President Sees Election Cash in Rebuilding Iraq
Bush's Golden Vision
by Roger Trilling
October 15 - 21, 2003
In October 1, members of the Iraqi Governing Council confronted L. Paul Bremer, head of the Coalition Provisional Authority and the man who had appointed them. They were protesting his decision to spend $1.2 billion training a new Iraqi police force?-in Jordan. Bremer claimed that the facilities required did not exist in Iraq. The council demurred, insisting that their country not only had the facilities but could provide them more cheaply. "If we had voted, a majority would have rejected it," one council member said to The New York Times. "He told us what he did. He did not ask us."
The money for Jordan came out of a $60 billion funding package for Iraq, conjured by Congress in April at the president's request. In the next few weeks, they will probably approve another $87 billion, of which $70 billion is tabbed for Baghdad. That's the easy part. What's more complicated is how it will be spent, both at home and abroad. And as subcontracts awarded to Saudi conglomerates or Kuwaiti telecoms make clear, there will be a broad impact to these taxpayer billions suddenly flowing to the Persian Gulf.
Which was part of the idea all along. Deputy Defense Secretary Paul Wolfowitz and other neoconservatives have long justified regime change in Iraq as the first step in a larger, longer, vastly more ambitious regional transformation. And while some critics have focused on the military dimension?-Syria next, then Iran?-right now it's about money. More soldiers may be a possibility, but contractors are inevitable.
So is a certain amount of campaign cash, cycled back from those who profit in the reconstruction. Against the backdrop of a treasury-draining scheme to remake the world, a few million dollars in corporate contributions to a sitting president may seem insignificant, but one can be sure they matter to Bush?-and to his political opponents. For Democrats, the spectacle of a Republican administration larding out contracts to close allies is a political disaster.
"A hundred-fifty billion dollars is a large amount of money with no incumbent claimant," observed John Pike, of globalsecurity.org, a nonpartisan think tank for defense. "It's new money, up for grabs, and the campaign effects are a given. Such a large sum serves to consolidate the existing distribution of power in Washington, where one party is in control, and there's an uncompetitive electoral system in Congress. So this will further undermine the pretense that we live in a functional democracy?-meaning, you can look forward to another round of redistricting after the next election!"
Toward that end, the administration is already putting its own people in place, gatekeepers who will manage that potentially lucrative union between American investment and Iraqi resources. Like Thomas Foley, an old business-school friend of the president's, and also one of his 2000 Connecticut campaign bosses. Foley will decide which of Iraq's roughly 200 state-owned enterprises are fit to survive.
Iraq is being set up for auction, and in Washington and Baghdad, the administration is lining up bidders. Lawyers and lobbyists, many with deep ties to the Republican electoral machine, are corralling investors ready to join in the enormous gamble. "If you go to the Four Seasons and shout out 'Who's working on a deal in Iraq?' everybody there will raise their hand," said Ed Rogers, one of the GOP's top lobbyists in Washington, according to The Hill. With non-American companies frozen out, and the UN withdrawing its mission, U.S. firms will be on their own, just the way the administration wants it.
Estimates vary on how long it will take to get Iraq up and running, but progress will be measured in oil production: Iraq is hovering around a million barrels a day now (the Coalition Provisional Authority claims 1.7); it was about 2.7 million under Saddam; 3.5 is Iraq's traditional OPEC quota, and 6 million barrels would make Iraq the rival of Russia or Saudi Arabia. At $25 to $30 a barrel, go figure. Oil experts say it will take at least five years. The administration says two.
Either way, it will depend on the army and the marines?-and perhaps Bush's re-election?-to stay the course.
For now, Iraqi reconstruction is dominated by military needs, and these will generate a new infrastructure. "The big-ticket items?-telecommunications systems, satellite uplinks?-are related to command-and-control functions," military analyst Chris Hellman explained. "But we're also going to upgrade port facilities, build access roads, fence lines, airfields, helipads . . . and anything related to military flow, either air or sealift, we'll leave behind."
Many have wondered whether the U.S. will, like an old colonial power, install garrisons in Iraq. Well, yes and no. Modern military technology is designed to accommodate early departures as well as lengthy occupations. "We're seeing some very permanent-looking temporary facilities," Hellman said. "And some of these bases will be used by the Iraqi army and police. But we're building to U.S. military specs, and that's what the Iraqis will be buying, or be given. Why? Because we've been there twice in a decade, and the military thinks it'll be nice to have them there if we need to come back."
The U.S. engagement is open-ended, in terms of time, money, and possible casualties. Its goals?-establishing security, basic social services, and a functioning democracy?-are vague, and vulnerable to endless sabotage. If things go badly, we can just turn Iraq over to an elected or appointed proxy (one State Department source called neocon favorite Ahmed Chalabi "our permanent exit strategy"). If things go well, the U.S. military could withdraw in a few years. But one thing is sure: We're spending money today as if there will be a tomorrow, and nobody believes in Iraq's tomorrows like this administration.
"Leaders in the region speak of a new Arab charter that champions internal reform, greater political participation, economic openness, and free trade," President Bush told the American Enterprise Institute last February. "A new regime in Iraq would serve as a dramatic and inspiring example of freedom for other nations in the region."
It's a tall order. "We're only training about 40,000 troops, and so far there's been no mention of an Iraqi air force," Pike explained. "It's a rough neighborhood, so for some years to come, only the U.S. presence will deter Syria, Iran, or Turkey. But the real pacing factor affecting our presence there will be the extent to which the U.S. can install a security apparat capable of controlling the police, the army, the politicos, and other key institutions in Iraqi society." After 30 years of Saddam's dictatorship, that's an ominous thought. But it may help explain why the Iraqi Governing Council was so upset about that police training program in Jordan.
Given the continuing absence of weapons of mass destruction, the reasons for war remain a mystery. Similarly, post-war planning has always been a secret. In November 2002, as the UN sent weapons inspectors into Iraq, the army hired Kellogg Brown & Root (KBR), a subsidiary of Halliburton, to develop plans for running Iraq's oil fields. Vice President Cheney had been Halliburton's CEO until 2000, and on March 8, just 11 days before the war began, KBR got a long-term contract for the repair and maintenance of Iraq's oil fields.
Also in early March, as the UN debate unraveled, the Pentagon solicited private bids from half a dozen U.S. construction companies to repair Iraqi infrastructure. It was a closed process. Other potential bidders were not invited to compete, because of the pressing need for speed and the small number of companies with appropriate security clearances.
On March 25, less than a week into the conflict, President Bush asked Congress for $62 billion to pay for the war and begin reconstruction. A few weeks later, Bechtel, a firm strongly identified with the GOP, emerged as the clear winner in the contest to rebuild Iraq. Although Democrats on various oversight committees began to complain about the closed nature of the bidding process, the subtext of their concern was that the Pentagon was choosing companies with strong Republican ties. Given the money involved, it seemed an ominous precedent in an election year.
On September 17, Bush asked for the $87 billion supplemental provision. Staffers on congressional oversight committees, however, were shocked to discover that, for the $20 billion earmarked for Iraqi reconstruction costs, no one could tell them how the numbers were derived or who came up with them. The budget also allocates billions for classified purposes, which caused Democratic senator Edward Kennedy to accuse the Pentagon of administering a slush fund for bribing potential coalition allies. The bill also designates at least $5 billion as "transfer funds," which Secretary Rumsfeld can redirect as he deems fit. It's a mysterious document.
Ordinarily, the State Department, through its Agency for International Development (AID), would oversee reconstruction costs. But in a bitter and public turf war, Rumsfeld had wrested control from Powell, and AID money was to be administered by L. Paul Bremer, who reports only to the Pentagon, which reports only to the White House. Not only was the State Department frozen out?-so was Congress. They had been asked to appropriate billions for reconstruction, only to see it disappear into a closed circuit running from the White House, which requested the money, through Donald Rumsfeld, to the Coalition Provisional Authority in Baghdad, which oversees its spending.
Congress is responsible for the budget, but Republicans also owe a special fealty to President Bush, who is their party's star fundraiser, and can influence their own re-election prospects. So when it comes to voting on the president's budget, they have divided loyalties. This is not the case for Democrats, who are acutely aware that although the $150 billion is for Iraq, most of it will be spent in Washington. Beginning in the spring, and with growing momentum through the summer and fall, Washington's law and lobby firms started mobilizing around the new business opportunities popping up in Baghdad.
One of the most conspicuous is New Bridge Strategies, which was created for this purpose. Its vice chair is Ed Rogers, a founding partner in one of Washington's most powerful Republican lobby firms, Barbour Griffith & Rogers (BGR). His partner Haley Barbour ran the Republican National Committee in the mid '90s, and helped organize the GOP takeover of Congress in 1994. Another BGR principal, Jennifer Larkin, ran the House Conservative Action Team, now called the Republican Study Committee, which their website calls "the largest, most influential Republican member organization in Congress." Yet another BGR officer, Keith Schuette, helped start and run the International Republican Institute, which represents the party's interests overseas. "The bottom line on New Bridge is that it appears to be very closely linked to BGR, which has many overlapping ties to the highest levels of the Republican Party," said Thomas Ferguson, a campaign finance expert at the University of Massachusetts at Boston.
New Bridge's chairman is Joe Allbaugh, who was often referred to as the third point, with Karl Rove and Karen Hughes, in the president's "iron triangle." In the '90s, Allbaugh served as Governor Bush's chief of staff, and then as national campaign manager for Bush-Cheney 2000. Since then, he has trained for Iraq's reconstruction as head of FEMA, the Federal Emergency Management Agency.
When Allbaugh resigned to take on his duties at New Bridge, it was widely seen as a cash-out. But there is little reason to believe he would walk out on his friend and boss on the verge of a presidential election. As a lobbyist, he may not be leaving Bush's circle so much as becoming a different kind of operative, able to bind corporate and lobbying dollars to White House priorities.
On October 5, much to Secretary Rumsfeld's surprise, Iraq officially became a White House operation. Placed under the stewardship of the National Security Council, Iraq is now a Condi Rice responsibility, which puts it about halfway between Rumsfeld and Karl Rove. According to the next day's New York Times, "Ms. Rice called it 'a recognition by everyone that we are in a different phase now' that Congress is considering Mr. Bush's . . . [supplemental] request."
Why congressional deliberations would usher in a different phase was left unstated, but the relation between Congress and the national security advisor became clear four days later. Bill Young, chair of the House Committee on Appropriations, was concerned that Rice, who is appointed by the president and not confirmed by Congress, cannot be called before Congress, nor compelled to turn over information?-on, say, how contracts get awarded. As such, he drafted an amendment precluding her stewardship over the spending. It passed unanimously.
Rice, meanwhile, had already appointed a four-person steering committee, called the Iraq Stabilization Group. Their brief was to coordinate the various government agencies and keep things moving in Baghdad. Why? Because as the campaign season progresses, Iraq's predicament will become an ever more sensitive issue. "Forget all the talk about Arab democracy," Professor Ferguson said. "The election these guys are focused on is right here at home."
