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April 13, 2008
Secret Iraqi Deal Shows Problems in Arms Orders
By SOLOMON MOORE
BAGHDAD An $833 million Iraqi arms deal secretly negotiated with Serbia has
underscored Iraq's continuing problems equipping its armed forces, a process
that has long been plagued by corruption and inefficiency.
The deal was struck in September without competitive bidding and it
sidestepped anticorruption safeguards, including the approval of senior
uniformed Iraqi Army officers and an Iraqi contract approval committee.
Instead, it was negotiated by a delegation of 22 high-ranking Iraqi
officials, without the knowledge of American commanders or many senior Iraqi
leaders.
The deal drew enough criticism that Iraqi officials later limited the
purchase to $236 million. And much of that equipment, American commanders
said, turned out to be either shoddy or inappropriate for the military's
mission.
An anatomy of the purchase highlights how the Iraqi Army's administrative
abilities - already hampered by sectarian rifts and corruption - are
woefully underdeveloped, hindering it in procuring weapons and other
essentials in a systematic way. It also shows how an American procurement
process set up to help foreign countries navigate the complexity of buying
weapons was too slow and unwieldy for wartime needs like Iraq's, prompting
the Iraqis to strike out on their own.
Such weaknesses mean that five years after the American invasion, the
170,000-strong Iraqi military remains under-equipped, spottily supplied and
largely reliant on the United States for such basics as communications
equipment, weapons and ammunition, raising fresh questions about the Iraqi
military's ability to stand on its own.
Iraq's defense minister, Abdul Qadir, defended the arms deal, saying he had
followed proper contracting protocols and had informed Prime Minister Nuri
Kamal al-Maliki every step of the way.
Nonetheless, American commanders and some Iraqi officials criticized the
Serbian arms purchase. Closer monitoring of weapons deals has been a
delicate subject since a series of tainted arms purchases totaling $1.3
billion in Iraqi government funds in 2004 and 2005. Lacking electronic
banking systems at the time, Iraqi officials paid for second-rate or
nonexistent weapons and equipment in cash, using middlemen to ferry duffle
bags stuffed with bricks of $100 bills.
That episode brought down the previous defense minister, Hazam Shalan, now a
fugitive, and tarnished the reputation of the interim prime minister, Iyad
Allawi. American and Iraqi officials said that the loss of so much money and
time caused critical delays in the development of the Iraqi Army.
Those with knowledge of the Serbian arms deal said they knew of no specific
crimes, but warned that with so little transparency and such poor oversight,
problems were likely to emerge, as they did with the 2004 deal.
The Serbian deal called for the purchase of a large number of helicopters,
planes, armored personnel carriers, mortar systems, machine guns, body
armor, military uniforms and other equipment. It was largely negotiated by
Mr. Qadir and the planning minister, Ali Glahil Baban. In response to the
criticism, Mr. Qadir said he "froze" purchases of the personnel carriers and
some aircraft, reducing the final contract price to $236 million. The deal
was signed in March, American military officials said.
"We just want to have a mix of procedures for contracts so we can expedite
our acquisition," Mr. Qadir said, adding that "American timelines for
delivery were too far away."
Despite the criticism, some American advisers said the deal was an essential
part of the Iraqi military's learning curve and a test of the American
military's capacity to balance guidance and restraint.
"We can be very overbearing as a nation, and part of this task is a feel for
this task," said Lt. Gen. James M. Dubik, the commander of the Multinational
Security Transition Command and the head of America's security advisory
mission in Iraq. "How do I impose myself enough to keep things going but
back off enough to let development occur? There is an art to this."
Diverging Accounts
American military officials and the Iraqi authorities alike point to the
Pentagon's Foreign Military Sales program as the reason the Serbian arms
deal was pursued in the first place. After that, however, their versions of
events diverge sharply.
Under the sales program, used by more than 100 allied nations, Pentagon
officials serve as intermediaries for government-to-government defense
procurements, handling administrative issues, logistics, delivery,
maintenance and training. Clients sometimes get the benefit of American
economies of scale, American expertise regarding weapons systems and quality
control and built-in transparency and corruption safeguards. Defense
contractors also benefit to some extent, because the program often channels
clients to American companies that produce arms and other equipment.
American officials hoped the program would help Iraq spend more of its own
money on defense. Last year, for the first time, Iraqi military expenditures
of $7.5 billion surpassed the $5.5 billion in American financing for Iraq's
military. But the program is intended for peacetime, and with protocols
spanning hundreds of pages, it is built more for transparency and
standardization than for speed.
Beginning in late 2006, the Iraqi government deposited $2.6 billion in an
account for Foreign Military Sales procurements. But by September 2007, less
than $200 million worth of badly needed equipment had been delivered, and
many of those items were stockpiled because of poor distribution and
accountability systems. And that, the officials pointed out, was during one
of the most violent periods on record.
"The problem with F.M.S. is that it didn't deliver on time," a senior Iraqi
official said, "and this was used by some in government to say, 'Look, this
is deliberate. The U.S. is trying to keep us unarmed so that we'll always be
in need of the Americans.' "
General Dubik, in an interview in his office in the Green Zone,
acknowledged, "There was an issue of credibility in our system."
But there were problems on the Iraqi side as well, American military
officers said. A bureaucracy used to functioning under a command economy
during the reign of Saddam Hussein had little use for formal procurement
protocols and was unaccustomed to such basic practices as writing detailed
specifications.
"I mean literally, the Iraqis had some letters of request that said, 'We
want to buy 1,000 trucks,' " said Joe Benkert, an assistant defense
secretary for global affairs who manages the Foreign Military Sales program.
Some critics, all of them high-ranking Iraqi and American military
officials, made the more serious charge that senior Iraqi officials
intentionally obstructed American-sponsored procurements because they feared
the sales program would prevent them from siphoning off a share of the
money. But they offered no independent corroboration.
"The defense minister is playing games," said an official with Iraq's
Defense Ministry who spoke out because of his concern about corruption, but
also spoke on condition of anonymity for fear of reprisals. "He is stopping
F.M.S.," the official said. "Contracts just sat on his desk waiting for
approval for six or seven months sometimes."
American procurement experts were so mystified by some of the delays that
they set up a new office to track procurements and found that many of the
delays led straight back to Mr. Qadir's desk. Mr. Qadir denied delaying
contracts or making money from them.
After months of delays and an overhaul of the Pentagon procurement
bureaucracy, the program increased the value of its delivered equipment to
$1 billion by this February. But in the absence of a comprehensive
distribution and inventory system in Iraq, much of that equipment remains
locked in Iraqi storehouses, American officials said.
Mr. Qadir, who made headlines during a January visit to the United States,
when he said Iraq could not take full military responsibility for itself
until 2018, blamed the slowness of the Foreign Military Sales program for
his decision to deal directly with Serbia. "Foreign Military Sales is a
system built to provide weapons systems to a national force in a peaceful
time," he said.
A Deal in the Dark
In an interview in February in his office, Mr. Qadir, a Sunni Arab native of
Ramadi, confirmed that the original Serbian deal "exceeded $800 million."
"The thing is, we did not limit ourselves to any fixed number or fixed
price," he said.
But critics say the deal circumvented fragile anticorruption safeguards.
Indeed, at Mr. Qadir's urging Mr. Maliki abolished the national contracts
committee, a mandatory review agency for all government purchases of more
than $50 million.
Mr. Maliki also overrode the nation's Supreme Economic Committee after it
expressed concerns that the Serbian deal lacked guarantees of service from
the Serbian government.
The deal was also supported by Iraq's Office of the Commander in Chief, a
shadowy group of Shiite advisers to Mr. Maliki that American officials
accused last year of leading a purge of Sunni Iraqi Army commanders who had
cracked down on Shiite militia leaders.
The same group, which rejected suggestions that it bring in Western
advisers, has marginalized senior uniformed officers charged with
procurement decisions and kept American officials in the dark about Iraqi
financing of arms deals, according to high-ranking American officials
familiar with its workings.
"It struck me as bizarre," said a Western official with knowledge of the
security ministries, who spoke on condition of anonymity because he did not
want to be seen as criticizing people he was advising. "You can only explain
it in two ways: a desire to avoid oversight and a desire to offer
opportunities for graft and corruption."
A high-ranking Iraqi government official who spoke on condition of
anonymity, for fear of reprisals against him and others in his office, said,
"We have no confidence in the Iraqi contracting process."
"I heard about it out of the blue, that the minister of defense took a
delegation to Serbia and came back and said that he had signed deals with
the Serbian prime minister," the official said. "Why Serbia? Why not
Ukraine? Why not Russia? We just don't know."
American military officials did persuade Mr. Qadir to cancel the $200
million purchase of 30 to 40 French-made Puma helicopters, arguing that they
were unsuited to Iraq's harsh climate. The minister also decided against
buying armored personnel carriers and Gazelle helicopters.
American and Iraqi military officers also questioned the wisdom of
purchasing tens of millions of dollars of nonmilitary crowd control gear -
batons, stun guns and plexiglass shields - usually used by police forces,
and $76 million worth of mortar systems, which are too imprecise to use
against guerrillas. The minister said he still intended to buy the riot
control equipment, to handle crowds of Shiite pilgrims, and mortar systems,
because the insurgents have them.
Critics of the deal also complained that the arms agreement thwarted the
standardization of the Iraqi Army's hodgepodge of war mat
Secret Iraqi Deal Shows Problems in Arms Orders
By SOLOMON MOORE
BAGHDAD An $833 million Iraqi arms deal secretly negotiated with Serbia has
underscored Iraq's continuing problems equipping its armed forces, a process
that has long been plagued by corruption and inefficiency.
The deal was struck in September without competitive bidding and it
sidestepped anticorruption safeguards, including the approval of senior
uniformed Iraqi Army officers and an Iraqi contract approval committee.
Instead, it was negotiated by a delegation of 22 high-ranking Iraqi
officials, without the knowledge of American commanders or many senior Iraqi
leaders.
The deal drew enough criticism that Iraqi officials later limited the
purchase to $236 million. And much of that equipment, American commanders
said, turned out to be either shoddy or inappropriate for the military's
mission.
An anatomy of the purchase highlights how the Iraqi Army's administrative
abilities - already hampered by sectarian rifts and corruption - are
woefully underdeveloped, hindering it in procuring weapons and other
essentials in a systematic way. It also shows how an American procurement
process set up to help foreign countries navigate the complexity of buying
weapons was too slow and unwieldy for wartime needs like Iraq's, prompting
the Iraqis to strike out on their own.
Such weaknesses mean that five years after the American invasion, the
170,000-strong Iraqi military remains under-equipped, spottily supplied and
largely reliant on the United States for such basics as communications
equipment, weapons and ammunition, raising fresh questions about the Iraqi
military's ability to stand on its own.
Iraq's defense minister, Abdul Qadir, defended the arms deal, saying he had
followed proper contracting protocols and had informed Prime Minister Nuri
Kamal al-Maliki every step of the way.
Nonetheless, American commanders and some Iraqi officials criticized the
Serbian arms purchase. Closer monitoring of weapons deals has been a
delicate subject since a series of tainted arms purchases totaling $1.3
billion in Iraqi government funds in 2004 and 2005. Lacking electronic
banking systems at the time, Iraqi officials paid for second-rate or
nonexistent weapons and equipment in cash, using middlemen to ferry duffle
bags stuffed with bricks of $100 bills.
That episode brought down the previous defense minister, Hazam Shalan, now a
fugitive, and tarnished the reputation of the interim prime minister, Iyad
Allawi. American and Iraqi officials said that the loss of so much money and
time caused critical delays in the development of the Iraqi Army.
Those with knowledge of the Serbian arms deal said they knew of no specific
crimes, but warned that with so little transparency and such poor oversight,
problems were likely to emerge, as they did with the 2004 deal.
The Serbian deal called for the purchase of a large number of helicopters,
planes, armored personnel carriers, mortar systems, machine guns, body
armor, military uniforms and other equipment. It was largely negotiated by
Mr. Qadir and the planning minister, Ali Glahil Baban. In response to the
criticism, Mr. Qadir said he "froze" purchases of the personnel carriers and
some aircraft, reducing the final contract price to $236 million. The deal
was signed in March, American military officials said.
"We just want to have a mix of procedures for contracts so we can expedite
our acquisition," Mr. Qadir said, adding that "American timelines for
delivery were too far away."
Despite the criticism, some American advisers said the deal was an essential
part of the Iraqi military's learning curve and a test of the American
military's capacity to balance guidance and restraint.
"We can be very overbearing as a nation, and part of this task is a feel for
this task," said Lt. Gen. James M. Dubik, the commander of the Multinational
Security Transition Command and the head of America's security advisory
mission in Iraq. "How do I impose myself enough to keep things going but
back off enough to let development occur? There is an art to this."
Diverging Accounts
American military officials and the Iraqi authorities alike point to the
Pentagon's Foreign Military Sales program as the reason the Serbian arms
deal was pursued in the first place. After that, however, their versions of
events diverge sharply.
Under the sales program, used by more than 100 allied nations, Pentagon
officials serve as intermediaries for government-to-government defense
procurements, handling administrative issues, logistics, delivery,
maintenance and training. Clients sometimes get the benefit of American
economies of scale, American expertise regarding weapons systems and quality
control and built-in transparency and corruption safeguards. Defense
contractors also benefit to some extent, because the program often channels
clients to American companies that produce arms and other equipment.
American officials hoped the program would help Iraq spend more of its own
money on defense. Last year, for the first time, Iraqi military expenditures
of $7.5 billion surpassed the $5.5 billion in American financing for Iraq's
military. But the program is intended for peacetime, and with protocols
spanning hundreds of pages, it is built more for transparency and
standardization than for speed.
Beginning in late 2006, the Iraqi government deposited $2.6 billion in an
account for Foreign Military Sales procurements. But by September 2007, less
than $200 million worth of badly needed equipment had been delivered, and
many of those items were stockpiled because of poor distribution and
accountability systems. And that, the officials pointed out, was during one
of the most violent periods on record.
"The problem with F.M.S. is that it didn't deliver on time," a senior Iraqi
official said, "and this was used by some in government to say, 'Look, this
is deliberate. The U.S. is trying to keep us unarmed so that we'll always be
in need of the Americans.' "
General Dubik, in an interview in his office in the Green Zone,
acknowledged, "There was an issue of credibility in our system."
But there were problems on the Iraqi side as well, American military
officers said. A bureaucracy used to functioning under a command economy
during the reign of Saddam Hussein had little use for formal procurement
protocols and was unaccustomed to such basic practices as writing detailed
specifications.
"I mean literally, the Iraqis had some letters of request that said, 'We
want to buy 1,000 trucks,' " said Joe Benkert, an assistant defense
secretary for global affairs who manages the Foreign Military Sales program.
Some critics, all of them high-ranking Iraqi and American military
officials, made the more serious charge that senior Iraqi officials
intentionally obstructed American-sponsored procurements because they feared
the sales program would prevent them from siphoning off a share of the
money. But they offered no independent corroboration.
"The defense minister is playing games," said an official with Iraq's
Defense Ministry who spoke out because of his concern about corruption, but
also spoke on condition of anonymity for fear of reprisals. "He is stopping
F.M.S.," the official said. "Contracts just sat on his desk waiting for
approval for six or seven months sometimes."
American procurement experts were so mystified by some of the delays that
they set up a new office to track procurements and found that many of the
delays led straight back to Mr. Qadir's desk. Mr. Qadir denied delaying
contracts or making money from them.
After months of delays and an overhaul of the Pentagon procurement
bureaucracy, the program increased the value of its delivered equipment to
$1 billion by this February. But in the absence of a comprehensive
distribution and inventory system in Iraq, much of that equipment remains
locked in Iraqi storehouses, American officials said.
Mr. Qadir, who made headlines during a January visit to the United States,
when he said Iraq could not take full military responsibility for itself
until 2018, blamed the slowness of the Foreign Military Sales program for
his decision to deal directly with Serbia. "Foreign Military Sales is a
system built to provide weapons systems to a national force in a peaceful
time," he said.
A Deal in the Dark
In an interview in February in his office, Mr. Qadir, a Sunni Arab native of
Ramadi, confirmed that the original Serbian deal "exceeded $800 million."
"The thing is, we did not limit ourselves to any fixed number or fixed
price," he said.
But critics say the deal circumvented fragile anticorruption safeguards.
Indeed, at Mr. Qadir's urging Mr. Maliki abolished the national contracts
committee, a mandatory review agency for all government purchases of more
than $50 million.
Mr. Maliki also overrode the nation's Supreme Economic Committee after it
expressed concerns that the Serbian deal lacked guarantees of service from
the Serbian government.
The deal was also supported by Iraq's Office of the Commander in Chief, a
shadowy group of Shiite advisers to Mr. Maliki that American officials
accused last year of leading a purge of Sunni Iraqi Army commanders who had
cracked down on Shiite militia leaders.
The same group, which rejected suggestions that it bring in Western
advisers, has marginalized senior uniformed officers charged with
procurement decisions and kept American officials in the dark about Iraqi
financing of arms deals, according to high-ranking American officials
familiar with its workings.
"It struck me as bizarre," said a Western official with knowledge of the
security ministries, who spoke on condition of anonymity because he did not
want to be seen as criticizing people he was advising. "You can only explain
it in two ways: a desire to avoid oversight and a desire to offer
opportunities for graft and corruption."
A high-ranking Iraqi government official who spoke on condition of
anonymity, for fear of reprisals against him and others in his office, said,
"We have no confidence in the Iraqi contracting process."
"I heard about it out of the blue, that the minister of defense took a
delegation to Serbia and came back and said that he had signed deals with
the Serbian prime minister," the official said. "Why Serbia? Why not
Ukraine? Why not Russia? We just don't know."
American military officials did persuade Mr. Qadir to cancel the $200
million purchase of 30 to 40 French-made Puma helicopters, arguing that they
were unsuited to Iraq's harsh climate. The minister also decided against
buying armored personnel carriers and Gazelle helicopters.
American and Iraqi military officers also questioned the wisdom of
purchasing tens of millions of dollars of nonmilitary crowd control gear -
batons, stun guns and plexiglass shields - usually used by police forces,
and $76 million worth of mortar systems, which are too imprecise to use
against guerrillas. The minister said he still intended to buy the riot
control equipment, to handle crowds of Shiite pilgrims, and mortar systems,
because the insurgents have them.
Critics of the deal also complained that the arms agreement thwarted the
standardization of the Iraqi Army's hodgepodge of war mat
