Global Policy Forum

By Michael Schwartz*

Media coverage of the Iraq War has generally portrayed the current quagmire as the result of an American failure to achieve a set of otherwise admirable goals: suppressing the insurgency that is intimidating the Iraqi people and sabotaging the economy; stopping the destructive ethno-religious violence that has become a major source of civilian casualties; building an Iraqi army that can establish and sustain law and order; rebuilding electrical and sewage systems and the rest of the country's damaged infrastructure; ramping up oil production to place Iraq on a positive economic trajectory; eliminating the element that has made crime in the streets a prevalent and profitable occupation; and nurturing an elected parliament that can effectively rule. US failure, then, resides in its inability to halt and reverse the destructive forces within Iraqi society.

This rather comfortable portrait of the US as a bumbling, even thoroughly incompetent giant overwhelmed by unexpected forces tearing Iraqi society apart is strikingly inaccurate: Most of the death, destruction, and disorganization in the country has, at least in its origins, been a direct consequence of US efforts to forcibly institute an economic and social revolution, while using overwhelming force to suppress resistance to this project. Certainly, the insurgency, the ethno-religious jihadists, and the criminal gangs have all contributed to the descent of Iraqi cities and towns into chaos, but their roles have been secondary and in many cases reactive. The engine of deconstruction was -- and remains -- the US-led occupation.

Repairing the Oil Pipeline at Al Fatah

Once in a while, we get a glimpse of this unreported reality. On April 25, James Glanz of the New York Times offered a neat window into the ugliness of US culpability. He told the story of an American effort to repair an inoperative oil pipeline in Al Fatah, a village about 130 miles north of Baghdad. The pipeline had been damaged early in the war by an American air attack on a bridge across the Tigris River over which it traveled.

Immediately after the fall of Saddam Hussein's regime in April 2003, plans were activated to repair the bridge and reestablish the pipeline. Original estimates indicated that "it would cost some $5 million and take less than five months to string the pipelines across the bridge once it was repaired." Initially, $75.7 million was allocated for the repair job. Work began almost immediately, because the American occupation authorities were anxious to acquire the $5 million a day in oil revenues that a reconnected pipeline promised.

Just as immediately, problems began to arise -- first and foremost from the decision of occupation officials not to repair the bridge. As a result, KBR, the Halliburton subsidiary in charge of the project, was forced to seek a new pipeline route across the Tigris. To handle this unexpected problem, the entire $75 million budget -- originally designated for both bridge and pipeline repair – was reallocated to the pipeline project alone. Nevertheless, when Robert Sanders of the Army Corps of Engineers arrived to inspect the work eight months later in July of 2004, it was already two months past its projected completion date.

What Sanders found that day, according to Glanz, "looked like some gargantuan heart-bypass operation gone nightmarishly bad. A crew had bulldozed a 300-foot-long trench along[side] a giant drill bit in a desperate attempt to yank it loose from the riverbed." A supervisor later told Sanders that they knew this was impossible, but "had been instructed by the company in charge of the project to continue anyway." The denouement came soon enough: "After the project had burned up all of the $75.7 million allocated to it, the work came to a halt."

Sanders issued a scathing report detailing what he called "culpable negligence" on the part of KBR. But his report had only the most modest impact. Though KBR was deprived of its bonus fees for the project by the Army Corps of Engineers, nothing was done to recover the wasted millions, or to force the company to complete the project.

Four important points emerge from this story:

First, the oil pipeline was damaged and the bridge destroyed by US forces. The attack was ordered on April 3, 2003 by General T. Michael Moseley "to stop the enemy from crossing the bridge." This was typical of the infrastructural damage caused by the US in Iraq. During the initial battles of the invasion, and then during sweeps against the Iraqi resistance after the occupation had begun, American forces destroyed or damaged roads, bridges, electrical transmission and oil facilities, sewage lines and water treatment plants, commercial and industrial structures, even mosques and hospitals. While the resistance also targets such structures, particularly oil pipelines and electrical transmission lines, its destructive powers have been relatively modest compared to what American airpower can accomplish with 500 and 2000 pound bombs.

Second, instead of simply repairing the damage, the US undertook a major overhaul of the pipeline system. Occupation authorities replaced the original plan to repair the bridge and pipeline with one to sink a new pipeline into the bed of the Tigris river, in the process escalating the repair costs from $5 million to $75 million.

This strategic decision reflected the larger American project of economic reform that involved demobilizing Iraqi state enterprises (including those with much experience in just this sort of repair work) and so bringing the Iraqi economy into the global system on its knees. Modern equipment and infrastructure, introduced everywhere by largely American-owned multinational corporations, would then have to be maintained by those same corporations. This economic "opening" was to be the linchpin of occupation policy, and L. Paul Bremer's Coalition Provisional Authority, housed in Saddam's old palaces in Baghdad's Green Zone, put much planning and energy into this effort. All the reconstruction projects undertaken with the $18 billion Congress had allocated for the task (as well as with what Iraqi oil money was on hand) had this focus.

Third, the contractor knew beforehand that the project might fail. The Al Fatah crossing project was one of many undertaken without competitive bidding by KBR, the omnipresent Halliburton subsidiary. In implementing its ambitious plan, KBR officials seem to have ignored at least three technical reports warning "that the effort would fail if carried out as designed." A later investigation by the United States Special Inspector General for Iraq Reconstruction concluded: "[T]he geological complexities that caused the project to fail were not only foreseeable but predicted."

So why did KBR proceed with a doomed plan? Glanz does not address this question, but the answer can be found in the combined impact of two elements of US reconstruction policy: lack of competitive bidding and lack of self-regulation by contractors. In the absence of competitive bidding, there was an incentive to propose and execute the most ambitious and expensive versions of any project, and to squirrel away hidden profits during its execution. In this case, the cancellation of the bridge reconstruction project only added to that incentive, since the money previously reserved for it could now devolve into the pipeline-repair budget.

Such tendencies toward overspending and corruption might normally be constrained by tight oversight procedures. But at Al Fatah, as elsewhere in Iraq, no oversight system for reconstruction projects was ever implemented. As a result, there was no formal way to rein in outside companies, penalize them for unjustified cost overruns or failure to execute a contract as promised (except relatively toothless, ex post facto investigations).

The consequences of this fatally flawed contracting system are now visible all over Iraq, where inappropriate, inadequate, incomplete even never-started (but paid-for) projects are legion; and where, in each and every case, contractors received top dollar for even the shoddiest sort of work. When the media reports on such cases, it is usually with the mantra-like explanation that the ever increasing need for security against insurgent attacks drove insurance and other costs to ridiculous levels or simply halted work and so was the root cause for such problems. Glanz's report, to its credit, specifically puts this explanation in its proper place: "Although the failures of [reconstruction] are routinely attributed to insurgent attacks, an examination of this project shows that troubled decision-making and execution have played equally important roles." As a consequence of this pattern, multiplied across the entire reconstruction effort, the most profitable projects were the most ambitious ones and sometimes they could actually be more profitable if they failed than if they succeeded.

Fourth, the project has not been and may never be completed. Inspector Sanders was sent to investigate because KBR was delinquent in completing the project. He determined the project was doomed and the people in charge agreed that "it was just the wrong place for horizontal drilling." But, by then, "all the money had been spent"; there were no funds left to implement a new strategy.

That was in July of 2004. In April 2006, when Glanz undertook his investigative report, a new project had been commissioned, utilizing the skills of two other corporations and a more modest strategy, which nevertheless was projected to cost $40 million or so. According to Colonel Richard B. Jenkins, the Army officer now in charge, it was "essentially a finished project," but an official at the Iraqi North Oil Company begged to disagree. No oil, he pointed out, had yet been transported through those pipelines. If the project was ever actually completed, it remained vulnerable, of course, to attack along its entire length by an insurgency in part brought into being by the failure of just such projects to provide the crucial things any modern economy needs. American officials now acknowledge that increased production "will only happen if Iraqis can protect the entire pipeline" -- which is, of course, a pipe(line)dream.

The timeline at Al Fatah -- three years and counting to complete a project well-prepared Iraqi companies could undoubtedly have finished in months -- epitomizes the way the country's oil facilities have been "reconstructed" in American hands. Before the invasion, Iraq was producing close to three million barrels of oil per day, a rate far below its potential. Only in six of the thirty-six months since the American invasion has the daily average gone above two million barrels. Like Al Fatah, other reclamation projects faltered, failed, or were offset by new acts of destruction.

The Corrosive Impact of Reconstruction Efforts

If anything, things are worse in other infrastructural areas. The initial $18 billion US commitment to reconstruction has been augmented by unknown amounts of leftover oil revenues from the Saddam era and perhaps $5 billion in miscellaneous revenues, mostly donations and loans from other countries. This total was substantially below the cautious initial United Nations estimate that $56 billion would be needed to restore the country to infrastructural viability after the initial invasion (which followed upon the damage done in the 1991 Gulf War and the years of fierce sanctions that followed), a figure that escalated dramatically as the fighting continued and the decrepit state of the country became fully apparent.

At no point were enough funds available to restore Iraq to economic and social health, and the money that was available went to corporations essentially intent on plundering the reconstruction project for everything it was worth. Not surprisingly, then, other infrastructural areas fared even worse than the oil sector. The initial United Nations report estimated, for example, that $12 billion would be needed just to bring Iraq's electrical grid back to minimal functionality. Nevertheless, the inadequate $5.6 billion allocated for the task was reduced further when $1.2 billion was diverted in 2004 to train the Iraqi army. Ambitious and ill-chosen electricity projects similar to the Al Fatah oil pipeline project were already underway when costs started to escalate as electrical installations became frequent targets of both the resistance and the Americans, each seeking to deprive the other of needed power. (As with oil, the bulk of the destruction was done by the occupation: Whereas the insurgents sabotaged transmission lines and occasionally were able to assault switching stations, the US used air power to attack facilities in resistance strongholds, destroying power plants in Falluja, Tal Afar, Ramadi, and other cities.)

The impact of the reconstruction effort was further vitiated by the same sort of corruption and inefficiency that characterized the Al Fatah project. In early 2006, for instance, the Iraqi electricity minister, Mohsen Shlash, declared that "some of the work carried out was worth just one-tenth of the money being spent." Three years and several billion dollars into the reconstruction effort, generation capacity was no greater than after the initial American attack, and what electric output existed was now being shared with the massive occupation establishment. Electrical power -- virtually continuous in Baghdad before the war -- was down to 2-6 hours per day by early 2006; some neighborhoods had as little as one hour per day. In January 2006, Shlash estimated that $20 billion would be needed to repair the system, nearly twice the original estimate. At almost exactly that moment, the Bush administration announced that there would be no further US investment in the reconstruction of electricity facilities. With the ongoing war eating away at existing capacity, this promised further declines in power available to Iraqi citizens.

Sanitation systems, already desperately inadequate, were further damaged by the war. Here the damage was almost exclusively a result of American air power. While neither the Americans, nor the resistance targets sewers, the 2000 pound bombs used by the US against Saddam's regime, and later against insurgent strongholds, sometimes demolished underground sewer lines, releasing sewage into the streets, the ground-water, and the country's two main rivers. As a result of this and of an over-stressed, deteriorating sewage system, the streets of many cities have been inundated with health-threatening garbage.

An initial $2.8 billion in reconstruction money allocated to Bechtel corporation for sewage-system reconstruction was not enough to restore the system and, as in other areas, it, too, was frittered away through inefficiency and corruption while the system continued to degenerate. Unprocessed filth contaminated the rivers and the underground water supply, rendering ineffective what water-purification systems were still functional and creating threats to public health all along the Tigris and Euphrates rivers, even in downstream areas where there had been little actual fighting. In early 2006, the US military commander in Iraq, Lt. Gen. Peter Chiarelli, acknowledged that "only about a quarter of the nation" had "drinkable water." At about the same time, US occupation authorities announced that no more than 40% of projected water-purification projects would be completed, and that no further projects would be initiated.

The health-care system, once the best in the Middle East, was already suffering before the war began. While few hospitals were damaged in the initial American offensive, neither were they rejuvenated after the fall of Saddam's regime. With the rise of the resistance, however, some hospitals and aid stations in embattled cities have been rendered inoperative by US artillery and air attacks aimed at preventing guerrilla fighters from obtaining medical care. Those not physically assaulted suffered from broken equipment, severe shortages of drugs, and the mass departure of professional personnel, fearful of being caught between sides or driven out by the predatory kidnapping practices of outlaw gangs.

Meanwhile, "the most important program in the health sector," a $243 million no-bid contract awarded to the multinational Parsons Corporation, flashed into the headlines in early 2006 when a US government investigation found that only 20 of 150 planned medical clinics could be completed within the budget, and that "remedial actions were unable to salvage the overall program." Parsons suffered few sanctions, as the contract had already been "terminated by consensus, not for cause" in January of 2006, with only six centers completed. As it turned out, Parsons was not even under a binding contract to finish the mere 14 centers that were still candidates for completion: the negotiated settlement only called for Parsons to "try to finish 14 more clinics by early April [2006] and then leave the project."

As for the rest of the American occupation's original $786 million commitment to reconstructing the Iraqi health system, Baghdad's Medical City, one of the principle hospital centers in the country, appears to be a typical case. Dr. Hammad Hussein told independent reporter Dahr Jamail:

"I have not seen anything which indicates any rebuilding aside from our new pink and blue colors here where our building and the escape ladders were painted…. What this largest medical complex in Iraq lacks is medicines. I'll prescribe medication and the pharmacy simply does not have it to give to the patient. [The hospital is] short of wheelchairs, half the lifts are broken, and the family members of patients are being forced to work as nurses because of shortage of medical personnel."

In early 2006, Ammar al-Saffar, the Iraqi Health Ministry's second in command, told the World Bank:

"Over the next four years, we need $7 to $8 billion just for reconstruction. This does not include the operational budget." He warned, however, that Iraqi coffers alone were incapable of funding such an investment. "We are looking here and there for donations from the international community."

A telling indicator of the condition of the Iraqi infrastructure and its immediate prospects can be found in descriptions of the elaborate embassy, referred to as "George W's palace" by Baghdad residents, that the US is now constructing inside the capital's fortified Green Zone. According to the London Times, the $592 million structure will be "the biggest embassy on earth," and will feature "impressive residences for the Ambassador and his deputy, six apartments for senior officials, and two huge office blocks for 8,000 staff to work in. There will be what is rumoured to be the biggest swimming pool in Iraq, a state-of-the-art gymnasium, a cinema, restaurants offering delicacies from favourite US food chains, tennis courts and a swish American Club for evening functions."

What's more, once the construction is finished next year, embassy personnel can be reassured that the site, the size of Vatican City, "will have its own power and water plants," completely independent from Baghdad's, thus protecting it from the outages and pollution suffered by Iraqi residents of the city. It is clear that American authorities preparing for their new embassy are not expecting the rejuvenation of any element in the Iraqi infrastructure in the foreseeable future.

Deconstructing Iraq

Ultimately the failure at Al Fatah is emblematic of the larger deconstruction of Iraq. Except when it comes to the American embassy (whose construction is, miraculously, on schedule), the pattern has been approximately the same wherever you look: First, the American military fatally damaged existing, already weakened facilities and support systems. Second, inadequate reconstruction was proposed, and given to large, foreign (usually American) corporations that knew next to nothing about local conditions (and generally cared less). Third, reconstruction itself was sabotaged by the contractors' programmatic inefficiency and corruption, compounded by damage from the ongoing guerrilla war. Fourth, the money ran out, while the cost of finishing projects escalated well beyond original projections. Finally, ongoing destruction promises to erode further an already hopelessly compromised system.

In January 2006, the US announced that there would be no new US allocations at all for Iraqi reconstruction. A US official told the London Times:

"US reconstruction is basically aiming for completion [this] year. No one ever intended for outside assistance to continue indefinitely, but rather to create conditions where the Iraqi economy can use reconstruction of essential services to get going on its own."

On the question of whether the Iraqis could handle this new responsibility, the Financial Times reported that depleted oil exports had already starved a desperately weak government and economy of needed funds. As a consequence "most of the government's purchases are for short term needs" and "little cash has been available for Iraqi-funded reconstruction."

The image of the Bush administration in Iraq as a bumbling giant, overwhelmed by the destructive forces within Iraqi society, is a pernicious misrepresentation. A close look at the facts on the ground demonstrates that the American occupation itself has been the primary destructive force in Iraq as well as the direct or ultimate source of the bulk of the violence; that the American military, in its zealous pursuit of the resistance, still generates much destruction; and that American reconstruction efforts have -- through greed, corruption, and incompetence -- only deepened the infrastructural crisis.

The American presence in Iraq continues to be a force for deconstruction.

About the Author: Michael Schwartz, Professor of Sociology and Faculty Director of the Undergraduate College of Global Studies at Stony Brook University, has written extensively on popular protest and insurgency, and on American business and government dynamics. His work on Iraq has appeared on numerous internet sites, including Tomdispatch, Asia Times, Mother Jones, and ZNet; and in print in Contexts, Against the Current, and Z Magazine. His books include Radical Protest and Social Structure, and Social Policy and the Conservative Agenda (edited, with Clarence Lo).