01. January 2005 · Comments Off on Iraqi Quagmire: Contracting · Categories: Iraq

The Center for Corporate Responsibility has this list of it’s Top Ten War Profiteers of 2004:

At the beginning of the Iraq war, Andrew Natsios, head of the U.S. Agency for International Development (AID), proclaimed that the reconstruction of Iraq would look like a modern-day Marshall Plan. But a year and a half later, a combination of bureaucratic ineptitude, corporate corruption and the growing Iraqi resistance threaten to undermine the Bush administration’s grand designs.

In mid-July, U.S. officials admitted that fewer than 140 of the 2,300 reconstruction projects funded by the U.S. were underway. Although AID says “dirt has been turned” on 1,167 projects including schools and hospitals, with at least 70 new ones staring each week, it’s unlikely that the big picture has changed much. The kidnapping and execution of contract personnel and the ongoing sabotage of key projects — power plants, electricity lines and oil pipelines — has slowed work in many areas of the country to a crawl, jacking up the cost of security, insurance and other ancillary expenditures, which in most cases amount to half of the contractors’ budgets.

By August, Ambassador John Negroponte had to announce that more than $3 billion of $18 billion in U.S. aid earmarked by Congress for engineering and reconstruction work would be used for security and counterinsurgency operations.

The announcement was tacit recognition that a kind of vicious cycle is at work. The aggravation caused by the lack of electricity and other basic services is certain to be blamed on the CPA and the contractors, which could result in further support for the resistance. Exactly how much the resistance has gained from the festering resentments caused by the stalled reconstruction process is difficult to say. But an increase in attacks on construction sites – more than one a day according to the Army – indicates that they are a clear target of the resistance.

In late December, Contrack International, the lead partner on a $320 million transportation systems contract, announced that it was withdrawing from Iraq because of “prohibitive” security costs.

By the fall, news that just 7 percent of the $18 billion originally allocated for reconstruction set off fireworks in Congress. Senator Richard Lugar, R-Indiana, blasted the Bush administration as “incompetent” for failing to devote adequate on-the-ground personnel to contract administration, management, and oversight.

“It’s beyond pitiful, it’s beyond embarrassing, it’s now in the zone of dangerous,” added Chuck Hagel, R-Nebraska.

For the most part, it looks like a pretty good report. But of course, they have to score one on the boogyman:

U.S. firms are not the only ones to complain about how difficult it has been to get in on the action. (Rep. James P. Moran Jr., D-Virginia, told to a Washington Post reporter that a company in his district was told by Pentagon officials that “if they want the money they really have to go though Halliburton.”) Even the administration’s closest Iraqi allies have been critical.

Let’s see: somebody at the Pentagon told Rep. Moran, who told a WaPo reporter, who told them – riiiiight.

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