Financing the Future of Iraq

Hunched over an unadorned desk in a claustrophobic office on the ground floor of Saddam Hussein’s former Republican Palace sits the most popular reconstruction official in Baghdad.

Retired Adm. David Nash seems an unlikely focus of international attention. Yet the lanky, soft-spoken Nash has one asset that has had him collecting more calling cards than civilian administrator L. Paul Bremer III and U.S. commander Lt. Gen. Ricardo Sanchez combined: $18.6 billion.

As the man responsible for doling out rebuilding contracts approved by Congress this fall, Nash found himself besieged at a sold-out seminar for 1,400 contractors in Washington and at a more intimate London gathering. But the Coalition Provisional Authority official keeps a coy distance from them and the stream of would-be suitors in Iraq.

“I have friends I didn’t even know I had. They write me and call me all the time,” Nash, 61, said in a recent interview. “Sometimes I strike it up to old age that I don’t even know who they are.”

But the allure of a job doling out historic largess has come with headaches of equal proportion.

The process has angered the French, Germans and Russians, all of whom were declared ineligible for the 26 prime contracts for failing to join the U.S.-led coalition. And it is now irking eligible contractors because of this week’s White House directive that Nash stop issuing requests for proposals while rule changes are considered.

That means the money will probably not be doled out by the Feb. 1 target date. Meanwhile, Iraqi public opinion, increasingly hostile amid lingering power and water shortages and an unending spree of postwar violence, has shown no sign of reversing.

Despite such obstacles, coalition leaders insist that their efforts are about to move forward more quickly and smoothly. In recent weeks, the CPA has assigned two deputies to Bremer who were given one prime directive: Make it work faster.

Retired Lt. Gen. Joseph “Keith” Kellogg, who captured Defense Secretary Donald H. Rumsfeld’s attention as head of the Joint Chiefs’ command, control, communications and computer systems directorate, began working as Bremer’s chief of staff Dec. 2. The former leader of the Army’s 82nd Airborne Division, Kellogg is described by colleagues as an “expediter” known for cutting through red tape.

Ensconced in his new second-floor office in the toppled dictator’s palace, he described his job as ensuring discipline and speed throughout a massive reconstruction program.

“I’m the guy who’s supposed to make the trains run on time,” Kellogg said.

Also joining Bremer was Richard H. Jones, an Arabic-speaking career foreign service officer who has spent the past two years as U.S. ambassador to Kuwait. Jones is charged with focusing on political reconstruction, including dealing with the quarrelsome Iraqi Governing Council, freeing Bremer and Kellogg to focus on security and rebuilding the war-ravaged nation.

Looking for leaders who probably wouldn’t be rattled by mortar attacks at their offices, the Pentagon sought out Kellogg to oversee about 120 reconstruction staffers and contractors who employ thousands of workers. Kellogg, Nash’s direct supervisor, is one of several former military leaders charged with instilling armed forces discipline in nominally civilian jobs within the CPA.

The change has come amid substantial reversals. Bremer was scheduled to approve 2,700 initial projects on Dec. 10 and to begin awarding construction contracts beginning Feb. 1. (Some emergency contracts have already been awarded through the U.S. Agency for International Development, which has given out $700 million in so-called bridge financing.)

But following the administration’s order that he postpone putting out requests for proposals, Nash arrived in Washington on Wednesday to discuss whether that process -- and the rebuilding effort itself -- may wind up being delayed for months.

Working under Nash are half a dozen officials in charge of Iraq’s oil, utilities and other sectors, men such as Bill Smith, who retired as a Navy captain in October and went straight to Iraq. The crop-haired cadre of former military officials would not look out of place at the Pentagon. That’s for good reason, Kellogg said.

“It brings a culture to this. The reconstruction of Germany and the reconstruction of Japan, most of that was done by a lot of military, because we’re used to that.”

There was also the matter of who would be comfortable in a war zone, Nash added. “Part of it is who will come,” he said. “It’s people who can cope with this type of environment.”

Nash had just switched jobs from engineering firm Parsons Brinckerhoff in Michigan to BE&K; in Alabama last summer when he got a call asking him to help with Iraq’s reconstruction in Washington. He left the new job after one day and moved to Washington. In a meeting shortly thereafter, an intriguing question came up: “Does anybody know how to spend about $20 billion?”

Nash, who had headed a Navy civil engineering program with an $8-billion annual budget, was a logical choice. He arrived in July for a 90-day stint that became permanent when the $18.6-billion appropriation was approved.

CPA officials expect attacks to intensify as insurgents target new water, power and other projects, just as they have contributed to the fuel shortage by attacking oil pipelines.

“The real wild card is security. The bad guys have a lot of incentive to try and make sure these projects don’t come off,” Smith said. “How do you secure a 50-mile water line or a power transmission line?”