By Penrod, Grant
News Media and the Law , Vol. 28, No. 1
Information on how public money is being spent to reconstruct Iraq is as elusive as America's search for weapons of mass destruction
The U.S. government has committed billions of taxpayer dollars to rebuild Iraq's war-torn infrastructure, with little commitment to show the American public how those dollars will be spent.
What kinds of projects will be undertaken? Who will or has been hired and why? What kinds of profits will those companies reap? Who is overseeing the allocation of billions of dollars of public money?
The expenditure of such vast amounts of taxpayer dollars demands the highest levels of public oversight and transparency - often because secrecy leads to abuse, fraud and theft. But much like the search for weapons of mass destruction in Iraq, little has been uncovered in the quest for public accountability of America's reconstruction contracting process.
"I've worked in national security my whole career and this is the most difficult time I've had getting information," said David Wood, national security reporter for Newhouse News Service. "All of the reporting is: 'I can't tell what's going on.'"
In November 2002, months before the start of the war, Bush administration officials secretly began preparing to award contracts to private companies to complete the anticipated reconstruction projects. Normally, the government contracting process requires the government to publicly request proposals and bids from interested companies. The proposals are scored and ranked, and a contract is awarded based on the highest-ranked proposal.
In this case, the U.S. Agency for International Development, the State Department agency responsible for awarding many of the reconstruction contracts, and the Army Corps of Engineers decided that the normal contracting process would not work. They needed to deploy reconstruction efforts quicker than the normal process would allow, and to maintain secrecy about the Bush administration's plans to go to war.
USAID selected seven companies with security clearances and previous experience working with the government - about half the number that would normally bid - and allowed them to bid on the initial reconstruction contracts. Many of these initial contracts - worth more than $2 billion - were awarded to a sole bidder with no competition at all. Although the contracts were signed in early March 2003, the information was not disclosed until later in the month, a few days after the invasion.
Not long after the contracts were announced, questions and criticisms began to arise over the lack of transparency and accountability. Details of the contracts - including exactly what work was being performed, which subcontractors were performing the work, and how much they were charging - were not publicly available.
J. Brian Atwood, former director of USAID, questions such a need for secrecy.
"I don't think the taxpayers are well served when there is not a competitive bidding process for the work," Atwood told Newhouse News Service for a March 28, 2003, article on the reconstruction contracts.
Many of the contracts were awarded on a "cost-plus" basis, whereby the contracted company is reimbursed by the government for whatever it spends. The company is then paid a percentage of those expenditures in profit. Such contracts make it difficult to determine how much profit a company is making from a contract, and encourages companies to run up large bills to increase profits.
The criticism was fueled by allegations of impropriety in the process. A number of major news outlets reported that the companies selected for the no-bid and limited-bid contracts were prominent campaign contributors to the Bush administration, including Bechtel and Halliburton, the company led by Vice President Dick Cheney before he ran for office in 2000.
Allegations that a Halliburton subsidiary, Kellogg, Brown & Root, had overcharged for fuel imported into Iraq from Kuwait under one of the no-bid contracts strengthened the calls for a more transparent process. …