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.
PHOTO: NY TIMES
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.
The largest and most prominent Iraqi subcontractor that has emerged belongs to the al-Bunnia family, which grew immensely wealthy under the former government and was known for lavishing gifts, especially luxury cars, on members of Saddam's family.
"It is hard to understand the rationale for giving them contracts," said an American businessman.
Al-Bunnia family members, in interviews over the last several months, have denied that they supported the old government and have said that their business skills are needed to rebuild the country.
Looking at a list of companies that had received subcontracts from Becthel, Othman, the governing council member, said he recognized at least half dozen companies that had profited from close relations to Saddam or members of his family.
Samir Sumaidy, a member of the Governing Council who owns a construction firm doing business in China, said on Friday that the Iraqi interim government receives no information from Bremer's authority on how it is spending both Iraqi and American funds.
"At the moment, we have no access to the process on the American side of how the money is being spent," he said.
An American businessman, who would not allow his name to be used, said that the occupation authority was doling out contracts for hundreds of thousands of dollars by simply telephoning favored firms and announcing, "I have a contract for you," as he characterized a telephone call he received this week.
Othman, one of the Iraqi government members, who said he used "strong words" with Bremer this week, said, "I hope Congress knows what is going on, but if they don't know and we don't know, then God help everybody."
Council members said the contract to train Iraqi police in Jordan offended them because Jordan would draw a large payment from the dwindling Iraqi treasury and because many Iraqis resent Jordan's close ties to old government.
"The Iraqis are not very happy to see such large sums of money put in the hands of Jordan," said Chadirji, a lawyer and Governing Council member.
At a news briefing on Friday, Charles Heatly, a spokesman for the occupation authority, said that 35,000 police were to be trained in Jordan because the facilities did not exist in Iraq, an assertion that several Governing Council members challenged.
The Jordan plan was formally announced on Friday in a press release. Heatly said he thought that most council members had understood and agreed with Bremer's presentation on police training in their meeting on Wednesday.
But five council members said in interviews that the interim Iraqi government opposed the plan. "If we had voted, a majority would have rejected it," said Chadirji. "He told us what he did, he did not ask us."
The purchase of about 20,000 Kalashnikov automatic weapons, 50,000 revolvers and 10 million rounds of ammunition from Jordan has also been widely criticized by Iraqi Governing Council members.
The contract was issued by the Interior Ministry during the summer when it was being supervised by the former New York police commissioner, Bernard Kerik. Kerik did not respond to requests for an interview.
"It is totally unnecessary to buy them from outside the country," said Chadirji, who noted that he had purchased a number of Kalashnikovs to arm his personal body guards and that the price in the local market is as low as US$50 for each weapon.
Buying in bulk
Heatly said that the logistical problems associated with buying so many Kalashnikovs in small lots from the Iraqi market would be excessive.
There would be no cost if the occupation authority obtained them from the US military, which is now custodian of countless thousands of Iraqi weapons, many of them said to be in mint condition
Heatly did not have figures for the number of Kalashnikovs in allied hands, but he said there were not enough of them to satisfy the requirements of the contract.
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