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Sun, Oct 05, 2003 - Page 12 News List

Iraqi council curious about US dealings

Governing Council members have complained that they have 'no access' to information on how proconsul Paul Bremer is spending rebuilding money

By Patrick Tyler and Raymond Bonner  /  NY TIMES NEWS SERVICE , BAGHDAD

Work is under way to rebuild Baghdad's telephone system on Wednesday -- a crucial part of getting Iraq back on its feet. Each line must be spliced and tested.

PHOTO: NY TIMES

Last month the Iraqi Governing Council questioned why the American occupation authority had issued a US$20 million contract to buy new revolvers and Kalashnikov rifles for the Iraqi police when the US military was confiscating tens of thousands of weapons every month from Saddam Hussein's abandoned arsenals.

On Wednesday the Iraqi council, in a testy exchange with occupation proconsul, Paul Bremer, challenged an American decision to spend US$1.2 billion to train 35,000 Iraqi police officers in Jordan when such training could be done in Iraq for a fraction of the cost. Germany and France have offered to provide such training free.

These decisions are being questioned by Iraqi officials as Congress is also seeking to examine how the American occupation authority and the military are spending billions of dollars here.

Iraqi officials and businessmen charge that millions of dollars in contracts are being awarded without competitive bidding, some of them to former cronies of Saddam's government.

`No transparency'

"There is no transparency," said Mahmoud Othman, a Kurdish member of the Governing Council, "and something has to be done about it.

"There is mismanagement right and left, and I think we have to sit with Congress face-to-face to discuss this. A lot of American money is being wasted, I think. We are victims, and the American taxpayers are victims."

A number of businessmen say they believe it is necessary to pay kickbacks to win contracts. A spokesman for one of the largest American corporations awarding subcontracts here, Bechtel, said his company had neither paid any kickbacks nor been approached by Iraqis seeking to pay kickbacks.

He said Bechtel made all of its contract information available on its Web site and at offices in Baghdad and Basra. A check of the Web site on Friday found no information, only a notice that the site was "under construction."

The lack of transparency and competition, Governing Council members said in interviews, may be encouraging corruption. They said they believed that many contracts had been inflated beyond the reasonable cost for the work, creating opportunities for kickbacks between prime contractors and subcontractors.

One council member, Naseer K. Chadirji, said: "As the Governing Council, we are in a very weak legal position. We don't have the right to investigate these contracts."

He added: "I don't have the evidence, but I think there is corruption. This is a common grievance that people tell me."

An Iraqi executive, who made millions of dollars as an insider under the Saddam government and would not allow his name to be used, said that this week a relative outside Iraq had alerted him that a Bechtel executive was looking to become a silent partner in an Iraqi company that would be favored with subcontracts from Bechtel.

A senior Bechtel official in Iraq, Clifford George Mumm, said that his company "would fire immediately anyone who tried to do such a thing" and that he did not believe any Bechtel executive would engage in the kind of behavior described.

Mumm said there have been no kickbacks on the 105 subcontracts Bechtel has signed with Iraqi firms. "Nothing could be farther from the truth," he said.

Asked about Iraqi assertions that Bechtel and other major American firms are awarding contracts to Iraqis that grew rich under Saddam, Mumm said that all of the Iraqi firms that get Bechtel subcontracts are "vetted" by the Coalition Provisional Authority under Bremer.

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