New York Times
April 13, 2008
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 matériel, which includes firearms from the United States, China, the Balkans, Pakistan and Russia; 150 types of land vehicles; and a United Nations panoply of aircraft.