Politics Questioned in Hospital Plan

Earlier this year, First Lady Laura Bush formed an unusual alliance with the White House National Security Council to fund a new state-of-the-art children’s hospital in Iraq.

But rather than being embraced as a welcome addition to a nation with a shattered healthcare system, the proposed hospital has quietly become a battleground.

Critics have questioned not only the wisdom of a high-end hospital in a country without basic healthcare, but the politics behind the proposal. The hospital would be operated under the guidance of Project Hope, a charity whose president is a Bush family acquaintance from Texas.

The clash, believed to be one of the few between the White House and Congress over a specific reconstruction project, has left the National Security Council bargaining for the hospital’s fate and legislators questioning the administration’s overall plan to rebuild Iraq.

“I am concerned about spending large sums on a state-of-the-art hospital that may be more the result of political pressure than the best use of taxpayer dollars,” Sen. Patrick J. Leahy of Vermont, the ranking Democrat on the Senate Foreign Operations Subcommittee, said in a statement.

In an interview with The Times, Laura Bush acknowledged her support for the project and stressed the importance of improving children’s healthcare in Iraq, which has one of the highest rates of child mortality in the Middle East.

She said the idea first came up in conversations with national security advisor Condoleezza Rice and Shirin Tahir-Kheli, the NSC’s senior director for democracy, human rights and international operations.

The first lady said she knew Project Hope’s chief executive, John P. Howe III, from his days as president of the University of Texas Health Science Center, when President Bush was the state’s governor.

Her determination to build the hospital comes as the first lady seeks a higher profile in government and politics during a presidential campaign year. She has already stepped up her appearances at fundraisers and begun a campaign to raise awareness of women’s heart health issues.

“It will be a hospital with new, good equipment,” Bush said. “We hope that can come to pass.”

The hospital, with a price tag of at least $500 million, ran into trouble almost as soon as the administration introduced it in Congress in January as part of a cluster of projects to be financed from $18.6 billion in reconstruction funds approved last fall.

The initial proposal called for “state-of-the-art tertiary pediatric” care, with a child cancer ward and centers for high-risk pregnancies, burn treatment and even plastic surgery.

Rep. Jim Kolbe, an Arizona Republican who heads the House Appropriations subcommittee on foreign operations, raised doubts about the necessity of such an expensive hospital in a country with little infrastructure, according to GOP sources.

Congressional staffers who reviewed the proposal expressed skepticism about whether it was better to fund a high-end medical facility or pay for basic public health measures such as clean water and vaccinations.

“It was a question of opportunity cost,” said a Republican budget analyst. “We only have so much money. The question is, ‘Where is the most productive use?’ ”

In response to the objections, NSC officials repeatedly stressed the first lady’s backing of the hospital and Project Hope, according to congressional officials who were involved in the negotiations.

In the end, Kolbe agreed to provide about $4 million to the project for drawing up blueprints and operating plans for a hospital focused on primary medical needs.

An NSC official defended the project as necessary to improve children’s healthcare in Iraq.

“A children’s hospital will give children access to quality care for a range of pediatric medical conditions and save countless lives,” the official said.

Another person close to the project said, “This is more than symbolic.”

The NSC, which has scrambled to repackage the hospital proposal, is expected to come back with a modified plan later this week. The plan is expected to call for Project Hope to raise $50 million for training and equipment for the facility.

One version of the plan called for U.S. taxpayers to fund the hospital under a $50-million contract awarded in open competition by the U.S. Agency for International Development, which has overseen much of the infrastructure improvements to Iraq’s health system. The agency would build the hospital so that it could be expanded to the higher-end pediatric facility that was envisioned initially.

USAID officials said such public-private partnerships have been used before, once with Project Hope at a children’s hospital in Shanghai. Project Hope raised more than $40 million for that facility.

They stressed that no final decision had been reached on the Iraq project, even though a USAID contractor has posted a job listing on the Internet for a construction manager.

“These partnerships are a win-win because they bring in the private sector to match the U.S. government contribution, resulting in the best deal for the U.S. taxpayer,” said Luke Zahner, a spokesman for the agency.

One proposed location for the hospital was Basra, but community leaders there questioned the need for a specialized children’s hospital. Improving the decrepit, 682-bed general hospital should take priority, they said. There are also continuing problems with the supply of water and electricity.

More than 80% of the city government’s office equipment, supplies and vehicles were looted after Saddam Hussein’s fall last year, said Fakhir Mousawi, Basra’s director general.

“I would prefer that that money be spent on the services and infrastructure that we need right now,” Mousawi said. “Most of the public utilities should get maintenance and rehabilitation.”

Times staff writer Alissa J. Rubin and special correspondent Salar Jaff in Baghdad contributed to this report.