CONTENTS

9. THE CORRUPT IRAQI MINISTRIES

1. FRAUD AND ACCOUNTABLE BILLIONS OF DOLLARS

BILLIONS ARE MISSING UNDER PAUL BREMER. Nearly four years after Paul Bremer was made administrator in Iraq, he appeared before the Senate Foreign Relations Committee. He failed to explain what he did with $12 BILLION weighing 363 TONS of newly printed $100 BILLS.. The American currency was flown to Baghdad. The bundles of $100 bills were loaded into the back of American pick-up trucks and distributed randomly to people in the streets. (McClacthy Newspapers, February 8, 2007)

No one in the congressional hearing even asked Bremer or the inspector general how much of that $12 billion in cash was handed out to American contractors in Baghdad. (McClacthy Newspapers, February 8, 2007)

After Bremer left his post in Iraq two years later in 2005, Bush awarded him the Presidential Medal of Freedom, even though he totally mismanaged the reconstruction of Iraq. (McClacthy Newspapers, February 8, 2007)

Also in 2005, the Department of Defense’s special inspector general for Iraq, Stuart Bowen, said that an audit he conducted found that in some ministries the payroll was padded with up to 90 percent “ghost employees.” Some of whom never really worked there or perhaps did not really exist. (McClacthy Newspapers, February 8, 2007)

Bremer said that he decided to provide the money to meet those payrolls, even though he knew they were bogus, for fear of starting riots and demonstrations among the Iraqis. (McClacthy Newspapers, February 8, 2007)

MORE FRAUD: BILLIONS OF DOLLARS ARE MISSING AND MISSPENT.

The Office of the Special Inspector General for Iraq Reconstruction was created in January 2004 with the objective of examining reconstruction money spent in Iraq. The inspector general’s GOP lawyer, Stuart Bowen, sent American occupation officials to jail on bribery and conspiracy charges. He also exposed disastrously poor construction work by well-connected companies like Halliburton and Parsons, and he discovered that the military did not properly track hundreds of thousands of weapons it shipped to Iraqi security forces. (New York Times, November 3, 2006)

Most likely because of his role as whistle-blower, Bush terminated his federal oversight agency effective October 1, 2007. This was a clause tacked onto the House Armed Services Committee over the objections of Democratic counterparts during a closed-door conference. (New York Times, November 3, 2006)

The only certified public-accounting firm used by the CPA to monitor its spending was a company called North Star Consultants, located in San Diego, which was so small that it operated out of a private home. I t was subsequently determined that North Star did not, in fact, perform any review of the CPA’s internal spending controls. (The American Conservative, October 24, 2005) A 2004 GAO report confirmed that many private security contractors in Iraq were charged the United States government exorbitant fees for their services. The contracts allowed security costs to be rolled into the overall cost of the contract without being itemized. In one case, contract security guards were effectively being billed at $33,000 per guard per month while the average rate for a security specialist worked out to between $13,000 and $20,000 per month. (The American Conservative, October 24, 2005) The CPA distributed over $600 million in cash to four regional commanders to fund reconstruction projects as part of the Commanders’ Emergency Response Program. An audit of one region disclosed that 80 percent of the funds could not be accounted for, and more that $7 million in cash was missing. Many of the contracting agents working under the regional commands reportedly stole the money. In one reported instance, an American contracting officer doubled the price of a multimillion-dollar contract and brazenly explained that the extra money would be for his retirement fund. (The American Conservative, October 24, 2005) In June 2004, the CPA handed power and control of the Development Fund for Iraq (DFI) back to an Iraqi government. By then, the coalition had spent or disbursed about $14 billion of the Iraqi fund on reconstruction projects and on the administration of the government, according to the audits. The GAO announced in July 2004 that the State Department announced that the $18.4 billion plan placed too much emphasis on superfluous construction projects and not enough on creating jobs for Iraqis. The amount was 300 percent more than what General Richard Myers, chairman of the Joint Chiefs of Staff, projected in April that he would need to make it through September. (Los Angeles Times, July 22, 2004) United Nations estimates were much higher than that of any White House official. The international organization predicted the reconstruction cost would be $100 billion a year for a minimum of three years. By August 2004, only $600 million of that $18.4 billion earmarked for reconstruction had been spent. The blame was largely a result of the Pentagon’s planning failures and the interim government’s reluctance to consult qualified Iraqis. Instead, the administration brought in American defense contractors who failed to determine what was needed. A large chunk of the aid -- contractors’ profits and American and other foreign workers’ salaries -- wound up outside Iraq and did not help the Iraqi economy. (New York Times, August 9, 2004; Los Angeles Times, September 26, 2004) One official involved in reconstruction estimated that “hundreds of millions” had been squandered because of improper operation and maintenance of United States-funded projects. (Los Angeles Times, April 10, 2005) In 2005, auditors reviewed the files of 225 contracts totaling $327 million to see if the embassy “could identify the current value of paid and unpaid contract obligations.” It could not. Financial records understated payments made by $108,255,875 and overstated unpaid obligations by $119,361,286. (The Guardian, July 7, 2005) The auditors also reviewed the paperwork of a further 300 contracts worth $332.9 million. Of 198 contract files reviewed, 154 did not contain evidence that goods and services were received, 169 did not contain invoices, and 14 did not contain evidence of payment. (The Guardian, July 7, 2005) In January 2005, auditors issued a report detailing evidence of fraud, corruption and waste by the Iraqi Interim Government when Bremer was in charge. They found that $8.8 billion -- the entire Iraqi Interim Government spending from October 2003 through June 2004 -- was not properly accounted for. The Iraqi Office of Budget and Management at one point had only six staff, all of them inexperienced, and most of the ministries had no budget departments. Iraq’s newly appointed ministers and their senior officials were free to hand out hundreds of millions of dollars in cash as they pleased, while American “advisers” watched. (The Guardian, July 7, 2005) CPA personnel did not review and compare financial, budgetary and operational performance to planned or expected results. One ministry gave out $430 million in contracts without its CPA advisers seeing any of the paperwork. Another claimed to be paying 8,206 guards, but only 602 could be found. Auditors determined that CPA headquarters in Baghdad did not maintain full control and accountability for approximately $119.9 million, and that agents in the field did not properly account for or support over $96.6 million in cash and receipts. The agents were mostly Americans in Iraq on short-term contracts. One agent’s account balance was “overstated by $2,825,755, and the error went undetected.” (The Guardian, July 7, 2005) Another agent was given $25 million cash for which Bremer’s office “acknowledged not having any supporting documentation.” Of more than $23 million given to another agent, there were only records for $6,306,836 paid to contractors. (The Guardian, July 7, 2005) Many of the American agents submitted their paperwork only hours before they headed to the airport. Two left Iraq without accounting for $750,000 each, which has never been found. CPA head office cleared several agents’ balances of between $250,000 and $12 million without any receipts. One agent who did submit receipts, on being told that he still owed $1,878,870, turned up three days later with exactly that amount. (The Guardian, July 7, 2005) In May 2005, it was discovered that nearly $100 million, that was to be disbursed for Iraqi reconstruction projects, was missing. Rapid Regional Response Program, an obscure rebuilding effort operated from the Hillah office. The program was designed to jump-start reconstruction in south-central Iraq by allowing local United States officials to quickly issue contracts worth up to $200,000 each. (New York Times, May 5, 2005) Auditors could not determine how the money at the Hillah office was doled out to Iraqi workers. In one case, an official was fired for mishandling funds was allowed to continue disbursing money nearly a month after his termination. An American official told auditors that he was given $6.75 million on June 21, 2004. He was told that he had to spend the money by June 28, the day that the United States-led occupation administration turned over “sovereignty” to an interim Iraqi government. (New York Times, May 5, 2005) In one case, two United States officials left Iraq after completing their tours of duty without accounting for a total of $1.5 million. The manager of the cash funds simply zeroed out the balance on a spreadsheet. Auditors charged that this was an attempt “to remove outstanding balances by simply washing accounts.” (New York Times, May 5, 2005) In another case, the United States ordered the removal of the official in charge of the overall cash program on May 30, 2004, but he remained in office until June 20. When told he had failed to account for $1,878,870, the official returned exactly that amount three days later. Auditors suspected the officials had “a reserve of cash and turned in only the amount” needed to complete the clearance process. (New York Times, May 5, 2005) In yet another case, one payment official had three errors in his accounting books. He told superiors that he gave $311,100 to another United States official when he had actually handed over $1,210,000 -- leaving it unclear what happened to $898,900. (New York Times, May 5, 2005) By 2005, over $1.5 billion was disbursed to interim Iraqi ministries without any accounting, and more than $1 billion designated for provincial treasuries never made it out of Baghdad. More than $430 million in contracts issued by the Petroleum Ministry were unsupported by any documentation, and $8 billion were given to government ministries that had no financial controls in place. Nearly all of it disappeared, spent on “payroll,” wages for “ghost employees” in the Ministries of the Interior and Defense. (The American Conservative, October 24, 2005) Millions of dollars disappeared on truckloads and by helicopter. The CPA reportedly distributed funds to contractors in bags off the back of a truck. One notorious incident in April 2004, $1.5 billion in cash that had just been delivered by three Blackhawk helicopters was handed over to a courier in Erbil, in the Kurdish region, never to be seen again. (The American Conservative, October 24, 2005) A $500 million power-plant contract was reportedly awarded to a bidder based on a proposal one page long. After a joint commission rejected the proposal, its members were replaced by the minister, and the project was approved. But no plant was ever built. (The American Conservative, October 24, 2005) Even though the Bush administration refused to admit that reconstruction was a failure, it changed course to deepen its involvement in the process of running Iraq. As insurgent attacks intensified throughout the spring of 2005, United States officials began to take a more active role in acting as a mediator among political factions, pushing for the government to be more inclusive. (Los Angeles Times, May 20, 2005) By 2006, the CPA controlled more than $20.7 billion in Iraqi funds. The money was deposited into an account called the Development Fund for Iraq (DFI). These included no-bid contracts to Halliburton worth $2.4 billion. (Boston Globe, April 16, 2006)

In thee spring of 2006, the report by the Special Inspector General for the Reconstruction of Iraq said: “The lack of records and equipment accountability raises significant concerns about possible fraud, waste and abuse of Task Force Shield program by United States and Iraqi officials.” (Los Angeles Times, April 30, 2006)

In May 2006, Stuart Bowen, the Special Inspector General for Iraq Reconstruction, examined whether Iraqi security forces were developing a logistics operation capable of sustaining the hundreds of thousands of troops and police officers the American military that it claimed had been trained. (New York Times, October 30, 2006)

Five months later, Bowen concluded his study and found major discrepancies in American military records on where thousands of 9-millimeter pistols and hundreds of assault rifles and other weapons had ended up. The American military did not even take the elementary step of recording the serial numbers of nearly half a million weapons provided to Iraqis, the inspector general found, making it impossible to track or identify any that might be in the wrong hands. (New York Times, October 30, 2006)

In May 2006, Stuart Bowen, the Special Inspector General for Iraq Reconstruction, examined whether Iraqi security forces were developing a logistics operation capable of sustaining the hundreds of thousands of troops and police officers the American military that it claimed had been trained. (New York Times, October 30, 2006)

Five months later, Bowen concluded his study and found major discrepancies in American military records on where thousands of 9-millimeter pistols and hundreds of assault rifles and other weapons had ended up. The American military did not even take the elementary step of recording the serial numbers of nearly half a million weapons provided to Iraqis, the inspector general found, making it impossible to track or identify any that might be in the wrong hands. (New York Times, October 30, 2006)

Four percent of all weapons supplied by the Pentagon were missing.

United States weapons, earmarked for the Iraqi government, allegedly made it to black-market arms dealers on the streets of Baghdad. Official Iraq Army and police uniforms could easily be purchased presumably because government shipments were intercepted or otherwise corrupted. (New York Times, October 30, 2006)

Similarly, the Senate Armed Services Committee failed to locate hundreds of thousands of weapons intended for Iraqi security forces. Additionally, the Pentagon also never provided spare parts, maintenance personnel, or even repair manuals for most of the weapons given to the Iraqis. (New York Times, October 30, 2006)

Bowen concluded that Iraqi security forces still depended heavily on the Americans to fund its army. These included deliveries of fuel and ammunition, troop transport, health care, and maintenance. Bowen found that the American military was not able to say how many Iraqi logistics personnel it had trained. This was because the Pentagon told the inspector general that a computer network crash erased records. Those problems occurred even though the United States spent $133 million on the weapons program and $666 million on Iraqi logistics capabilities. (New York Times, October 30, 2006)

The inspector general concluded that of the 505,093 weapons that had been given to the Ministries of Interior and Defense over several years, serial numbers for only 12,128 were properly recorded. The weapons includde rocket-propelled grenade launchers, assault rifles, machine guns, shotguns, semiautomatic pistols, and sniper rifles. (New York Times, October 30, 2006)

Of those weapons, 370,000 were purchased with American taxpayer money under the Iraq Relief and Reconstruction Fund (IRRF) and therefore fell within the inspector general’s mandate. (New York Times, October 30, 2006)

Despite the potential risks from losing track of those weapons -- involving 19 different contracts and 142 delivery orders -- the United States recorded serial numbers for no more than a few thousand. There were also significant discrepancies in the numbers of weapons purchased and those in Iraqi warehouses. While 176,866 semiautomatic pistols were purchased with American money, just 163,386 showed up in warehouses -- meaning that more than 13,000 were unaccounted for. All 751 of the M1-F assault rifles sent to Iraq were missing, and nearly 100 MP-5 machine guns. (New York Times, October 30, 2006)

The report also said that although the United States planned to scale back its support for logistics and maintenance for Iraqi security forces in 2007, it was unclear whether the Iraqi government had any intention of compensating by allocating sufficient money to the Ministries of Interior and Defense. (New York Times, October 30, 2006)

1. SIPHONING OFF $100 BILLION. The Iraq Defense Ministry was the victim of one of the largest thefts in history. One billion dollars meant to buy arms from Pakistan and Poland was siphoned off, resulting in overpayment for inferior equipment such as armored cars. (Britain’s The Independent, September 19, 2005) The contracts were awarded without bidding and were signed with a Baghdad-based company, and not directly with the foreign supplier. The money was paid up front and was paid at great speed out of the ministry’s account with the Central Bank. Military equipment purchased in Poland included 28-year-old Soviet-made helicopters. (Britain’s The Independent, September 19, 2005) The materials were so poorly constructed that even a bullet from an elderly AK-47 machine-gun could penetrate their armor. A shipment of the latest MP5 American machine-guns, at a cost of $3,500 each, consisted in reality of Egyptian copies worth only $200 a gun. Other armored cars leaked so much oil that they had to be abandoned. A deal was struck to buy 7.62mm machine-gun bullets for 16 cents each, although they should have cost between 4 and 6 cents. (Britain’s The Independent, September 19, 2005)

2. CUSTER BATTLES. Custer Battles provided security services to the coalition. It received $11 million in Iraqi funds including $4 million in cash in a sole-source contract to supply security at Baghdad International Airport. The company had never provided airport security before receiving the contract. It also received a $21 million no-bid contract to provide security for the exchange of Iraqi currency. Much of the currency that was “replaced” by Custer Battles was never been accounted for. (The American Conservative, October 24, 2005) Custer Battles also allegedly took over abandoned Iraqi-owned forklifts at the airport, repainted them, and then leased them back to the airport authority through a company set up in the Cayman Islands. Custer Battles reportedly set up a number of shell companies in offshore tax havens in Lebanon, Cyprus, and the Cayman Islands to handle the cash flow. (The American Conservative, October 24, 2005) A federal lawsuit in early 2005 charged Custer Battles with defrauding the CPA of tens of millions of dollars in Iraq reconstruction funds. According to the lawsuit, the firm was paid approximately $15 million to provide security for civilian flights at Baghdad International Airport at a time when there were no planes flying. Moreover, the government doled out $100 million worth of contracts to the firm despite a thin track record and evidence the government was not getting its money’s worth. (Washington Post, February 15, 2005) 3. CACI INTERNATIONAL. CACI International was involved in the Abu Ghraib interrogations. The company was accused by the GAO in April 2004 of having failed to keep records on hours of work that it was billing. It routinely upgraded employee job descriptions so that more could be charged per employee per hour. (The American Conservative, October 24, 2005) 4. ASARS CORPORATION. ASARS was paid $42.8 million to train and equip 6,000 guards to protect Iraq’s electrical infrastructure. The audit found that it could not be determined whether any of the objectives were met because the “program barely got started before it was canceled” in March 2005. (Los Angeles Times, April 30, 2006) The audit report criticized the company’s construction of what was supposed to be a classroom and auditorium for the security guards at the Taji military base outside Baghdad. Instead, the company erected an open-air pavilion and charged the government $1.4 million. The audit said the pavilion should have cost $50,000 to $100,000. (Los Angeles Times, April 30, 2006) 5. ROBERT STEIN. The first corruption charges against an American contractor in the rebuilding of Iraq were brought against Robert Stein in November 2005. Stein was in charge of $82 billion in government contracts. The scam involved three Americans and five Army officers. (NBC News, February 2, 2006) Stein was involved in a multi-million scheme to rig contracts to build a regional democracy center in southern Iraq, a police academy, and a public library in Karbala. Stein was allegedly paid off by an American businessman, Philip Bloom, who was also charged. Bloom who received $13 million in Iraq contracts. (MSNBC, November 17, 2005) Stein was accused of taking “kickbacks and bribes” that involved “take or excessive bids.” That included jewelry, car payments, and house payments that were made in exchange for contracts for Iraq reconstruction. At least $100,000 of the alleged bribes went into the bank account of Stein’s wife, Cynthia, from whom he was separated. Three months later -- in February 2006 -- Stein admitted to embezzling $2 million and taking $1 million in bribes. (MSNBC, November 17, 2005; NBC News, February 2, 2006) 6. PRIVATE GUARDS. Thousands of the heavily armed private guards in Iraq were under contract with the United States government and private companies. Some were involved in shootings in Iraq -- but none was ever prosecuted. Instead, in at least one fatal case, he was sent home. (Los Angeles Times, December 4, 2005) The contractors functioned in a legal gray area. Under an order issued by the Coalition Provisional Authority, contractors suspected of wrongdoing were prosecuted in their home countries. The contractors had immunity from Iraqi courts and never faced American prosecution, giving little recourse to Iraqis seeking justice for wrongful shootings. (Los Angeles Times, December 4, 2005) The contractors received high wages. A team of private contractors to protect a single United States official cost upward of $5,000 a day. Security firms operating in Iraq were cited for fraud and have clashed with United States forces. (Los Angeles Times, December 4, 2005) 7. DARWISH CORPORATION. In September 2004, the Pentagon barred Darwish Corporation from receiving future American contracts because of his alleged role in a scheme to defraud the United States of millions of dollars on a security contract in Iraq. (Los Angeles Times, March 15, 2005)

8. TASK FORCE SHIELD. Under a program named Task Force Shield, the United States paid two security firms $147 million to train and to equip tens of thousands of Iraqis to safeguard oil pipelines and transmission towers.

In February 2006, the GAO issued a scathing report regarding the cost of reconstruction. It said 16 to 22 percent of reconstruction costs went to paying for security. (Government Accounting Office, Testimony before the Senate Foreign Relations Committee, February 8, 2006)

In the spring of 2006, the report by the Special Inspector General for the Reconstruction of Iraq said: “The lack of records and equipment accountability raises significant concerns about possible fraud, waste and abuse of Task Force Shield program by United States and Iraqi officials.” (Los Angeles Times, April 30, 2006)

The amount of corruption in Iraq continued to escalate. According to an audit by Special Inspector General for Iraq Reconstruction in July 2006, the Iraqi government estimated that corruption cost the country at least $4 billion a year. The audit concluded that the Bush administration’s overall handling of Iraq contracting -- from no-bid contracts to failing to standardize contracting regulations to help prevent fraud -- was deeply flawed. (Wall Street Journal, August 3, 2006)

2. FAILING TO OBTAIN GLOBAL SUPPORT

United Nations estimates for reconstruction were much higher than that of any White House official. The international organization predicted the reconstruction cost would be $100 billion a year for a minimum of three years.

The few global nations, that promised funds for reconstruction, were slow in living up to their promises. At an October conference in Madrid, Spain, the United States pledged $18.7 billion, by far the most among the 38 countries, along with the World Bank and the International Monetary Fund. Pledges totaled $22.2 billion in grants and $9.6 billion to $13.3 billion in loans through 2007. According to the World Bank, only $2.5 billion of all the pledges were specifically for 2004. More than $25 billion was offered in a lump sum. (New York Times, December 9, 2003)

A bureaucratic squabble between the Departments of Defense and State held up the $18.6 billion. The dispute centered on the State Department and its co-agency, the United States Agency for International Development, vying for some of the contracting authority. (Chicago Sun Times, December 22, 2003)

The State Department believed it could better oversee contracts because it would take the chief United States diplomatic role in Iraq on July 1, when power was set to transfer to Iraqis. (Chicago Sun Times, December 22, 2003)

In December, the Bush administration punished those countries that did not support the war. Wolfowitz announced that any country that failed to support the war would not be allowed to build on the $20 billion in contracts. Corporations in Russia, Germany, France, and Canada were the largest firms that were blackballed by Bush. They were not allowed to compete for subcontracts on the United States funds earmarked for reconstruction. The policy did not apply to $13 billion in international pledges. (Washington Post, December 9, 2003)

On the day after Wolfowitz’s pronouncement, Bush asked for the help of those countries that had opposed his war. Bush made phone calls to heads of state of countries that had just been penalized. Within one week, James Baker flew to Russia, Germany, and France to lobby their heads of state to forgive Iraq’s $125 billion foreign debt. (Newsweek, December 22, 2003)

The White House blamed the blunder on lower-level officials. Top officials from the State and Defense departments agreed not to talk about the Bush administration’s punitive policy. But the next day, Bush endorsed the policy on contracts. (Newsweek, December 22, 2003)

3. CODDLING AMERICAN CORPORATIONS

The Bush administration’s policy regarding Iraqi property after American occupation violated The Hague Regulations of 1907 as well as the United States Army’s own code of war. The Hague Regulations stated that an occupying power must respect “unless absolutely prevented, the laws in force in the country.” The convention stated that occupying powers “shall be regarded only as administrator and usufructuary of public buildings, real estate, forests, and agricultural estates belonging to the hostile State, and situated in the occupied country. It must safeguard the capital of these properties, and administer them in accordance with the rules of usufruct.” (The Nation, November 24, 2003)

Prior to Bush’s war, the administration notified both American and European corporations that they would be treated equally in determining which would receive contracts. Bush boasted that both European and American oil corporations would be treated equally when contracts would be handed out once the war terminated.

However, CBS’ “60 Minutes” reported on April 25, 2003 that a secret memo was sent out only to American companies,” inviting them to submit bids. Subsequently, European firms were left out. The White House handed out contracts to Dick Cheney’s Halliburton and George Shultz’s Bechtel.

The State Department strongly rejected allegations that Bush had unfairly awarded contracts for the reconstruction of Iraq to American companies with close connections to the administration. It would have made sense for United States and British firms to get a significant share of any repair and development jobs in Iraq, because they were such major players in the global industry. Britain and the United States possessed the best technology and professional expertise in that area. (New York Times, March 28, 2003)

American oil companies waited in the wings to land contracts with a new Iraqi regime. Primary benefactors included Exxon Mobil Corporation of Irving, Texas, and Royal Dutch/Shell Group of London. The losers were the French, Russian and Chinese oil companies that have either signed contracts or negotiated preliminary agreements to drill in Iraq. Royal Dutch/Shell said it discussed opportunities with Hussein’s government in the mid-1990s -- and was ready to resume the dialogue if a new government was installed. (Los Angeles Times, March 11, 2003)

The company with perhaps the most at stake was Paris-based TotalFinaElf, which had negotiated but never signed agreements to develop two of Iraq’s largest oil fields, Majnoon and Nahr Bin Omar. The contracts, valued at $7 billion, could ultimately double Total’s oil reserves and boost its production by 400,000 barrels a day.

TotalFinaElf CEO Thierry Desmarest declared in February 2003 that he was not about to cede the field to United States and British rivals. Desmarest acknowledged that France’s opposition to a likely war could make Total’s standing in Iraq “more complicated,” but he expressed confidence the company could land new contracts if allowed to engage in good-faith negotiations. (Los Angeles Times, March 11, 2003)

The French, among the original members of the international consortium formed in 1928 to develop Iraq’s reserves, continued to enjoy favored treatment in Baghdad after Iraq nationalized its oil industry in 1972. Russia's oil industry also had special access after Iraq tilted toward the Soviet Union during the Cold War.

After the 1991 Persian Gulf War, the United States government prohibited American firms from engaging in any commercial activities or business negotiations with the Iraqi government. United Nations sanctions barred foreign companies from investing in Iraq’s oil sector, though they were allowed to negotiate deals for the future. One reason Total’s contracts were never consummated was that the company wanted to include language making the work contingent on the lifting of sanctions, and Hussein’s government refused. (Los Angeles Times, March 11, 2003)

Petrel Resources, a tiny oil firm in Dublin, Ireland, had been negotiating with Hussein’s government since 1978 for exploration rights in Iraq's western desert, and recently signed a contract. I was unclear whether the contract would be recognized by a new regime. And if United States and British companies were to lobby for business in Iraq, then Petrel would likely lose a contract. (Los Angeles Times, March 11, 2003)

Bush’s war provided a gigantic bonanza for the United States-dominated oil-services industry which specialized in repairing damaged infrastructures. The first contracts were doled out to Halliburton, Schlumberger Ltd., Baker Hughes Incorporated, and BJ Services Company to provide repair, rehabilitation, engineering, and construction services. These contracts added up to over $1.5 billion. An additional $5 billion in contracts were awarded at a later date. As part of that first phase, engineering, and construction project specialists such as Aliso Viejo-based Fluor Corporation could be in the running for contracts to repair and upgrade Iraqi oil facilities. (Los Angeles Times, March 11, 2003)

The Army Corps of Engineers contracted with Kellogg, Brown and Root (KBR) as its main oilwell firefighting firm -- without any bidding. Other companies included major contributors to the Republican Party: Bechtel Group, and Fluor Corporation. These three and Halliburton had funneled a total of $2.8 million over the last two election cycles over $1.90 million to Republicans. Meanwhile, Halliburton was continuing to pay Cheney approximately $5 million annually as part of his retirement. (Washington Post, March 12, 2003; Los Angeles Times, March 19, 2003; Yahoo News, March 27, 2003)

On April 17, the United States Agency for International Development awarded the Bechtel Group the first major contract in a vast reconstruction plan for Iraq. The contract guaranteed Bechtel $680 million over 18 months. The decision touched off a heated contest among some of the nation’s most politically connected construction concerns. Under secretary of state Alan Larson responded, saying he was “surprised” in such charges. He said that giving American companies first-line responsibilities was simply a matter of efficiency. He also said electricity supplies had to be restored, ports opened, and safe water provided as quickly as possible.

Several Bin Laden family members had invested about $10 million in a private equity fund operated by former subsidiary of Bechtel before 9/11. Fremont Group, a San Francisco-based private investment firm, once was a unit of Bechtel. Fremont spokeswoman Pat Harden confirmed Bin Laden’s family had invested $10 million in a Fremont fund. (New Yorker, May 5, 2003)

Together, the six companies invited to bid on the Bechtel contract contributed $3.6 million to federal election campaigns, two-thirds to Republicans, according to the Center for Responsive Politics. (Christian Science Monitor, October 10, 2003)

By the end of August -- four months after Bush declared major combat operations over -- Halliburton had pocketed more than $1.7 billion and was on the verge of raking in hundreds of millions more dollars under the Army’s a no-bid contract. Independent experts estimated that as much as one-third of the monthly $3.9 billion cost of keeping American troops in Iraq went to independent contractors.

About $1 billion was allocated to KBR through mid-August for contracts associated with Operation Iraqi Freedom. In addition, the company earned about $705 million for an initial round of oil field rehabilitation work for the Army Corps of Engineers. (Washington Post, August 28, 2003)

The services by Halliburton and Brown and Root Services included the construction and management of military bases, logistical support for the 1,200 intelligence officers hunting Iraqi weapons of mass destruction, and delivering mail and producing millions of hot meals. Specific work orders assigned to Brown and Root Services included $142 million for base camp operations in Kuwait, $170 million for logistical support for the Iraqi reconstruction effort, and $28 million for the construction of prisoner of war camps, the Army spreadsheet shows. The company was also allocated $39 million for building and operating United States base camps in Jordan, the existence of which the Pentagon has not previously publicly acknowledged. (Washington Post, August 28, 2003)

INVESTIGATING FEDERAL CONTRACTS. Senior Republican and Democratic lawmakers asked that the congressional investigation into how federal contracts were awarded for the reconstruction of Iraq be expanded to include nearly every aspect of the American occupation of that country

In an unusual show of bipartisan cooperation, the ranking Republicans and Democrats on the Senate Foreign Relations Committee and the House International Relations Committee sent a letter to the head of the General Accounting Office asking that he immediately begin assessing the effectiveness of the security efforts, humanitarian programs, economic development, procurement and political operations in Iraq. (New York Times, May 23, 2003)

In an unusual show of bipartisan cooperation, the ranking Republicans and Democrats on the Senate Foreign Relations Committee and the House International Relations Committee sent a letter to the head of the General Accounting Office. They asked that he immediately begin assessing the effectiveness of the security efforts, humanitarian programs, economic development, procurement and political operations in Iraq. (New York Times, May 23, 2003)

The Center for Public Integrity did the first detailed analysis of $8 billion in contracts awarded to 71 United States companies by the Pentagon and the State Department. In October, the non-partisan group reported that executives from 70 corporations, that received government contracts in Iraq and Afghanistan, contributed over $500,000 to Bush’s 2000 election campaign. These companies received an overwhelming majority of government contracts for billions of dollars of reconstruction work in Iraq and Afghanistan. (Washington Post, October 31, 2003; USA Today, October 31, 2003)

Two-thirds of the money was given to campaign committees went to the GOP; one-third was earmarked for the Democratic Party. Dell Computer executives and employees funneled the most -- $119,000 -- to Bush’s election and re-election campaign. Then came Bearing Point, a business consulting firm, at $119,000; General Electric at $72,000; and of Halliburton at $28,000. (Washington Post, October 31, 2003; USA Today, October 31, 2003)

Nine of the 10 biggest contractors -- the largest of which were Bechtel and Halliburton, either employed former senior government officials or had close ties to government agencies and to Congress. (Washington Post, October 31, 2003; USA Today, October 31, 2003)

The Bush administration awarded billions of dollars of contracts to ten companies in Iraq that had paid more than $300 million in penalties since 2000 to resolve allegations of bid rigging, fraud, delivery of faulty military parts, and environmental damage, while working on projects around the world. (Chicago Tribune, April 26, 2004)

The United States paid more than $780 million to one British firm that was convicted of fraud on three federal construction projects and banned from United States government work during 2002. (Chicago Tribune, April 26, 2004)

A Virginia company convicted of rigging bids for American-funded projects in Egypt also was awarded Iraq contracts worth hundreds of millions. A third firm found guilty of environmental violations and bid rigging won United States Army approval for a subcontract to clean up an Iraqi harbor. (Chicago Tribune, April 26, 2004)

Seven other companies with Iraq reconstruction contracts have agreed to pay financial penalties without admitting wrongdoing. Together, the 10 companies paid to resolve 30 alleged violations since 2000. Six paid penalties more than once. But the companies were awarded $7 billion in Iraq reconstruction contracts. (Chicago Tribune, April 26, 2004)

THE TOP CONTRACTORS: Kulak Construction Company was based in Turkey and supplied construction workers to United States bases. It employed 30,301 civilians.

KBR was based in Houston and supplied logistics support to United States troops. It employed 15,336 workers. The companies with the largest number of employees were foreign firms in the Middle East that subcontracted to KBR.

Prime Projects International had its base in Dubai and supplied labor for logistics support. Its work force exceeded 10,560.

L-3 Communications’s headquarters were in New York. It provided translators and other services from its 5,886 employees.

Gulf Catering Company was based in Saudi Arabia. Its 4,002 employees provided kitchen services to United States troops.

77 Construction based itself in Irbil, Iraq and provided logistics support to troops. Its payroll consisted of 3,219 employees.

ECC was based in Burlingame, California and was contracted to work on reconstruction projects. It maintained 2,390 employees.

Serka Group had headquarters in Turkey and its 2,250 workers supplied logistics support to United States bases.

IPBD Limited was based in England and supplied labor, laundry services. and other support from its 2,164 employees.

Daoud & Partners Company was based in Amman, Jordan. Its workforce of 2,092 supplied labor for logistics support.

EOD Technology Incorporated of Lenoir City, Tennessee supplied security, explosives demolition, and other service. Its payroll consisted of 1,913 personnel. ( Los Angeles Times, July 4, 2007)

ESS hired Blackwater to maintain the company’s security. These costs amounted to $19.6 million and were allegedly paid by the United States government. However, Blackwater claimed it billed ESS $2.3 million for its services. That was a markup of more than $17 million was ultimately passed on to the government. Three weeks after the hearing, KBR told shareholders it may be forced to repay up to $400 million to the government as a result of an ongoing Army investigation. (The Nation, April 2, 2007)

ArmorGroup, which started in Iraq with 20 employees and a handful of SUVs, increased to a force of 1,200 -- the equivalent of nearly two battalions -- with 240 armored trucks. Nearly half of the publicly traded company’s $273.5 million in revenue in 2006 came from Iraq. Globally, ArmorGroup employed 9,000 people in 38 countries. (Washington Post, June 16, 2007)

ArmorGroup’s headquarters were located near Baghdad’s Green Zone. The company acquired a fleet of $200,000 tactical armored vehicles equipped with two gun hatches and able to withstand armor-piercing bullets and some of the largest roadside bombs. ArmorGroup lost 26 employees in Iraq, based on insurance claims. (Washington Post, June 16, 2007)

ArmorGroup operated 10 convoy security teams. It charged $8,000 to $12,000 a day, although the cost could vary depending on convoy size and the risk. For security reasons, the convoys were limited to 10 tractor-trailers protected by at least four armored trucks filled with 20 guards: four Western vehicle commanders with M-21 assault rifles and 9mm Glock pistols, and 16 Iraqis with AK-47s. Washington Post, June 16, 2007)

ArmorGroup was under constant attack. It ran 1,184 convoys in Iraq in 2006 and reported 450 hostile actions -- mostly roadside bombs, small-arms fire, and mortar attacks. The company was attacked 293 times in the first four months of 2007. Washington Post, June 16, 2007)

4. TRADING WITH THE ENEMY ACT

Some corporations were not as fortunate as Halliburton and Bechtel. Before Gulf War II, The Office of Foreign Assets Control (OFAC) released heavily documents outlining penalties levied against 51 companies. The countries were sanctioned under the Trading With the Enemy Act or the International Emergency Economic Powers Act. ChevronTexaco and Fleet Bank ranked at the top of the list for illicit trading with Iraq. Corporate Crime Reporter and the corporate watchdog group Public Citizen released the names of the companies.

1. ChevronTexaco traded with Iraq, and paid $14,071 in fines.

2. Fleet Bank traded with Iran and paid $41,000 in fines.

3. Wal-Mart, the New York Yankees, ESPN and Caterpillar traded with Cuba, and settled for $50,000, $75,000, about $40,000, and $18,000 respectively. The team’s infraction involved negotiations with Cuban baseball players.

4. ExxonMobil and Wells Fargo Bank traded with Sudan and settled for $50,000 and $5,500 respectively.

5. Wal-Mart, the New York Yankees, ChevronTexaco, and ESPN settled charges of illegal trading with countries such as Iraq, Cuba, and others. (CNN, April 14, 2003)

5. CORPORATE FRAUD: HALLIBURTON AND KELLOGG BROWN AND ROOT

Cheney always insisted that Halliburton never violated any laws. For example, on October 5, 2004, he said, “The reason they keep mentioning Halliburton is because they’re trying to throw up a smokescreen. They know the charges are false ... there’s no substance to the charges.” (Commission on Presidential Debates, October 5, 2004)

1. In November 2003, Halliburton was charged with gouging prices on imported fuel. Cheney’s former firm charged the federal government $1.59 a gallon while the Iraqis “get up to speed.” However, the Iraq’s national oil company said it could purchase fuel for 98 cents a gallon. The average wholesale cost of gasoline during that period in the Middle East was about 71 cents a gallon. That meant Halliburton was charging more than 90 cents a gallon to transport fuel into Iraq from Kuwait. (Boston Globe, October 16, 2003; Time, November 3, 2003)

While Halliburton charged $2.68 a gallon to import fuel from Kuwait, the Energy Support Center spent only $1.57 a gallon. That was because the Energy Support Center purchased fuel directly from Kuwait Petroleum and paid Altanmia less one-third of what Halliburton did to truck in the fuel. (Houston Chronicle, July 22, 2004)

In a report withheld from Congress, Halliburton overcharged the government $108 million under its no-bid Iraq oil contract to deliver fuel to Iraq in the early days of the war. The Pentagon's Defense Contract Audit Agency said Halliburton had charged $27.5 million to deliver $82,100 worth of liquefied petroleum gas. (Los Angeles Times, March 16, 2005)

The report, dated October 2004, suggested Halliburton might have overcharged the government on its $2.5-billion contract to supply fuel and protect Iraq’s oil infrastructure. An earlier draft audit of the same contract turned up $61 million in questionable charges. The report also faulted Halliburton for misleading auditors, poorly managing multimillion-dollar subcontracts and failing to deliver key documents to justify the prices paid for fuel. (Los Angeles Times, March 16, 2005)

In March 2005, in the first criminal case of contracting fraud in Iraq, a former manager for Halliburton subsidiary Kellogg Brown and Root (KBR) was indicted on 10 counts by a federal jury for cheating the government out of nearly $4 million in Kuwait. A separate audit also found Halliburton could not account for $1.8 billion in a separate contract to repair oil fields in Iraq. (Washington Post, March 17, 2005)

In addition, the audit by the Coalition Provisional Authority’s own inspector general found that $8.8 billion could not be accounted for. The audit also found that the payrolls in Iraqi ministries under the control of the CPA were padded with thousands of ghost employees. In one example, the audit said the CPA paid for 74,000 guards even though the actual number could not be validated. In another, 8,206 guards were listed on a payroll but only 603 people doing the work could be counted. (MSNBC, August 19, 2004)

2. In December 2003, allegations were made that KBR overcharged the United States government $61 million on a contract to supply fuel for Iraq. KBR charged the government $2.27 a gallon to deliver gasoline from Kuwait, while a similar contract for gas from Turkey set the price at only $1.18. (Washington Post, December 11, 2003)

3. The United States military awarded Halliburton a $220 million contract to operate mess halls in Iraq. In December 2003, auditors found that Halliburton already had awarded a subcontract under which the cost was actually $67 million lower than the $220 million. (Washington Post, December 11, 2003)

4. In January 2004, two KBR employees, working for Halliburton in Kuwait, accepted up to $6 million in kickbacks from a Kuwaiti company that was awarded contracts to supply United States troops in Iraq. In February, KBR repaid the United States military $27.4 million for overcharging for meals served to troops. (Wall Street Journal, January 23, 2004; Reuters, February 3, 2004)

5. Two former Halliburton said that the company systematically wasted United States government funds in its operations in Iraq and Kuwait. They claimed that Halliburton overspent funds under a $3.7-billion contract to provide food and lodging to American troops. They said Halliburton bought dozens of substandard housing units that were in need of frequent repair, and then they complained at changing providers when the supervisor located another source of better temporary housing units for less money. Federal funds were also wasted in the purchase of cellular phones and temporary housing for troops. Halliburton provided a 10 percent additional payment on its phone bills to a Kuwaiti company for providing cellular phones -- though nothing in the contract between Halliburton and the company called for such payments. (Los Angeles Times, February 13, 2004)

According to David Wilson and James Warren, both of whom worked for Halliburton, “brand new $85,000 trucks were abandoned or torched’ if they got a flat tire or experienced minor mechanical problems.” (Center for American Politics, February 11, 2004)

6. After Defense Department auditors warned on December 31 that Halliburton was supplying inaccurate cost data, the Army Corps of Engineers awarded the firm $1.2 billion in new contracts in mid-January, bringing its total to $5.8 billion. The Pentagon and the Justice Department investigated charges that Halliburton overbilled the United States by $61 million for fuel. The firm admitted that one or two employees took kickbacks in overcharging the United States $6.3 million. (Los Angeles Times, April 17, 2004)

7. In March 2004, the Pentagon withheld $300 million in payments to Halliburton. The company was accused of overcharging the price for meals served to troops in Iraq and Kuwait. (Chicago Tribune, March 18, 2004)

8. Former Halliburton logistics specialist Marie deYoung said that Halliburton paid $45 per case of soda and $100 per 15-pound bag of laundry. According to deYoung, “Halliburton did not comply with the Army's request to move Halliburton employees from a five-star hotel in Kuwait, where it costs taxpayers approximately $10,000 per day to house the employees.” (Center for American Politics, February 11, 2004)

9. Michael West, who worked as a foreman for Halliburton, said he and other employees spent weeks in Iraq with virtually nothing to do, but were instructed to bill 12-hour days for seven days a week on their timesheets. (Center for American Politics, February 11, 2004)

10. In July 2004, a grand jury investigated Halliburton’s work in Iran, where it was illegal for United States companies to operate. It involved Halliburton Products and Services Ltd., a subsidiary registered in the Cayman Islands and headquartered in Dubai that provided oil field services in Iran. The operations in Iran included Cheney's stint as chief executive from 1995 to 2000, when he frequently urged the lifting of such sanctions. (Los Angeles Times, July 21, 2004)

Cheney was CEO when Halliburton Products and Services set up shop in Iran. In fact, Cheney was so adamant about doing business with terrorist nations like Iran, he even went abroad to publicly attack American foreign policy after meeting with top officials from a foreign government. (60 Minutes, “Do Business with the Enemy,” January 25, 2004)

11. KBR employees in Iraq were told to remove shrapnel and bullets from food and serve it. Pentagon auditors questioned more than $1 billion in costs by Halliburton for its work in Iraq. (Air America, June 28, 2005)

12. A report by congressional Democrats was based on Defense Contract Audit Agency (DCAA) documents and a briefing by DCAA officials was completed in June 2005. It detailed $813 million in questioned costs on a Halliburton contract to provide logistical support to United States troops and $219 million on a no-bid contract to restore Iraqi’s oil network. The DCAA found an additional $442 million in Halliburton charges that were “unsupported,” meaning the company had not provided enough documentation to justify the cost. (Air America, June 28, 2005)

Some of the items that Pentagon auditors questioned included:

* $152,000 in “movie library costs”

*A $1.5 million tailoring bill that auditors deemed higher than reasonable

*More than $560,000 worth of heavy equipment that was considered unnecessary

*Two multimillion-dollar transportation bills that appeared to overlap (Air America, June 28, 2005)

13. Rory Mayberry, a former food manager in Iraq for Kellogg Brown and Root (KBR) testified that the dining hall where he worked in early 2004 routinely served foods that were “outdated or expired as much as a year,” or that had been removed from trucks whose convoys had been attacked. Mayberry also said, “We were told to go into the trucks and remove the food items and use them after removing the bullets and any shrapnel from the bad food that was hit.” (Washington Post, June 28, 2005)

Yet during the same period, approximately three times each week, KBR would cater like management parties and barbecues for KBR employees where sanitary food was served. (Senate Democratic Party Committee Hearing, “An Oversight Meeting on Waste, Fraud, and Abuse on U.S. Government Contracting in Iraq,” June 27, 2005)

14. Gary Butters, chairman of Lloyd-Owen International (LOI) described how, on June 9, 2005, his firm had undertaken a “high-risk task to deliver dining construction goods to the KBR-managed camp in Fallujah.” He said that just a mile out from the camp, “our convoy was ambushed ... and we suffered serious casualties in a near four-hour fight. We lost 3 individuals to direct fire, seven individuals were injured and on arrival at the U.S. base, one U.S. Military person was also sadly injured in an attempt to assist.” (Senate Democratic Party Committee Hearing, “An Oversight Meeting on Waste, Fraud, and Abuse on U.S. Government Contracting in Iraq,” June 27, 2005)

15. KBR lured unsuspecting Middle Easterners from poor countries into working in dangerous jobs in Iraq. Of the tens of thousands of foreign workers were hired by KBR, many came from impoverished Asian nations. They were lured to Iraq with false promises of a safe job in Kuwait or Jordan, work for as little as $1.56 an hour. (Center for American Progress, October 18, 2005)

A group of Nepalese men were given fraudulent paperwork that promised them jobs at a luxury hotel in Amman, Jordan. But instead they wound up in Iraq working for KBR. Subsequently, 12 of them were kidnapped by terrorists in Iraq and a few days later publicly slaughtered. (Madison Capital Times, October 17, 2005)

16. Not only did KBR serve United States troops in Iraq spoiled food, but also contaminated water from the Euphrates River, containing numerous pathogenic organisms. This was nearly two times the normal contamination levels of untreated water. American Progress Action, September 21, 2005)

17. KBR was in charge of water quality in Iraq and Kuwait. In March 2005, KBR’s water treatment expert, Ben Carter, discovered the problem. A July 14, 2005, memo showed that Halliburton’s public relations department knew of the problem. ” (Washington Post, January 23, 2006)

Carter told company officials at the base that they would have to notify the military. Carter said, “They told me it was none of my concern and to keep my mouth shut.” When KBR refused to take action, he resigned the following month. ” (Washington Post, January 23, 2006)

Carter said there was little doubt that raw sewage was routinely dumped upstream of intake much less than the required two-mile distance. On at least one occasion, he spoke to the chief military surgeon at the base, asking him whether he was aware of stomach problems afflicting people. He said the surgeon told him he would look into it. Carter said, “They brushed it under the carpet. I told everyone, ‘Don’t take showers, use bottled water.’ ” (Washington Post, January 23, 2006)

Seven months later -- in January 2006 -- the Office of the Special Inspector General for Iraq Reconstruction determined that the water source at a base camp for military and civilians was not treated. (Office of the Special Inspector General for Iraq Reconstruction, July 15, 2005 memo by William Granger; Washington Post, January 23, 2006)

The report said the level of contamination was roughly two times the normal contamination of untreated water from the Euphrates River. While bottled water was available for drinking, the contaminated water was used for virtually everything else, including hand-washing, laundry, bathing, and making coffee. (Washington Post, January 23, 2006)

18. In 2005, the Pentagon’s Defense Contract Audit Agency questioned KBR’s bill of $263 million. That included costs for fuel deliveries, pipeline repairs, and other tasks that auditors said were potentially inflated or unsupported by documentation. (New York Times, February 27, 2006)

The Army withheld payment on just 3.8 percent of the charges questioned by the Pentagon audit agency, which was far below the rate at which the agency’s recommendation was usually followed or sustained by the military. This was called the “sustention rate.” (New York Times, February 27, 2006)

About $208 million of the disputed charges were primarily related to the cost of importing fuel, which was at the heart of the controversy surrounding the contract. KBR hired a Kuwaiti company, Altanmia, to transport fuel in enormous truck convoys. The Pentagon auditors found that in part because of the transportation fees that KBR agreed to pay Altanmia, the cost for a gallon of gasoline was roughly 40 percent higher than what the American military paid when it did the job itself -- under a separate contract it had negotiated with Altanmia. (New York Times, February 27, 2006)

The Army said it had largely accepted KBR’s assertions that costs had been driven up by factors beyond its control -- the rising cost of the war and the hard-line negotiating stance of the state-owned Kuwait Petroleum Corporation. The Army said the Kuwaiti fuel company blocked attempts by KBR to renegotiate its transportation contract with Altanmia. (New York Times, February 27, 2006)

In February 2006, the Army reimbursed KBR for nearly all of the disputed $263 million despite that Pentagon’s own auditors had identified more than $250 million in charges as potentially excessive or unjustified. (New York Times, February 27, 2006)

CHENEY IS CAUGHT IN TWO LIES. After leaving Halliburton to become vice president, Dick Cheney received more than $150,000 in deferred compensation each year from Halliburton and held 433,000 stock options, which increased in value when the company’s stock increased. (Time, May 30, 2004)

In the summer of 2000, vice presidential candidate Cheney lied when he denied that Halliburton had contracts with Saddam. On ABC’s This Week, San Donaldson asked Cheney: “I’m told, and correct me if I’m wrong, that Halliburton, through subsidiary companies, was actually trying to do business with Iraq?”

Cheney replied: “no. No. I had a firm policy that we wouldn’t do anything in Iraq, even arrangements that were supposed to be legal. What we do with respect to Iran and Libya is done through foreign subsidiaries, totally in compliance with U.S. law. … Iraq’s different, but we’ve not done any business in Iraq since the sanctions (were) imposed, and I have a standing policy that I wouldn’t do that.” (ABC News, July 30, 2000)

Scooter Libby, Cheney’s chief of staff, was briefed in October 2002 about the proposal to issue a contract to Halliburton. An e-mail indicated that a $7 billion no-bid contract awarded to Halliburton on March 8, 2003 was coordinated with Cheney’s office. (Time, May 30, 2004)

In September 2003, Cheney was a guest on NBC’s Meet the Press, when host Tim Russert asked about Halliburton. Citing the company’s role in rebuilding Iraq as well as Cheney’s prior position as Halliburton’s CEO, Russert asked, “Were you involved in any way in the awarding of those contracts?”

Cheney replied: “Of course not, Tim ... And as vice president, I have absolutely no influence of, involvement of, knowledge of in any way, shape or form of contracts led by the (Army) Corps of Engineers or anybody else in the Federal Government.” (Time, May 30, 2004; June 7, 2004)

Cheney had lied again. His comments differed from an e-mail from six months earlier and dated March 5, 2003. The e-mail said “action” on a multibillion-dollar Halliburton contract was “coordinated” with Cheney’s office. The e-mail said that Undersecretary of Defense Douglas Feith received “authority to execute RIO (Restore Iraqi Oil)” from Deputy Defense Secretary Paul Wolfowitz. RIO became one of several large contracts the Bush administration awarded to Halliburton in 2003. (Time, June 7, 2004)

The e-mail said Feith approved arrangements for the contract “contingent on informing WH (White House) tomorrow. We anticipate no issues since action has been coordinated w VP’s (Vice President’s) office.” (Time, June 7, 2004)

Three days later, the Army Corps of Engineers gave Halliburton the contract, without seeking other bids. One year later, Pentagon officials acknowledged that Feith had discussed the Halliburton contract in advance with Cheney’s office. (Los Angeles Times, June 14, 2004)

One year later in October 2004, the FBI launched an investigation into whether Halliburton overcharged taxpayers for fuel in Iraq. The inquiry also surrounded allegations that the Bush administration might have showed favoritism to Halliburton. Cheney denied that his office played a role in the contract.

BUNNY GREENHOUSE IS FIRED. In the October 2004 FBI investigation, Bunny Greenhouse, the top contracting official in the United States Army Corps of Engineers, wrote to the secretary of the Army, asking for a full investigation of special treatment to Halliburton. She contended that the award of contracts without competition to KBR put at risk “the integrity of the federal contracting program as it relates to a major defense contractor.” (MSNBC, October 28, 2004)

Greenhouse first attended a secret meeting at the Pentagon, where a lot of people were present to finalize the financial and other details of the Halliburton contract. During that meeting, she became distressed that the conversation about the financial dealings was taking place in the presence of Halliburton personnel who were in the meeting. She wrote that she asked the Army commanding general who presided at the meeting to ask the Halliburton personnel to leave the meeting so that they would not be privy to these details. (MSNBC, October 28, 2004)

The commanding general asked them to leave the meeting. They did. The next day, she signed an approval for the contract. But she made the point with her superiors in all these meeting that the contract should be for one year only and not for five years. Her superiors overrode her. She placed her signature on the contract and wrote that it should not be for one year -- not five years -- because of the interest of competition. (MSNBC, October 28, 2004)

An internal 2003 Pentagon e-mail that said the Iraq contract “has been coordinated” with Cheney’s White House office. Yet, Cheney denied that his office played a role in the selection of his former company for federal business. (MSNBC, October 28, 2004)

Greenhouse was met with a barrage of reprisals for questioning the Halliburton deal. She was warned to stop interfering and threatened with a demotion. Her lawyer, Michael Kohn, sent a letter on her behalf to the acting Secretary of the Army. The letter explained Greenhouse’s Pentagon meeting and demanded an investigation of alleged violations of Army regulations in the contract’s awarding. Kohn charged that Greenhouse’s superiors tried to silence her. (Time, November 1, 2004)

Nearly one year later -- in August 2005 -- Greenhouse was demoted for what the Army called poor job performance. She had been the chief overseer of contracts at the Army Corps of Engineers for 20 years. After serving on the elite Senior Executive Service, Greenhouse was reassigned to a lesser job in the corps’ civil works division. (New York Times, August 29, 2005)

HALLIBURTON MOVES TO DUBAI. In 2007, Halliburton moved its corporate headquarters to Dubai from Texas in order to escape United States taxes. (New York Times, March 5, 2007)

The firm said that over 38 percent of its 13 billion dollar oil-field services revenue was generated from the Eastern Hemisphere. It also said its move to the United Arab Emirates was the next step in a strategic plan unveiled in 2006 to boost its business with national oil companies in and around the Gulf region. (New York Times, March 5, 2007)

CHARGES OF RAPE AND SEXUAL HARRASSMENT. By 2008, about 180,000 contractors were working in Iraq. KBR, by far the largest military contractor in Iraq, employed 2,383 women and maintained a total work force of 54,170. Women who worked as contractors in Iraq say that while on the job they encountered sexual discrimination and harassment, which sometimes veered dangerously to sexual assaults and even rapes. (New York Times, February 13, 2008)

1. In December 2007, Jamie Leigh Jones of Houston filed a federal lawsuit in which she claimed she was gang-raped in the Green Zone by several KBR workers in Baghdad. She said the United States government covered up the incident. (ABC News, December 10, 2007)

Halliburton placed Jones under guard in a shipping container with a bed and warned her that if she left Iraq for medical treatment, she would be out of a job. She said that she was held in the shipping container for at least 24 hours without food or water by KBR, which posted armed security guards outside her door, who would not let her leave. (ABC News, December 10, 2007)

According to her lawsuit, Jones was raped by “several attackers who first drugged her, then repeatedly raped and injured her, both physically and emotionally.” She said that an examination by Army doctors showed she had been raped “both vaginally and anally,” but that the rape kit disappeared after it was handed over to KBR security officers. (ABC News, December 10, 2007)

2. In 2007, Mary Beth Kineston, who drove trucks for KBR in Iraq, was sexually assaulted by another driver, who remained on the job, even after she reported the episode to KBR. Later, she said she was groped by a second KBR worker. After complaining to KBR about the threats and harassments endured by female employees in Iraq, she was fired.

Kineston was among a number of American women who reported that they were sexually assaulted by co-workers while working as contractors in Iraq. However, they were unable to seek justice or even significant compensation. (New York Times, February 13, 2008)

3. Linda Lindsey, of Houston, who worked for KBR in Iraq from 2004 until early 2007, said that she often saw evidence of sexual harassment or discrimination, and that male supervisors often tried to force female employees to grant sexual favors in exchange for promotions or other benefits.

Lindesey said that KBR’s management seemed unwilling to take action to improve working conditions for women in Iraq. She said, “We filed complaints against one supervisor, and the complaints disappeared. The impression you got was that they really didn’t want to hear it, because the money was coming in. Most of it was bad management on-site.” (New York Times, February 13, 2008)

Pamela Jones, of Texas, a KBR logistics coordinator in Kuwait in 2003 and 2004, was sexually assaulted by a supervisor. Jones said, “It was known that if you started complaining that you could lose your job. They give you an 800 number to report. But then they shoved it under the rug, and they told me I was a pest.” Jones later won an arbitration award from KBR (New York Times, February 13, 2008)

Many of improprieties and illegalities in Iraq were not investigated. The military justice system was unclear as it pertained to United States laws for contractors working in foreign war zones. (New York Times, February 13, 2008)

To placate American authorities, KBR and other companies eventually required Iraq-bound employees to agree to take personnel disputes to private arbitration rather than sue the companies in American courts. The companies repeatedly challenged arbitration claims of sexual assault or harassment brought by women who served in Iraq, raising fears among some women about going public with their claims. (New York Times, February 13, 2008)

Paul Brand, a Chicago psychologist who counseled contractors who have served in Iraq, said the harassment of female workers by male colleagues was common. But comprehensive statistics on sexual assaults in Iraq were unavailable, because no one in the government or the contracting industry. (New York Times, February 13, 2008)

The Bureau of Diplomatic Security of the State Department separately reported that it investigated four cases of rape or sexual assault involving female contractors, including Jones’s case. But the Pentagon failed to respond to a request for more comprehensive data, including the number of rape examinations done by military doctors in Iraq on behalf of female contractors. What is more, the Bush administration not offered to develop a coordinated response to the problem. (New York Times, February 13, 2008)

Heather Browne, a spokeswoman for KBR, said the company would protect women working in Iraq: “KBR’s commitment to the safety and security of all employees is unwavering. One instance of sexual harassment or assault is too many and unacceptable.” Yet KBR refused to say how many female employees had reported that they were victims of sex crimes in Iraq. (New York Times, February 13, 2008)

6. CORPORATE FRAUD: THE BECHTEL CORPORATION

On April 17, 2003, Bechtel was awarded a 12-month contract now worth up to $1.03 billion, authorizing the company to oversee the rehabilitation, reconstruction, and expansion of key elements of Iraq’s infrastructure. These included municipal water delivery and wastewater systems. (San Francisco Independent Media Center, April 6, 2004)

One year later, there was little evidence that this mandate had been achieved. Instead, rising epidemics of cholera, kidney stones, and diarrhea pointed to the failure of Bechtel’s mission. The company’s contractual failures occurred in Hilla, Najaf, Diwaniyah, Sadr City, and smaller villages where families faced crisis conditions due to the lack of access to clean water. One of Bechtel’s earliest priorities was to ensure the provision of potable water supplies to the population of southern Iraq in the first 60 days of the program. (San Francisco Independent Media Center, April 6, 2004)

Before the war began, water ran in every house in Hilla. In the war’s aftermath, looting and a lack of electricity caused the water infrastructure to stop working. Hilla had a water treatment plant and distribution center that Bechtel was contracted to restore within six months. Yet when the six-month period ended on October 17, 2003, there was little evidence that Bechtel had improved the system. (San Francisco Independent Media Center, April 6, 2004)

8. THE CORPORATIONS’ ARMIES AND BLACKWATER USA

Two coalition armies fought in Iraq: the official one and the private one supported by corporations. The number of private American security companies rapidly increased since the beginning of Bush’s war. Their enormous growth was facilitated by the United States military, which used the 20,000 to 30,000 contractors to offset chronic troop shortages. (Christian Science Monitor, July 18, 2007)

The security companies were awarded hundreds of billions of dollars by the United States government. They hired their own armies to fight insurgents. Armed contractors protected all convoys transporting reconstruction materiel, including vehicles, weapons, and ammunition for the Iraqi army and police. They guarded key United States military installations and provided personal security for at least three commanding generals. (Washington Post, June 16, 2007)

By 2007, the number of United States-paid private contractors in Iraq exceeded that of American combat troops. More than 180,000 civilians -- including Americans, foreigners, and Iraqis -- worked in Iraq under United States contracts. (United States State Department, July 2007; Los Angeles Times, July 4, 2007)

Coming from dozens of countries, hired by hundreds of companies, the number of contractors increased faster than the Pentagon’s ability to track them. Everything from who controlled their activities to who cared for them when wounded was unresolved. (Christian Science Monitor, July 18, 2007)

Most were not Americans. They come from Fiji, Brazil, Scotland, Croatia, Hungary, New Zealand, Pakistan, South Africa, Australia, and other countries. The numbers included at least 21,000 Americans, 43,000 foreign contractors, and about 118,000 Iraqis -- all employed in Iraq by United States tax dollars. About 130,000 contractors and subcontractors of different nationalities worked at United States and Iraqi military bases. (Los Angeles Times, July 4, 2007; Christian Science Monitor, July 18, 2007)

Security companies primarily operated out of public view, adding more manpower, purchasing expensive armor, and stepping up evasive action as attacks increased. One in seven supply convoys protected by private forces came under attack in 2007. One security company reported nearly 300 “hostile actions” in the first four months of 2007. (Washington Post, June 16, 2007)

The civilian armies drove dangerous truck convoys, cooked soldiers’ meals, and guarded facilities and important officials. The private armies were larger in size than the soldiers in the United States military. Thousands of civilians became casualties of the conflict. (Christian Science Monitor, July 18, 2007)

Attacks continued to increase as the war dragged on. By 2007, daily attacks were launched with hundreds of casualties. Many went unreported or underreported by the companies. At least 916 contractors were killed in the first four years of the war. More than 12,000 were wounded. An unknown number experience symptoms of post-traumatic stress disorder (PTSD). (Washington Post, June 16, 2007; Christian Science Monitor, July 18, 2007)

BLACKWATER. Blackwater USA was founded in 1996 by Eric Prince, who allegedly was the wealthiest person that had ever enlisted in the Navy SEALs. Prince began his career as a successful auto parts manufacturer in a business called Prince Manufacturing. The company was best known for was inventing the lighted sun visor. One could pull down that visor and it would light up.

Prince’s father helped fund the Republican revolution in 1994 that brought Newt Gingrich and the Contract with America to power. He also poured thousands into the Family Research Council that was headed by Gary Bauer.

One in every 60 soldiers in the 1991 Gulf War was a contractor. More than one decade later, 100,000 contractors profiteered from Bush’s war in Iraq. In addition, 48,000 employees of private mercenary companies operated in Iraq. Blackwater USA and its executives were heavy funders of the campaigns of Bush and his Republican allies.

These companies provide the Bush administration with extraordinary political cover:

Their deaths did not get counted.

Their injuries did not get counted.

Their crimes did not get reported.

They did not get investigated.

They did not get prosecuted.

Of the 100,000-plus contractors in Iraq, only one was indicted for a crime or violation that was committed there. That contractor was not even a mercenary contractor. It was a private contractor doing support work for the United States military.

Blackwater hired 20,000 independent contractors or mercenaries. Blackwater held at least $109 million worth of State Department contracts in Iraq. Its employees operated in a perilous environment that sometimes required the use of deadly force. In 2006 and 2007, Iraq’s Interior Ministry, which regulated security companies for the Iraqi government, received four complaints of shooting incidents involving Blackwater. (Washington Post, May 24, 2007)

Blackwater held at least $109 million worth of State Department contracts in Iraq. Its employees operated in a perilous environment that sometimes required the use of deadly force. In 2006 and 2007, Iraq’s Interior Ministry, which regulated security companies for the Iraqi government, received four complaints of shooting incidents involving Blackwater. (Washington Post, May 24, 2007)

In May 2005, a helicopter dropped CS gas, a riot-control substance the American military in Iraq used only under the strictest conditions and with the approval of top military commanders. An armored vehicle on the ground also released the gas, temporarily blinding drivers, pedestrians, and at least 10 American soldiers operating the Assassinations’ Gate checkpoint. (New York Times, January 10, 2008)

Both the helicopter and the vehicle were not from the United States military. They were part of a convoy operated by Blackwater. (New York Times, January 10, 2008)

In May 2007, Blackwater workers opened fire on the streets of Baghdad twice in two days. One of the incidents provoked a standoff between the security contractors and Iraqi forces. A Blackwater guard shot and killed an Iraqi driver. Then a Blackwater-protected convoy was ambushed in downtown Baghdad, triggering a furious battle in which the security contractors, United States, and Iraqi troops and AH-64 Apache attack helicopters were firing in a congested area. (Washington Post, May 24, 2007)

Also in 2007, Blackwater proposed the construction of a 220-acre training camp on an 800-acre parcel that was dedicated to egg farming and cattle ranching. Blackwater officials said their objective was to use the land to train personnel for duty in Iraq, Afghanistan, and anywhere else the Department of Defense needed help. Plans included firing ranges, a helicopter pad, a mock “combat town,” a track for high-speed driving classes, classrooms, an armory, a bunkhouse, and some administrative buildings. (InforShop News, March 13, 2007)

In 2007, Blackwater proposed the construction of a 220-acre training camp on an 800-acre parcel that was dedicated to egg farming and cattle ranching. Blackwater officials said their objective was to use the land to train personnel for duty in Iraq, Afghanistan, and anywhere else the Department of Defense needed help. Plans included firing ranges, a helicopter pad, a mock “combat town,” a track for high-speed driving classes, classrooms, an armory, a bunkhouse, and some administrative buildings. (InforShop News, March 13, 2007)

Blackwater was paid three-quarters of $1 billion by the State Department between 2004 and 2006. One of its functions was to guard the senior American officials in Iraq. It guarded Ambassador Zalmay Khalilzad, State Department officials, and 90 congressional delegations.

Blackwater recruited soldiers and other contractors from third countries to deploy in Iraq. In Chile, 92 percent of the population was against the Iraq war. Chile was on the Security Council at the time it went up for a vote and was against the Iraq war. Yet Blackwater and other companies went into Chile, hired hundreds of their soldiers and deployed them in Iraq as part of their so-called coalition.

In Honduras, Blackwater pulled their troops out of Iraq in 2005. Another United States mercenary company went into Honduras and hired those exact soldiers and redeployed them to Iraq. (Jeremy Harris, Blackwater)

The majority of the more than 100 security companies operated outside of Iraqi law, in part because of bureaucratic delays and corruption in the Iraqi government licensing process. Blackwater USA obtained a one-year license in 2005 but never applied for a license since that time. (Washington Post, June 16, 2007)

In late September 2007, al-Maliki asked the State Department to “pull Blackwater out of Iraq,” saying the private contractors committed unprovoked and random killings. The Iraqi prime minister’s office said that the government’s investigation had determined that Blackwater private security guards who shot Iraqi civilians three weeks earlier in a Baghdad square sprayed gunfire in nearly every direction, committed “deliberate murder” and should be punished accordingly. Seventeen Iraqis were killed, including women and children, and 27 were wounded. (CNN, September 16, 2007)

In October, the State Department offered limited immunity to Blackwater employees in the wake of a Baghdad shooting that left 17 civilians dead. FBI agents, who took over the investigation into the shootings, were barred from using any information obtained in the State Department probe. Blackwater employees were offred “limited use immunity” in return for their statements. (Washington Post, October 30, 2007)

Subsequently, top Democratic lawmakers sent letters to Secretary of State Rice demanding answers over reports that Blackwater was offered protection from prosecution when the State Department investigated the September 16 shooting. (Washington Post, October 30, 2007)

On November 14, the State Department Inspector General, Howard Krongard, testified before Henry Waxman’s Oversight and Government Affairs Committee. Krongard was the top State Department official charged with investigating allegations of waste, fraud, and abuse. In addition to all of the questionable actions by the State Department in the Blackwater investigation, Krongard faced charges that he impeded a Justice Department investigation into Blackwater over allegations the company was illegally smuggling weapons into Iraq. (The Nation, November 15, 2007)

The bombshell at the hearing was the revelation that Krongard’s brother, Alvin Krongard accepted a position as a paid consultant for Blackwater, where he served on the company’s advisory board. Until his resignation in 2004, Alvin Krongard was the number-three man at the CIA more on that later. (The Nation, November 15, 2007),?P>

The FBI determined that at least 14 of the 17 murdered civilians were unjustified and violated deadly-force rules. The findings indicated that Blackwater’s employees recklessly used lethal force. (New York Times, November 14, 2007

Also in 2007, 256 former inmates at Abu Graib brought a lawsuit against Blackwater. Susan Burke, the lead attorney for the Iraqis, said CACI interrogators took part in torture at the prison in 2003 and 2004. She argued that CACI employees were not just following military personnel's instructions but even directed some of the abuse. (Newsweek, December 31, 2007)

Even though the Iraqi government demanded the expulsion of Blackwater employees, the State Department renewed its contract in May 2008. State Department officials said that they did not believe they had any alternative to Blackwater, which supplied about 800 guards to the department to provide security for diplomats in Baghdad. Officials said only three companies in the world met their requirements for protective services in Iraq, and the other two did not have the capability to take on Blackwater’s role in Baghdad. (New York Times, May 10, 2008)

8. MORE CORRUPTIONFRAUD

Corruption plagued Iraq reconstruction since the beginning of Bush’s war. Hundreds of projects were never finished, including repairs to the country’s oil pipelines, and electricity system. Congress gave more than $30 billion to rebuild Iraq, and at least $8.8 billion of it has disappeared, according to a government reconstruction audit. (Associated Press, August 25, 2007)

The enormous expenditures of American and Iraqi money on the Iraq reconstruction program, at least $40 billion over all, were criticized for reasons that went well beyond the corruption cases that had been uncovered. Weak oversight, poor planning, and seemingly endless security problems contributed to many of the program’s failures. (New York Times, August 28, 2007)

The payments, in return for the insurgents’ allowing supplies to move and construction work to begin, began with the earliest projects in 2003, according to Iraqi contractors, politicians, and interpreters involved with reconstruction efforts. (McClatchy Newspapers, August 27, 2007)

By July 2007, the United States government completed 3,300 projects in Anbar with a total value of $363 million. Another 250 projects with a total price tag of $353 million are under way. (McClatchy Newspapers, August 27, 2007)

Several federal agencies were investigated a widening network of criminal cases involving the purchase and delivery of billions of dollars of weapons, supplies, and other matériel to Iraqi and American forces. This amounted to the largest ring of fraud and kickbacks uncovered in the conflict here. Everything from AK-47s, armored vehicles, and plastic explosives to boots and Army uniforms were sold illegally. (New York Times, August 28, 2007)

An investigation led to several indictments of Americans. One probe involved a senior American officer who worked closely with General David Petraeus in setting up the logistics operation to supply the Iraqi forces when Petraeus was in charge of training and equipping those forces in 2004 and 2005. (New York Times, August 28, 2007)

By the summer of 2007, a total of 73 criminal investigations related to contract fraud in Iraq, Kuwait, and Afghanistan. Twenty civilians and military personnel were charged in federal court as a result of the inquiries that involved contracts valued at more than $5 billion and presumably amounted to about $15 million in bribes. (New York Times, August 28, 2007)

Crimes included submitting false claims for amounts less than $2,500 as well as serious cases involving, conspiracy, bribery, product substitution and bid-rigging or double-billing involving large dollar amounts or more senior contracting officials. The investigations involved contractors, government employees, local nationals, and American military personnel. (New York Times, August 28, 2007)

In August 2007, an Army major, his wife and his sister were indicted on charges that they accepted up to $9.6 million in bribes for Defense Department contracts in Iraq and Kuwait. (New York Times, August 28, 2007)

Reports of crimes also came from American military personnel who reported corruption as it spread rampantly across Iraq. Many were vilified, fired, and demoted.

1. Navy veteran Donald Vance said he was imprisoned by the American military in a security compound outside Baghdad and subjected to harsh interrogation methods. There were times, huddled on the floor in solitary confinement with that head-banging music blaring dawn to dusk and interrogators yelling the same questions over and over, that Vance began to wish he had just kept his mouth shut. Vance told the FBI about the guns and the land mines and the rocket-launchers were being sold for cash. No receipts necessary. He told a federal agent the buyers were Iraqi insurgents, American soldiers, State Department workers, and Iraqi embassy, and ministry employees. The seller, he claimed, was the Iraqi-owned company he worked for: Shield Group Security Company.

For his trouble, he says, he got 97 days in Camp Cropper, an American military prison outside Baghdad that once held Saddam, and he was classified a security detainee.

2. Nathan Ertel was another soldier who helped Vance gather evidence documenting the sales. Ertel and Vance were illegally imprisoned and subjected to physical and mental interrogation tactics “reserved for terrorists and so-called enemy combatants.” (Associated Press, August 25, 2007)

3. Bunnatine “Bunny” Greenhouse, the highest-ranking civilian contracting officer in the United States Army Corps of Engineers, testified before a congressional committee in 2005 that she found widespread fraud in multibillion-dollar rebuilding contracts awarded to former Halliburton subsidiary KBR.

Soon after, Greenhouse was demoted. She was reassigned to a tiny cubicle in a different department with very little to do and no decision-making authority, at the end of an otherwise exemplary 20-year career

4. Robert Isakson filed a whistleblower suit against contractor Custer Battles in 2004, alleging the company -- with which he was briefly associated -- bilked the United States government out of tens of millions of dollars by filing fake invoices and padding other bills for reconstruction work. Eventually, a federal jury agreed with him and awarded a $10 million judgment against the now-defunct firm, which had denied all wrongdoing.

In 2006, U.S. District Judge T.S. Ellis III overturned the jury award. He said Isakson failed to prove that the Coalition Provisional Authority was part of the United States government.

The Army claimed it examined approximately 18,000 contracts in 2007. Overall, they amounted to close to $3 billion and represented every transaction made between 2003 and 2007 by a contracting office in Kuwait. Among the contracts were awards to former Halliburton subsidiary KBR, which received billions of dollars since 2001 to be a major provider of food and shelter services to United States forces in Iraq and Afghanistan. (Associated Press, August 30, 2007)

In September, Pentagon Inspector General Claude Kicklighter traveled to Iraq to investigate how United States weapons intended for Iraqi security forces ended up being used for murders and other violent crimes in Turkey.

In 2007, Special Inspector General for Iraq Reconstruction Stuart W. Bowen Jr. corroborated other allegations that billions of dollars had been misspent on Iraq’s infrastructure. The State Department so badly managed a $1.2 billion contract for Iraqi police training that it could not tell what it got for the money spent. Because of disarray in invoices and records on the project -- and because the government is trying to recoup money paid inappropriately to contractor DynCorp International, LLC -- auditors temporarily suspended their effort to review the contract’s implementation. (Associated Press, October 23, 2007)

Bowen reviewed a February 2004 contract to DynCorp awarded by the State Department’s Bureau for International Narcotics and Law Enforcement Affairs (INL). The company was to provide housing, food, security, facilities, training support, law enforcement staff with various specialties, as well as weapons and armor for personnel assigned to the program. (Associated Press, October 23, 2007)

In 2008 alone, the United States spent $100 billion on contractors in Iraq since the invasion in 2003, a milestone that reflected the Bush administration’s unprecedented level of dependence on private firms for help in the war. (Congressional Budget Office, August 2008)

One out of every five dollars spent on the war in Iraq went to contractors for the United States military and other government agencies, in a war zone where employees of private contractors now outnumber American troops. (Congressional Budget Office, August 2008)

The budget office’s report found that from 2003 to 2007, the government awarded contracts in Iraq worth about $85 billion, and that the administration was now awarding contracts at a rate of $15 billion to $20 billion a year. At that pace, contracting costs will surge past the $100 billion mark before the end of the year. Through 2007, spending on outside contractors accounted for 20 percent of the total costs of the war, the budget office found, according to the people with knowledge of the report. (Congressional Budget Office, August 2008)

By 2008, contractors in Iraq employed at least 180,000 people in the country, forming what amounted to a second, private, army, larger than the United States military force, and one whose roles and missions and even casualties among its work force have largely been hidden from public view. The widespread use of these employees as bodyguards, translators, drivers, construction workers, and cooks and bottle washers allowed the administration to hold down the number of military personnel sent to Iraq, helping to avoid a draft. (Congressional Budget Office, August 2008)

An audit by the Special Inspector General of Iraq, Stuart Bowen, showed that millions of dollars were wasted on a $900 million army contract to build courthouses, prisons, police, and other security facilities in Iraq. (Agence France Presse, July 28, 2008)

Bowen found that the contractor, Parsons Delaware Inc., completed only about a third of 53 planned construction projects. The report said, “Although the failure to complete some of the work is understandable because of its complex nature and the unstable security environment in Iraq, millions of dollars in waste are likely associated with incomplete, terminated and abandoned projects under this contract.” (Agence France Presse, July 28, 2008)

The contract was one of a dozen design-build construction contracts awarded by the army in 2004 to restore Iraq’s infrastructure in broad areas such as security and justice, water, oil, electricity, and transportation. (Agence France Presse, July 28, 2008)

Parsons was supposed to build police and civil defense training areas, two prisons, two courthouses, fire stations, and border control facilities. The report said more than 142 million dollars, or nearly 43 percent of the funds disbursed so far, “were spent on projects that were either terminated or cancelled, although a number of the projects were subsequently completed.” (Agence France Presse, July 28, 2008)

Repeated construction delays prompted the government to cancel the construction of two partially built prisons, one at Nasiriyah and the other at Khan Bani Saad. The Nasiriyah prison was later completed by another contractor, but the facility at Khan Bani Saad was turned over half finished to the Iraqi government which has no plans to use it. (Agence France Presse, July 28, 2008)

About 40 million dollars has been spent on the Khan Bani Saad prison. The report read, “At this point the entire amount disbursed for this project may ultimately be wasted because the government of Iraq currently has no plans for completing or using this facility.” (Agence France Presse, July 28, 2008)

The audit said there were “significant weaknesses” in the government’s oversight of the contract, which created “an environment that was conducive to waste and inefficiency.” (Agence France Presse, July 28, 2008)

9. THE CORRUPT IRAQ MINISTRIES

1. IRAQ’S POLICE AND SECURITY FORCERS. When Administrator Jay Bremer arrived in Baghdad in the spring of 2003, he immediately tried to reorganize the city’s police force after its officers had abandoned their posts and their stations had been looted during the invasion. (Michael Gordon and General Bernard Trainor, Cobra II)

Garner met with Robert Gifford who was formerly a deputy in the State Department’s International Narcotics and Law Enforcement Affairs. Gifford was ordered to arrange a public relations stunt that he called a “police event.” The objective was to encourage the Iraqi police to return to work. (Michael Gordon and General Bernard Trainor, Cobra II)

Garner flew to Baghdad on April 18 to set up his administration. An internal report indicated that the Iraqi police were corrupt, unprofessional, and untrustworthy. The Bush administration never had a plan to rebuild the country’s police forces. (Michael Gordon and General Bernard Trainor, Cobra II)

From the outset, the Interior Ministry carried out extra-judicial killings and widespread torture in prisons under its control. On August 2, 2004, a witness identified one of the men who abducted and murdered American journalist Steven Vincent as an Interior Ministry employee. Vincent had written several exposures of extra-judicial killings by Shi’ite militias linked to SCIRI that was behind a wave of terror against people believed to be supportive of the armed anti-occupation resistance or critical of the Baghdad government. The British Observer, July 2005)

In 2005, United States authorities turned the police over to the Iraqi Interior Ministry, and Bayan Jabr was named interim minister. It immediately that corruption was rampant. Jabr’s position was similar to the United States’ FBI and Department of Homeland Security. He controlled billions of dollars and more than 100,000 men in police and paramilitary units. (Los Angeles Times, March 9, 2006; Harper’s Magazine, August 2006)

Jabr, a Shi’ite with ties to sectarian militias, was notorious for links to death squads. Additionally, hundreds of millions of dollars earmarked for building the country’s police force were missing. Jabr was a former high-ranking member of the Iranian-backed Badr Brigade, the military arm of the fundamentalist Shi’ite Supreme Council for the Islamic Revolution in Iraq (SCIRI). After taking over the Interior Ministry, he quickly purged it of Sunnis, and members of the Badr Brigade were widely incorporated into the ministry’s police and paramilitary units. (Harper’s Magazine, August 2006)

One year later, Jawad al-Bolani was named Interior Minister after the new Iraqi government was formed and Maliki was named prime minister. Assuming his position in May 2006, al-Bolani oversaw the country’s police and security forces. However, he lacked the political support to purge many of the worst offenders that infiltrated security and police forces. (San Diego Union Tribune, September 18, 2006)

The Interior Ministry included senior managers who tolerated or encouraged the infiltration of Shi’ite militias into the police under the previous government. Shi’ite militiamen and criminals became entrenched throughout Iraq’s police and internal security forces. They regularly blocked efforts by some Iraqi leaders and the United States military eradicate them. Consequently, Sunnis distrusted the Interior Ministry and were skeptical that sectarian violence would decrease. (San Diego Union Tribune, September 18, 2006)

A senior United States commander said that of the 27 paramilitary police battalions, “we think five or six battalions probably have leaders that have led that part of the organization in a way that is either criminal or sectarian or both.” (San Diego Union Tribune, September 18, 2006)

It was not until 2006 that the Bush administration decided to revamp and expand police training programs in an attempt to improve accountability. The White House tripled the number of training teams being attached to police forces throughout the nation and expanded police training academies in Jordan and Iraq. (Los Angeles Times, March 9, 2006)

The United States military conducted detailed readiness evaluations and inventories to locate the hundreds of millions of dollars in vehicles, guns, ammunition, and other police equipment that was distributed to local Iraqi stations without properly informing the Interior Ministry or obtaining receipts. Of the $1.2 billion in materials given to Iraqi police for three years -- between March 2003 and March 2006 -- unaccounted equipment totaled $500 million in value. (Los Angeles Times, March 9, 2006)

The company that sold Iraqi police forces 1,000 mounted machine guns and 1,500 AK-47 rifles was never paid and demanded that the government return the weapons. Dozens of the high-caliber mounted machine guns were lost, and nearly all of the AK-47 rifles disappeared. (Los Angeles Times, March 9, 2006)

In 2006, American military trainers investigated the Slaymaniya police academy that was suspected of engaging in “fraud and corruption.” The academy had a mere 226 graduates after three sessions. That was a much smaller number than other academies. (Los Angeles Times, March 9, 2006)

At least 450 cases were investigated in 2005 within the Interior Ministry. They included selling goods from the ration-card program, some of which have ended up in neighboring states -- and charges of replacing goods with lower-quality substitutes. (Radio Free Europe, October 13, 2005)

According to Integrity Commission officials in 2005, the committee identified more than 1,100 cases of administrative corruption and crimes. (Radio Free Europe, October 13, 2005)

In May 2005, Shi’ite militia groups in Iraq began dumping corpses into the streets and garbage dumps of Baghdad. The victims, overwhelmingly Sunni, were typically found blindfolded and handcuffed, their corpses showing signs of torture. They had broken skulls, burn marks, gouged-out eyeballs, and electric drill holes. (Harper’s Magazine, August 2006)

Jabr consistently disavowed any personal or institutional responsibility for violence committed by the death squads. However, he did acknowledge that some death squads operated within the Interior Ministry while he headed it. But he insisted that they were few in number and blamed much of the sectarian killing on terrorists who “used the clothes of the police or the military.” (Harper’s Magazine, August 2006)

A 57-year old physician in Mosul recounted the story of killings and torture by the Interior Ministry police commando unit known as the Wolf Brigade. The unit was recruited from former members of Saddam’s Republican Guard. (A Citizen of Mosul, October 25, 2005)

By October 2005, the death toll attributed to such groups had grown to more than 500. (Harper’s Magazine, August 2006)

The following month, American troops discovered more than 160 beaten, whipped, and starved prisoners -- again, mostly Sunnis -- at a secret detention center run by the country’s Interior Ministry.

Subsequently, Shi’ite militias became integrated into the Iraqi government’s security apparatus. Their work was so organized, systematic, and targeted that they were commonly referred to in both the United States and in Iraq as “death squads.” (Harper’s Magazine, August 2006)

In 2006, American military trainers investigated the Slaymaniya police academy that was suspected of engaging in “fraud and corruption.” The academy had a mere 226 graduates after three sessions. That was a much smaller number than other academies. (Los Angeles Times, March 9, 2006)

The number of Shi’ite militiamen and criminals in the police and internal security forces continued to increase. They blocked efforts by some Iraqi leaders and the American military to root them out. This led to more distrust by Sunnis as well as the escalation of more sectarian violence across Iraq. (New York Times, September 16, 2006)

In addition, Interior Minister Jawad al-Bolani, in charge of Iraq’s police forces, lacked the political support to purge many of the worst offenders. These included senior managers who tolerated or encouraged the infiltration of Shi’ite militias into the police under the previous government. (New York Times, September 16, 2006)

Over 1,200 of Iraq’s policemen and other employees had been convicted in the past of murder, rape, and other violent crimes. Some were even on death row. Few were ever fired. An American official commented on the 27 paramilitary police battalions in Iraq. He said, “We think 5 or 6 battalions probably have leaders that have led that part of the organization in a way that is either criminal or sectarian or both.” (New York Times, September 16, 2006)

In May 2006, Jabr was rewarded by Maliki and was named Finance Minister of Iraq. (Harper’s Magazine, August 2006)

As the number of killings increased to over 100 per day in Baghdad in October 2006, al-Bolani suspended an entire Iraqi police brigade. He was suspicions that some members might have permitted, or even participated in, death squad killings. (New York Times, October 5, 2006)

The suspension involved the 8th Brigade Second Division of the Iraqi national police known as “Falcon.” About 800 special police commandos were transferred from their base in the Aalam neighborhood in western Baghdad to a training site north of the capital. The troops were not disarmed, but two of their most senior commanders were detained. (New York Times, October 5, 2006)

In November 2006, gunmen dressed in Iraqi police commando uniforms and driving vehicles with Interior Ministry markings rounded up dozens of people inside a government building in the heart of Baghdad. They drove off with them in one of the most brazen mass kidnappings. Iraqi officials said as many as 150 people had been taken; the American military command put the total at 55. (New York Times, November 13, 2006)

While the Iraqi agreed to basic police instruction at the academy in 2007, it refused to train more senior officers there. The Iraqi government also scaled back plans by Anbar officials to expand the provincial police force by almost 50 percent. (New York Times, October 28, 2007)

Initially, provincial police officials in Anbar proposed adding 9,000 officers to the police force of 20,911, an expansion they said was needed because of the vast territory in western Iraq. But the Iraqi government ordered that the provincial force be increased by only 4,000, and issued orders to start the expansion by hiring 3,000 of them. (New York Times, October 28, 2007)

As for the rest of the 9,000, 2,000 were eventually to be hired by the National Police, which reported to the Shi’ite-dominated Interior Ministry. Also, 3,000 were given civilian jobs that involved no law enforcement or military training. (New York Times, October 28, 2007)

Financing for the Anbar police was carefully controlled. The police chief was given his budget of $200,000 and was required to provide receipts. No other province had its police financing so carefully metered. (New York Times, October 28, 2007)

To expedite the ability to train police and supplement the training at the Baghdad police academy, the Iraqi government decided to build two new police academies. They were located in the southern city of Basra and the northern town of Mosul. (New York Times, October 28, 2007)

That was no help to the Sunnis in Anbar. So the Americans pushed in mid-2007 to establish a police academy at a former Anbar air base that the British established at Habbaniya during their colonial occupation. At a cost of just over $10 million, the Americans financed the complex and paid for the international police advisers who were mostly Americans. The base, which was situated between Fallujah and Ramadi, was also used for training the Iraqi Army and still featured the sturdy structures erected during the British occupation, as well as a British cemetery. (New York Times, October 28, 2007)

The attempt to form a police force in Anbar province was not the only failure. In Diyala Province, north of Baghdad, American military officers pushed the Iraqi government to hire more than 6,000 local Iraqis, many of them Sunnis, as police. Despite promises of action by al-Maliki, none was hired by the Interior Ministry. (New York Times, October 28, 2007)

The growing tensions over efforts to hire more Sunni police officers came at a critical moment in the American military deployment in Iraq. With the number of American combat brigades set to decline by 25 percent by mid-2008, American commanders were eager to build up the Iraqis’ capability to secure their neighborhoods. (New York Times, October 28, 2007)

Another attempt by the United States military was to organize local Sunnis into neighborhood watch groups, what the American military called “Concerned Local Citizens.” The benefits of this approach were evident near Yusufiya and Mahmudiya, in an area south of Baghdad. It was once so violent it had been known as the “triangle of death” and had been overseen by the Second Brigade of the American Army’s 10th Mountain Division. (New York Times, October 28, 2007)

Before neighborhood watch groups were organized in this region in June 2007, more than 12 American and Iraqi soldiers were killed each month in the area, according to an analysis circulating within the American military command. After June, the casualties declined to one soldier killed each month. The number of vehicles destroyed from roadside bombs was running at 11 per month before June. (New York Times, October 28, 2007)

However, the organization of local Iraqis in neighborhood watch groups was one step. The administration’s ultimate goal was to codify the arrangement by training these groups as police. The Pentagon also hoped that by persuading the Iraqi government to hire Sunnis as police they would encourage a new, ground-up form of political accommodation. (New York Times, October 28, 2007)

The United States military hoped that Shi’ite-dominated ministries in Baghdad would develop new working relations with largely Sunni police forces in the field, easing the sectarian divide and laying the basis for a more representative national government. (New York Times, October 28, 2007),?P>

In June 2007, American forces pushed through western Baquba, the capital of the province, in an effort to sweep the city clear al Qaeda militant. More than 4,600 “Concerned Local Citizens” since became organized in Diyala Province. (New York Times, October 28, 2007)

Several months later, the Iraqi government hired 1,738 Sunnis -- from a list of 2,400 applicants – to be trained as police officers in the town of Abu Ghraib in Diyala Province. Plans were made to add 12,000 new policemen in Baghdad towards the end of 2007. (New York Times, October 28, 2007)

But hiring police officers became difficult, since al-Maliki ordered that the Diyala police force be increased by more than 6,000, and provincial officials submitted a list of names in July that included many Sunnis to the Interior Ministry in Baghdad. (New York Times, October 28, 2007)

Some Interior Ministry officials questioned whether such a substantial increase was needed, and some members of the reconciliation committee argued that the original al-Maliki decree might not be valid. Consequently, the hiring process was stalled. (New York Times, October 28, 2007)

Yet the Iraqi government surprised the Americans by hiring 548 Iraqis who were not on the roster. When American officials analyzed the new hires, they determined that the list was predominantly made up of Shi’ites. (New York Times, October 28, 2007)

It was not the only time that the Interior Ministry hired Shi’ite police despite the concerns of local officials. The ministry sent 663 Shi’ite police in late 2007 to the city of Tal Afar in the northern Nineveh Province. (New York Times, October 28, 2007)

2. THE IRAQ MILITARY. Soon after interim Prime Minister Allawi took office in the summer of 2005, he announced plans to create a tank division for the new Iraqi army. The $283-million project began in 2004 and was intended to show the power of Iraq’s new government. But under the guidance of a task force overseen by one of America’s top generals, it became another example of corruption in Iraq. (Los Angeles Times, March 15, 2005)

The United States contractor working on the project repeatedly warned the task force -- headed by Army General David Petraeus -- that a Lebanese middleman involved in the deal might be sending kickbacks to Iraqi Defense Ministry officials. (Los Angeles Times, March 15, 2005)

However, high-level United States military officials did not act on the contractor’s pleas for tighter financial controls. Dale Stoffel wrote in a November 30, 2005 e-mail to a senior assistant to Petraeus: “If we proceed down the road we are currently on, there will be serious legal issues that will land us all in jail.” (Los Angeles Times, March 15, 2005)

Although the United States did not consider the brigade vital to fighting the insurgency, Allawi saw it as a politically important demonstration to Iraqi citizens that the government was reconstituting its armed forces. The Iraqis agreed to pay for an entire mechanized division at an estimated cost of $283 million. (Los Angeles Times, March 15, 2005)

Allawi wanted at least one tank brigade in place before the January 30, 2004 national assembly election. The deadline put pressure on the United States military to deliver the tanks quickly. Petraeus backed Stoffel -- a weapons dealer with extensive experience in the Eastern European equipment used by the Iraqi army -- as a man who could obtain and deliver the goods. Stoffel had a long history of working with the United States government. He acted on behalf of United States intelligence agencies to covertly buy foreign military equipment for research and testing by the United States military.

In a letter to Iraqi Defense Minister Hazem Sha’alan on July 20, 2004, Petraeus pledged to “fully support” Stoffel, who proposed to refurbish Iraq’s tanks and personnel carriers and buy new equipment from Eastern European sources. (Los Angeles Times, March 15, 2005)

Eight days later, Stoffel was killed in an ambush near Baghdad.

On August 16, Stoffel’s firm, Wye Oak Technology of Monongahela, Pennsylvania, signed a “broker’s agreement” with the Defense Ministry. This gave Stoffel the exclusive right to buy tanks and other equipment for the mechanized division on the ministry’s behalf. Stoffel was awarded the contract without competitive bidding. The contract was structured so that Stoffel was paid a percentage of the price of goods purchased -- an arrangement barred by United States law but allowed in Iraq. (Los Angeles Times, March 15, 2005)

Iraqi Deputy Defense Minister Mashal Sarraf insisted on another unusual provision, according to sources with knowledge of the contract. He required that Stoffel conduct all financial transactions through middleman Zayna. Sarraf did not respond to requests for comment made through the Defense Ministry. (Los Angeles Times, March 15, 2005)

In September 2004, Stoffel signed a limited power of attorney allowing Zayna to “arrange financing and request banking guarantees” for the contract, records show. Zayna was to act as a broker between Stoffel and the Defense Ministry, reconciling invoices and disbursing payments. Another Lebanese businessman, Mohammed abu Darwish, worked with Zayna’s firm, General Investment Group, on the contract and participated in meetings with task force officials. (Los Angeles Times, March 15, 2005)

Soon after he started work on the contract, Stoffel began to voice concerns about Zayna and his relationship with Iraqi defense officials. In conversations with military officials, Stoffel complained that Zayna was charging him a three percent fee on financial transactions. He suspected that a portion of the fee was being kicked back to the Defense Ministry. Stoffel also said Zayna was trying to force him to use certain subcontractors that he believed were secretly controlled by Zayna and Iraqi officials. (Los Angeles Times, March 15, 2005)

Subsequently, senior United States military officials continued to work with the middleman, Raymond Zayna, who took over part of Stoffel’s job. Although the United States military initially insisted that the Iraqi government was in control of the project, e-mails showed that Petraeus’ task force supervised it. (Los Angeles Times, March 15, 2005)

After five years of war profiteering, General George Casey, commander of American forces in Iraq, ordered sweeping changes for privatized military support operations. He confirmed violations of laws against human-trafficking and other abuses by contractors that involved thousands of foreign workers on American bases. (Baltimore Sun, April 24, 2006)

Casey ordered that contractors be required by May 1, 2006 to return passports that had been illegally confiscated from laborers on United States bases after determining that such practices violated American laws against trafficking for forced or coerced labor. Human brokers and subcontractors from South Asia to the Middle East imported thousands of laborers into Iraq from impoverished countries. (Baltimore Sun, April 24, 2006)

Casey made his decision partially on two memos indicating that confiscating passports from such workers was widespread on American bases. One memo included an order dated April 4, 2006 and was titled “Subject: Prevention of Trafficking in Persons in MNF-I” or Multinational Forces-Iraq. It said the military also confirmed a host of other abuses during an inspection of contracting activities supporting the United States military in Iraq. They included deceptive hiring practices; excessive fees charged by overseas job brokers who lured workers into Iraq; substandard living conditions once laborers arrived; violations of Iraqi immigration laws; and a lack of mandatory “awareness training” on United States bases concerning human trafficking. (Baltimore Sun, April 24, 2006)

The other memo was pertained to all contractors in Iraq and was dated April 19 and titled “Withholding of Passports, Trafficking in Persons.” The memo showed that Casey threatened harsh actions against firms that failed to return passports or end other abusive practices. He said contracts could be terminated, contractors could be blacklisted from future work, and commanders could physically bar firms from bases. (Baltimore Sun, April 24, 2006)

Hazim al-Sha’alan was Iraq’s acting Defense Minister between June 2004 and April 2005. He and 23 other Defense Ministry officials were charged with the misappropriation of more than $1 billion between June 28, 2004 and February 15, 2005. (Radio Free Europe, October 13, 2005)

During that time period, al Sha’alan signed 89 contracts worth $1.27 billion. In September 2005, Hadi al-Amiri, a member of Iraq’s Integrity Commission, said that a contract worth $949 million was signed with a firm identified as Al-Ayn Company. The firm was paid in full in advance, and the ministry failed to secure guarantees from the firm on the contract. (Radio Free Europe, October 13, 2005)

Another contract worth $226.8 million was signed for the purchase of 24 new helicopters, of which only four were delivered to Iraq. Other outdated helicopters in disrepair were also marked for delivery by the contractor in a former Soviet republic. (Radio Free Europe, October 13, 2005)

The second contract was also paid in full without guarantees. The contractor wanted to replace the undelivered helicopters with technical instruments and equipment. (Radio Free Europe, October 13, 2005)

In another case, an Army brigade received money to support 2,200 men. It was discovered that there were fewer than 300 effectives. In addition, 602 actual guards at the Ministry of the Interior were billed as more than 8,200 for payroll purposes. (The American Conservative, October 24, 2005)

In September 2005, Sha’alan was charged with embezzling $1 billion from the Iraqi Defense Ministry. Ali Allawi, Iraq’s finance minister, called the matter “one of the largest thefts in history.” Subsequently, Sha’alan fled to Jordan to avoid prosecution. (BBC, September 19, 2005)

The money was intended to buy the latest equipment for the Iraqi Army but cheap, out-of-date pieces allegedly were purchased instead. Sha’alan then reportedly hid the cash abroad. (BBC, September 19, 2005)

In one case, 28-year-old helicopters were purchased despite the fact they should have been scrapped after 25 years. In other examples, officials said Sha’alan deliberately paid too much for such items as bullets, with the difference between the actual cost and the inflated amount paid also disappearing. (BBC, September 19, 2005)

In July 2005, United States military officials acknowledged that the Iraqi Defense Ministry squandered more than $300 million buying faulty and outdated military equipment. Vendors were suspected of vastly overcharging for substandard equipment, including helicopters, machine guns and armored vehicles, and kicking back money to Iraqi Defense Ministry buyers. (Knight Ridder, July 17, 2005)

Other purchases included a shipment of sleek MP5 machine guns, costing about $3,500 apiece. In another case, defense officials bought expensive armored personnel carriers to protect Iraqi troops on trips through perilous areas. The vehicles leaked so much oil that they broke down after only a few miles. Eventually all were parked as too dangerous to use. (Knight Ridder, July 17, 2005)

The Iraq Defense Ministry was the victim of one of the largest thefts in history. One billion dollars meant to buy arms from Pakistan and Poland was siphoned off, resulting in overpayment for inferior equipment such as armored cars. (Britain’s The Independent, September 19, 2005)

The contracts were awarded without bidding and were signed with a Baghdad-based company, and not directly with the foreign supplier. The money was paid up front and was paid at great speed out of the ministry’s account with the Central Bank. Military equipment purchased in Poland included 28-year-old Soviet-made helicopters. (Britain’s The Independent, September 19, 2005)

The materials were so poorly constructed that even a bullet from an elderly AK-47 machine-gun could penetrate their armor. A shipment of the latest MP5 American machine-guns, at a cost of $3,500 each, consisted in reality of Egyptian copies worth only $200 a gun. Other armored cars leaked so much oil that they had to be abandoned. A deal was struck to buy 7.62mm machine-gun bullets for 16 cents each, although they should have cost between 4 and 6 cents. (Britain’s The Independent, September 19, 2005)

State-owned Iraqi Airways planes were purchased for $3 million apiece, but officials contended that they should not have cost more than $600,000 each. Iraqi Airways carried 2,400 employees even though it had not operated for over a year and had no planes. The airline itself was sold to an unidentified buyer without any paperwork to show for how much it was sold and what assets were included. It was reported that the buyer might have been Ahmad Chalabi. (The American Conservative, October 24, 2005)

With the failure to produce a viable Iraqi military, the Bush administration turned to “Provincial reconstruction teams.” Carried out by United States authorities, they were to be a critical part of the Bush administration’s strategy to build up the new Iraqi government. But in November 2006 -- more than three years into the war --- the inspector general for Iraq reconstruction released its findings. The report indicated that training efforts in Iraq were failing. Friction between the Iraqi government and the State Department and the Pentagon undermined the United States government’s effort to train provincial governments. (Boston Globe, November 1, 2006)

The training was carried out by “provincial reconstruction teams” of soldiers, aid workers, and diplomats. The objective was to teach local authorities in Iraq on how to deliver basic services to their municipalities, and to take over duties from the United States coalition. The training included local issues such as running elections and making decisions over local budgets. (Boston Globe, November 1, 2006)

Teams helping nine other provincial governments reported varying degrees of success, from “somewhat able” to “generally unable” to fulfill their missions. The two teams deemed “generally unable” to fulfill their mission in Anbar and Basra provinces. Team members did not interact personally with their Iraqi counterparts because of the risk of violence, seriously hindering their mission of mentoring and skill -building. (Boston Globe, November 1, 2006)

That was also the case of the provincial offices in Karbala, Qadisiyah, and Wasit whose officials recommended that the State Department stop deploying personnel to those areas.

In other provinces, e-mails and cell phone calls substituted for regular face-to-face contact between the American mentors and Iraqi local officials. (Boston Globe, November 1, 2006)

The inspector’s office said the State Department had difficulty finding foreign service officers willing to join the teams, filling just 60 percent of the civilian positions. The teams also lacked consistent funding. In 2006, the State Department requested $400 million in supplemental funding for the teams, but a congressional subcommittee recommended that funds be reduced to $300 million and that disbursement be withheld until the State Department filed updates on the teams’ progress. (Boston Globe, November 1, 2006)

The audit said the State Department and the Department of Defense argued over who was responsible for the security of the teams and who should pay the bill for the programs, noting that the two branches of government still had not come to an agreement on how to work together. (Boston Globe, November 1, 2006)

By the beginning of 2007, Iraqi army recruits numbered 80,000 and were paid $300 monthly. Known as “Awakening,” 82 percent were Sunni. (Inter Press Service, January 14, 2008) The forces were strongly criticized by Sunni residents in Baghdad and other cities. The Awakening was the only powerful players in many Sunni areas in Baghdad, and so they showed their power. Violence became routine procedure for them as well as for American soldiers. (Inter Press Service, January 14, 2008)

Awakening forces were widely criticized for corruption and for brutal tactics. Many spoke of them as “gangs,” “criminals,” “dogs of the Americans,” and “thieves.” But the Bush administration credited the Awakening forces with bringing stability to volatile areas. (Inter Press Service, January 14, 2008)

In early January, more than 200 Iraqi residents were arrested by Awakening fighters supported by the al-Muthanna battalion of the Iraqi army. They reportedly arrested teenage boys and killed “suspects in cold blood and threw their bodies in garbage dumps. One father said “Awakening soldiers told his son when they took him that they would cut off his head, and it seems that they meant it.” (Inter Press Service, January 14, 2008)

Condemning the Awakening, the Sunni religious group, The Association of Muslim Scholars (AMS), condemned the detentions. The AMS said United States forces and the al-Maliki government were responsible for the safety of the detained. (Inter Press Service, January 14, 2008)>/P>

3. THE IRAQI MINISTRY. Up to 35 officials in the Iraqi Ministry of the Interior ranking as high as general were arrested in December 2008. Some were accused of quietly working to reconstitute Saddam’s Ba’athist Party, according to senior security officials in Baghdad. (New York Times, December 17, 2008)

Senior security officials said there was significant evidence tying those arrested to a wide array of political corruption charges, including affiliation with Al Awda, or the Return, a descendant of the Ba’athist Party. (New York Times, December 17, 2008)

While most members of the Ba’athist Party were Sunni Muslims, as Saddam was, those arrested were a mix of Sunnis and Shi’ites. A high-ranking Interior Ministry official said that those affiliated with Al Awda had paid bribes to other officers to recruit them and that huge amounts of money had been found in raids. (New York Times, December 17, 2008)