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Cronyism in US Contracts Clouds Iraq Fundraising
Published on Saturday, October 18, 2003 by the Inter Press Service
Cronyism in US Contracts Clouds Iraq Fundraising
by Thalif Deen

UNITED NATIONS - A recent political ad campaign highlighting corruption and cronyism in U.S. contracts awarded to rebuild Iraq takes a shot at a major corporation with ties to the White House.

According to the facetious political slogan aired on U.S. television, international donors were offered a piece of unsolicited advice: ''If you are writing out checks, please make sure to spell Halliburton with two 'l's''.

The huge U.S.-based energy conglomerate, once headed by Vice President Dick Cheney, has received more than two billion dollars in contracts for the reconstruction of Iraq.

But what is outrageous, say analysts, is that Halliburton was awarded 1.2 billion dollars in contracts on a non-competitive basis, shutting out all other contractors.

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

A second major U.S. company, Bechtel Corporation -- with close ties to the administration of President George W. Bush -- has also come under fire for various irregularities relating to Iraqi contracts.

Clifford George Mumm, a senior Bechtel official in Baghdad, has denied any irregularities in the 105 subcontracts the firm has signed with Iraqi companies.

But Henry Waxman, a congressman from the State of California, has accused the Bush administration of wasting billions of dollars in contracts with Halliburton and Bechtel ''when Iraqi companies could do the work for less''.

On Thursday, the 'New York Times' reported that two senior Democratic congressmen were questioning if Halliburton was overcharging the U.S. government for supplying gasoline in Iraq.

In a letter to the White House Office of Management and Budget, Waxman and Representative John Dingell of Michigan said, ''the overcharging by Halliburton is so extreme that one expert has privately called it 'highway robbery'.''

The 15-member European Union (EU) has called for a ”separate and transparent'' fund to hold its money for Iraq.

”It's not a criticism of how the coalition operates, but if we're putting money through an international fund, I'm not in a position in which I have to answer questions on the procurement policies of the (coalition-run) development fund for Iraq,” said EU External Relations Commissioner Chris Patten earlier this month, according to Radio Free Europe.

Spain, which is hosting a major international donor conference Oct. 23-24, is expecting about six billion dollars in pledges for the reconstruction of Iraq.

''Unfortunately, the money will not be spent 'to improve the lives of Iraqis' as the Bush administration claims, but only to repair what was wantonly broken by the invasion, and incidentally to enrich U.S. contractors,'' Jim Jennings, president of Conscience International, told IPS.

Last week Democratic Senator Patrick Leahy successfully pushed through two amendments to a piece of legislation that will require the U.S.-run Coalition Provisional Authority (CPA) in Baghdad to release monthly details of Iraq's oil production and revenues, and also impose criminal penalties against fraud in Iraq-related contracts.

Former U.N. Assistant Secretary-General Hans Von Sponeck, who headed the Iraq 'Oil for Food Program', told IPS that even the Iraqi budget administered by the CPA lacks transparency.

''Here's what I can say guardedly if I were an Iraqi who wanted to understand how my country's resources are allocated at this crucial moment,'' he said.

The proposed Iraqi budget, he said, includes a deficit of 2.2 billion dollars, identified with the comment, ''funded from committed financial assets''.

”What are these committed financial assets?” Von Sponeck asked.

''What has happened to the cash the U.S. army captured? Should it not be identified as income in the 2003 budget? A very large amount of money -- 925 million dollars -- is identified as ''various expenditures'. What are these 'various expenditures'?”

''The point I am trying to make is that we seem to see the beginning of a lot of 'cover up', which needs to be strongly criticized,'' Von Sponeck added.

The Bush administration has sought about 87 billion dollars from the U.S. Congress for the reconstruction of Iraq and Afghanistan. But it is desperately seeking additional money from the donor community in an attempt to share the huge burden.

The upcoming donor conference in Madrid was expected to receive a moral boost following the unanimous adoption of a Security Council resolution on Thursday calling on U.N. member states not only to provide troops for a new multinational peacekeeping force in Iraq but also to provide money to rebuild the war-devastated country.

But in a joint statement issued after the resolution was adopted, France, Germany and Russia said pointedly that Washington has not created the conditions necessary ''to envisage any military commitment'' or even the offer of ''further financial contributions beyond our present engagement''.

The three countries were seeking greater sovereignty for Iraqis and also a major role for the United Nations in the reconstruction of Iraq. The resolution adopted on Thursday falls short on both counts, they said.

The London 'Financial Times' quoted unnamed White House officials as saying the U.N. vote would not necessarily translate into large financial contributions at the Madrid conference next week.

Japan has already indicated it will pledge about 1.5 billion dollars for next year, and up to about 5.0 billion dollars over the next five years.

The EU has already approved about 233 million dollars in reconstruction aid for Iraq. But so far Britain is the only European nation that is expected to provide additional funding -- about 439 million dollars -- from its 2003 and 2004 budgets.

© Copyright 2003 Inter Press Service


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