Who's Sordid Now? By PAUL KRUGMAN

From: "aurora_borealis_sky_spirit"
Who's Sordid Now? By PAUL KRUGMAN

September 30, 2003

Who's Sordid Now?

By PAUL KRUGMAN
t's official: the administration that once scorned nation-building now
says that it's engaged in a modern
version of the Marshall Plan. But Iraq isn't postwar Europe, and
George W. Bush definitely isn't Harry
Truman. Indeed, while Truman led this country in what Churchill called
the "most unsordid act in history,"
the stories about Iraqi reconstruction keep getting more sordid. And the
sordidness isn't, as some would
have you believe, a minor blemish on an otherwise noble enterprise.

Cronyism is an important factor in our Iraqi debacle. It's not just that
reconstruction is much more
expensive than it should be. The really important thing is that cronyism
is warping policy: by treating
contracts as prizes to be handed to their friends, administration
officials are delaying Iraq's recovery, with
potentially catastrophic consequences.

It's rarely mentioned nowadays, but at the time of the Marshall Plan,
Americans were very concerned
about profiteering in the name of patriotism. To get Congressional
approval, Truman had to provide
assurances that the plan would not become a boondoggle. Funds were
administered by an agency
independent of the White House, and Marshall promised that priorities
would be determined by
Europeans, not Americans.

Fortunately, Truman's assurances were credible. Although he is now
honored for his postwar leadership,
Truman initially rose to prominence as a fierce crusader against war
profiteering, which he considered
treason.

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.

Meanwhile, several companies with close personal ties to top
administration officials have begun brazenly
offering their services as facilitators for companies seeking Iraqi
business. The former law firm of Douglas
Feith, the Pentagon under secretary who oversees Iraq reconstruction,
has hung out its shingle. So has
another company headed by Joe Allbaugh, who ran the Bush-Cheney
campaign
in 2000 and ran FEMA
until a few months ago. And a third entrant is run by Ahmad Chalabi's
nephew.

There's a moral here: optimists who expect the administration to get its
Iraq policy on track are kidding
themselves. Think about it: the cost of the occupation is exploding, and
military experts warn that our army
is dangerously overcommitted. Yet officials are still allowing Iraqi
reconstruction to languish, and the
disaffection of the Iraqi public to grow, while they steer choice
contracts to their friends. What makes you
think they will ever change their ways?

Copyright 2003 The New York Times