Savidge: Protecting Iraq's oil supply

From Martin Savidge
CNN

http://edition.cnn.com/2003/WORLD/meast/03/21/otsc.irq.savidge/

BASRA, Iraq (CNN) --We are with the 1st Battalion, 7th Marines in southern Iraq. Obviously the focus of the effort here is the oil industry, the oil infrastructure. That is considered crucial. Not because of what many people have said, and criticized, that the United States wanted to grab oil. The military leaders say that is not the plan at all.

[The plan] is to get the oil -- which is so valuable to this nation and to so many other nations in the Persian Gulf region -- back into the hands of the Iraqi people. They say it has not been under their control; it has been under Saddam Hussein's control to make him richer.

So there was a very big push into southern Iraq for that purpose. We are at a facility just outside of Basra, which we cannot name because it still could come under attack from Iraqi artillery or Scud missiles. It is estimated that 14 percent of the entire world's oil supply flows through this region.

The Marines were very concerned in the days leading up [to] and planning the assault on this facility that it had been targeted for destruction. In other words, that it may have been booby-trapped or that there had been explosives laid.

There was a great deal of concern that if they did not race and get through with some element of surprise, that the whole thing could have been blown up.

That would have been an economic and ecological disaster. And had it gone up when the Marines were arriving, it could have meant a great loss of life.

The Marines got here in time. It had not been detonated. No Marines were injured or killed in the assault here. There was a brief firefight and about 50 people were taken into custody, including about 20 to 25 who are considered POWs, or prisoners of war.

One officer here said this was pretty much a crown jewel in the opening effort of the Gulf War, because now the revenues that will eventually come from this facility will help rebuild the nation after the war is over.

I should point out that the "shock and awe" in southern Iraq took place last night.

We were up moving into the attack positions with the ground forces as they were preparing to head into southern Iraq. They met some resistance up there at the Kuwaiti-Iraq border. Well, that was quickly resolved. They called in Tomahawk strikes and airstrikes that went on all night long.

There is a lookout there, a hill referred to as Safwan Hill, on the Iraqi side of the border. It was filled with Iraqi intelligence gathering. From that vantage point, they could look out over all of northern Kuwait.

It is now estimated the hill was hit so badly by missiles, artillery and by the Air Force, that they shaved a couple of feet off it. And anything that was up there that was left after all the explosions was then hit with napalm. And that pretty much put an end to any Iraqi operations up on that hill.

Then this morning they airlifted in U.S. military forces that now hold that vantage point. So, all last night there was an intense artillery, air and missile bombardment throughout the southern part of Iraq. And that is what paved the way for the ground forces to begin pushing in.

One of the interesting things to note that we saw as we came across the border and began moving into southern Iraq was the precision of those attacks.

You would find artillery pieces blown up. You would find tanks that were shattered. You would find armored personnel carriers that were destroyed and still burning at the side of the road.

You did not see, though, major buildings that had been damaged. You did not see damaged homes or any sign of collateral damage.

That may have happened, but there was not an overwhelming indication of that, which is remarkable given the light show we saw from the vantage point we had from the border.

EDITOR'S NOTE:This report was written in accordance with Pentagon ground rules allowing so-called embedded reporting, in which journalists join deployed troops. Among the rules accepted by all participating news organizations is an agreement not to disclose sensitive operational details.

Barely a month before the US-led Coalition Provisional Authority ended its rule over occupied Iraq, a little-known committee charged with approving the authority's spending met for the penultimate time in one of Saddam Hussein's Baghdad palaces.

By the time the meeting of the so-called Program Review Board broke up a few hours later, some $2bn had been approved for disbursement - part of what one US official describes as a last-minute "spending binge" by the provisional authority before it handed power to an Iraqi interim government.

The money was not from US taxpayers. It came out of Iraqi funds - the proceeds of Iraqi oil sales, government bank accounts frozen since the 1991 Gulf War and funds left over from the UN-administered "oil-for-food" programme that managed Iraqi oil sales before the US invasion.

From the same Iraqi funds the provisional authority, in the final two months of its existence, sent nearly $1.8bn in cash to the Kurdish regional government, over and above its regular financing to the region. The Kurds have refused to provide UN-mandated auditors with access to their records but have insisted they have not spent any of it. A spokesman for the Kurdish regional government said the payment was part of $4.5bn in funds it claims the UN owed the region as part of the now defunct oil-for-food programme. Behind the scenes, however, the Kurds have been in talks with several international banks to ship part of that money to Switzerland, guided by a Washington lobbying firm with close ties to the US Republican party.

No one has accused any of these parties of acting improperly. But the lack of transparency is fuelling questions over the payment to the Kurds, as well as dozens of others totalling billions of dollars made from Iraqi oil revenues during the CPA's rule.

Altogether, the CPA spent, or made commitments to spend, nearly $20bn in Iraqi money - a sum greater than the annual gross domestic product of Iraq. Evidence suggests the money was spent in a chaotic and haphazard way and that occupation officials routinely violated CPA procedures.

Next week a UN audit panel is set to give its verdict on how Iraq's money was spent. The CPA's inspector general is also finalising a report that is expected to be sharply critical of the stewardship of Iraqi funds.

Auditors have found that the lack of controls left funds open to fraud, loss or theft. Hundreds of millions of dollars in Iraqi oil revenues may also have been squandered. The office of the CPA inspector-general is investigating at least 27 cases of alleged corruption by CPA officials. A person with knowledge of the investigations says there is evidence of fraud and abuse.

Paul Bremer, the former administrator of Iraq, did not respond to several interview requests. But before Mr Bremer left Baghdad at the end of June the CPA said, in written answers, that the Iraqi funds had been "expended in the interests of the Iraqi people" and in a transparent manner - conditions set by the UN when it authorised the provisional authority to spend Iraqi oil revenues.

Those contentions are being questioned by auditors and others. "I don't think we sustained our obligations," said one US official. "We just threw the money over the fence."

In its reconstruction of Iraq the CPA had two main sources of money to draw on. The first was an $18.4bn allocation from the US Congress. The second was the Development Fund for Iraq (DFI), an account set up under UN resolution 1483 that concentrated billions of dollars in Iraqi assets dispersed worldwide. Also at the Americans' disposal were millions of dollars worth of cash, rugs, jewels and other loot seized by US soldiers from Baathist properties.

By the time it was dissolved on June 28 the CPA had spent or committed virtually all the funds that had passed through the development fund. By contrast, the authority had spent just $366m of the US funds on reconstruction, and earmarked around $5bn for projects. (The total amount spent has since risen to about $1.2bn.)

Part of the reason for the disparity is that the US funds were difficult to spend. Rules designed to ensure that money was not wasted or misused slowed the signing of contracts. CPA officials including Mr Bremer also complained that the Pentagon had taken control of US reconstruction funds and was reluctant to let them spend the money.

By contrast, the development fund was readily available for spending and could be controlled fro m Baghdad. Those charged with meeting Iraq's massive and urgent needs felt they had no option but to start spending freely from the Iraqi account.

"One of the advantages of the Iraqi accounts was that money could be delivered faster," says Walt Slocombe, the CPA's special adviser on security and defence until November 2003. "Bremer took the position under legal advice that he was in charge of the money - that he could spend it without rattling what he affectionately called 'the Washington squirrel cage'."

To handle the growing number of requests for funding from the Iraqi account the CPA established the Program Review Board. The review board was designed to ensure that spending was transparent and in the interests of the Iraqi people, as stipulated by the UN resolutions.

In the chaotic early days of the occupation, however, the review board often failed to observe its own rules. Meetings often failed to attract the eight voting members required to approve a project, but projects were often approved regardless. In other cases approval for projects was given outside formal meetings and not reflected in official minutes. An Iraqi representative was meant to sit in on meetings but turned up to just two of the 43 board meetings held in 2003.

By the standards applied to US money, projects funded with Iraqi money received cursory examination. According to figures from the Open Society Institute, funded by George Soros, the financier, 73 per cent of all contracts worth more than $5m were not competitively bid. "In 2003, [the review board] was a rubber stamp," says a US official.

Initially the review board's members approved relatively small projects relating to the country's day-to-day running in the aftermath of war: getting back-up generators, restoring oil pipelines and outfitting and training Iraqi police. Other projects appeared less urgent: $3,500 was set aside to pay actors, stagehands and producers at a Baghdad Theatre Festival.

As time went on, more and bigger projects came before the review board. Because of the delays in getting US money some multi-billion dollar projects were also being funded with Iraqi money. This was the case in a $1.4bn project to rebuild Iraq's oil infrastructure, granted to Halliburton, the US oil services company formerly headed by Dick Cheney, the US vice president, without competitive tender. The contract made Halliburton the largest single recipient of Iraqi funds.

"I know I spent some money from [the development fund] on it," says retired Rear Admiral David Oliver, the former chief financial officer for the CPA. "It purely was the matter that we'd run out of US money."

So many requests were made for changes to the sources of financing that, in January 2004, the review board's members wrote to Mr Bremer voicing their concern. The Iraqi finance minister objected that the UN-stipulated criteria were not being met.

The $2bn in projects approved by the board during its meeting on May 15 often replicated funds already assigned by the US Congress. The amount of Iraqi funds to be spent on security in the run-up to the handover of power was increased to $1bn, even though the US Congress had already assigned $3.2bn for that purpose. Similarly, the board assigned $315m in Iraqi funds to the electricity sector when the US Congress had already assigned $5.5bn to its reconstruction.

The minutes of the review board's final session two weeks later reflect deep unease among some members of the panel about the pace of spending. With Iraqi funds nearly depleted Yusaf Samiullah, the UK representative, urged the board to consider only proposals that were urgent or a matter of national security. He was overruled. However the board did overrule Mr Bremer's proposal that $10m be set aside for a museum to remember Saddam Hussein's victims.

It was not just the review board that had stepped up its spending. In June 2004, the CPA sent nearly $1.8bn in development fund money to the Iraqi ministries, more than double the monthly average that year. The CPA said the unusually large transfer would help to cover obligations following the transfer of authority. Just in case, it also set aside $800m from Iraqi funds to cover contracts after CPA officials had gone home.

Several audit panels were established shortly after the US invasion to oversee its spending of the Iraqi funds. But many billions of dollars were spent before they were up and running.

UN resolution 1483 established the International Advisory and Monitoring Panel (IAMB), made up of representatives from the International Monetary Fund, the World Bank, the UN and the Arab Development Fund. But disagreements with the US over the panel's remit meant its chosen auditors, from accounting firm KPMG, did not start work in Iraq until a year later.

The CPA, for its part, named Stuart Bowen as its inspector-general. But he did not arrive in Iraq until February 2004, nine months after the authority began spending Iraqi funds.

With both sets of auditors now having managed to produce several reports, the picture that emerges is that inexperienced and overwhelmed CPA staff struggled to keep track of billions of dollars in spending.

Accounting systems were improvised and inadequate, both sets of auditors have found, leaving Iraqi funds open to fraud and abuse. Though neither set of auditors has yet concluded that any money is missing, they have found many troubling anomalies that are being investigated.

"There's a couple of cases where we were told that the CPA has the suspicion that one of their guys was taking money and they're doing their own investigation," says an IAMB official.

In the case of one $2.6m payment authorised by the CPA's senior adviser to the Ministry of Oil, IAMB auditors were unable to find a contract, evidence of tender procedures or evidence of any services rendered. In another case, a contract was entered into in spite of objections from the Iraqi representative to the review board. The contract was wrongly signed by a CPA senior adviser, and an advance payment of $3m made "without justification", the IAMB auditors said. "The contract was later cancelled and the adviser subsequently left the CPA," the IAMB report noted.

With multiple investigations probing allegations of corruption in the UN's oil-for-food programme during the last years of Saddam's regime, the IAMB has been reluctant to discuss with the US the touchy issue of its spending of Iraqi funds. But its audit reports obliquely refer to a series of incidents that raise questions about the conduct of some White House appointees in Iraq.

Many relate to the use of Iraqi funds by the health ministry - headed at the time by James Haveman, a CPA senior adviser appointed to the post by President George W. Bush. Mr Haveman - who was praised for having done a "superb job" by Donald Rumsfeld, the US defence secretary - appears, from the auditors' report, personally to have controlled hundreds of millions of dollars in Iraqi cash, granting contracts on his own authority, circumventing procurement rules and failing to keep adequate records.

Auditors found that Mr Haveman controlled the bank account that held the ministry's cash - nearly $5m at the time of the handover. The ministry's records wrongly recorded the asset as an expense. They also found that cheques were made out personally to Mr Haveman, instead of contractors.

Records of transfers made between the development fund and health ministry were out by $610,000; the ministry's trial balance was out by $1.3m. In three cases, contracts granted by the ministry were not publicly tendered. Millions of dollars in contracts were supported only by a letter from Mr Haveman. The ministry refused to explain the accounting discrepancies or provide auditors with any tender documents.

Mr Haveman declined to be interviewed about the discrepancies detailed by the auditors. He cast doubt on the quality of KPMG's audit report, saying in an e-mail that "to comment would give credence to it". He added: "We had a clear separation between myself and the funds expended and this was done as a matter of policy and integrity."

Many of those who worked with Mr Haveman expressed their admiration for his work, as well as scepticism that he would have sought to benefit from the large amounts of cash apparently passing through his hands. Auditors said it was likely that he and other CPA officials had "cut corners" and ignored regulations in an effort to get quick results.

The CPA's Mr Bowen has been even more critical of the way Iraqi money was handled. Iraq had no functioning banking system, so making local payments meant moving convoys of cash around the country. Hundreds of millions of dollars in cash was kept in a vault in a Baghdad palace. However investigators working for the inspector-general watched in surprise as a CPA official left the open vault unattended. When locked, the key was placed in an unsecured backpack.

The CPA did not keep a proper inventory of valuables seized by US soldiers from former regime officials, the inspector-general found, so it was unable to "ensure that non-cash assets would be available for the use and benefit of the Iraqi people". Mr Bowen also found that the CPA did not issue any standard operating procedures or develop an effective system to monitor or review contracts.

Files were often missing or incomplete, hindering the CPA's ability to "demonstrate the transparency required of . . . contracts using DFI funds", concluded Mr Bowen, a former lawyer for Mr Bush.

Charles Krohn, a former aide to David Nash, the retired US Navy admiral who was running the US reconstruction effort in Iraq, says: "When I was there, there was a general concern about the nature of the contracts to Halliburton and so on . The thought was that these were not tightly-constructed contractual devices and that the oversight wasn't really what it could be."

Under its own rules the CPA was required to hire an independent auditing firm to assist in the accounting of the Iraqi fund. But the firm appointed, at a cost of $1.4m, was not a certified public accountant but rather a consulting firm. It never carried out the job.

Those charged with the difficult and dangerous task of overseeing Iraq's reconstruction make no apologies for the way they spent Iraqi oil revenues. They say any accounting discrepancies must be seen in the context of the scale and urgency of the task they faced.

"The whole place was at a standstill - it was dying on its feet," says Sir Jeremy Greenstock, former UK special representative to Iraq. "Of course, from the point [of view] of democratic, and particularly American, accounting procedures, there were corners cut," he says. "They were cut in the interests of getting the Iraqi economy jump-started again."

With just 1,200 people working in dangerous conditions it was unrealistic to expect the CPA to uphold the standards of a fully-fledged civil service, Sir Jeremy says.

Others say the inspector-general and IAMB were inappropriately applying US contracting standards to the Iraqi system. "I, candidly, was not interested in having an army of auditors because I thought you had to slide into the Iraqi system as quickly as possible in order encourage them to take responsibility," says Mr Oliver.

In its written answers before its dissolution the CPA strongly denied breaching the UN resolutions governing how Iraqi funds could be spent. "Great care was taken to put in place management processes to ensure DFI funds were expended pursuant to the standards contained in [the resolutions] . . . The standards established by CPA will stand up to outside scrutiny," it predicted in June.

Additional reporting by Stephen Fidler and Demetri Sevastopulo

You reported (“Polish hostage held in Iraq is released unharmed”, 21 November) the Foreign Secretary’s response to our study published in The Lancet of civilian deaths in Iraq. It is heartening that Jack Straw has addressed the topic in such detail. However, his response includes an apparent misreading of our results. Our study found that violence was widespread and up 58-fold after the Invasion that from 32 of the neighbourhoods we visited we estimated 98,000 excess deaths; and that from the sample of the most war-torn communities represented by 30 households in Fallujah more people had probably died than in all of the rest of the country combined. Fallujah is the only insight into those cities experiencing extreme violence (ie Ramadi, Tallafar, Fallujah, Najaf); all the others were passed over in our sample by random chance. If the Fallujah cluster is representative, there were about 200,000 excess deaths above the 98,000.  

Perhaps Fallujah is so unique that it represents only Fallujah, implying that it represents only 50-70,000 additional deaths. There is a tiny chance that the neighbourhood we visited in Fallujah was worse than the average experience, and only corresponds with a couple of tens of thousands of deaths. We also explain why, given study limitations, our estimate is likely to be low Therefore, when taken in total, we concluded that the civilian death toll was at least around 100,000 and probably higher, not between 8,000 and 194,000 as Mr Straw states. While far higher than the Iraq ministry of health surveillance estimates, on 17 August the minister himself described surveillance in Iraq as geographically incomplete, insensitive and missing most health events. We, the occupying nations, should aspire to acknowledge the dignity of every life lost, and to monitor trends and causes of deaths to better serve the Iraqis, and in doing so, sooner end this deadly occupation.

Centre for International Emergency, Disaster and Refugee Studies

Tucked away in the Iraqi appropriation was $3 billion for a new paramilitary unit.
Vietnam similarities?

Robert Dreyfuss
January 1, 2004

With the 2004 electoral clock ticking amid growing public concern about U.S. casualties and chaos in Iraq, the Bush administration’s hawks are upping the ante militarily. To those familiar with the CIA’s Phoenix assassination program in Vietnam, Latin America’s death squads or Israel’s official policy of targeted murders of Palestinian activists, the results are likely to look chillingly familiar.

The Prospect has learned that part of a secret $3 billion in new funds—tucked away in the $87 billion Iraq appropriation that Congress approved in early November—will go toward the creation of a paramilitary unit manned by militiamen associated with former Iraqi exile groups. Experts say it could lead to a wave of extrajudicial killings, not only of armed rebels but of nationalists, other opponents of the U.S. occupation and thousands of civilian Baathists—up to 120,000 of the estimated 2.5 million former Baath Party members in Iraq.

“They’re clearly cooking up joint teams to do Phoenix-like things, like they did in Vietnam,” says Vincent Cannistraro, former CIA chief of counter terrorism. Ironically, he says, the U.S. forces in Iraq are working with key members of Saddam Hussein’s now-defunct intelligence agency to set the program in motion. “They’re setting up little teams of Seals and Special Forces with teams of Iraqis, working with people who were former senior Iraqi intelligence people, to do these things,” Cannistraro says.

The plan is part of a last-ditch effort to win the war before time runs out politically. Driving the effort are U.S. neoconservatives and their allies in the Pentagon and Vice President Dick Cheney’s office, who are clearly worried about America’s inability to put down the Iraqi insurgency with time to spare before November. They are concerned that President Bush’s political advisers will overrule the national-security team and persuade the president to pull the plug on Iraq. So, going for broke, they’ve decided to launch an intensified military effort combined with a radical new counterinsurgency program.

The hidden $3 billion will fund covert (“black”) operations disguised as an Air Force classified program. According to John Pike, an expert on classified military budgets at www.globalsecurity.org, the cash, spread over three years, is likely being funneled directly to the CIA, boosting that agency’s estimated $4 billion a year budget by fully 25 percent. Operations in Iraq will get the bulk of it, with some money going to Afghanistan. The number of CIA officers in Iraq, now 275, will increase significantly, supplemented by large numbers of the U.S. military’s elite counterinsurgency forces. A chunk of those secret funds, according to Mel Goodman, a former CIA analyst, will to go to restive tribal sheikhs, especially in Sunni-dominated central Iraq. “I assume there are CIA people going around with bags of cash,” says Goodman.

But the bulk of the covert money will support U.S. efforts to create a lethal, and revenge-minded, Iraqi security force. “The big money would be for standing up an Iraqi secret police to liquidate the resistance,” says Pike. “And it has to be politically loyal to the United States.”

Unable to quell the resistance to the U.S. occupation, the Pentagon is revamping its intelligence and special-operations task force in Iraq, a classified unit commanded by an Air Force brigadier general. It’s also pouring money into the creation of an Iraqi secret police staffed mainly by gunmen associated with members of the puppet Iraqi Governing Council. Those militiamen are linked to Ahmad Chalabi’s Iraqi National Congress (inc), the Kurdish peshmerga (“facing death”) forces and Shiite paramilitary units, especially those of the Iran-backed Supreme Council for Islamic Revolution in Iraq. Technically illegal, these armed forces have been tolerated, even encouraged, by the Pentagon. Some of these militias openly patrol Baghdad and other cities, and in the south of Iraq, scores of Islamic-oriented paramilitary parties, with names like Revenge of God, are mobilized.

Because the militiamen who will make up the paramilitary force are largely from former Iraqi exile political groups, many have personal scores to settle. They will be armed with detailed lists, seized from government files, of Iraqi Baathists. Sporadic but persistent revenge killings against Hussein loyalists have already plagued Iraq. In Baghdad, Basra, and scores of smaller cities and towns, hundreds of former Iraqi officials and members of the Arab Baath Socialist Party have been gunned down, and the murderers have not been arrested or, in most cases, even pursued. Virtually signaling open season on ex-Baathists, Maj. Ian Poole, spokesman for the British forces controlling Basra, told The New York Times: “The fact is, these are former Baath Party officials. That makes it hard to protect them.”

Chalabi’s INC is promising to use its own intelligence teams to act forcefully against opponents of the United States. Chalabi, the darling of U.S. neoconservatives and the Pentagon’s choice to be Iraq’s first prime minister, is leading the charge for the “de-Baathification” of Iraq. When elements of the U.S. Army in Iraq seek to enlist the support of mid- and low-level Baath officials in trying to put a national bureaucracy back into place, Chalabi objects, often clashing with U.S. Army officers overseeing civil affairs.

Echoing Chalabi are various U.S. hawks and neo cons. “The Kurds and the Iraqi National Congress have excellent intelligence operations that we should allow them to exploit,” read a Wall Street Journal editorial. “Especially to conduct counterinsurgency in the Sunni Triangle.” More explicitly citing similar U.S. operations during the Vietnam War were Tom Donnelly, resident fellow at the American Enterprise Institute (AEI), and Gary Schmitt, executive director of the Project for a New American Century. Schmitt wrote a paper calling for a counterinsurgency effort modeled on the so-called COORDS program in Vietnam, an umbrella effort that included the notorious Phoenix assassinations. And, over lunch at a Washington eatery, I asked a neoconservative strategist how to deal with Iraq. “It’s time for ‘no more Mr. Nice Guy,’” he said. “All those people shouting, ‘Down with America!’ and dancing in the street when Americans are attacked? We have to kill them.”

The U.S. occupation of Iraq is beginning to resemble Vietnam in more ways than one. American forces under attack are reportedly responding with indiscriminate fire, often killing combatants and innocents alike. Body counts are disputed, including one prominent instance in Samarra when U.S. forces claimed 54 Iraqi rebels killed but angry townspeople said that the dead numbered less than a dozen (and included women and children). Houses of suspected insurgents are being blown up. The wife and child of Izzat Ibrahim, a fugitive Iraqi official thought to be coordinating the insurgency, were seized and held hostage. The entire village of Auja, Hussein’s hometown near Tikrit, was surrounded by barbed wire and turned into a strategic hamlet, with ID cards issued by U.S. forces needed to enter and exit it.

In early November, the Pentagon civilians ordered the U.S. military in Iraq to launch a heavily armed offensive against suspected strongholds of the resistance, using fighter bombers, laser-guided missiles, gunships and helicopters against targets of questionable importance, such as empty factories and warehouses. “It’s an absolutely insane strategy,” says Bob Boorstin, who oversees national-security policy for the Center for American Progress, a liberal think tank.

Until the offensive was launched, U.S. Army officers had been attempting, with uneven success, to rally local populations and adopt a hearts-and-minds approach. But in accordance with the neo cons’ policy of no more Mr. Nice Guy, the Pentagon ordered the aggressive new stance that took shape as Operation Ivy Cyclone and Operation Iron Hammer. “I was astounded by the warmth and fuzziness of our generals,” says Danielle Pletka, AEI vice president for foreign- and defense-policy studies, who just returned from a visit to Iraq. “Well, they got orders: ‘You need to fight, and fight hard.’ And it suddenly dawned on them that these were bad people, and maybe we need to go out and whomp the crap out of them.”

Yet “whomping” is hardly a strategy, and in Iraq the United States is clearly flailing, with a trial-and-error approach that seems haphazard and rudderless. Underlying the neocons’ worry is a nagging concern that Bush, who sided with the neo cons by launching the global war on terrorism and by going into Iraq, could abandon them for some form of cut-and-run strategy in order to protect his re-election efforts. Some say openly that the White House is “going wobbly,” while others, like the AEI’s Donnelly, believe in Bush’s steadfastness but admit to having second thoughts. “For a neocon like me, having a member of the Bush family carrying the banner is a bit unnerving,” says Donnelly, wryly.

But Boorstin, and many others in Washington, believe that Karl Rove, the White House’s political guru, is losing patience with the bungled situation in Iraq. “I have no doubt that Karl Rove is ready to cut and run,” says Boorstin. That sentiment is virtually seconded by Pletka, who maintains close contact with White House and Pentagon officials. “Some of the people around the president do want to cut and run,” she says, “but not his foreign-policy advisers.”

The latest offensives, combined with the counterinsurgency efforts, seem partly aimed at convincing Rove that there’s no choice but to continue to gamble that the Iraqi venture will pay off. “This is an unusual president,” says Richard Perle, an AEI fellow, member of the Defense Policy Board and perhaps the chief architect of U.S. Iraq policy. “He risked his presidency to do this in Iraq.” But Perle is worried that politics could trump policy. “I hope it doesn’t become a political issue, because that would encourage all of those who want us to fail, all of those arrayed against us,” he says. “If we were to retreat, I shudder to think of the wave of terrorism it would unleash.

Copyright © 2004 by The American Prospect, Inc. Preferred Citation: Robert Dreyfuss, “Phoenix Rising,” The American Prospect vol. 15 no. 1, January 1, 2004.

The huge sums in cash were paid out with little or no supervision and often without any paperwork, the reconstruction spending audit found. The report found problems with almost 2000 contracts worth $US88.1 million.

Others had a similar reaction. "It does not surprise me at all," said a Defense Department official who worked in Hilla and other parts of the country, who spoke anonymously because he said he feared retribution from the Bush administration. He predicted that similar problems would turn up in the major southern city of Basra and elsewhere in the dangerous desert wasteland of Anbar province. "It's a disaster," the official said of problems with contracting in Anbar.