, Richard (“Dick”) Cheney, Richard Perle, Elliott Abrams, Tom Clancy, US Department of Defense, Lewis (“Scooter”) Libby, US Central Command, Joint Chiefs of Staff, L. Paul Bremer

Category Tags: Economic Reconstruction, Military Operations, Political Administration, Public Opinion, Security, The 'Generals' Revolt', Oversight and Transparency

The International Advisory and Monitoring Board for Iraq (IAMB) learns during one of its meetings that the CPA has not yet installed metering equipment due to “security and technical” issues despite the fact that money has already been allocated for that purpose. This comes four months after the IAMB informed the CPA of the importance of metering Iraq’s oil production (see February 2004). [International Advisory and Monitoring Board for Iraq, 12/2004, pp. 4 pdf file]

Entity Tags: Coalition Provisional Authority, International Advisory and Monitoring Board for Iraq

Category Tags: Economic Reconstruction, Oversight and Transparency

In spite of the CPA’s stated intention to employ at least 50,000 Iraqis on reconstruction projects, the real number of Iraqis working to rebuild Iraq is only 15,000. This is less than a third of the CPA’s goal and less than a quarter percent of Iraq’s estimated workforce of 7 million. [Ozlu, 4/21/2006, pp. 25 pdf file]

Entity Tags: Coalition Provisional Authority

Category Tags: Economic Reconstruction

Pallets of US Currency Arriving in IraqPallets of US Currency Arriving in Iraq [Source: US Congress. House Committee on Government Reform] (click image to enlarge)At the request of the Coalition Provisional Authority, the Federal Reserve Bank sends the CPA $2.4 billion in cash. This is the largest cash pay-out of US currency in Federal Reserve history. This shipment is quickly followed by another large shipment three days later (see June 25, 2004). The money is drawn from the Development Fund for Iraq (DFI)and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. [US Congress, 2/6/2007 pdf file; Reuters, 2/7/2007]

Entity Tags: US Federal Reserve, Coalition Provisional Authority

Category Tags: Economic Reconstruction, Political Administration

Cash shipments to Iraq by monthCash shipments to Iraq by month [Source: US Congress. House Committee on Government Reform] (click image to enlarge)The US Federal Reserve sends the Coalition Provisional Authority (CPA) in Baghdad $1.6 billion on giant pallets aboard military C-130 cargo planes. This is the last of a series of several shipments that began in April 2003 (see April 2003). The money was drawn from the Development Fund for Iraq (DFI)and special US Treasury accounts containing revenues from sales of Iraqi oil exports, surplus dollars from the UN-run oil-for-food program, and frozen assets that belonged to the government of Saddam Hussein. Most shipments were under $1 billion, except for this one and two others, one in December, and one just three days before (see December 12, 2003 and June 22, 2004). Together these shipments amount to $12 billion, some 363 tons of palleted cash. This shipment and the other June shipment of $2.4 billion (see June 22, 2004) account for almost half of the total amount shipped to Iraq. There will be no more shipments to the CPA after this date because on June 28, authority to govern Iraq, and hence the authority to manage Iraq’s funds, will be transferred to Iraq’s new Interim Government (see June 28, 2004). [US Congress, 2/6/2007 pdf file; Reuters, 2/7/2007]

Entity Tags: US Federal Reserve, Iraq

Category Tags: Economic Reconstruction, Political Administration

Norwegian petroleum firm Det Norske Oljeselskap (DNO) signs a production-sharing agreement with the Kurdistan Regional Government (KRG) before a legal framework has been drawn up in Iraq to govern such actions. [Petroleum Economist, 2/8/2006]

Entity Tags: Det Norske Oljeselskap

Category Tags: Economic Reconstruction, Neoliberal Reforms

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