From the NY Times:
The Iraq Money Tree
nvading, occupying and rebuilding Iraq will cost American taxpayers more than $100 billion. But for some lucky companies, Iraq is emerging as a profit center. The administration has begun farming out contracts, and politically connected firms like Halliburton are among the early winners. This looks like naked favoritism and undermines the Bush administration's portrayal of the war as a campaign for disarmament and democracy, not lucre.
Despite the limited damage of this war, the ravages of earlier conflicts and sanctions have left much of Iraq in ruins. Roads, ports and schools must be rebuilt, the oil industry revived and power grids and communications networks repaired. Some emergency contracts need to be awarded right away. But that does not mean this should be done without competition or that such contracts should be long term. Moreover, by grabbing much of the first year's money, the favored American companies may have a leg up for signing future deals as well. Reconstruction is expected to cost some $20 billion a year for the next three years.
With so much money involved it is vital that bidding be competitive, transparent and open to all. That has not happened so far. Shortly before the war began, the Army Corps of Engineers awarded a no-bid contract to fight oil fires for the next two years to a subsidiary of Halliburton, the company Vice President Dick Cheney ran from 1995 to 2000. The deal could be worth as much as $7 billion.
Federal contracting regulations allow normal rules to be bypassed when time is short and national security concerns are involved. Those exceptions may apply to oil fields set aflame during the fighting, but it's hard to see how they justify a multiyear contract. Congress has rightly asked the corps to provide details on the Halliburton contract and on why no competing firms were allowed to bid.
Over at State, the Agency for International Development has limited bidding to a short list composed mainly of government contracting insiders. These include the Bechtel Group, on whose board sits George Shultz, a former secretary of state, and the Fluor Corporation, whose recently retired chief executive is being considered by the Pentagon to run Iraq's oil industry.
Companies unfairly excluded from bidding for these contracts are justifiably upset, including those based in Britain, America's most important military ally in Iraq. Under World Trade Organization rules, procurement contracts are supposed to be open to all bidders, domestic and foreign.
Even if a legal basis can be found for these closed bidding arrangements, they are unacceptable. The Iraq war was fought in the name of high principles. Victory should not turn into an undeserved financial bonanza for companies that have cultivated close ties with the Bush administration.
fred |
