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Tuesday, September 30, 2003
Crony capitalism one-two punch
The New York Times is getting all over the selling of Iraq. First there is Paul Krugman (who, unlike Donald Ruskin actually is an economist):
Iraq's reconstruction, by contrast, remains firmly under White House control. And this is an administration of, by and for crony capitalists; to match this White House's blithe lack of concern about conflicts of interest, you have to go back to the Harding administration. That giant, no-bid contract given to Halliburton, the company that made Dick Cheney rich, was just what you'd expect.
And even as the situation in Iraq slides downhill, and the Iraqi Governing Council demands more autonomy and control, American officials continue to block local initiatives, and are still trying to keep the big contracts in the hands of you-know-who.
For example, in July two enterprising Middle Eastern firms started offering cellphone service in Baghdad, setting up jury-rigged systems compatible with those of neighboring countries. Since the collapse of Baghdad's phone system has been a major source of postwar problems, coalition authorities should have been pleased.
But no: the authorities promptly shut down the services. Cell service, they said, could be offered only by the winners in a bidding process — one whose rules, revealed on July 31, seemed carefully designed to shut out any non-American companies. (In the face of strenuous protests the rules were revised, but still seem to favor the usual suspects.) Oddly, the announcement of the winners, originally scheduled for Sept. 5, keeps being delayed. Meanwhile, only Paul Bremer and his people have cellphones — and, thanks to the baffling decision to give that contract to MCI, even those phones don't work very well. (Aside from the fact that its management perpetrated history's biggest accounting fraud, MCI has no experience in building cell networks.)
Then there's electricity. One reason Iraq still faces blackouts is that local experts and institutions were excluded from the repair business. Instead, the exclusive contract was given to Bechtel, whose Republican ties are almost as strong as Halliburton's. And if a recent story in The Washington Post is accurate, Bechtel continues to ignore pleas by Iraqi engineers for essential spare parts.
Then there is this from Douglas Jehl:
A group of businessmen linked by their close ties to President Bush, his family and his administration have set up a consulting firm to advise companies that want to do business in Iraq, including those seeking pieces of taxpayer-financed reconstruction projects.
The firm, New Bridge Strategies, is headed by Joe M. Allbaugh, Mr. Bush's campaign manager in 2000 and the director of the Federal Emergency Management Agency until March. Other directors include Edward M. Rogers Jr., vice chairman, and Lanny Griffith, lobbyists who were assistants to the first President George Bush and now have close ties to the White House.
At a time when the administration seeks Congressional approval for $20.3 billion to rebuild Iraq, part of an $87 billion package for military and other spending in Iraq and Afghanistan, the company's Web site, www.newbridgestrategies.com, says, "The opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq."
The sleaze and rank opportunism is so thick that you can cut it with a knife.
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