The multibillion robbery the US calls reconstruction

The shameless corporate feeding frenzy in Iraq is fuelling the resistance

Naomi Klein

Saturday June 26, 2004 "The Guardian" -- Good news out of Baghdad: the Program Management Office, which oversees the $18.4bn in US reconstruction funds, has finally set a goal it can meet. Sure, electricity is below pre-war levels, the streets are rivers of sewage and more Iraqis have been fired than hired. But now the PMO has contracted the British mercenary firm Aegis to protect its employees from "assassination, kidnapping, injury and" - get this - "embarrassment". I don't know if Aegis will succeed in protecting PMO employees from violent attack, but embarrassment? I'd say mission already accomplished. The people in charge of rebuilding Iraq can't be embarrassed, because, clearly, they have no shame.
In the run-up to the June 30 underhand (sorry, I can't bring myself to call it a "handover"), US occupation powers have been unabashed in their efforts to steal money that is supposed to aid a war-ravaged people. The state department has taken $184m earmarked for drinking water projects and moved it to the budget for the lavish new US embassy in Saddam Hussein's former palace. Short of $1bn for the embassy, Richard Armitage, the deputy secretary of state, said he might have to "rob from Peter in my fiefdom to pay Paul". In fact, he is robbing Iraq's people, who, according to a recent study by the consumer group Public Citizen, are facing "massive outbreaks of cholera, diarrhoea, nausea and kidney stones" from drinking contaminated water.

If the occupation chief Paul Bremer and his staff were capable of embarrassment, they might be a little sheepish about having spent only $3.2bn of the $18.4bn Congress allotted - the reason the reconstruction is so disastrously behind schedule. At first, Bremer said the money would be spent by the time Iraq was sovereign, but apparently someone had a better idea: parcel it out over five years so Ambassador John Negroponte can use it as leverage. With $15bn outstanding, how likely are Iraq's politicians to refuse US demands for military bases and economic "reforms"?

Unwilling to let go of their own money, the shameless ones have had no qualms about dipping into funds belonging to Iraqis. After losing the fight to keep control of Iraq's oil money after the underhand, occupation authorities grabbed $2.5bn of those revenues and are now spending the money on projects that are supposedly already covered by American tax dollars.

But then, if financial scandals made you blush, the entire reconstruction of Iraq would be pretty mortifying. From the start, its architects rejected the idea that it should be a New Deal-style public works project for Iraqis to reclaim their country. Instead, it was treated as an ideological experiment in privatisation. The dream was for multinational firms, mostly from the US, to swoop in and dazzle the Iraqis with their speed and efficiency.

Iraqis saw something else: desperately needed jobs going to Americans, Europeans and south Asians; roads crowded with trucks shipping in supplies produced in foreign plants, while Iraqi factories were not even supplied with emergency generators. As a result, the reconstruction was seen not as a recovery from war but as an extension of the occupation, a foreign invasion of a different sort. And so, as the resistance grew, the reconstruction itself became a prime target.

The contractors have responded by behaving even more like an invading army, building elaborate fortresses in the green zone - the walled-in city within a city that houses the occupation authority in Baghdad - and surrounding themselves with mercenaries. And being hated is expensive. According to the latest estimates, security costs are eating up 25% of reconstruction contracts - money not being spent on hospitals, water-treatment plants or telephone exchanges.

Meanwhile, insurance brokers selling sudden-death policies to contractors in Iraq have doubled their premiums, with insurance costs reaching 30% of payroll. That means many companies are spending half their budgets arming and insuring themselves against the people they are supposedly in Iraq to help. And, according to Charles Adwan of Transparency International, quoted on US National Public Radio's Marketplace programme, "at least 20% of US spending in Iraq is lost to corruption". How much is actually left over for reconstruction? Don't do the maths.

Rather than models of speed and efficiency, the contractors look more like overcharging, underperforming, lumbering beasts, barely able to move for fear of the hatred they have helped generate. The problem goes well beyond the latest reports of Halliburton drivers abandoning $85,000 trucks on the road because they don't carry spare tyres. Private contractors are also accused of playing leadership roles in the torture of prisoners at Abu Ghraib. A landmark class-action lawsuit filed by the Centre for Constitutional Rights alleges that Titan Corporation and CACI International conspired to "humiliate, torture and abuse persons" in order to increase demand for their "interrogation services".

And then there's Aegis, the company being paid $293m to save the PMO from embarrassment. It turns out that Aegis's CEO, Tim Spicer, has a bit of an embarrassing past himself. In the 90s, he helped to put down rebels and stage a military coup in Papua New Guinea, as well as hatching a plan to break an arms embargo in Sierra Leone.

If Iraq's occupiers were capable of feeling shame, they might have responded by imposing tough new regulations. Instead, Senate Republicans have just defeated an attempt to bar private contractors from interrogating prisoners and also voted down a proposal to impose stiffer penalties on contractors who overcharge. Meanwhile, the White House is also trying to get immunity from prosecution for US contractors in Iraq and has requested the exemption from the new prime minister, Iyad Allawi.

It seems likely that Allawi will agree, since he is, after all, a kind of US contractor himself. A former CIA spy, he is already threatening to declare martial law, while his defence minister says of resistance fighters: "We will cut off their hands, and we will behead them." In a final feat of outsourcing, Iraqi governance has been subcontracted to even more brutal surrogates. Is this embarrassing, after an invasion to overthrow a dictatorship? Not at all; this is what the occupiers call "sovereignty". The Aegis guys can relax - embarrassment is not going to be an issue.

· A version of this article first appeared in the Nation

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Ashcroft’s Big Con

False confessions, coerced pleas, show trials — the Justice Department’s reliance on Soviet-style tactics has turned the war on terror into a Potemkin village

By Harvey A. Silverglate, Boston Phoenix

BOSTON IS HOME to the Ponzi scheme, named after the notorious swindler Charles Ponzi who, in 1919, amassed a fortune by fooling investors tempted by reliable returns. The plan worked this way: by delivering regular payouts from "earnings," Ponzi established a track record that attracted ever more investors. The catch was that investors were not paid with profits on anything real, but out of funds invested by later investors. And later investors were paid from investments made by those who followed them. And so on. It was an ingenious façade until the music stopped — which was, of course, inevitable.

Ponzi ended up doing time in federal prison, and yet Attorney General John Ashcroft — the man who today is in charge of guarding against such criminal maneuvers — seems to be something of a Ponzi schemer himself. Only this time what is at stake is not the hard-earned cash of hapless investors, but our national security.

On June 14, Ashcroft unveiled the federal indictment of Nuradin M. Abdi, a 32-year-old Somali citizen living in Ohio who was charged in a conspiracy to bomb an unidentified shopping mall in Columbus; if convicted, he could face 55 years in prison.



Although the indictment itself was mostly boilerplate, the prosecutors’ motion to deny bail contained all kinds of damning detail about Abdi’s comings and goings between Canada and Ethiopia, and his training in "radio usage, guns, guerrilla warfare, bombs [for] violent Jihadi conflicts overseas and any activity his al Qaeda co-conspirators might ask him to perform here in the United States."

Well, this may or may not be true. We have no way of knowing, now or in the future, because there has not been and likely never will be a trial. And even if Abdi were to plead guilty and "admit" all these facts, we could not have any confidence in their truth. Why? Because one of Abdi’s alleged co-conspirators was none other than Iyman Faris, a former Ohio truck driver who was more or less forced to plead guilty last year to planning to destroy the Brooklyn Bridge. For that crime, Faris was sentenced, in October 2003, to a prison term of 20 years. A public trial was not an option for Faris; his choice was either to plead guilty or be detained indefinitely, incommunicado, as an "enemy combatant." Under such circumstances, any information he may have provided implicating Abdi must be considered dubious at best.

To an observer unfamiliar with Faris’s unusual situation, the case against Abdi sounds pretty straightforward, typical of cases involving state witnesses: in an effort to reduce his long prison sentence, Faris must have ratted on his former partner-in-crime to federal investigators and then to a grand jury, resulting in Abdi’s indictment. Justice prevailed, and useful intelligence is making us safer.

But is it? Even if Faris were simply a convict hoping to gain a reduced sentence, he would still have all the credibility problems we normally associate with rewarded witnesses — who, as Harvard Law professor Alan Dershowitz often says, "are taught not only how to sing, but also how to compose." However, Faris is not just an ordinary convict, much less an ordinary witness; he’s not even an ordinary rewarded witness. As Carl Takei and I explained in this column back in March (see "Crossing the Threshold," News and Features, March 5), Faris falls into a special category of individuals who are the victims of a prosecutorial ruse reminiscent of the Stalinist show trials described by Arthur Koestler in his powerful novel Darkness at Noon. There, we said: "In ... Darkness at Noon ... the protagonist is accused of crimes against the state and is given a choice by his jailers. If he signs a confession and admits wrongdoing, he will receive a public trial. But if he refuses to cooperate, his case will be dealt with ‘administratively’ and out of sight. This two-track justice system, in which problem cases were whisked from view and dealt with in secret while public trials merely paraded the coerced guilt of the ‘accused,’ converted the Soviet Union’s justice system into an appalling masquerade."

And, indeed, Faris, a naturalized US citizen of Kashmiri birth, was the victim of just such a masquerade. He was secretly arrested in March 2003, charged with plotting to destroy the famous bridge, and held incommunicado for two months. Then he was made an offer he couldn’t refuse: he could either plead guilty and cooperate with the FBI, or President Bush and the Department of Defense would declare him an "enemy combatant." Once so declared, his criminal case would be terminated without trial, and he would be held incommunicado indefinitely, without access to legal counsel. Rather than fall into such a purgatory, Faris agreed to plead guilty, sign a statement of "facts," and be sentenced to 20 years. It was a long sentence, but a 20-year tunnel with light at the end of it was better than the alternative.

Faris told FBI interrogators that the signed statement of "facts" they were going to present to the sentencing judge was a fabrication. During his public sentencing hearing in October of last year, he interrupted the proceedings to insist, again, that he’d been pressured by prosecutors and agents to sign the false statement of facts. Faris’s frantic pleas went unheeded by the sentencing judge, who went along with the program. So did Faris’s lawyer, former federal prosecutor J. Frederick Sinclair, who cooperated with the feds to draft the plea agreement in which Faris waived every single right, including the right to appeal or even to obtain his case records. Faris then began serving his sentence.

SO IT SHOULD come as no surprise that, half a year later, Faris’s name has popped up as a co-conspirator in yet another plot, this time with another alleged member of Al Qaeda, Nuradin M. Abdi. Thanks to the extreme secrecy surrounding these cases, we cannot be certain that Abdi was indicted based on whatever it was that Faris, under continued pressure by the feds, told his interrogators. And, after all, the pressure on Faris was not the usual one applied to "turned" witnesses, in which the defendant is sentenced, and then sings and composes to get a reduction; instead, the pressure was on him to sing and compose merely to be allowed to plead guilty and get the 20 years, rather than fall into the "enemy combatant" mire.

A hint of the relationship between Faris’s Kafkaesque dilemma and Abdi’s indictment is provided by the Washington Post’s June 15 report that "prosecutors have spent the past six months building a criminal case against [Abdi]," according to unnamed "officials." Faris was sentenced on October 29, and it is quite possible that he told a tale about Abdi just around the time he was desperately seeking to avoid designation as an enemy combatant. And, of course, we have no idea what other harsh methods federal interrogators may have used to win Faris’s cooperation, now that, in the aftermath of Abu Ghraib, we understand the repertoire of persuasive techniques in their arsenal (see "Advice of Counsel: Torture Is Okay," This Just In, June 18).

Let’s be very clear about why the Justice Department has developed this ruse for circumventing the courts: a trial jury, once aware of these circumstances, would never believe a word of Faris’s testimony against Abdi, but if the pattern established in the Faris case is any guide — and it almost certainly is — the Abdi case will never go to trial. Given that there’s no sign of substantial corroborating evidence from reliable sources other than Faris, even a novice lawyer could probably get Abdi acquitted by any moderately fair-minded jury — but without a trial, that won’t make any difference.

Abdi almost certainly will face the same Hobson’s choice earlier presented to Faris: he can either plead guilty or, if he insists on going to trial, President Bush will prevent such a trial by designating him an enemy combatant, meaning he will be turned over to indefinite military custody and held incommunicado. Then, of course, he will get no visits from relatives, friends, or lawyers. I’d wager that Abdi’s case will follow this pattern and end just as Faris’s did, with a Soviet-style show-trial plea of guilty. And then the cycle can begin over again.

See the emerging picture? It’s an endless series of faux prosecutions in which defendants are threatened to "cooperate" and plead guilty, or face indefinite incommunicado imprisonment, with all the physical and psychological terrors that accompany finding oneself in a bottomless legal pit. Like a Ponzi scheme, the structure of these prosecutions resembles a pyramid: defendants are pressured to testify against other friends, associates, and cohorts, who are then indicted regardless of whether the testimony, given under enormous pressure, would ever stand up in a real trial — and, in fact, it never will have to stand up at a real trial. Those new defendants are then, in turn, subjected to the same pressures. None of the "evidence" ever gets to be heard and evaluated by a jury of honest Americans, but the march of prosecutions and guilty pleas rolls onward, and the Bush administration’s war on terror is palmed off on the public as a huge success.

This is one helluva way to run a war on terror. After all, Ashcroft was certainly right when he warned, as he did at the June 14 press conference announcing the Abdi indictment, that "we know our enemies will go to great lengths to lie in wait and to achieve the death and destruction they desire." But what’s really scary is that if these kinds of show trials — the law-enforcement and judicial equivalents of Ponzi schemes — are what Ashcroft & Company are doing to protect the nation, then we are likely in worse trouble than even the pessimists among us imagine, for we have no reasonable assurance that we are capturing and imprisoning the right people. It’s all a great public-relations front for the FBI and the Departments of Justice and Defense. In the end the testimony and the intelligence they’ve gathered by such means add up to little more than, in Macbeth’s words, "a tale told by an idiot, full of sound and fury, signifying nothing."

Harvey A. Silverglate can be reached at has@harveysilverglate.com. Carl Takei and Dan Poulson assisted with this piece.

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