inside the glass house

Highway robbery: Missing billions and Iraq fund
NEW YORK - The US pulled off another diplomatic coup last week when it strong-armed the 15-member Security Council to adopt a new resolution calling on UN member states to provide troops for a multinational force in Iraq and also increased funds for the reconstruction of the war-devastated country.

But so far, the hard-won resolution - which may ultimately turn out to be an exercise in futility - has neither generated funds nor attracted troops. The international community is obviously sending a strong political message to the Bush administration: You got yourself into this mess, now get yourself out of it.

The World Bank has said Iraq needs about $55 billion for reconstruction through 2007. The US, which is providing about $20 billion, needs the remaining $35 billion in international donor funds, to jump-start the battered Iraqi economy.

The donor conference in Madrid, where Sri Lanka was to pledge nothing more than a shipment of tea to Iraq, is expected to receive funds amounting to only about $5 to $6 billion. This would be peanuts by American standards. The oil-blessed Arab nations are being prodded to give more. But chances are slim.

The US, which has about 24,000 foreign troops in Iraq, also needs about 20,000 more foreign troops to relieve the pressure on the 130,000 American troops who are battling an intense guerrilla war in a country turning out to be another Vietnam.

But the US is unlikely to get most of the funds it needs or most of the troops it is seeking from the international community. The dispute is over two political uncertainties: how much of sovereignty is the US willing to concede to Iraqis so that they can run their own country, and when will the Bush administration end its military occupation?

What is clear is that the US has no intention of losing control over either Iraq's 112 billion barrels of oil reserves or the new prime real estate it has acquired in West Asia.
As long as it decides to hold on to both, the US is unlikely to get the kind of economic and military support it desperately needs to get out of the Iraqi quagmire.

France and Germany - key European nations which are also members of the Security Council - have refused to offer troops or additional funds even though both countries voted for the resolution. The funding for Iraq has also come under fire because most of the contracts are going not only to American companies but specifically to firms with close ties to the Bush administration.

A recent political ad campaign highlighting corruption and cronyism in US contracts for rebuilding Iraq takes a passing shot at a major American corporation with links to the White House. According to the facetious political slogan aired on US television, international donors were offered a piece of unsolicited advise: "If you are writing out cheques, please make sure to spell Halliburton with two 'l's".

A huge US-based energy conglomerate, Halliburton was once headed by Vice President Dick Cheney. The company has received more than $2 billion dollars in contracts for the reconstruction of Iraq. But what is outrageous, say political analysts, is that Halliburton was awarded $1.2 billion worth of these contracts on a non-competitive basis, shutting out all other contractors.

"If the US has abandoned the concept of transparency, which it so assiduously preaches to others, how do you expect international donors to dig deep into their pockets to help in the reconstruction of Iraq?" asks one Asian diplomat.

A second major US company, Bechtel Corporation, which also has close ties with the Bush administration, has come under scrutiny for various irregularities relating to Iraqi contracts. Clifford George Mumm, a senior Bechtel official in Baghdad, has denied that his company had given any kickbacks in the 105 subcontracts it had signed with Iraqi companies.

But Henry Waxman, a US Congressman from California, has accused the Bush administration of wasting billions of dollars in contracts with Halliburton and Bechtel "when Iraqi companies could do the work for less." The New York Times reported last week that two senior Democratic Congressmen were questioning whether Halliburton was overcharging the US government for the supply of gasoline in Iraq.

In a letter to the White House Office of Management and Budget, Representative Waxman and Representative John Dingell of Michigan said: "The overcharging by Halliburton is so extreme that one expert has privately called it highway robbery."
The widespread charges of corruption and cronyism have prompted the 15-member European Union to call for a transparent multilateral donor fund to replace the existing US-run Development Fund for Iraq.

Last week, the London-based charity Christian Aid accused the US-administered Coalition Provisional Authority in Baghdad of failing to properly account for about $4 billion in Iraqi oil revenues. Jim Jennings, president of Conscience International, a US-based non-governmental organisation puts it this way: "Unfortunately, the money will not be spent 'to improve the lives of Iraqis' as the Bush administration claims, but only to repair what was wantonly broken by the invasion, and incidentally to enrich US contractors."

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