Is this a real story?
The top national story in today’s Chicago Tribune, “War contractors are big donors,” is about the correlation between those firms receiving reconstruction contracts in Iraq and Afghanistan and the political contributions such firms made. Here’s the first few paragraphs: Many of the companies that have received some of the nearly $8 billion in reconstruction contracts ...
The top national story in today's Chicago Tribune, "War contractors are big donors," is about the correlation between those firms receiving reconstruction contracts in Iraq and Afghanistan and the political contributions such firms made. Here's the first few paragraphs:
The top national story in today’s Chicago Tribune, “War contractors are big donors,” is about the correlation between those firms receiving reconstruction contracts in Iraq and Afghanistan and the political contributions such firms made. Here’s the first few paragraphs:
Many of the companies that have received some of the nearly $8 billion in reconstruction contracts in Iraq and Afghanistan also have been strong contributors to the Republican Party or have close connections with government officials, a new study by a government watchdog group concluded Thursday. The report, issued by The Center for Public Integrity, a non-partisan, non-profit investigative group, was the result of a six-month investigation into contracts in Iraq and Afghanistan. Charles Lewis, executive director of the center, said in a statement that the report reveals “a stench of political favoritism and cronyism surrounding the contracting process in both Iraq and Afghanistan.”
The Tribune is not the only paper to run with this — it’s also in the New York Times, Los Angeles Times, USA Today, and Washington Post. If you want to see the whole report, it’s available here. Sounds pretty damning? Well, yes, until you consider the following facts:
The winners of the top 10 contracts for work in Iraq and Afghanistan contributed about $1 million a year to national political parties, candidates and political action committees since 1990, according to the group, which studies the links between money and politics.
This is mathematically true, but overlooks the fact that the overwhelming majority of these contributions come from only three of the firms on the list — Bechtel, Dell, and Kellog, Brown & Root (yes, they’re a subsidiary of Halliburton).
[W]hen this much money is flying around, you inevitably get a lot of it steered into friendly hands, even without systematic crony-ization of the whole process. And one hears more and more examples of contracts getting very inexpensive bids from local Iraqi companies, only to end up in the hands of American companies whose bids are an order of magnitude higher. I don’t think you have to figure wholesale corruption or even favoritism is taking place, at least not only that. The people who award the contracts are likely acting under provisions which (understandably and rightly) give preferential treatment to American companies. And many of the people making the calls probably have little knowledge of Iraqi society or business practices and thus little way of evaluating the trustworthiness and reliability of local operators.
The Center for Public Integrity wants to claim that there’s a fire here. Looking over their numbers, I’m not even convinced there’s any smoke. More on this soon…. and now it’s here. UPDATE: While the allegations of systemic corruption appear to be bogus, that doesn’t mean that the reconstruction process is being efficiently managed. This Newsweek story (hat tip to mc_masterchef for the link) suggests that incompetence is a much bigger problem than malfeasance when it comes to reconstruction. The first two paragraphs:
Helmut Doll waits. And waits. Doll, the German site manager for Babcock Power, a subcontractor of Siemens, is hoping for the arrival of Bechtel engineers at the Daura power plant, Baghdad’s largest. U.S. construction giant Bechtel has the prime contract, now worth about $1 billion, for restoring Iraq’s infrastructure. That includes Daura, which should supply one third of the city’s generating capacity but today, six months into the U.S. occupation, is producing only 10 percent. “Nobody is working on the turbine,” explains Doll. “Bechtel only came and took photos. We can’t judge Bechtel’s work progress because they’re not here.” Questioned, Bechtel spokesman Howard Menaker says Iraq’s power has to be viewed as “a holistic system”—generation doesn’t have to come from a particular plant—and in recent weeks Bechtel has sent engineers to the site. He also blames the delay on more stringent—or finicky, depending on your point of view—American standards. Menaker said the Daura turbine is “covered with friable asbestos and is right now a hazardous work site.” The company says it has just completed “a protocol for asbestos abatement.” Still, It’s not easy determining why the biggest power plant in Iraq’s largest city seems to be such a low priority. Baghdad is still beset by blackouts, and so much of America’s success or failure depends on power: the economy can’t recover with-out it. The next logical place to ask is the U.S. Agency for International Development, which gave Bechtel the contract last April. Questioned by NEWSWEEK about Daura, USAID chief Andrew Natsios referred to a priority list drawn up by a coordinating committee under the Coalition Provisional Authority—the chief occupying power—and said he didn’t know where Daura was on it. His aide said the CPA would know. No, Natsios said, he thought Bechtel would know. But Bechtel’s Menaker responded: “We perform the work tasked to us by USAID. We don’t make decisions on priorities. USAID and CPA make those decisions.” Some CPA officials concede privately that the problem stems from the lack of preparation before the war. “It always comes back to the same thing: no plan,” says one CPA staffer. (emphasis added).
ANOTHER UPDATE: Tom Maguire has a newsbreak on another Center for Public Integrity study.
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
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