William Fisher

NEW YORK, Dec 22 2005 (IPS) — After a thousand days of widely acknowledged failure in the job of rebuilding Iraq, the U.S. Department of Defence has been quietly relieved of that responsibility, with the State Department taking over as Washington’s lead reconstruction agency and coordinating the work of all other government departments.

While supporters of the policies of President George W. Bush dismiss the change as an administrative adjustment, others suggest it is symbolic of a decades-old turf battle between the two departments, and the administration’s increasing frustration with the reconstruction performance of the Pentagon and its contractors.

They also point to the switch as an example of how the president goes about making policy changes in Iraq – exhorting the public to “stay the course” while changing it without fanfare.

Steven Aftergood, who heads the Project on Government Secrecy for the Federation of American Scientists, told IPS, “It’s a belated recognition that existing policy on reconstruction and stabilisation has been woefully inadequate.”

The switch was made through a little-noticed Dec. 7 Presidential National Security Directive. Its objective is “to promote the security of the United States through improved coordination, planning, and implementation for reconstruction and stabilisation assistance for foreign states and regions at risk of, in, or in transition from conflict or civil strife”.

The directive says, “The Secretary of State shall coordinate and lead integrated United States Government efforts, coordinating these efforts with the Secretary of Defence to ensure harmonisation with any planned or ongoing U.S. military operations across the spectrum of conflict.”

It explains that to maximise the effectiveness of U.S. rebuilding efforts, “a focal point is needed (i) to coordinate and strengthen efforts of the United States Government to prepare, plan for, and conduct reconstruction and stabilisation assistance and related activities in a range of situations that require the response capabilities of multiple United States Government entities and (ii) to harmonise such efforts with U.S. military plans and operations”.

To achieve the objectives of the directive, the secretary of state will appoint a coordinator for reconstruction and stabilisation with wide-ranging responsibilities.

While reconstruction efforts in Iraq and Afghanistan have been made far more difficult by security concerns, they have also been plagued by massive corruption, overcharging by many U.S. contractors, lack of transparency and accountability in the contracting process, and confusion about lines of responsibility among U.S. government agencies, and between the U.S. and Iraqi governments.

The State Department has now been tasked to “resolve relevant policy, programme, and funding disputes among United States government departments and agencies with respect to U.S. foreign assistance and foreign economic cooperation, related to reconstruction and stabilisation…”

The Bush directive, which is global in scope and not limited to Iraq and Afghanistan, also established a Policy Coordination Committee (PCC) for Reconstruction and Stabilisation Operations. The PCC will be chaired by the Coordinator for Reconstruction and Stabilisation and a member of the National Security Council (NSC) staff.

The State Department will lead U.Sg Government efforts to prevent countries at risk “from being used as a base of operations or safe haven for extremists, terrorists, organized crime groups, or others who pose a threat to U.S. foreign policy, security, or economic interests”.

Problems with contractors and with financial management in general have dogged the Defence Department for many years. The agency’s contracting procedures have been widely condemned and, in one much-publicised case, the department’s most senior contracting official received a prison term for conflicts of interest and other offences involving the Boeing Corporation, one of the largest military contractors.

Other Pentagon contractors have also proved problematic – in particular, the Halliburton Company has been accused of substantial over-charges on many of its no-bid contracts and has become the poster child for a broken system.

Government accountants have never been able complete a satisfactory audit of Pentagon expenditures.

Most recently, the Government Accountability Office (GAO) revealed that Defence Department contractors have received eight billion dollars over five years in bonuses on weapons programmes that were often plagued by significant cost overruns, performance problems and delays.

The GAO, an independent auditor for Congress, reviewed 93 of 597 military contracts in force between 1999 and 2004 that included the possibility of a bonus. Contractors on average were awarded about 90 percent of the bonus money available, the agency said.

For example, Lockheed Martin and Boeing received 1.7 billion dollars, or about 91 percent of 1.847 billion dollars available on four major programmes, including the Joint Strike Fighter, even as these programmes “experienced significant cost increases, technical problems and development delays”, the GAO said.

The GAO report also cited the Boeing-United Technologies RAH-66 Comanche helicopter, canceled in April 2004, and two other Lockheed programmes: the F/A-22 fighter and a satellite system to detect enemy missile launches.

Bonuses paid on these troubled programmes ranged from 74 percent to 100 percent of the potential award, the agency said.

“These practices undermine the effectiveness of fees as a motivational tool and marginalise their use in holding contractors accountable,” the audit agency said. “They also serve to waste taxpayer funds.”