New Setback for Pentagon Iraq Biz Plan

Pentagon freezes Iraq funds amid corruption probes

Boston Globe -12/30/2003

WASHINGTON -- The Pentagon has frozen new funds approved for Iraqi reconstruction amid growing allegations of corruption and cronyism associated with the rebuilding process.

Companies eager for a stake in the $18.6 billion in fresh postwar funds that Congress approved in November have been told not to expect requests for proposals from the Defense Department, the first step in the kind of ambitious redevelopment slated for the war-torn country. The freeze will almost certainly mean the United States will not issue new contracts until well after the initial Feb. 1 target date.

"We're on hold and we'll be on hold until we hear differently," Admiral David Nash, the director of the Pentagon's Iraq Program Management Office, yesterday told the Engineering News-Record, a construction trade journal. He gave no further details.

The Pentagon also announced last week it would postpone until early January a conference for companies interested in rebuilding Iraq, according to Robyn Powell of the National Defense Industrial Association, which coordinates meetings between industry and the military.

"I don't know why the conference has been canceled again," Powell told Reuters.

The Pentagon's decision to delay Iraqi reconstruction is another setback for a process already hobbled by political insecurity and, increasingly, concerns over corruption and misconduct. The success of the US-led bid to remake Iraq politically depends largely on efforts to reverse the country's chronic unemployment by repairing it economically. But lawmakers in Washington and businesspeople in Iraq say the bidding process lacks transparency and favors a growing class of monopolists and oligarchs that could overwhelm the country's infant regulatory framework.

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printed from New Setback for Pentagon Iraq Biz Plan on 2004-03-23 20:08:44