Iraq's Missing Billions

In a courtroom in Virginia a trial passed almost unnoticed last week that can help us understand why the occupation of Iraq has gone so disastrously wrong. The greed, incompetence and ill preparedness of the occupiers was spelt out in excruciating detail in the case against Custer Battles - two war profiteers who arrived broke and on the make in Baghdad during the early days of the occupation.

Their case helps to explain how the American led interim government managed to spend its way through over $20 billion of reconstruction money yet leave Iraqis with less electricity, less clean water and with hospitals in an even worse condition than during the worst of the days of crippling sanctions against Saddam. They were sanctions that claimed 250,000 lives over 10 years.

Details are now emerging of how other US companies massively overcharged for their work and failed to deliver on what they promised, and how contracts worth millions were subcontracted down to locals who were paid a fraction of what the big US companies were paid for the work.

Hospitals were left with sewage floating in the kitchens and operating theatres, without the most basic life saving equipment despite contracts worth millions being handed out to US companies by Paul Bremer's interim government. Now Bremer's successor Dan Speckhard has said in response to this that it is: "water under the bridge"

This week, as Iraq descends even further into hell, one wonders if the prospect of civil war could have been avoided if there had been a little more electricity, fresh water and the promise of better hospitals. The Iraqi people desperately needed some assurance; some proof that life might just get better - it never came.

When the two men who make up Custer Battles - Scott Custer and Michael Battles, (who ran unsuccessfully as a Republican Congressional candidate in 2002) - arrived in Iraq, one former workmate said they didn't have enough money between them to pay the $15 airport tax. Within months they had contracts worth $37.5 million for security and transport work.

In the case that ended last week, Custer Battles were found guilty under the false claims act on three counts. Now they've been ordered to pay back approximately $11 million. The attorney who led their successful prosecution told Dispatches: "There is an orgy of greed among the contractors in Iraq. American law was suspended, Iraqi law was suspended and Iraq basically became a free fraud zone.....in a free fraud zone you can steal anything you like."

According to Alan Grayson the attorney prosecuting Custer and Battles, the Bush administration's failure to prosecute them in the criminal courts signalled the Pentagon's indifference to the war profiteering of US companies. "For all practical purposes participating in it," Grayson said.

It's not the first time that those involved in Bush's administration have been linked with companies that have been accused of behaving improperly. The US Vice President Dick Cheney once headed the US company Halliburton- They received $1.6 billion of Iraqi money to help reinstate the country's oil supply. Auditors said $177 million were overcharged. Although Halliburton continues to deny this, it reached a settlement with the U.S government to repay $9 million. According to Henry Waxman, a Democratic congressman from California: "Halliburton gouged the taxpayer, government auditors caught the company red-handed, yet the Pentagon ignored the auditors and paid Halliburton hundreds of millions of dollars a huge bonus."

In an investigation for Channel 4's Dispatches programme the Guardian sent their award winning Iraqi reporter, Ali Fadhil, to investigate the reality of the reconstruction on the ground by looking at a hospital for babies and children. As a doctor himself, Ali was able to offer a specialised insight. He discovered that often even crucial hospital projects were abandoned; basic works weren't carried out and the US companies were rarely called to account.

Even in areas where there had been no security problems, work was abandoned. He discovered that the US Interim government in Baghdad pursued a policy of de-Baathification, which consisted of sacking everyone including those who understood how the country was run. In the case of the health service, for example, the job of running Iraq's health service was handed to a Republican sympathiser and health administrator from Michigan with almost no international health or post-conflict experience.

The official US report into the rebuilding of Iraq blames unforeseen security costs, haphazard planning and shifting priorities for the failures. It ignores the fraud and profiteering despite the numerous cases now coming before the courts as whistleblowers come forward to describe army personnel packing thousands of pounds into backpacks and leaving the country.

The cliche that it the Iraqi was "all about oil" has been repeated to the point of tedium, but the rebuilding of Iraq IS all about money and the Iraqis have not seen much of it. The average labourer is paid seven dollars a day and they have seen at least $20 billion worth of contracts handed out to American companies.

Post invasion, post Abu Ghraib, post the internment of thousands of Iraqi men in prison without hope of trail- at least some fresh running water might have helped cool a situation now way out of control.

Maggie O'Kane
http://commentisfree.guardian.co.uk/maggie_okane/2006/03/post_4.html