The more these stories seep out into the public media, the more we will learn the lesson about shoddy, messianic transformations by zealots:
The project
President Bush wanted the 'right' people in charge of the reconstruction of Iraq. Unfortunately for the country, that meant loyalty to the president rather than expertise - including a 24-year-old estate agent put in charge of the stock exchange, writes Rajiv Chandrasekaran in the second exclusive extract from his new book
Tuesday February 20, 2007
The Guardian
The opportunity to participate in the US-led effort to reconstruct Iraq as part of the Coalition Provisional Authority (CPA), which ran Iraq's government from April 2004 until June 2004, attracted all manner of Americans: restless professionals, Arabic-speaking academics, development specialists and war-zone adventurers. But before they could go to Baghdad, they had to get past Jim O'Beirne's office in the Pentagon. To pass muster with O'Beirne, a political appointee who screens prospective political appointees for defence department posts, applicants didn't need to be experts in the Middle East or in post-conflict reconstruction. What seemed most important was loyalty to the Bush administration.
The selection often followed a call from a well-connected Republican on behalf of a friend or trusted colleague. Some people were personally recruited by the president.
O'Beirne's staff asked questions in job interviews that could have got an employer in the private sector hauled into court. (The Pentagon was exempted from most employment regulations because it hired people - using an obscure provision in federal law - as temporary political appointees.) Did you vote for George Bush in 2000? Do you support the way the president is fighting the war on terror? Two CPA staffers said that they were asked if they supported Roe v Wade (the ruling that effectively legalised abortion in the US). One former CPA employee, who had an office near the White House liaison staff, wrote an email to a friend describing the recruitment process: "I watched resumés of immensely talented individuals who had sought out CPA to help the country thrown in the trash because their adherence to 'the president's vision for Iraq' [a frequently heard phrase at CPA] was 'uncertain'."
Another CPA staffer told me that when he went to the Pentagon for his predeployment interview, one of O'Beirne's deputies launched into a 10-minute soliloquy about domestic politics that included statements opposing abortion and supporting capital punishment. The staffer didn't agree with what was said, but he nodded. "I felt pressure to agree if I wanted to go to Baghdad," he said.
Many of those chosen by O'Beirne's office to work for the CPA lacked vital skills and experience. A 24-year-old who had never worked in finance - but had applied for a White House job - was sent to reopen Baghdad's stock exchange. The daughter of a prominent neoconservative commentator and a recent graduate from an evangelical university for home-schooled children were tapped to manage Iraq's $13bn (£6.7bn) budget, even though they had little experience in accounting.
"I'm not here for the Iraqis," one staffer said. "I'm here for George Bush."
The decision to send the loyal and the willing, instead of the best and the brightest, is now regarded by many as one of the Bush administration's gravest errors. Many of those selected because of their political fidelity spent their time trying to impose a conservative agenda on the postwar occupation, which sidetracked more important reconstruction efforts and squandered goodwill among the Iraqi people, according to many who participated in the reconstruction effort.
Endowed with billions of dollars in US reconstruction funds and a comparatively quiescent environment in the aftermath of the US invasion, the CPA was the US government's first and best hope to resuscitate Iraq - to establish order, promote rebuilding and assemble a viable government, all of which, experts believe, would have constricted the insurgency and mitigated the chances of civil war. Many of the basic tasks Americans struggle to accomplish today in Iraq - training the army, vetting the police, increasing electricity generation - could have been performed far more effectively in 2003 by the CPA.
But many CPA staff members were more interested in other things: in instituting a flat tax, in selling off government assets, in ending food rations and otherwise fashioning a new nation that looked a lot like the United States. Many of them spent their days cloistered in the walled-off enclave of the Green Zone.
Jay Hallen, aged 24, was restless. He didn't much like his job at a real-estate firm. His passion was the Middle East, and although he had never been there, he was intrigued enough to take Arabic classes and read histories of the region in his spare time.
He had mixed feelings about the war to topple Saddam, but he viewed the US occupation as a ripe opportunity and was delighted when the CPA said it wanted him in Baghdad. But the day he arrived in the city, his new boss, Thomas Foley, the CPA official in charge of privatisation, told Hallen that he wanted him to take charge of reopening the stock exchange.
"Are you sure?" Hallen asked. "I don't have a finance background." He had not followed the US stock markets. He had not studied economics.
"It's fine," Foley replied.
Before the war, Baghdad's stock exchange looked nothing like its counterparts elsewhere in the world. There were no computers or electronic displays. Trades were scrawled on pieces of paper and noted on large blackboards. If you wanted to buy or sell, you came to the exchange yourself and shouted your order to one of the traders.
Quickly absorbing the CPA's ambition during the optimistic days before the insurgency flared, Hallen didn't just want to reopen the exchange; he wanted to make it the best, most modern stock exchange in the Arab world. He wanted to promulgate a new securities law that would make the exchange independent of the finance ministry, with its own bylaws and board of directors. He wanted to install a computerised trading and settlement system.
Iraqis cringed at the plan. Their top priority was reopening the exchange, not setting up computers or enacting a new securities law. Brokers and traders wanted to go back to work. Investors wanted to buy and sell. "People are broke and bewildered," broker Talib Tabatabai had told Hallen. "Why do you want to create enemies? Let us open the way we were."
But Hallen was convinced that major changes had to be enacted. A nonprofit American organisation was tasked with rewriting the securities law, and offered assistance with training brokers and purchasing computers. Hallen began firing Iraqis. The old stock exchange employed 85 people - but Hallen was determined to create a lean, US-style exchange with just 40 salaried positions. He met each of the old employees and then chose 45 to sack. "It was not an easy time, because people in Iraq are not used to getting fired," he said.
Hallen nominated nine Iraqis to serve on the exchange's board of governors. As he met candidates, he screened them for proficiency in English - he later said that this was for his personal benefit - and for "a very American style of thinking in terms of business and capitalism".
By the spring of 2004, the securities law was ready. The stock exchange's board selected Tabatabai, the US-educated broker who had been so critical of Hallen, as its chairman. The board hired back the 45 workers whom Hallen had fired. The stock exchange didn't need more employees, but it didn't make sense to create enemies of fellow Iraqis.
And they didn't want to wait several more months for the computerised trading system to be up and running. They ordered dozens of DryErase boards to be installed on the trading floor instead. Tension between Hallen and the board grew. Hallen regarded the board as "stubborn and resistant to change". Board members couldn't understand why Hallen wouldn't leave them alone. It was their country, after all.
On June 22, Hallen left Iraq. Two days later, the stock exchange opened. Brokers barked orders to floor traders, who used their trusty whiteboards. Transactions were recorded not with computers but with small chits written on in ink.
I asked Tabatabai what would have happened if Hallen hadn't been assigned to reopen the stock exchange. He smiled. "We would have opened months earlier. He had grand ideas, but those ideas did not materialise. Those CPA people reminded me of Lawrence of Arabia."
The hiring of Bremer's most senior advisers was settled upon at the highest levels. Some were personally recruited by Bush. Others got their jobs because an influential Republican made a call on behalf of a friend or trusted colleague. That is what happened with James K Haveman Jr, who was selected to oversee the rehabilitation of Iraq's health care system. Haveman, a 60-year-old social worker, was largely unknown among international health experts, but he had connections. He had been the community health director for the former Republican governor of Michigan, John Engler, who recommended him to Paul D Wolfowitz, the deputy secretary of defence.
The job of rehabilitating Iraq's health-care system had previously been held by Frederick M Burkle Jr, a physician with a master's degree in public health and postgraduate degrees from Harvard, Yale, Dartmouth, and the University of California at Berkeley. Burkle was a naval reserve officer with two bronze stars and a deputy assistant administrator at the US Agency for International Development (USAID). He taught at the Johns Hopkins School of Public Health, where he specialised in disaster-response issues. During the first Gulf war, he provided medical aid to Kurds in northern Iraq. He had worked in Kosovo and Somalia. And in the lead-up to the invasion of Iraq, he had been put in charge of organising the US response to the expected public health crisis in Iraq. A USAID colleague called him the "single most talented and experienced post-conflict health specialist working for the United States government".
But Burkle was replaced. A senior official at USAID told him that the White House wanted a "loyalist" in the job. Burkle had a wall of degrees, but he didn't have a picture of himself with the president.
Haveman was well-travelled, but most of his overseas trips were in his capacity as a director of International Aid, a faith-based relief organisation that provided health care while promoting Christianity in the developing world. Prior to his stint in government, Haveman ran a large Christian adoption agency in Michigan that urged pregnant women not to have abortions.
He faced a considerable task: preventing disease, providing clean drinking water and improving care at hospitals were a matter of urgency; so, too, was obtaining drugs and medical supplies. And hospitals and clinics were out of antibiotics, painkillers, and other medicines.
Haveman arrived in Baghdad with his own military aide, his own chief of staff and his own priorities. He approached problems the way a health-care administrator in America would: he focused on preventive measures to reduce the need for hospital treatment. He urged the health ministry to mount an antismoking campaign, and assigned an American from the CPA team, who turned out to be a closet smoker, to lead the public-education effort. Several members of Haveman's team noted wryly that Iraqis faced far greater dangers than a little tobacco.
Medical care in Iraq had long been free. Under Saddam, the government picked up the tab. That was anathema to Haveman, who insisted that Iraqis should pay a small fee every time they saw a doctor. He also decided to allocate almost all of the health ministry's $793m (£407m) to renovating maternity hospitals and building 150 new community medical clinics. His intention was "to shift the mind-set of the Iraqis that you don't get health care unless you go to a hospital".
A noble goal, no doubt, but there was no money set aside to rehabilitate the emergency rooms and operating theatres at Baghdad's hospitals, even though injuries from insurgent attacks were now the country's single largest public health challenge. |
