Resistance Hero Faces New Enemy: Kuwait’s Bumbling Reconstruction : War’s aftermath: The wealthy dairy owner is philosophical about his plant, which was destroyed by allied bombers.

He looks every inch the Kuwaiti milkman: plump, jolly and self-effacing, wearing a spotted white robe, a big gold watch, black tasseled loafers and a merry grin. He likes to use American slang, especially “okey-dokey,” and offers his guests Popsicles.

But 27-year-old Mohammed Ezzat Jaafar, who once ran one of the largest dairies in the Middle East, is a quiet hero--first of the Kuwaiti resistance, now of his country’s painful, stumbling reconstruction.

When Iraqi tanks rolled into this oil emirate last August, many wealthy Kuwaitis fled into luxurious exile in Saudi Arabia, Dubai and London.

Jaafar kept his dairy running and sold his milk for a tenth of the prewar price. He also forged passports, driver’s licenses and exit visas, funneled money to the underground and sheltered the hunted.

Then Iraqi President Saddam Hussein’s secret police caught up with him. While he was being beaten with lead pipes in Baghdad, allied jets mistakenly bombed his $90 million dairy into rubble.

“My plant is fully depreciated now,” he said.

Jaafar has yet to learn why his factory was targeted. It had been seized by the Iraqis a week earlier, but no weapons were stored there.

When the first bombers streaked over on Feb. 14, they caught seven Iraqi soldiers in the process of looting sugar, juice, milk and tomato paste. Two days later, the warplanes returned to level what was left.

After liberation, Jaafar went to ask U.S. officials about the bombing and to request a team to check the plant for unexploded ordnance.

“We tried to find out why it was done and we couldn’t,” he said. “Apparently, it’s classified. We just wanted to satisfy our curiosity. I think they thought we would sue them.”

Four months later, the factory rubble still stinks of fetid milk. Jaafar has it sprayed each week to deter rats until he can have the wreckage bulldozed and removed. Yet he shows no trace of bitterness.

“It’s gone, it’s gone, we will rebuild,” he said. “There were people who died in this war. That is much more important. We are happy that they liberated the country.”

Before the war, the Kuwaiti Danish Dairy Co. produced yogurt, cheese, buttermilk, tomato paste, 10 kinds of juices and 60 flavors of ice cream, with annual sales of more than $80 million, Jaafar said. It was Kuwait’s largest supplier of milk, made from powder imported from New Zealand and Holland.

It also was prepared for trouble. During the Iran-Iraq War, when explosions from that conflict could be heard in Kuwait city, the government feared disruptions in Kuwait’s food supply and asked producers to stockpile. When the Iraqis invaded, the dairy had a four- to six-month supply of raw materials, packaging and spare parts.

It functioned through January, and KDD foodstuffs are still on Kuwaiti grocery shelves, stamped for sale by July 16.

But pricing was a problem. The Iraqis banned Kuwaiti currency and declared that one Kuwaiti dinar would be worth one Iraqi dinar--of perhaps a tenth the value. The dairy decided to maintain the prewar price; a carton of milk that cost a Kuwaiti dinar before the invasion would still be sold for one Iraqi dinar.

Jaafar says the policy was aimed at preserving consumer loyalty.

“When the customer needs, you have to decide: Do you want to be a greedy person, and do you want the customer to remember that? ‘Ah, in time of need, this person multiplied his price by 5, 8, 10, 20 times?’ I don’t want it to sound like we were heroes. . . . Our purpose was to serve.”

But wartime speculators bought up the milk and resold it at exorbitant prices. Jaafar responded by sending out his own inspectors. Stores selling KDD products at more than a 10% markup were told their supplies would be cut off unless they reformed.

“We didn’t want people to fear that milk was in short supply,” he said. “This war was an opportunity for profiteering, but I’d rather not talk about that, because these are the decisions that other people have made. And at what cost did they make those decisions?”

Meanwhile, Jaafar was doing a brisk business in forged documents. The dairy’s publicity department whipped up about 30 fake stamps used to produce fake Kuwaiti identifications cards and driver licenses, Lebanese travel documents and trumped-up passports for those who wanted to leave the country under a new name.

Jaafar also created an elaborate financial fraud to protect the company from being seized by the Iraqis. Some of the company’s shares were owned by the ruling Sabah family, and Iraqis had declared that all Sabah property would be confiscated.

So Jaafar created a fake portfolio of letters from banks, internal memos, minutes of board of directors’ meetings that never took place, all to document that the Sabah shares had actually been sold a year before the invasion.

“I just sat down and made it up on the PC, with different fonts,” he said. “You copy it on the fax machine, then you’ve got a fax from them. Then all you have to do is forge the signature.”

The bank letters, on a London letterhead, are amazingly detailed, laced with financial jargon and references to a fictitious secret bank account called “Charlie-Zulu-Omega-Bravo.”

“They like these secret accounts, the Iraqis, so we gave them some,” he said. “The best part is, this stuff was translated in Basra and attested by the notary public there as bona fide.”

But Jaafar believes he was betrayed from within, by a longtime Lebanese employee whose Palestinian wife had typed one of the fake letters. “It was stuff that only they knew. They had very specific information,” he said. “They thought the rest of the stuff was real.”

Jaafar, his father, two employees and a Kuwaiti Ministry of Defense official masquerading as the dairy’s public relations manager were arrested Dec. 27 and taken to Baghdad. His friends tell of the beatings; he doesn’t mention them.

“What was really upsetting was when they treated my father badly. You feel a sense of, not despair--you resign yourself.”

Postwar Kuwait remains choked with vengeful anger against those who collaborated, and vigilante justice still reigns unchecked. Jaafar reported his suspicions about his betrayer and washed his hands of the matter.

“I am not in the business of deciding,” he said. “I’ve notified the authorities, and it’s up to them to do what’s right.”

Now, in his office next to the rubble, where portraits of President Bush and Kuwait’s emir hang side by side, Jaafar is trying to rebuild. He admits frustration at the chaos in the Kuwaiti government, and the paralysis in the private sector.

His telephones still don’t work properly. A Motorola salesman has offered to install a new communications system, but the company is still waiting to be assigned a frequency by the Ministry of Communications. He has found an overseas supplier who will accept payment in Kuwaiti dinars, but his bank cannot seem to arrange the transfer of funds.

He wants a loan to rebuild the factory, but the Ministry of Finance and the central bank have not set rates yet for industrial loans. “They can’t decide on a monetary policy. We’re not going to wait to see what the country’s monetary policy is going to be before we get on with it,” Jaafar said.

The government has promised compensation for wartime losses. But there is as yet no agency to verify the claims. Many businessmen frankly admit that they will not attempt to clear the wreckage lest they jeopardize their potential compensation. Jaafar has heard that maybe the agency will start functioning in September, inshaallah-- if God wills it.

Undeterred, Jaafar hired a consultant to document the damage and will remove the ruined factory even if it means he won’t be fully compensated. He is using his own money to refurbish the basement of a building that was undamaged, to order new equipment, to restart his ice cream factory, to import powdered milk.

“We hope to be back in business very soon,” he said.

Still, these are anxious times. Jaafar’s Saudi Arabian competitors are eating away at his markets, and the Saudi government has found excuses to refuse to let 13 of his supply trucks across the border, he said.

Reconstruction is further hindered by postwar gouging. Though shortages of goods have mostly vanished, prices are still vastly inflated. The other day, Jaafar went to buy a toothbrush and found that it cost two dinars, or more than $6. He said: “I couldn’t believe it! I thought it was a mistake. Customers are not stupid!”

Having survived the Iraqis, however, Jaafar is not about to be defeated by speculators and bureaucrats.

“I am determined,” he said. “I’ve seen this damn thing start. I will see it end.”