The Center for Public Integrity

The Pentagon has awarded seven contracts to San Diego-based Science Applications International Corp. to oversee much of the massive jobs of building a new government and mass media in post-war Iraq. Although the Defense Department and SAIC have chosen to keep much of the contract information secret—including the cost—the Center for Public Integrity has been able to glean some interesting details about the deals, which were all awarded in February 2003. The contracts all appear to last for one year and call for all of the work to be directed by Undersecretary of Defense for Policy Douglas Feith. Feith's top deputy at the Pentagon is Christopher "Ryan" Henry. Henry was a senior vice president at SAIC until October 2002.

One contract calls for SAIC to hire 150 so-called "Subject Matter Experts" who have been identified by the U.S. government as having "demonstrated an understanding of government operations required in (Iraq); language, cultural and geographic issues; and local recruitment requirements in (Iraq)." Specifically, the contract says the SMEs will, among other tasks, "identify, contact and recruit individuals in the exile and captive Iraqi community who are willing to devote themselves to the reconstruction and stability of Iraq." The contract requires SAIC to lease apartments, cover living expenses and provide support staff and services for the SMEs. Much of the work is to be done in Arlington, Va., but the contract does require the SMEs to deploy to Iraq for no fewer than 30 days. Although most of the dollar figures in the contracts were removed by the Pentagon in copies supplied to the Center for Public Integrity, one section indicates that, for certain "executive management consultants," the company will be paid $209 per hour.

While the Defense and State Departments have granted the lion's share of contracts in Iraq and Afghanistan directly from Washington, a few U.S. companies have made their deals directly with local governing authorities that have emerged with U.S. support or direction.

The companies do not appear on the lists of contracts the Center for Public Integrity obtained under the Freedom of Information Act; their direct dealings with the provisional authorities in Iraq and Afghanistan demonstrate the complexity of tracking the role of private companies in the post-war countries.

Three U.S. companies—banking and brokerage powerhouse J.P. Morgan Chase, oil giant Chevron/Texaco and global telecommunications provider MCI—have won contracts from the Coalition Provisional Authority in Iraq, the Iraq State Oil Marketing Organization, and the Afghanistan provisional government.

In Iraq, Peter McPherson, director of economic development for the Coalition Provisional Authority—whose members were appointed by Coalition Provisional Authority Administrator L. Paul Bremer on July 13, 2003—told reporters in an Aug. 29, 2003, teleconference from Baghdad that CPA will pay J.P. Morgan Chase $2 million over an up-to-three-year period to run an operating consortium of 13 banks from 13 countries that will constitute the Trade Bank of Iraq. The temporary bank's role is to issue and confirm credit letters to facilitate and encourage immediate importation of items like food, electrical equipment, and oil refinery machinery, and later that will allow for trade in oil and heavy machinery, worth hundreds of millions of dollars and effectively phasing out the UN oil-for-food program.

More than 70 American companies and individuals have won up to $8 billion in contracts for work in postwar Iraq and Afghanistan over the last two years, according to a new study by the Center for Public Integrity. Those companies donated more money to the presidential campaigns of George W. Bush—a little over $500,000—than to any other politician over the last dozen years, the Center found.

Kellogg, Brown & Root, the subsidiary of Halliburton—which Vice President Dick Cheney led prior to being chosen as Bush's running mate in August 2000—was the top recipient of federal contracts for the two countries, with more than $2.3 billion awarded to the company. Bechtel Group, a major government contractor with similarly high-ranking ties, was second at around $1.03 billion.

However, dozens of lower-profile, but well-connected, companies shared in the reconstruction bounty. Their tasks ranged from rebuilding Iraq's government, police, military and media to providing translators for use in interrogations and psychological operations. There are even contractors to evaluate the contractors. 

Nearly 60 percent of the companies had employees or board members who either served in or had close ties to the executive branch for Republican and Democratic administrations, for members of Congress of both parties, or at the highest levels of the military.

The results of the Center's six-month investigation provide the most comprehensive list to date of American contractors in the two nations that were attacked in Washington's war on terror. Based on the findings, it did not appear that any one government agency knew the total number of contractors or what they were doing. Congressional sources said they hoped such a full picture would emerge from the General Accounting Office, which has begun investigating the postwar contracting process amid allegations of fraud and cronyism.