The new El Dorado

DONALD H. RUMSFELD ought to consider giving this book as a Christmas gift. In recent months, the secretary of Defense has emerged as the chosen scapegoat for the debacle that is Iraq. Angry generals and disappointed neoconservatives alike have turned on the man once hailed as the architect of brilliant victories over the Taliban and Saddam Hussein, charging him with bad judgment, even bad manners. In “Blood Money,” T. Christian Miller rides to Rummy’s rescue. His compelling account of the occupation and so-called reconstruction of Iraq describes naivete, incompetence, corruption and venality on a scale so colossal as to make it impossible to blame the results on any single figure. If Rumsfeld has screwed up -- as he surely has -- it turns out he has had plenty of accomplices in both Washington and Baghdad.

Since time immemorial, wars have provided opportunists with the chance to make a buck. Until Iraq, however, wealth derived from war carried a taint. Those who enriched themselves while others fought and died were “war profiteers” or “merchants of death,” phrases rife with negative connotations. In Iraq, all this has changed. For all of the talk about democracy, human rights and the well-being of the Iraqi people, profit has emerged de facto as the primary rationale of the enterprise, according to Miller, an investigative reporter for The Times who has covered the war and the rebuilding effort in Iraq. Although the phrase “war profiteer” has all but vanished from the lexicon, “contractors” -- a morally neutral term -- flood the battlefield in unprecedented numbers.

Only the inattentive will find this surprising. For at least the last quarter of a century, the U.S. government has sought to privatize war, outsourcing functions that the armed services once performed themselves. For a nation committed to market principles, reliance on contractors seemingly promised effectiveness, economy and flexibility. Rather than count on the bloated, slow-moving federal bureaucracy to support the troops in the field, better to rely on lean, entrepreneurial private firms to do the job.

This sounds good in theory, but Miller shows that the actual results are something else again. In Iraq, tens of thousands of private-sector civilians provide comprehensive life support for 130,000 U.S. troops. Contractors build camps, prepare meals, haul trash, deliver supplies, clean latrines and launder uniforms. The vast majority of the monies thus expended have gone not to lean and agile firms but to a handful of favored companies like the Halliburton subsidiary KBR, formerly known as Kellogg Brown & Root. These behemoths have demonstrated a capacity for FEMA-like inefficiency, waste and incompetence. Miller reports that KBR invoiced the government $200 million for meals that it never served. It charged $2.64 per gallon to import fuel to Iraq while a Defense Department agency was performing the same function for less than half that price. In one nifty little operation, it billed the government $617,000 to provide soft drinks to 2,500 soldiers -- that’s almost $247 a head. According to Miller, KBR has already billed more than a billion dollars in questionable costs, with few U.S. officials bothering to ask questions. “Action,” he writes, “was more important than accountability.”

When it came to putting Iraq back on its feet, accountability was nonexistent and contractor performance even more abysmal. Although Miller pays tribute to a cadre of dedicated Americans who tried to do right by both the Iraqi people and the U.S. taxpayer, conditions on the ground overwhelmed their efforts. Flawed planning assumptions, a political culture in Washington that worships the distribution of pork, and the ineptitude of L. Paul Bremer III, the American administrator in Iraq, all combined to produce “a Looney Tunes version of government” in Baghdad along with an environment conducive to cronyism, fraud and corruption on an epic scale. By the summer of 2003, writes Miller, Hussein’s Republican Palace had become like “the cantina bar in ‘Star Wars,’ ” swarming with assorted mercenaries, lobbyists, gunrunners, petroleum engineers, con artists, Republican Party hacks and the wide-eyed offspring of neoconservatives eager to spread democracy across the Islamic world.

Congress has appropriated more than $30 billion to rebuild Iraq. “What appeared to be a remarkably generous foreign aid package,” Miller observes, “was in fact a remarkable program of domestic handouts and corporate welfare.” Little of that sum actually produced improvements in the lives of average Iraqis. Most of it ended up lining the pockets of businesses adept enough to finagle a seat on the gravy train.

Miller describes that finagling in detail. Huge defense contractors maneuvered to obviate the requirement for competitive bidding by partnering with Alaskan Natives, for example. At the behest of U.S. Sen. Ted Stevens (R-Alaska) and to give impoverished Alaskan Natives an economic boost, Congress had passed legislation awarding special privileges to Alaska Native corporations, qualifying small native enterprises for lucrative no-bid federal contracts. To cash in on Iraq, big-name contractors essentially used Alaska Native corporations as fronts, Miller reports. For a piece of the action, the Native Alaskans committed to reconstruction contracts far beyond their capabilities, turning the actual work and the lion’s share of revenue over to their much larger “subcontractors” -- which had concocted the plan in the first place.

But of all the tales that Miller tells, the saga of Scott Custer and Mike Battles is surely the best. Down-at-the-heels ex-Army buddies with maxed-out credit cards and no prospects, but endowed with an abundance of audacity, they bummed enough money to get from the U.S. to Baghdad, the new El Dorado. With no employees, no assets and no relevant experience, the newly constituted firm of Custer Battles soon won a $16.8-million contract to provide security for Baghdad International Airport. By 2004, Custer Battles had $100 million in contracts. The two high-rolling principals achieved something akin to celebrity status, even as the firm they had created was engaged in a spectacular rip-off. As Miller shows, Custer Battles failed to provide even the minimum standard of service and repeatedly engaged in blatant fraud. Studios take note: There are the makings of a movie here, but doing justice to the story will require the services of an Evelyn Waugh.

An excellent reporter, Miller seldom ventures into analysis. But by implication, his stories point to several larger conclusions. “Blood Money” renders untenable the claim that when it comes to managing national security affairs, the tough-minded Republicans (in contrast to the wimpy Democrats) are the party of competence and sound judgment. It also exposes as false the notion that when it comes to tough jobs, the hard-charging Defense Department (in contrast to the hand-wringers over at State) can be counted on to produce results. Above all, it raises questions about the seriousness of those who formulate U.S. policy. Could it be that the so-called global war on terror is in actuality little more than a scheme to bilk the taxpayer and loot the resources of those we claim to liberate? *