"KUWAIT CITY: Al-Mal Kuwait is reported to have signed a high-profile agreement with US company 'New Bridge Strategies,' run by former US political and business big-timers, including Manager of President Bush's 2000 election campaign Joe Allbaugh, sources said. The agreement aims at floating a shareholding company 'Diligence LL Middle East Co' to offer security and consultation services to prospective investors in Iraq.
"Former CIA and FBI chief William Webster will be the Chairman of the company. On its board will be big names like Richard Burt, former Assistant Secretary of State for European and Canadian Affairs and former US Ambassador to Germany, and Edward Rogers who was an assistant to George Bush Senior. Sources at Al-Mal, headed by MP Mohammed Al-Saqar, have not disclosed much details of the agreement, except that the company's share in the project will be 40 per cent.
"Earlier, Diligence clinched a deal with Iraq's Civil Administration to provide security services, for which the administration has a budget of $1.5 billion. The deal includes supply of employees, setting up security facilities all over the country, regulating salary payments, submission of day-to-day reports, follow-up of local appointments, training and management of security personnel, and training of Iraqis in security management...." [links added] [more]
Boeing will take hit in ethics case, observers say
Impact likely will spread beyond tanker program involved, experts say
By Philip Dine and Cynthia Wilson
Of the Post-Dispatch
"The news last week that two top Boeing Co. executives had been fired for violating conflict-of-interest guidelines is likely to reverberate far beyond the multibillion-dollar aerial tanker program most directly involved. Observers say the matter could affect the company's overall military business as well as the U.S. defense industry.
""People are starting to ask whether the Boeing reputation for ethical behavior and technical excellence has in some way been diminished," said Loren Thompson, chief operating officer at the Lexington Institute, a military think tank in Virginia.
One of Boeing's most ardent boosters in Congress, Sen. Christopher "Kit" Bond, R-Mo., appeared uncomfortable when asked about the matter Friday at Lambert Field, where he was addressing the Medicare bill.
""That's really a tragedy," Bond said. "I don't know a lot about it. I'm not involved with that tanker deal." Bond said his focus was on getting more work for the tactical aircraft and weapons plants in St. Louis. The tanker work would take place elsewhere.
"Bond, a senior Senate defense appropriator, said he hoped the controversy wouldn't slow the tanker deal. He pledged to continue to press for contracts for Boeing's St. Louis-based military operations.
"Boeing fired Chief Financial Officer Michael M. Sears for improperly communicating with Air Force acquisitions official Darleen Druyun about a job with the company while she was involved in government decisions related to Boeing, including the lease and purchase of Boeing 767 refueling tankers. Chicago-based Boeing said Sears and Druyun sought to conceal their misconduct after the company launched an investigation.
"Sears, who has denied any wrongdoing, had been seen as a potential successor to Boeing Chairman and Chief Executive Phil Condit. He had run McDonnell Douglas' military business here and came to Boeing after the aerospace giant bought McDonnell six years ago.
""I think it's going to have consequences, particularly on the revolving door," said Lawrence Korb, who was assistant secretary of defense under President Ronald Reagan. "It's going to be more difficult for people coming out of the Pentagon to get jobs than it was a couple of years ago."..." [more]
"SEATTLE — Two senators who have long criticized Defense Department plans to acquire 100 air-refueling tankers from Boeing Co. say the recent dismissals of two top Boeing executives should compel the department to postpone finalizing the deal.
"In a letter Friday to Defense Secretary Donald Rumsfeld, Republican Sens. John McCain of Arizona and Peter Fitzgerald of Illinois said it would be "irresponsible" for the department to go ahead without a full review into whether the Boeing executives, who were fired for alleged unethical behavior, improperly affected negotiations in the multibillion-dollar deal...." [more]
"Neil Bush, a younger brother of US President George W. Bush, has had a $60,000-a-year employment contract with a top adviser to a Washington-based consulting firm set up this year to help companies secure contracts in Iraq.
"Neil Bush disclosed the payments during divorce proceedings in March from his now ex-wife, Sharon. The divorce was finalised in April and the court papers were disclosed by the Houston Chronicle this week.
"Mr Bush said he was co-chairman of Crest Investment Corporation, a company based in Houston, Texas, that invests in energy and other ventures. For this he received $15,000 every three months for working an average three or four hours a week.
"The other co-chairman and principal of Crest is Jamal Daniel, a Syrian-American who is an advisory board member of New Bridge Strategies, a company set up this year by a group of businessmen with close links to the Bush family or administrations. Its chairman is Joe Allbaugh, George W. Bush's campaign director in the 2000 presidential elections.
"Other figures at New Bridge include Ed Rogers, its vice-chairman and a senior official in the Reagan and first Bush administrations, and Lanny Griffith, with whom he works in the lobby firm Barbour Griffith & Rogers. Lord Charles Powell, adviser to former British prime minister Margaret Thatcher, is listed as an advisory board member.
"On its website, New Bridge describes itself as being created to "take advantage of business opportunities in the Middle East following the conclusion of the US-led war in Iraq".
"In his deposition, Neil Bush said he provided Crest "miscellaneous consulting services". This included "answering phone calls when Jamail [sic] Daniel, the other co-chairman, called and asked for advice".
"There is evidence that the relationship between Mr Bush and Mr Daniel goes further. Joseph Peacock, Crest's company secretary, is one of the original investors in Ignite, Neil Bush's educational software company based in Austin, Texas.
"In 1996, Mr Daniel and his wife hosted a $1,000-a-plate fund-raising dinner at their Houston mansion for the Texas Alliance Against Alcohol Abuse. The event was chaired by Sharon Bush, while George H. W. Bush, the former president, and his wife Barbara were to be present, according to the Houston Chronicle in 1996.
"Other investors in Ignite, which was founded last year, include George H. W. and Barbara Bush, and Winston Wong, a Taiwan businessman who started the Grace Semiconductor Manufacturing Corp. The court papers further show Mr Bush benefits from a contract with Grace, a company also backed by Jiang Miangheng, son of Jiang Zemin, the former president of China.
"Under the deal, signed on August 15 2002, Grace would pay Mr Bush $2m in shares over five years, issued in annual $400,000 increments...." [more]
"Kirkuk, Iraq -- Three successive explosions rattled the windows at the Northern Oil Co. on a recent afternoon. Within minutes, several U.S. contractors and Iraqi executives rushed out to start assessing the damage from yet another attack on Iraq's oil pipelines.
"Insurgents have been striking almost weekly against a labyrinth of pumping stations and hundreds of miles of pipeline that snakes through the desolate plains and rugged hills of northern Iraq, bearing crude oil exports to the Turkish port city of Ceyhan. The attacks have all but shut down the flow of 850,000 barrels of exported crude that coursed through Kirkuk's hub of pipelines each day before the war, U.S. and Iraqi officials say.
"Describing the vulnerability of the pipeline, one insurgent, Ali, a 32- year-old former Iraqi army sergeant turned resistance fighter, recently put it this way: "The truth is, there is very little they can do to stop us. We can hit them every day if we want to."..." [more]
"Six weeks after Specialist Randy Baylen of the U.S. Army's Third Infantry Division rolled into Baghdad on April 8 and helped topple Saddam Hussein, he was still eating meals meant for the battlefield: precooked food in foil bags. Based at the Al-Rashid Hotel, Baylen showered and washed his sand-caked clothes by the empty swimming pool. "They don't want to make us feel too comfortable," he said at the time.
"Baylen lacked food and access to plumbing partly because the civilian contractors that were supposed to provide them were unable to obtain insurance.
"The difficulty in getting coverage in Iraq has had negative repercussions during the invasion, the occupation and the rebuilding. Premiums that jumped as much as 500 percent in the weeks before the war contributed to civilian contractors' delays in getting food, water, showers and toilets to troops, says the U.S. Army's logistics chief at the time, Lt. Gen. Charles S. Mahan Jr.
"More than a month after Baghdad fell in April, members of the tank platoon guarding the Central Bank of Iraq said they were so low on rationed water that soldiers turned to intravenous bags from their medical kit for hydration. They defecated in plastic shopping bags that they burned on a trash heap in front of the headquarters of Rasheed Bank, Iraq's second-largest bank.
"The cost of insuring workers and equipment has soared. "Virtually every one of the contractors' indemnification went up 300-400 percent," Mahan says. The contractors then had to reevaluate their business plans to take the higher costs into account. "That's why we were a little slow off the take on getting materials and people there.
""Ultimately, our soldiers suffered," says Mahan, 57, who retired in November. "We had soldiers living pretty badly early on."
"From war to reconstruction, insurance is playing an important but little-noticed role in Iraq. Insurance has gained in importance as the United States gives private corporations tasks that were formerly done by military personnel, from feeding troops and guarding bases to repairing sewage and power systems.
""By over-outsourcing, you've made yourself at the mercy of the market," says Peter Singer, a fellow at the Brookings Institution in Washington and author of the book "Corporate Warriors" (Cornell University Press, 2003).
"He says the ratio of contractors to soldiers at war has jumped tenfold since the first Persian Gulf War, in 1991, to one contractor for every 10 military members. "Insurance is one of these market forces you have to take into account," he says.
"The insurance business is one that U.S. Ambassador L. Paul Bremer III is well versed in. Before becoming the top-ranking U.S. official in Iraq, Bremer had been chief executive officer of a unit of Marsh & McLennan Cos., the world's biggest insurance broker. In October 2001, he assembled the unit called Marsh Crisis Consulting, for advising companies on planning for and recovering from terrorism, natural disasters, lawsuits and financial misconduct.
"On Sept. 19, Bremer underscored the importance of insurance when he signed an order that opened Iraqi industry to 100 percent foreign ownership except for three precious sectors: oil, banking and insurance...." [more]
"WASHINGTON (AFP) Already rocked by a series of ethics problems, Boeing could be facing a deeper crisis that would affect the bottom line for the aerospace giant and one of the largest US defense contractors.
Earlier this week, Boeing sacked chief financial officer Mike Sears for improperly recruiting a US Air Force official to join the firm at the time she was involved in decisions that affected the company.
"The case involved the hiring of Darleen Druyun, who retired late last year as the Air Force's principal deputy assistant secretary for acquisition and management, and joined Boeing in January.
"Druyun, believed to be a key official in crafting a controversial tanker leasing deal with Boeing while at the Air Force, was fired by Boeing this week along with Sears.
"Boeing said it had hired former US senator Warren Rudman to review the company's ethics procedures to avoid a repeat of the latest incident.
"But the turbulence may only be starting for the aviation giant, which had been sanctioned by the Pentagon earlier this year following the discovery that it had obtained secret documents from its chief competitor, Lockheed Martin Corp., for a bid on a rocket project....
"Other woes could be in Boeing's future as well. Federal law prohibits a company from offering jobs to public officials while the official is overseeing government business with the company, and violations can result in prison terms as well as fines.
"Boeing's image meanwhile is taking a battering.
"The problems with the tanker deal in the wake of the Lockheed scandal "make it clear that Boeing's ethical problems go right to the very top of its management," Ken Boehm, chairman of the National Legal and Policy Center, a watchdog group.
""After being hit with a billion-dollar sanction earlier this year by the Defense Department for unethical contracting practices, Boeing cannot assert that its ethical problems are the result of a few corrupt middle managers."..." [more]
"CHICAGO -- Boeing Co.'s ousted chief financial officer, Mike Sears, fired for what the company said was a breach of ethics, denied any misconduct and said he was "deeply disappointed" by the action.
"Sears was dismissed Monday, along with another senior executive, for allegedly violating the company's ethical standards at a time when Boeing was involved in trying to negotiate a multibillion-dollar tanker leasing deal with the Pentagon.
"The 56-year-old Sears has declined to speak with reporters and did not return a telephone call to his suburban residence on Wednesday.
"But in a statement issued through a law firm in Chicago this week, he said: "At no time did I engage in conduct which I believed to be in violation of any company policy.
""At all times, I have faithfully carried out my duties on behalf of Boeing to the best of my ability. I am deeply disappointed that the company took the action it did."
"Boeing said it fired Sears after learning in an in-house inquiry that he had communicated with Darleen Druyun about a possible job with the aerospace giant at a time last year when she was working as a senior Air Force procurement official and thus in a position to influence Boeing contracts.
"Druyun, who joined the company's missile-defense unit in January, also was fired.
"The actions have raised new questions about the $17 billion tanker leasing deal that Boeing secured approval for in Washington this month.
"Legal authorization for the deal was included in the defense budget signed by President Bush on Monday. But after the firings, Defense Secretary Donald Rumsfeld asked Pentagon attorneys to look into whether the contract signing should be delayed.
"Both Sears and Druyun were fired "for cause," meaning they get no severance pay.
"In addition, the publisher of Sears' planned business management book, Soaring Through Turbulence, said the book will no longer be published in March as scheduled "in light of recent events.""
"...• HOMELAND SECURITY. Diane Allbaugh recently registered to work on homeland security issues for Grab Barrier, manufacturer of the Ground Retractable Automobile Barrier system. Allbaugh signed up two other clients, Tradewinds Environmental, a remediation firm, and Manhole Barrier Systems, to work on issues of homeland security, waste management and disaster relief.
"Meanwhile, Allbaugh’s husband, President Bush confidant and former director of the Federal Emergency Management Agency Joe Allbaugh, has signed on to lobby for Polycom, a California-based videoconferencing company. Polycom has also signed Lee Johnson, former chief of staff to Sen. Kay Bailey Hutchison (R-Texas), to lobby on its behalf...." [links added] [more]
"WASHINGTON, Nov. 25 — Three U.S. Democratic lawmakers asked the Pentagon inspector general on Tuesday to investigate alleged overpricing of gasoline sent to Iraq by Halliburton, the firm once run by Vice President Dick Cheney.
"Sen. Joseph Lieberman from Connecticut, Rep. Henry Waxman from California and Rep. John Dingell from Michigan, also urged the Pentagon to look into the use of money from a humanitarian account, the Development Fund for Iraq, to buy gasoline and possibly weapons.
"''We hope you will help restore transparency and accountability to this process by undertaking the important investigations described in this letter,'' the lawmakers wrote.
"A subsidiary of Texas-based Halliburton has been importing gasoline into Iraq under a contract with the U.S. Army Corps of Engineers until the oil-rich country's refineries are running at full capacity.
"Halliburton, where Cheney served as chief executive from 1995 to 2000 when he left to become U.S. President George W. Bush's running mate, has denied claims of overbilling and says the dangerous security situation has elevated prices.
"The Corps of Engineers also said it has not found evidence of wrongdoing but is looking into cheaper ways of importing oil.
"The lawmakers asked the Pentagon to look into why it cost as much as $2.65 a gallon to import gas from Kuwait when the Iraqi state oil company told them it paid less than a dollar a gallon. The Army says it costs an average of $1.60 a gallon.
"''The price Halliburton has charged to import gasoline from Kuwait needs thorough investigation,'' the lawmakers wrote.
"''Transparency and accountability are essential if the efforts to reconstruct Iraq are to succeed,'' they added...." [more]
"A major pipeline linking oilfields in northern Iraq to the country's biggest refinery was ablaze today, witnesses said.
"Sheets of flame and thick black smoke were shooting from the damaged line next to the desert highway near the village of Sharqat, about 30 miles north of Beiji, the site of Iraq's largest oil refinery, witnesses said.
"There was no immediate explanation about what had caused the blaze. The location of the fire was about 135 miles north of the capital, in the so-called Sunni Triangle where guerrillas have repeatedly attacked pipelines linking Iraq's oil fields with Turkey.
"Sabotage of pipelines and other infrastructure has become a major problem for the US-run coalition and its Iraqi partners as they try to revive the country's giant petroleum industry - the key to economic recovery...." [more]
"Senator John McCain and others have long portrayed a $20 billion Air Force commitment to lease and buy up to 100 Boeing 767 refueling planes as a poster child of wasteful government spending. It is now looking more like a poster child for the sheer corruption of the Pentagon's procurement process.
"On Monday, Boeing fired its chief financial officer, Michael Sears, and Darleen Druyun, a former Air Force acquisition manager who had overseen the deal prior to going to work for Boeing last January. The aerospace giant says it discovered that the two executives had started talking about Ms. Druyun's joining Boeing before she recused herself from working on company matters, and that they sought to cover up evidence of those contacts.
"This is a case of Washington's proverbial revolving door, except here the door apparently failed to revolve before a government official became entangled, in that conflict-ridden sort of way, with a private company. Adding to the concern is the fact that Mr. Sears was first notified about Ms. Druyun's desire to explore her options by her daughter, who already worked, coincidentally enough, at Boeing.
"This is pathetic (and potentially criminal) behavior on the part of a guardian of taxpayer dollars and of one of the nation's most admired companies...." [more]
From AATM, 9/10/03:
In an interview with Buzzflash, Paul Krugman says, "There's an enormous scandal right now involving Boeing and a federal contract, which appears to have been overpaid by $4 billion. The Pentagon official who was responsible for the contract has now left and has become a top executive at Boeing. And it's been barely covered in the press –- a couple of stories on inside pages."
"WASHINGTON (AP) -- Defense Secretary Donald H. Rumsfeld on Tuesday questioned whether the Air Force should go ahead with a multibillion dollar lease deal with Boeing Co. after the company announced the firing of two senior executives, including one linked to the lease negotiations.
"When asked whether the contract signing should be delayed until the Pentagon reviews the matter further, Rumsfeld said, "At a senior staff meeting this morning I asked our senior folks to ask themselves that question and to look into it."
"He said he did not know how long that might take.
"Legal authorization for the deal was included in the defense budget signed by President Bush on Monday.
"Rumsfeld said Pentagon lawyers would be consulted.
""We're the custodians of the taxpayers' dollars; we have an obligation to see that things are done properly," he said.
"On Monday, Boeing announced the firing of its chief financial officer, Mike Sears, and former Air Force official Darleen Druyun, just 10 months after Druyun was hired as vice president and deputy general manager of Boeing's Missile Defense Systems unit.
"Sears had been considered a top candidate to succeed chairman and chief executive officer Phil Condit.
"Boeing said Sears and Druyun were fired for violating company policies on hiring, and that they tried to cover up their misconduct, which is being investigated by the government.
"Boeing's internal investigation found that Sears approached Druyun about joining Boeing while Druyun was overseeing hundreds of Boeing contracts for the Air Force...." [more]
"OVERLAND PARK, Kan. -- Michael M. Sears, the ousted chief financial officer at Boeing Co., resigned Tuesday as a director of Sprint Corp.
"Boeing fired Sears Tuesday for improperly hiring former Air Force official Darleen Druyun while she was still negotiating contracts with Boeing on behalf of the Pentagon.
"The Chicago-based aerospace company also dismissed Druyun for her part in covering up the alleged misconduct.
"Sprint said Sears was on the board since May...." [more]
BUSH PUTS TANKER PLAN IN MOTION Leasing prices must be renegotiated, but the added jobs for Boeing Wichita are considered to be on their way.
BY ALAN BJERGA
Wichita (Kan.) Eagle
"WASHINGTON - President Bush put his signature Monday on the 767 tanker program, closing one chapter of the tanker saga even as ethics questions linger over how Boeing won the project.
"Bush gave the Pentagon and Boeing the go-ahead for the tankers through language in the $401.3 billion defense authorization bill, which he signed in a Pentagon ceremony.
"The U.S. military "needs to be fast and smart and agile, and it is," he said.
"The president didn't mention the controversial tanker program during his 10-minute address that preceded the bill-signing, focusing instead on pay raises for members of the military and $9.1 billion for ballistic-missile defense projects.
"But under the language Congress approved in the authorization bill, the program will allow the Air Force to lease 20 Boeing 767s as military tankers beginning in 2006, then buy 80 more beginning in 2008.
"Modifications will be done at Boeing Wichita, which Boeing has said will gain about 1,000 jobs.
"The signing concluded a struggle that lasted more than two years to gain congressional approval for the multibillion-dollar program.
"Rep. Todd Tiahrt, R-Goddard, attended the ceremony partly because he wanted to see the tanker program become law with his own eyes.
""I don't normally go to the signing of a defense bill," he said, but "this is huge for Wichita."
"But just because the bill is done, and the jobs are as certain as they can be until people are actually hired, that doesn't mean the tankers will stay out of headlines.
"Because the compromise that got the program's final approval is different than what the Air Force and Boeing originally negotiated, the leasing price will have to be renegotiated.
"Also, an analysis of the number of in-flight refueling tankers the Air Force needs will soon begin, with planned release this summer. That could lead to more tanker orders.
"And finally, Boeing continues to face critics who charge that employees acted improperly in negotiations with the Pentagon.
"Boeing has already admitted it has ethics issues, appointing former Sen. Warren Rudman to review its programs.
"And Monday, it took action that directly reflects on how it got the tanker program.
"Boeing fired employee Darleen Druyun and chief financial officer Mike Sears for improperly discussing Druyun's future employment at Boeing while Druyun worked at the Pentagon on the tanker program.
"The Pentagon's inspector general is already investigating Druyun for giving Boeing information about an Airbus bid at that time. The ethics revelation "puts a cloud over the tanker deal" as negotiators determine costs and envision future orders, said Keith Ashdown, policy director for Washington, D.C.-based Taxpayers for Common Sense...." [more]
"David Nash, head of the new Iraq Infrastructure Reconstruction Office (IIRO), appealed to businesses' patriotism last week at a conference designed to enlist them in the effort to rebuild the war-torn country.
"But Mr Nash, a retired rear admiral, must have felt as if he had walked into hostile fire when it came to question time. One by one, small businessmen aired concerns that they would be cut out of the process.
"Sylvester Myers, an independent construction supervisor, appeared to sum up the mood when he asked Mr Nash whether Halliburton, the Houston oil-services giant, had an information booth at the conference.
""These are the guys who are going to be running the show," Mr Myers said. "I know how it works."
"Many procurement experts agree with that assessment - although they do not think a conspiracy is to blame.
"The scale of the rebuilding effort is so vast, they say, and the timetable so ambitious that it seems all but guaranteed that the government will call on large, familiar companies such as Halliburton.
"The security situation in Iraq should also tilt the competition in large companies' favour, they argue, as government agencies put more emphasis on bidders' ability to protect themselves.
""At the prime contractor level there are going to be a bunch of the usual suspects," said Steven Kelman, professor of public administration at Harvard...." [more]
"CHICAGO - Boeing Co. unexpectedly fired its top financial executive on Monday for unethical conduct, saying he negotiated the hiring of a missile defense expert while she worked for the U.S. government and was in a position to influence Boeing contracts.
"The former Air Force official, Darleen Druyun, was dismissed along with chief financial officer Mike Sears - 10 months after she was hired as vice president and deputy general manager of Boeing's Missile Defense Systems unit.
"The 56-year-old Sears had held top positions in each of Boeing's top businesses, commercial aircraft and defense, before being named to the financial post 3 1/2 years ago. He had been considered a top candidate to succeed 62-year-old Phil Condit as CEO.
"The disclosure is another black eye for Boeing's booming defense-contract business, which had $1 billion in government rocket business stripped in July after the Air Force ruled that the company broke the law by using records from rival Lockheed Martin to help win contracts.
"It also refocuses attention on the government's controversial multibillion-dollar plan to acquire 100 of its 767 planes for use as midair refueling tankers. The Pentagon's Office of the Inspector General has been looking into allegations Druyun acted improperly in giving Boeing financial information about a competing bid by Airbus.
"Boeing said Sears was dismissed for violating company policies by communicating directly and indirectly with Druyun about future employment last year before she had disqualified herself from acting in her official government capacity on matters involving Boeing. It also said an internal review found recently that both attempted to conceal their misconduct.
""Compelling evidence of this misconduct by Mr. Sears and Ms. Druyun came to light over the last two weeks," Condit said, without elaborating...." [more]
"Boeing's chief financial officer was fired yesterday over a mounting industrial espionage scandal involving the US aerospace and defence giant and its European rival Airbus Industrie.
"Mike Sears, who was seen in some quarters as a potential successor to Boeing's chairman, Phil Condit, was dismissed after "compelling evidence of misconduct" came to light in the past two weeks, according to the company.
"Boeing also fired a former US Air Force official, Darleen Druyun, who gave the company confidential information about a rival bid by Airbus for a $20bn tanker refuelling contract while she was still working for the Pentagon.
"An internal review had discovered that Mr Sears had violated company policy by communicating with Ms Druyun while she was still acting in a government capacity on matters relating to the company. They had both also attempted to conceal their misconduct, Boeing said.
""Upon review of the facts, our board of directors determined that immediate dismissal of both individuals for cause was the appropriate course of action," Mr Condit said. Mr Sears has been replaced by Boeing's senior vice-president of finance, James Bell, who has been appointed acting chief financial officer.
"The sackings could not come at a more sensitive time for Boeing as it battles with an Airbus consortium for a £13bn contract to supply similar air-to-air refuelling tankers to the RAF. The Ministry of Defence is expected to make a decision next month between the Boeing-led Tanker Team and Air Tanker, the rival consortium headed by EADS, the majority shareholder in Airbus.
"Apart from supplying Boeing with information about the USAF tanker contract, Ms Druyun also had several personal ties with individual Boeing employees, it emerged during the investigations.
"While she was deputy head of procurement for the Air Force, she agreed to sell her home to a Boeing lawyer who was working on the tanker contract. Her daughter and son-in-law were also Boeing employees. Ms Druyun was subsequently hired as vice-president of Boeing's missile defence systems business 10 months ago.
"Under the original tanker deal, Boeing had agreed to lease 100 Boeing 767s to the USAF for use as air-to-air refuelling tankers. Ms Druyun told Boeing that Airbus had submitted a bid which was $5m to $17m cheaper per aircraft than Boeing's bid...." [more]
Jamie Doward and Jessica Hodgson
Sunday November 23, 2003
The Observer
"A powerful banking group with close links to the Pentagon, which has also invested money on behalf of the Bin Laden family, is in talks to bail out beleaguered Daily Telegraph owner Conrad Black.
"The revelation suggests that Britain's bestselling broadsheet - coveted by rival newspaper barons because of its political influence - may not go under the hammer after all, as Lord Black tries to quell a shareholder rebellion in the face of allegations that he and several acolytes pocketed millions of dollars that was not theirs to take.
"Daily Express owner Richard Desmond and the Daily Mail & General Trust, which owns the Daily Mail, are keen to buy the Telegraph titles, despite the fact that questions over the concentration of media ownership would be raised.
"The Carlyle Group, known as the Ex-Presidents Club because of the number of former world leaders it employs, is considering taking a stake in Hollinger International, which owns the Telegraph titles, the Jerusalem Post and the Chicago Sun-Times, according to those close to the firm....
"If Carlyle - which, despite being only 15 years old, manages more than $14 billion in funds on behalf of investors such as George Soros and the Bin Laden family (who are estranged from their son Osama) - does take a stake in Hollinger, questions are bound to be asked over the links between the two firms, both of which have powerful links to the military.
"Leading foreign policy hawks Richard Perle and Henry Kissinger sit on the Hollinger board. Black himself is a member of the secretive Bilderberg group, an organisation comprising the world's leading businessmen and politicians, which some have accused of being an alternative world government...." [more]
"It's amazing the coincidences you find digging into Hollinger International, the publishing empire that includes Chicago's Sun-Times and London's Daily Telegraph and is quickly slipping from Conrad Black's control.
"Let's start with the board of directors, which includes Barbara Amiel, Conrad's wife, whose right-wing rants have managed to find an outlet in Hollinger publications.
"And there's Washington superhawk Richard Perle, who heads Hollinger Digital, the company's venture capital arm. Seems that Hollinger Digital put $2.5 million in a company called Trireme Partners, which aims to cash in on the big military and homeland security buildup. As luck would have it, Trireme's managing partner is none other than . . . Richard Perle.
"Perle, of course, has been pushing hard for just such a military buildup from his other perch at the Pentagon's secretive and influential Defense Policy Board, where there are a number of other Friends of Hollinger.
"There's Gerald Hillman, managing partner of Hillman Capital, which also got a $14 million investment from Hollinger, according to the Financial Times. Hillman is also a partner at Trireme.
"And then there's Henry Kissinger, another longtime Hollinger director, though it must be said that Henry is very busy and was only able to make one board meeting last year.
"Rounding out the Hollinger director-hawks is Richard Burt, the former arms negotiator and ambassador to Germany. Burt is also on the board of Archer Daniels Midland, whose former chairman, Dwayne Andreas, and director Robert Strauss, were also Hollinger directors until last year. Small world, huh?
"Some might consider Andreas a somewhat risky choice for corporate director, inasmuch as ADM had to pay a $100 million fine for price-fixing during his watch. But Andreas probably felt right at home at Hollinger, alongside A. Alfred Taubman, who as head of Sotheby's was nabbed for fixing art auction prices. Taubman gave up his Hollinger seat last year, around the time he checked into prison.
"Iran has agreed to provide Iraq, with which it fought a devastating ten year war, refined petroleum products to help cover projected winter shortages, an Iraqi oil ministry official said.
"Aism Jihad, the Iraqi oil ministry spokesman, told Reuters from Iran that a joint Iranian-Iraqi committee will also study a plan to link the two countries' oil products and gas networks to facilitate the exchange.
"“An agreement was reached for Iran to provide Iraq with what it needs of oil products to confront the coming winter season,” Jihad said.
"“They will ship LPG (liquefied petroleum gas), petrol and kerosene as soon as possible,” he added.
""The committee is studying the linking of the networks for gas and oil products which will facilitate the exchange operations and boost this cooperation"
"The agreement was reached Saturday after Tehran-based talks between Iraq's Oil Minister Ibrahim Bahr al-Uloum and his Iranian counterpart, Jihad said, adding the joint committee was studying the mechanisms of implementing the deal.
""The committee is studying the linking of the networks for gas and oil products which will facilitate the exchange operations and boost this cooperation," Jihad noted.
"Asked what the Iranians will get in return for the refined products, Jihad said: "This has not been finalised. They may get Iraqi crude."
"Iraq and Iran fought a war between 1980 and 1988...." [more]
U.S. officials have shut Iraqis out of the business of reconstruction contracts, favouring a few high-profile Iraqi companies they trust and setting excessively high contract standards that most local companies cannot meet, say local business leaders.
"BAGHDAD, Nov 21 (IPS) - U.S. officials have shut Iraqis out of the business of reconstruction contracts, many local businessmen say.
"U.S. officials and the contractors working for them favour a few high-profile Iraqi companies they trust, and set excessively high contract standards that most Iraqi companies cannot meet, they say.
"U.S. officials have reportedly allowed some companies closely associated with the former regime to win lucrative contracts.
"U.S. officials deny most of the charges. They say some of the frustration comes because Iraqis do not understand legal obligations.
"Reconstruction contracts in Iraq are awarded through three sources: the U.S. Army, U.S. Agency for International Development (USAID) and the Coalition Provisional Authority (CPA) headed by Paul Bremer.
"USAID contracts are awarded through the Bechtel Corporation. Army contracts are awarded primarily through the Halliburton Corporation which Vice President Richard Cheney headed until he moved to the White House. Some CPA contracts are awarded through Halliburton, but it has also signed some of its own agreements.
"The total value of the contracts awarded has not been made public, but sources in Baghdad put the figure above 10 billion dollars.
"For most Iraqis the two primary ways of learning about new reconstruction contracts are through a website set up by the CPA, and by attending a weekly meeting at the Convention Centre in Baghdad.
"The weekly meetings are organised by Kellog, Brown & Root, engaged by Halliburton to find subcontractors for its work.
"Several Iraqis say they are frustrated by the process.
""We look at the website, it has some good information about each contract, but not enough," Hend Adnan from an Iraqi engineering company told IPS. "They don't give information over the phone, so you have to come and attend these meetings to know more."
"But coming to the meetings does nothing to end the Iraqis' suspicion of the process.
""In colloquial Arabic we say things are done behind doors," says contractor Haidar Abdel Kazem. "You don't 'feel' the contracts, you feel it is decided before they are announced."
"Iraqis are often given less than a week to respond to bids, and asked to present lengthy documents.
""They give four, five days," says Abdel Kazem. "How are you going to prepare for it, how are you going to answer it, how are you going to get the answer to them? The period is unreasonable."
"And when they do respond properly to the contracts, many say they go home empty-handed...." [more]
"MOSCOW - Iraq might reconsider Russian oil giant Lukoil's $3.7bn deal to develop the huge West Qurna-2 field, scrapped by ousted President Saddam Hussein's government. Iraqi Oil Minister Ibrahim Bahr al-Uloum said earlier this week that all contracts signed under Saddam Hussein’s rule would be reconsidered, including the contract with LUKoil.
""Pertaining to the contracts signed during the bygone era, especially under the economic embargo, we clearly stated that these contracts will be reconsidered based on three essential tenets: their legality, competitiveness and where is the interest of the Iraqi people," Mr. Bahr al-Uloum was quoted as saying by Reuters. The minister said he had been invited by his Russian counterpart Igor Yusufov to visit Moscow, but he said no date had been set for the visit.
"The contract for the development of West Qurna-2 was signed in March 1997 and approved by the Iraqi Oil Ministry. A consortium of Russian companies, including LUKoil (68.5 percent), Zarubezhneft and Mashinimport (3.25 percent each), was expected to develop the field and use the extracted oil on production sharing terms, up to 2020.
"However, Iraq announced the rescission of the agreement at the end of last year, on the grounds that the company did not implement the contract. For its part, LUKoil insisted that the contract was valid. According to LUKoil officials, UN sanctions against Iraq did not allow the company to implement the agreement, but LUKoil considers this contract as valid.
"After the war in Iraq, a member of the US administration said LUKoil had lost the West Qurna contract. However, this statement was later refuted, and the issue was postponed until after an internationally recognized, legitimate government is installed in Iraq...." [more]
"A Canadian counterterrorism expert who was arrested after 2,400 mini-missile warheads were found at his New Mexico training facility has been cleared of all charges.
"David Hudak was ordered set free Wednesday after a U.S. District Court jury, after less than a day of deliberations, acquitted him of all nine counts stemming from his use of explosives and training of troops from the United Arab Emirates in counterterrorist techniques.
"Hudak's mother, Sandra Hudak, wept and clutched a tissue to her face as the verdicts were read, then hugged her husband, Bob Hudak.
""Oh, hubby," she said.
"Assistant U.S. Attorney Norm Cairns said: "We felt that this was a case that had to be tried. Obviously we're disappointed, but the jury has spoken. We respect the jury's verdict."..." [more]
"WASHINGTON (Reuters) - Prospective bidders are salivating over new Iraqi business worth up to $18.7 billion, from sellers of trucks and power generators to construction giants and oil refinery specialists.
"A sold-out Pentagon conference for contractors at an Arlington, Virginia, hotel on Wednesday had the heady feeling of a Gold Rush.
"More than 1,300 people from hundreds of U.S. and foreign companies stalked procurement officials in hallways and pitched their competence to work in Iraq. A follow-on conference is being held in London on Friday, targeting non-U.S. firms.
""There is just so much money that we can tap into. It's just wonderful to have this opportunity," one prospective bidder gushed to the Defense Department's director of procurement, Deidre Lee.
"A new U.S. office established in Baghdad to supervise and oversee contracts has set an aggressive timetable, awarding up to $18.7 billion in 25 contracts over the next 10 weeks to rebuild Iraq.
"Some draft tenders could be released by Friday for work funded by money already appropriated from Congress. Official bidding will begin from Dec. 5, with contracts awarded by Feb. 3, 2004...." [more]
"WASHINGTON Since the Sept. 11 attacks, the countries of Central and Eastern Europe have proven staunch allies in meeting America's challenges abroad, often in the face of public opposition. But their sense of solidarity with America is being replaced with cynicism caused by unmet expectations.
"During the war with Iraq, Polish special forces fought alongside U.S. and British forces, and Czech, Slovak and Ukrainian weapons specialists were on standby in Kuwait in case of chemical attack. In September, soldiers deployed by Central European states, among others, and commanded by Poland, replaced 10,000 U.S. Marines stationed in Iraq's south central region. Today, soldiers from nine of NATO's newest members patrol five provinces south of Baghdad. On Nov. 6, the first soldier from "New Europe" serving alongside American forces in Iraq, Major Hieronim Kupczyk of Poland, was killed in action.
"Central European leaders felt that in supporting America, they were standing up to predominantly antiwar European powers at their peril. President Jacques Chirac of France even hinted that countries that joined with America could find their bids for European Union membership blocked.
"Before and after the war, high-level meetings between top U.S. and Central European officials indicated a level of engagement that many Central European leaders presumed would carry over into the postwar reconstruction phase. Central European officials state categorically that real expectations were created.
"In early March, the State Department invited representatives of more than 30 countries to discuss postwar reconstruction of Iraq. The Czech foreign minister, Cyril Svoboda, said he had conveyed to Secretary of State Colin Powell on that occasion his country's interest in participating in the postwar reconstruction of Iraq. On April 15, the spokesman for the Slovak president stated that Commerce Secretary Don Evans had given the Slovak minister of economy a list of sectors pertaining to Iraqi reconstruction in which Slovak companies could participate. The expectations of Central European leaders were clear.
"Central European states' longtime links with Iraq have given them knowledge that could contribute to the country's reconstruction. During the cold war, much of Iraq's infrastructure, including power plants, airports and bridges, was built with the help of engineers from Poland, Hungary and Ukraine. But since the end of the war, not a single reconstruction contract has been awarded to a company from Central Europe, while the large American corporations Bechtel and Halliburton have been awarded contracts amounting to more than $3 billion.
"There is growing skepticism among Central European publics regarding the participation of their troops in this foray. According to one public opinion poll, at the beginning of October nearly 60 percent of Poles surveyed stated they were against continuing a Polish military presence in Iraq. When the Slovak Ministry of Defense dispatched soldiers to Iraq in March, only 25 percent of the Slovak public approved..." [more]
"WASHINGTON — The United States plans to award up to 24 new contracts in Iraq by February next year and foreign companies may be allowed to bid for the lucrative, dangerous work, a U.S. defense official said on Tuesday.
"Weighed down by complaints over the management of rebuilding work in Iraq, allegations of cronyism, overspending, limited competition and delays, the Pentagon has opened a new office in Baghdad to oversee contracts.
"''The work in Iraq is moving at such an incredible pace that we needed one office to oversee everything,'' said the defense official.
"Called the Project Management Office, it will handle contracts funded by the $18.7 billion appropriated by Congress to rebuild Iraq. The office was briefly titled the Iraq Infrastructure Reconstruction Office but it was decided to use the catchier name.
"Details of the contracts and how they will work are set to be announced at a conference in Washington on Wednesday to be addressed by new office head, retired Admiral David Nash.
"Of the 24 contracts awarded by Feb. 1, 2004, the defense official said up to 17 of these would be for construction and all of these deals would emphasize ''full and open competition,'' the lack of which was a complaint in early deals for Iraq.
"Many of the new contracts are also likely to be open to foreign bidders, excluded in the first round of prime contracts, a move that angered many traditional U.S. allies...." [more]
"ALBUQUERQUE, N.M. (AP) - A Canadian businessman charged with training foreign soldiers in military tactics at his Roswell counterterrorism school knew he was committing crimes and gambled that his greed-driven scheme wouldn't be discovered, a federal prosecutor said Tuesday.
"Trial testimony from David Hudak's co-workers shows he went ahead with military training for United Arab Emirate soldiers in the summer of 2002 despite knowing his company lacked proper State Department licensing, Assistant U.S. Attorney Greg Wormuth told jurors during closing arguments.
"Hudak was not a victim of U.S. government deception, the prosecutor said.
""The government and law enforcement did not turn a blind eye or set him up."
"But defence lawyer Robert Gorence said the evidence showed Hudak never intended to break the law, an element required for conviction. He told jurors they must acquit his client.
"The jurors deliberated briefly Tuesday before recessing; they were scheduled to convene again Wednesday morning. They must shift through more than five weeks of testimony and a mountain of exhibits.
"Hudak, 42, of Vancouver, faces a minimum mandatory sentence of 30 years if convicted on nine felony counts that accuse him of providing training without proper government approval and stockpiling 2,400 small warheads at his High Energy Access Tools company, among other charges.
"The defence has argued that Hudak was an unwitting victim, misled both by government officials and those who sold him the missiles.
""He's a simple man trying to build a business," Gorence said.
"At issue is whether Hudak "knowingly possessed" the small warheads as destructive devices, which is a government definition for missiles, grenades, mines, bombs and similar devices. He is charged with possession of destructive devices not registered to him.
"Wormuth said Hudak knew the warheads were a destructive device designed to "kill the enemy and destroy their property" as military ordnance.
"Hudak told jurors last week the warheads were sold to him as legal demolition charges by Jet Research Center, a U.S. subsidiary of Halliburton. He said he bought them for commercial demolition projects.
"Wormuth told jurors that, under the law, Hudak's intended use for the warheads was irrelevant...." [more]
US DELAYS 'HIT IRAQ OILFIELDS' Rebuilding work has been slow
Disputes in Washington over funding are slowing rebuilding of Iraqi oilfields, vital for the country's shaky economy.
"According to newspaper reports, Iraq's oil ministry has been refused money to help rebuild southern oilfields.
"The cash shortfall has meant that Iraq's oil output is still below pre-war levels.
"The US Congress, angry that initial contracts were allocated without competitive bids, has insisted that any future oil contracts be open to all.
Decisions delayed
"Earlier this month, the US Congress allocated $18.6bn (£11.02bn) to rebuild Iraq's shattered economy, including $1.9bn to restore the oilfields.
"But the new contracts covering the first $1bn worth of repairs are still out to tender, with no decision expected until December.
"Meanwhile, only $716m of the $960m allocated for the emergency oil repair work has been released, according to reports in the Wall Street Journal newspaper.
"These projects are being carried out by KBR, the subsidiary of Halliburton, the oil services company formerly run by US Vice President Dick Cheney, under a controversial "no-bid" contract with the US Army Corps of Engineers.
COST OF RECONSTRUCTING IRAQ
Security: $4.6bn
Restoring oil fields: $1.9bn
Electricity: $5.5bn
Water and sanitation: $3.5bn
Irrigation: $775m
CPA running costs: $980m
Transport and telecoms: $500m
Roads and bridges: $370m
Hospitals: $793m
source: Office of Management and Budget, US Congress
"According to a senior advisor to the Iraqi oil ministry, Thamer al-Ghadhban, "funding has been a real disappointment."
"He says that - among other problems - the oil export terminal at Mina al-Bakr lacks sophisticated equipment to communicate with the pumping stations onshore.
"That means the people operating the pipeline sometimes sending messages by pick-up trucks because of the lack of telephones or radios.
"Power has still not been restored at two oilfields in southern Iraq, and a pumping facility has been delayed by four months...." [more]
"EDMONTON - Activist-journalist Naomi Klein took an audience of mostly university students behind mainstream media headlines Sunday to expose what she said is the other side of the rebuilding going on in Iraq.
"American conglomerates such as Halliburton, one of the world's largest oilfield service companies, and Bechtel, a construction company, are not rebuilding Iraq, she told an overflow audience of more than 800 in the Horowitz Theatre at the University of Alberta. Rather, she said, the country's culture is being erased by a flood of American imports.
"After 13 years of sanctions and two wars, the Iraq taken over by invading American troops was economically floundering with no power and no telephone service, Klein said.
""If you were actually interested in rebuilding Iraq and bringing in a free market, it would have made sense to get the electricity up and running. Instead, 26 days after the war was declared over, with lights and phones still out in Baghdad, Paul Bremmer, the civil leader of Iraq, appointed by President George W. Bush, declared Iraq's borders open to foreign imports," Klein said.
"She weaved a narrative that connected high-powered American politicians with vested interests to companies awarded contracts in Iraq.
"All of the policies being implemented by the Americans are illegal under international law, she said.
"International trade lawyers have told Klein that once Iraqis get a government of their own, which is expected by June, "if they don't want to be a wholly owned subsidiary of Halliburton and Bechtel, they will have powerful legal grounds to re-nationalize all these assets."..." [more]
"RIYADH, : Saudi Arabia is pleased to see Iraq return to the world oil markets after years of disruption through war and embargo, Oil Minister Ali Al-Nuaimi said after overnight talks with his Iraqi counterpart Ibrahim Bahr al-Ulum, the official SPA news agency reported Monday.
""Saudi Arabia is pleased to see Iraq return to the international oil market in the interests of the people and the prosperity of this brother country, as well as an active member of OPEC," Nuaimi said.
"Iraq, which boasts the world's second largest oil reserves after Saudi, has not been restricted by the OPEC quota system since UN sanctions were imposed for the invasion of Kuwait in 1990.
"Iraq's return to the quota system may pose a serious problem for several countries including Saudi Arabia, which has benefited from a high quota to make up the shortfall.
"Despite the end of the UN embargo following the fall of the Baath regime in April, Iraq has failed to reach anywhere near its pre-1990 production level of more than three million barrels per day (bpd).
"Iraqi production continued its upward trend with 1.15 million bpd of Basrah Light exports and 400,000 bpd of deliveries to domestic refineries during October, the Middle East Economic Survey (MEES) reported Monday.
"Iraqi output increased 150,000 bpd during the month to 1.55 million bpd, but that was a slowdown in the speed of growth after increases of 350,000 bpd in both September and August...." [more]
"AMMAN, Jordan -- A shipment of 1 million barrels of Iraqi crude oil has arrived at Jordan's Red Sea port, the first such supply since the U.S.-led war in neighboring Iraq began, the Ministry of Energy and Mineral Resources said Sunday.
"The shipment, which arrived Saturday, will cover Jordan's needs for only two weeks, the ministry's secretary-general, Khaldoun Quteishat, told The Associated Press.
"He said the shipment followed an agreement reached with Iraqi authorities last month to let Jordan import 2.6 million barrels of Iraqi crude in the next three months at international market prices...." [more]
"It's not unusual for corporate reps and execs to converge on Washington, D.C., for trade fairs. Not to mention to court government officials in a bid to win megabuck contracts. But seldom do they have a shot at getting contracts worth billions--$18.7 billion to be precise--to help rebuild a shattered nation. And yet, that's exactly what hundreds of companies are doing this week as they vie for a portion of the pot set aside for the colossal task of rebuilding war-torn Iraq. The Coalition Provisional Authority in Iraq is hosting "Industry Days" in Washington and London hotels to begin the process of doling out the biggest foreign aid expenditure in U.S. history.
"Over 700 companies will attend the Washington conference, hoping to bid on more than 20 prime contracts and potentially thousands of subcontracts for everything from electricity and communications to transportation and security. Among possible restrictions: U.S. News has learned that U.S. officials were leaning toward granting prime contracts only to U.S. companies and firms from nations that committed troops to Iraq. Such a decision could be an enormous windfall for these few nations and a rebuke to some of America's closest allies (read: France and Germany). "Why," says a Pentagon official, "should we give American dollars to people who hold us in contempt?"
"The man in charge of the industry fest is retired Adm. David Nash, a former Navy combat engineer who ran military construction projects in Vietnam in the early 1970s. As head of the Iraq Infrastructure Reconstruction Office, he will coordinate an expedited contracting process expected to wrap up by February. In contrast to the initial contracts awarded to giants like Halliburton and Bechtel, the new round is expected to be more open and to broaden the pool of bidders to give smaller companies a piece of the action...." [more]
"Two Albuquerque police officers will leave Monday to fulfill duties in Iraq, but they're not soldiers.
"They are simply people taking a lucrative offer to work overseas, Chief Public Safety Officer Nick Bakas says.
""It's a well-paying contract for a year assignment. . . . Six figures is what I'm told," he said.
"The officers turned in their badges Friday and will leave next week, Bakas said.
"The two will work for Halliburton, a Houston-based defense and energy contractor, possibly in security, Bakas said.
"Halliburton's holds the main contract for reconstruction work in Iraq.
""Apparently, Halliburton and companies like them are recruiting nationwide and are looking for people with qualities that police officers have," Bakas said.
"The officers' departure could be the start of serious problems for the police department, Bakas said.
""Our struggle for (force) numbers, which is a difficult struggle, has become more difficult," he said.
"Bakas said the officers might have learned about the jobs on the Web. He said the company is looking for young people with law enforcement backgrounds...." [more]
"ALBUQUERQUE, N.M. - A former Halliburton Co. employee testified Thursday he helped consummate the sale of thousands of mini-warheads to a Canadian explosives expert even though he believed it was illegal - and never warned the buyer.
"Mitchell Hambright took the stand in the federal court trial of David Hudak, who is accused of stockpiling more than 2,400 shoulder-launchable SMAW missile warheads and using U.S. defense techniques to train foreign troops. Hudak, a Canadian who operated an anti-terrorism training business in Roswell, faces a mandatory 50 years in prison if convicted.
"Hambright said he worked for JRC, a Halliburton subsidiary, when JRC was sold to Accurate Arms Co. Inc. in 1994. That's when Hudak purchased the warheads at a discount as a "Blue Light" special, according to company documents shown to jurors.
"The merchandise was "not of any use to us, nor could it be sold to any of our customers," Hambright testified. "He was getting a lot of explosive devices at a good price."
"The documents described the merchandise as "charge demolition SMAW." SMAW stands for "shoulder-launched multipurpose assault weapon."
"Hambright, who described his JRC job as that of a contract facilitator, said he went along with orders to move the merchandise.
""I was directed by our new owner, Mr. (John) Sunday," Hambright said...." [more]
By Ariana Eunjung Cha
Washington Post Staff Writer
"BAGHDAD--They knew they were in danger. David "Butch" Dyess wrote his sons short messages to simply say: I'm still alive. Roy Buckmaster told his sister that in Iraq there are "a lot of really good people" and "some really bad people." "The bad people," he added, "try to blow us up when we drive by."
"The e-mails were among the men's last communications with their families in the United States. The two, contractors for Knoxville, Tenn.-based EOD Technology Inc., were traveling back to a base camp near the country's capital one morning last week when a makeshift roadside bomb exploded under their sport-utility vehicle and killed them. They had been helping the Army Corps of Engineers defuse bombs and destroy munitions left over from the old Iraqi regime.
"Private contractors like Dyess and Buckmaster, who are being buried this week, are the foot soldiers of the reconstruction of Iraq. Another contractor died Friday in an attack North of Baghdad, a U.S. military spokeswoman told the Associated Press.
"The increasing violence has forced companies to delay projects in less stable areas, take cumbersome security measures and reassess deployment plans, as workers have quit or refused to work in some areas...." [more]
SHOCK-THERAPY U.S.-led restructuring of Iraqi economy is on shaky ground, top economists say
ASSOCIATED PRESS
"Top economists are making dire predictions about the Bush administration's plan for a shock-therapy style reorganization of Iraq's postwar economy — a policy that met with mixed success across eastern Europe after the fall of the Soviet Union a decade ago.
"Experts say the U.S. plans, which aim to upend Iraq's closed state-run economy and convert it to one of the most open, capitalist economies in the world, would unleash new waves of unrest in an already strife-weary Iraqi population. International law forbids occupying powers from making such deep changes, they say.
"To revive Iraq's wilting economy, U.S. administrators and their Iraqi allies approved a plan to abolish most restrictions on trade, capital flows and foreign investment, allowing, for instance, foreign banks to open branches and buy Iraqi banks. It sets the top personal income and corporate tax rates at 15 percent, while slashing import tariffs to 5 percent.
"The new investment law approved last month doesn't address one of the most contentious issues — privatization of state-owned companies other than those dealing with oil — that the U.S.-led Coalition Provisional Authority and its Iraqi allies are considering.
"Such moves would be controversial anywhere. In Iraq, the society-transforming actions would happen in the midst of a guerrilla war, and be imposed by occupying powers of disputed legitimacy without Iraqis' consent, economists say.
"''This is all reckless in the context of Iraq. There's no peace, no stability, no rule of law, no court system,'' said Jeffrey Sachs, director of Earth Institute at Columbia University and architect of the post-communist transformation of Poland's economy. ''We don't even have a legal standing to make the changes we're talking about.''..." [more]
"...This massive military contractor has a long history of weaseling into war deals that reap huge profits for the company's owners and executives. During the Vietnam years, its Brown & Root subsidiary pumped money into Lyndon Johnson's campaign coffers and then drew billions of dollars from us taxpayers in profiteering funds from that war. Then, with Dick Cheney as its CEO in the 1990s, it grew even fatter on military deals, including getting Iraqi contracts to repair Saddam Hussein's war-torn oil industry.
"Now, Cheney has moved up to vice-president, Saddam has been declared the Great Satan, our troops are in an ongoing war in Iraq -- but there's Halliburton ... still weaseling, still profiteering. Cheney's old company (which puts more than $150,000 a year into his bank account) was first in line to get taxpayer funds from the Bush-Cheney regime for rebuilding Iraq. Of all the companies in the world, the Cheney-connected Halliburton got the non-bid contract to import gasoline into Iraq. So far, it has been paid $700 million for this chore, with the money coming not only from U.S. taxpayers, but also from a United Nations fund meant to provide humanitarian aid in Iraq.
"Lest you think Halliburton is humanitarian, it has been caught gouging everyone involved. The company is charging $1.59 a gallon for the gasoline that it delivers from countries close around Iraq. Yes, says Halliburton, this is expensive, but after all, it takes a lot to distribute fuel in a dangerous war environment.
"We might swallow that ... except that an Iraqi oil agency is able to get gasoline from the same surrounding countries, deliver it in the same hostile environment -- and charge only 98 cents a gallon, 40% less than Halliburton!
"Hey, Halliburton -- in war, when the bugle blows, you're supposed to charge, not overcharge." [more]
"ALBUQUERQUE, N.M. -- A counterterrorism center director testified at his federal trial Wednesday that the State Department did not raise concerns about training sessions he offered to foreign soldiers before accusing him of not being licensed.
"David Hudak said he never received a warning from the State Department about the type of training his company, High Energy Access Tools, or HEAT, provided to soldiers from Israel, Canada and Singapore.
"The U.S. government charges that his company trained soldiers from the United Arab Emirates under a $12.5 million contract using U.S. defense information without proper State Department licensing. Hudak, a Canadian citizen, faces 10 felony counts, including illegally possessing 2,400 warheads at the training center.
"Hudak acknowledged under cross-examination that the UAE soldiers had received training equivalent to advanced training in subjects considered sensitive defense information. He had testified Monday that he had no reason to believe sessions at his training center included classified defense information.
"He also said he had been exporting small warheads to other countries for eight years, but the State Department had never issued a warning about any of his procedures. He obtained an exporting license to ship the munitions, and HEAT never sent munitions without a license, he said...." [more]
TEHRAN, Nov. 12 (Xinhuanet) -- Iraq and Iran would soon start oil and gas swap projects, a senior Iraqi official was quoted by Iran's IRNA news agency as saying on Wednesday.
Iraqi Oil Minister Ibrahim Mohammad Bahr al-Uloum said he would discuss details of the projects during his upcoming visit to Tehran.
Bahr al-Uloum said he would discuss with Iranian officials about his participation in the next summit of the Organization of Petroleum Exporting Countries on Dec. 5.
Iranian Foreign Minister Kamal Kharrazi told a donor's conference for Iraq in Madrid last month that Tehran was ready to enter oil swap arrangements with Baghdad of up to 350,000 barrels aday to help the Iraqi reconstruction efforts.
He said Iran is ready to provide a facility of up to 300 million dollars in buyers' and suppliers' credits and offered to supply electricity and gas to Iraq.
"WASHINGTON -- Anxious to appear fair in doling out nearly $20 billion in work in Iraq, the U.S.-led authority there is holding conferences in Washington and London next week for prospective contractors.
"Called "CPA Industry Days," the Coalition Provisional Authority's Iraq Infrastructure Reconstruction Office is set to draw thousands of participants at its meetings in Washington on Nov. 19 and in London two days later.
""The conferences will allow both small and large industry to see where we are going and it will enhance the transparency of the contracting process," a U.S. defense official said Monday, adding that no new contracts would be announced.
"President George W. Bush signed an $87.5 billion spending package for Iraq last week, and nearly $20 billion of that will go to reconstruction work in the country, most of which will be done by private contractors.
"The contracting process in Iraq has been severely criticized, both abroad for giving much of the prime business only to U.S. firms and in Congress where allegations have been flying about cronyism and favoritism in handing out work.
"The CPA said on its web site the conferences were in response to "Congressional interest" in the contracting process and were a first step in a series of measures aimed at making the process as transparent as possible...." [more]
"Foreign companiesfrustrat-ed at their inability to win contracts to help rebuild Iraq and Afghanistan might heed the advice of Peter Kant.
""If you wait until the proposal is published, you're probably too late," says Mr Kant, who works at Jefferson Consulting Group, a Washington lobbying firm that specialises in securing government contracts for corporate clients.
"Those words may prove prophetic, as companies prepare to vie for $20bn (?17bn, £12bn) in fresh reconstruction funding for Iraq and Afghanistan recently approved by Congress.The Pentagon has vowed to open competition to a variety of companies. The effort will begin in earnest later this month when it hosts conferences for prospective bidders in London and Arlington, Virginia. But Mr Kant and other Washington lobbyists suggest that the sense of exclusion of foreign and smaller US companies may stem less from an overt campaign against them than their unfamiliarity with the realities of government contracting.
"Critics have dismissed many of the lobbying firms gearing up for an Iraq windfall as snake-oil salesmen - and worse. But lobbyists who specialise in federal procurement say the procedures are arcane and complicated even in the best of times. These are now likely to explode in complexity, as authorities rush through billions of dollars of contracts in a short period, making lobbyists indispensable.
""You have to have some sort of contact at the government agency," says Richard Morhouse of Reed Smith, a Washington law firm. "That's where a lobbyist or government rep [comes in]."..." [more]
"A new Pentagon office in Baghdad will coordinate and set priorities for Iraq reconstruction projects, including how to spend international donations and proceeds from the sale of Iraqi oil exports, as well as the $18.7 billion Congress recently approved, a Pentagon spokesman said yesterday.
"Maj. Joseph M. Yoswa, a spokesman on U.S.-led Coalition Provisional Authority matters, said the office will provide a central place for managing contracts and reconstruction work and should help address concerns about the oversight of the contracting process. John A. Shaw, a deputy undersecretary of defense, announced plans for the creation of the new office last month at a contractors' conference in London.
"In disclosing new details yesterday, Yoswa said the office is expected to have about 100 people on staff, including government and private-sector contract specialists. Retired Rear Adm. David J. Nash will run it.
"The new Iraq Infrastructure Reconstruction office, which will report to L. Paul Bremer, the civilian administrator for the U.S.-led occupation government, will not actually award any contracts to private companies, Yoswa said. Instead, the office will direct existing government agencies such as the U.S. Agency for International Development (USAID) and Army Corps of Engineers to award about 20 prime reconstruction contracts from the second round of U.S. funds for Iraq, he said.
""Hopefully Congress and the public will get more information out of this office in Baghdad than we've gotten from government agencies in Washington," said Sen. Ron Wyden (D-Ore.). "This needs to be a real step toward accountability and toward much wiser spending of American taxpayers' money."
"USAID and the Corps of Engineers, which has a prime role overseeing repairs to Iraq's oil fields and refineries, have both been criticized for their handling of the initial reconstruction contracts, which were awarded through limited competition or sole-source procedures.
"Yoswa said officials have not yet decided whether to allow limited bidding in the second round of funding to speed reconstruction. He said officials are also considering whether U.S. laws would allow foreign companies to bid on the contracts...." [more]
"ALBUQUERQUE, N.M. — A Canadian man accused of illegally training foreign soldiers testified today that he had no reason to believe sessions with United Arab Emirates soldiers at his Roswell counterterrorism facility involved any classified defence information.
"David Hudak of Vancouver told jurors in his second day of testimony that he had an agreement with his employees, who were devising and conducting the training in June 2002, that they would use classified information. He said he has no military background and that his expertise is in explosives.
"Hudak's trial on 10 federal felony counts entered its fourth week. The U.S. government charges that his company, High Energy Access Tools, or HEAT, trained soldiers from the U.A.E. under a $12.5-million contract without proper State Department licensing and by using U.S. defence information.
"He also is charged with illegally possessing 2,400 warheads at his training centre.
"He faces a mandatory 50 years in prison.
"Hudak testified that HEAT had provided similar training for soldiers from Canada, Singapore and Israel without licensing. U.S. government officials knew about those sessions, and even paid for the Israeli training, without raising the licensing issue, he said.
"Hudak said one HEAT employee with State Department connections had reassured him that the company had proper government approval, adding that the employee told him U.S. officials knew "we're in the good guys' book."..." [more]
By Joshua Chaffin in Washington and Jean Eaglesham and Jonathan Moules in London
"US authorities are moving to overhaul the way in which reconstruction contracts worth billions of dollars are awarded in Iraq, amid persistent criticism that the process has been marred by cronyism and has excluded foreign allies.
"The Coalition Provisional Authority is set to present a new Iraq Infrastructure Reconstruction Office, which will oversee contracts at a meeting for interested bidders in Arlington, Virginia, on November 19.
"The Pentagon promised the IIRO would "emphasise full and open competition in awarding contracts" as it doled out the $18.5bn (£11bn) in reconstruction funding that Congress approved last week as part of President George W. Bush's $87bn supplemental budget request for Iraq and Afghanistan.
"The IIRO is expected to consider granting significant rebuilding contracts to British companies, which have mostly served as subcontractors in Iraq to US companies.
""Due to the number, size and complexity of contracts in the supplemental budget, the CPA identified that it needed one office to focus on the contracting," said an official in the Department of Defence. "It will deal with the selection and prioritisation of reconstruction projects for the CPA."
"The reconstruction process has become a source of embarrassment for the White House since it emerged that a contract valued at up to $7bn to repair Iraq's oilfields was awarded without contest to Halliburton, the oil services company once headed by Vice-President Dick Cheney.
"Non-American companies, particularly in Europe, have complained that they were excluded from bidding on a $680m contract to repair bridges, hospitals and other infrastructure that went to Bechtel, the San Francisco construction group. USAid, which handled the contract, cited federal laws requiring US companies to be given priority since the contract was funded by US taxpayers.
"Meanwhile, a report recently published by the Center for Public Integrity, an independent watchdog group, has claimed that the contracting process has been opaque and haphazard.
"The IIRO, once known as the Programme Management Office, will be headed in Baghdad by retired Rear Admiral David Nash. It is to oversee and co-ordinate the US Agency for International Development, an arm of the State Department, and the Army Corps of Engineers, which have handled the reconstruction contracts...." [more]
"Jane Flasch (Rochester, NY) 11/10/03 - There are reports that some reservists and National Guardsmen stationed in Iraq are going without body armor and being forced to scrounge up food rations and fresh water. US Representative Louise Slaughter held a press conference Monday in Rochester calling on the Bush administration to remedy the situation. She wants to know where the billions of dollars Congress appropriated are going.
"Slaughter said she has heard numerous stories of troops in Iraq with insufficient supplies and inadequate shelter and inferior medical care. She also said that according to a recent survey, nearly half of the National Guardsmen in Iraq described their morale are "low" or "very low."
"Congress recently appropriated $87 billion dollars to rebuild Iraq. Back in the spring, it approved $63 billion. Slaughter said she wants there to be an accounting of where the money is going and has called for Congressional hearings into the matter.
""In no way have we shortchanged anything the Pentagon wanted. The question today is why our troops are not being given the necessities they need," she said.
"Slaughter said she is concerned about whether reservists and National Guardsmen are getting fewer supplies than those in the full time military.
"She said she is also concerned that supplies are being dolled out by a private company called Halliburton, which received the government contract without having to bid for it. Vice president Dick Chaney once worked for the company.
"Army specialist Jeffrey Vasco of Spencerport is stationed 50 miles north of Baghdad where he's been since March. His mom, Cheryl Bazil-Vasco, joined Slaughter at the conference.
"Bazil-Vasco said Jeffrey recently called her and said that his unit has had to do without ammunition and other basic supplies. He asked the family to send food, socks, water purification equipment -- even new boots.
""What do you say when you son calls from half a world away and asks for you to send him new combat boots because his are worn out and new ones will not be forthcoming," she asked.
"Cheryl said her son told her his reserve unit is holding together night vision battery packs with twine...." [more]
"The arrest of two of Russia's top businessmen in recent months was more than a distant headline for Washington's well-connected private equity firm, Carlyle Group.
"Carlyle, known for the glittering roster of former statesmen among its partners and advisers, has ties to both Mikhail Khodorkovsky and Platon Lebedev, the jailed Russian tycoons.
"Khodorkovsky, 40, Russia's richest man and former chief executive of Yukos Oil Co., serves as an adviser to Carlyle's Energy Group. He is among 15 luminaries who help the firm sort through investment opportunities in energy industries, along with former secretary of state James A. Baker III, former British prime minister John Major and Pulitzer-Prize-winning author Daniel Yergin.
"Khodorkovsky was arrested last month by Russian authorities for alleged fraud and tax evasion. Because the billionaire is seen as a possible political rival to President Vladimir Putin, his arrest has unsettled the country's business community and worried foreign investors.
"Carlyle spokesman Christopher W. Ullman declined to comment on the matter.
"Sources close to the firm say Carlyle is taking a cautious look at the business climate in Russia. So far, Carlyle has no investments in Russia, and has not followed through on preliminary discussions about starting a buyout fund with Russian investment company Alfa Group, the sources said.
"Lebedev, chairman of Group Menatep, a holding company that is a major shareholder in Yukos, was arrested in July on fraud charges. Lebedev had served as an adviser to Carlyle's European investment funds, but is no longer listed on the firm's Web site.
"Neither man has played a significant role for Carlyle, the sources said. Carlyle does not disclose its compensation to advisers.
"Meanwhile, the firm has lost the services of its most prominent associate: former president George H.W. Bush, who was senior adviser for Carlyle's Asia funds, retired last month, shortly after serving as the main draw at a dinner in Moscow to woo investors." [emphasis added]
"Carlyle Group, one of the US's largest private equity firms, has embraced the global fixation with mainland China and plans to open an office in Shanghai in the first quarter of 2003.
"Xiang-Dong Yang, managing director of Hong Kong-based Carlyle Asia Investment Advisors, said the firm had already started scouting for investments on the mainland. "Everyone prominent in the business is looking at a few deals, and that includes us," said Mr Yang.
"Another leading Asia-based private equity house said China was a tricky market "from a pricing point of view" but that it nonetheless holds "an undeniable fascination for us all"...." [more]
