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Bilked by U.S. contractors
The crooks who plundered Iraq

January 27, 2006 | Page 5

IN EARLY January, the Bush administration announced that it would be requesting no additional funding from Congress for Iraq reconstruction.

The announcement was a cruel joke at the expense of the people of Iraq. One, it implied that the reconstruction of Iraq was nearly complete, when the reality is that millions of Iraqis still live without electricity and decent sanitation. Two, it presumes that the billions of dollars the Bush administration previously earmarked for reconstruction in Iraq actually went to reconstruction.

In the meantime, American businesses, particularly those with ties to the Bush administration, are lapping up lucrative government contracts, and that gravy train isn't ending anytime soon. ELIZABETH SCHULTE shows how U.S. contractors are plundering Iraq.

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ROBERT STEIN Jr. "dressed all in black...even in the summer in Iraq, where the temperature often rose above 120 degrees," began a New York Times article in November, giving a glimpse into the sleazy world of U.S. contractors in Iraq.

Stein and his partner Philip Bloom were charged in federal court in a bribery and kickback scandal involving millions of dollars in Iraq reconstruction funds. Somehow, Stein--whose previous convictions include federal charges for credit card fraud and a suit in connection with an embezzlement scheme by a former employer--landed a plum job as a comptroller and financial officer for the American occupation authority.

Part of his job was hiring contractors for reconstruction projects in the area around Hilla in the south of Iraq, where he was in charge of about $82 million. Stein awarded at least $13 million in contracts to Bloom, in exchange for a hundreds of thousands of dollars in bribes.

The work done by Bloom and his construction companies was either never done, or was of such poor quality as to make the results almost useless, according to reports by the special inspector general for Iraq reconstruction and cited in the Times. It wasn't uncommon, for example, for buildings built by Bloom's companies to begin falling down almost as soon as they were built. "It's the most shoddy work I've ever seen from a contractor," a State Department official stationed in Hilla at the time told the Times. "It's a disaster."

Evidently, Stein originally went to Iraq when he was hired by S&K Technologies, which the Army had contracted to provide administrative support in Iraq. How he began working for the Coalition Provisional Authority is anyone's guess.

This story of fraud and theft is small potatoes in the Wild West of U.S.-controlled reconstruction projects in Iraq. Fortunes are there to be made, if you know the right people.

The Bechtel Group is one of the world's largest engineering and construction firms--and one of six corporations that the U.S. Agency for International Development (USAID) privately selected to bid on an Iraq contract early on.

In April 2003, Bechtel won a contract worth up to $680 million to rebuild Iraqi infrastructure that was destroyed by the war that had begun less than a month earlier. In September 2003, USAID announced that, due to the poor infrastructure and deteriorating stability in Iraq, Bechtel would get another $350 million on the contract, raising the contract's potential ceiling to $1.03 billion, according to the Center for Public Integrity.

Bechtel, of course, has deep ties to the White House. Bechtel's former "employees" include Reagan Defense Secretary Casper Weinberger and Nixon Treasury Secretary George Shultz.

When the Bush administration isn't awarding reconstruction money to its cronies, it's pouring it down the "security" sinkhole.

Of the $18.4 billion allocated for U.S. rebuilding in Iraq since 2003, roughly half has been diverted from repairing damaged electrical, sanitation and education systems. According to reconstruction officials and documents cited in the Washington Post last month, at least $2.5 billion has been redirected to security forces, prisons and detention centers. Money was also spent on special police forces.

"In the process," notes a January 2 Post article, "the United States will spend $437 million on border fortresses and guards, about $100 million more than the amount dedicated to roads, bridges and public buildings, including schools. Education programs have been allocated $99 million; the United States is spending $107 million to build a secure communications network for security forces."

As Mustafa Sidqi Murthada, who lives in Baghdad, told the Post, "It is easy for the Americans to say, 'We are doing reconstruction in Iraq,' and we hear that. But to make us believe it, they should show us where this reconstruction is. Maybe they are doing this reconstruction for them in the Green Zone. But this is not for the Iraqis." "Believe me, they are not doing this," he said, "unless they consider rebuilding of their military bases reconstruction."

"The U.S. never intended to completely rebuild Iraq," Brig. Gen. William McCoy, the Army Corps of Engineers commander overseeing the work, told reporters after the administration announced it wasn't going to request any more money for reconstruction. "This was just supposed to be a jump-start," he told the Washington Post.

Some "jump-start." Nationally, Iraqis have on average less than 12 hours of electrical power a day. In Baghdad, it was six hours a day in December. And this is according to U.S. figures, which many residents argue are too high. Iraq's national electrical grid has an average daily output of 4,000 megawatts, about 400 megawatts less than before the war.

The Americans, 26-year-old Zaid Saleem, who works at a market in Baghdad, told the Post, "are the best in destroying things but they are the worst in rebuilding."

Guilty of grand theft oil

THE STORIES of unscrupulous contractors stealing Iraq blind seldom make it into the news. But what's never reported is the theft that's taking place under the so-called rule of law.

U.S. rule, that is. It's considered a crime when someone picks your pocket, but if that someone is the U.S. government, and they've invaded your country to steal your oil, that's different.

The malfeasance was easy to see when it was revealed during the early stages of the occupation that Vice President Dick Cheney had pulled strings to win his friends at Halliburton and Halliburton subsidiary Kellogg, Brown & Root lucrative contracts in Iraq. The same went for other big campaign contributors, like construction corporation Bechtel, which were eager to grab the spoils in post-invasion Iraq.

This is about making the Bush administration's friends in Corporate America happy, but that's not all it's about. The invasion and occupation of Iraq means that the U.S. controls the country with the second-largest proven oil reserves in the world, multiplying its clout around the world.

And like any swindler, the U.S. used a web of lies to justify its scam--from Saddam Hussein's nonexistent "weapons of mass destruction" to its claims of bringing "democracy" and "liberation." This was the biggest con job of all.

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