The U.S. occupation of Iraq officially ended on June 28, 2004, in a secret ceremony in Baghdad. Officially, “full sovereignty” was handed from the Americans to the Iraqi Interim Government. But it was clear from the start that this was sovereignty in name, not in deed. First, there is the continued military occupation: 138,000 U.S. soldiers and Marines, plus 20,000 troops from other countries, all fully under U.S. control and with immunity from Iraqi laws. Then there is the continued political and economic occupation by the Bush Administration and its corporate allies.

Ultimately, and obviously, the Bush Administration’s interests in Iraq have nothing to do with Iraq’s long-term stability nor its economic, social or political health. The Bush Administration wants first to regain what the U.S. had originally with Hussein – a political regime that, while deadly to its people and its neighbors, was willing to do much of the U.S.’s bidding. In addition, the Bush Administration wants what it never truly had even with Hussein – full corporate access, not just to oil, but to all of the nations resources and wealth. This access would in turn be used to leverage equal access to the entire region. Sadly, the Bush Administration is well on its way to achieving these goals.

Economic and Political Occupation

The most important tools being used by the Administration to maintain varying degrees of economic and political control in Iraq are the 100 Orders enacted by L. Paul Bremer, III, head of the now defunct Coalition Provisional Authority (CPA). To retain control after the “hand-over,” the Bush Administration hand-picked the man who would take control of the Orders – the Prime Minister of Iraq – and many of the people who would implement them – the employees of Iraq’s government Ministries.

Thus, according to Lakhdar Brahimi, the UN special envoy for Iraq’s elections, the Prime Minister of Iraq, Iyad Allawi, “was the Americans choice.” Paul Bremer delayed the appointment of the Prime Minister not once but twice in order to ensure that the U.S. candidate was named. Brahimi said that the Iraqi Governing Council was “informed” of the final selection only after the fact, while press reports say the same of Brahimi.

Iyad Allawi is a thirty-year exile of Iraq with long-standing ties to both the CIA and the British Intelligence Service. The CIA supported his party, the Iraqi National Accord, and he partnered with the CIA on a failed coup attempt against Hussein in 1996. In addition to Allawi, many of those named to head Iraq’s Ministries are exiles with ties to the CIA, the U.S. government, and/or former members of the U.S.-appointed Iraqi Governing Council.

The (New and Improved) Bremer Orders

The Bremer Orders control every aspect of Iraqi life – from the use of car horns to the privatization of state-owned enterprises. It was thought that the “end” of the occupation would also mean the end of the Orders. Instead, in his final Order enacted on June 28, 2004, Bremer simply transferred authority for the Orders over to Allawi – America’s new man in charge of Iraq.

Bremer also ensured their implementation by stacking every Ministry with U.S.-appointed authorities with five-year terms – well into the period of the “elected” government which is to take place by the end of this year.

The fact that most of the Orders are illegal has not impacted their implementation in the slightest. They directly violate the international convention governing the behavior of occupying forces, the Hague regulations of 1907 (the companion to the 1949 Geneva conventions, both ratified by the United States), as well as the U.S. Army’s Law of Land Warfare. Article 43 of the Hague Regulations requires that an occupying power “re-establish and insure, as far as possible, public order and safety, while respecting, unless absolutely prevented, the laws in force in the country.” Indeed, in a leaked memo written on March 26, 2003, the British attorney general, Lord Goldsmith, warned Tony Blair that “the imposition of major structural economic reforms would not be authorized by international law.”

The Bremer Orders clearly alter key elements of the Iraqi constitution and long-standing laws in fundamental ways. Now, it appears that those Orders will live on.

The Orders are exercised pursuant to the Iraqi interim constitution, the Transitional Administration Law (TAL). The Annex to the TAL states that the Orders can only be overturned with the approval of the President, the two Vice Presidents and a majority of the Ministers.

The Annex also denies the interim government the ability to take “any actions affecting Iraq’s destiny beyond the limited interim period” which ends with the election of an Iraqi government “by 31 December 2005, but no later than January 2005.” The identical sentence appears in UN Security Council Resolution 1546 which outlines Iraq’s transition to “sovereignty.” Thus, while Allawi may succeed in overturning a few less far-reaching Orders if for no other reason than to demonstrate his independence from the Americans, it is beyond his authority to change any fundamental laws.

And, as Bremer said about the Orders, “You set up these things and they begin to develop a certain life and momentum on their own—and its harder to reverse course.”

Even more telling may be the words of Sinan Shabibi, governor of Iraq’s central bank, when he told an investors services roundtable in Washington, DC that the international financial community need not fear that Bremer’s radical changes to Iraq’s banking laws would be abolished after the hand-over because, “It is unreasonable to enact an economic strategy and then abolish it within two month.” He wasn’t lying. Of the dozens of changes made to the Orders by Bremer before his departure, Order #40: the Bank Law, and Order #56: the Central Bank Law, were two of the only ones left completely untouched.

As I detailed in the February/March issue of LeftTurn, the Bremer Orders do no less then “transition [Iraq] from a … centrally planned economy to a market economy” by U.S. fiat – to quote Order #39 on Foreign Investment. See this article for a detailed account of how the Orders implement a corporate globalization agenda on Iraq that now appears to be locked-in for the foreseeable future. Bremer described it this way when he boasted to the Boston Globe about how proud he was that the CPA had successfully designed “an open economy, with free trade, low taxes, and liberal foreign investment laws.”

Since I wrote that article, Bremer has gone even further, enacting new Orders that grant greater and longer-lasting corporate access and political control. Here is just a key sampling. All of the Orders can be read on the CPA website: www.cpa-Iraq.org.

Full Immunity for Contractors

Order #17, enacted just one day before Bremer hopped on a plane to start a U.S. media blitz promoting his forthcoming book, has received significant public attention for the full immunity it grants the coalition military forces operating in Iraq. Virtually ignored is that this same immunity applies to U.S. and all other foreign contractors as well.

The Order gives contractors, including private security firms, full immunity from Iraqi legal processes. They are not subject to Iraqi laws or regulations relating to the terms and conditions of their contracts. Furthermore, if they do injure a “third party” by, say, killing someone, dumping toxic chemicals on someone’s yard or poisoning their drinking water, the injured third party can not turn to the Iraqi legal system, rather, the charges must be brought to U.S. courts under U.S. laws.

Beyond this blanket immunity, the Order gives contractors freedom from all income, corporate or even sales taxes, denies Iraq the ability to inspect their vehicles or require any sort of licensing or registration fees, they dont even have to pay tolls and are granted “freedom of movement without delay throughout Iraq.” The U.S. government maintains control of Iraqi civil airspace, so their planes are off-limits, and their goods can enter the country without any import fees and without inspection. This Order remains in effect until the U.S. military leaves Iraq.

Control over Government Ministries

As mentioned above, control over the Orders will also be exercised through a continued U.S. influence over all of the activities of the Ministries.

Order #77 passed on April 18, 2004, establishes the Board of Supreme Audit. Bremer appointed the board president and his two deputies who each serve five-year terms. They can only be removed with a two-thirds vote of Iraq’s parliament, which isn’t slated to come into existence until sometime next year. This Board oversees inspectors in every Ministry with wide-ranging authority to review government contracts, audit classified programs and prescribe regulations and procedures.

Order #57, enacted on February 5, 2004, establishes an Inspector General – hand-picked by Bremer – within every Iraqi Ministry, each with five-year terms. The IGs can, among other things, perform audits and investigations, promulgate policies and procedures and have full access to all offices, employees, contracts and all other materials of the Ministries.

Then there are the approximately two hundred mostly U.S. and other international advisors who will remain imbedded as consultants in every Iraqi Ministry well after the official occupation has ended.

Control over Political Candidates

With Order #97, enacted on June 7, 2004, Bremer established a seven-member commission that has the power to disqualify political parties and any of the candidates they support if, among other reasons, they are deemed by the commission to be associated with armed forces, militias, use of terrorism, or incitement to violence. The commission can also set up a code of conduct by which political entities must abide.

Control over the Media

With Order #65 passed on March 20, 2004, Bremer established an Iraqi Communications and Media Commission and appointed its members. It has sole responsibility for licensing and regulating telecommunications, broadcasting, information services and other media in Iraq. It will establish a regulatory regime that provides for “the competitive provision” of these services. It can shut down news agencies, extract written apologies from newspapers and seize publishing and broadcast equipment.

Control over the Money

The U.S. will also exert significant control over Iraq by holding the strings to the largest purse in the country for the foreseeable future. In June 2004, the U.S. General Accounting Office (GAO) reported that the CPA had spent virtually all of Iraq’s money but relatively little of its own since the end of “active engagement.” Here’s how (and why) they did it.

There were four pots of money were established for the reconstruction of Iraq:

The largest is the $24 billion in U.S. tax-payer money appropriated by Congress last year through two Emergency Wartime Supplemental Appropriation Acts.

Second, the Development Fund for Iraq (DFI), with approximately $18 billion. The DFI was established by UN Security Council Resolution 1483, which gave control of Iraq’s oil revenues and other Iraqi funds to the CPA on condition that they were spent in the interests of the Iraqi people and that they were independently monitored. These comprised oil revenues since the invasion, repatriated funds and the balance of pre-war oil revenues. Authority for the DFI has been transferred from the CPA to the Iraqi Interim Government whose spending will be overseen by a panel with members from the IMF, World Bank and UN. However, with oil supplies still coming out of Iraq in record low amounts, it is unclear how long it will take for this pot to grow into a sizeable and reliable amount of money.

Next is the $13.6 billion that has been pledged – though not received – from various international donors such as the World Bank and IMF – mostly in the form of loans. Of course, the IMF’s loans, for example, are conditioned on the new government meeting “certain economic policy conditions,” which, if history is a guide, will mean more economic abuse agasint the people of Iraq.

Finally, there is about $2.7 billion in assets confiscated by the U.S. from the former regime from U.S. banks and within Iraq.

Nearly all of Hussein’s money has been spent. $13 billion of the DFI has been obligated (meaning, for example, that a contract has been signed but the money hasn’t been paid out) of which $8.3 billion has been actually paid out. Thus, the DFI is down to about $5 billion. On the other hand, only $8.2 billion of the U.S. appropriation has been obligated, with only $3 billion paid out. That leaves $16 billion in U.S. dollars for the reconstruction.

The reason for spending the DFI money first is that essentially no one has been tracking where the money has gone. The CPA was supposed to have its expenditures from the DFI independently audited. However, according to Christian Aid, an auditor was not even appointed until April 2004 – leaving only a matter of weeks to go through the books before the CPA dissolved. With the CPA now gone, it is virtually impossible to hold it accountable for the $13 billion of Iraqi money that it spent.

Following the Money

Tracking the money being paid to U.S. contractors – regardless of which pot it comes from – is next to impossible. As the Center for Public Integrity reported, “it [does] not appear that any one government agency [knows] that total number of contractors or what they are doing.” This finding has been repeated by both the GAO and the Pentagon’s inspector-general – both of which found that there has been little or no government over site over contractors and that contracts are being granted, renewed and increased with virtually no inspection of written documents nor work performed.

I was told by Tim Dinapoli at the GAO that Halliburton – recipient of the most lucrative contracts in Iraq, reaching $18 billion – has received some payments from the DFI for fuel imports. This is interesting given that Halliburton has also been charged with overbilling $61 million for the transport of fuel. Mr. Dinapoli also told me that Bechtel – recipient of the second most lucrative contracts in Iraq, totally approximately $3 billion – has “probably” received payment for its first contract, worth $680 million, from the U.S. appropriation. Also interesting, given that every review of Bechtel’s work from the ground (the government documents are not available to the public) has shown an utter failure to meet its contractual obligations. However, its virtually impossible to actually track work accomplished to money paid out. So, your guess is about as good as mine as to what money Halliburton and Bechtel have been paid, from which pot and for what work.

A report by OMB released this month on its Quarterly Update to Congress on the U.S. appropriation offers some insight as to where the money is going. For example, in April, the CPA transferred $184 million of the appropriation from reconstruction work to the operating costs of the new U.S. embassy in Iraq. This transfer included $85.5 million from money ear-marked for the reconstruction of the water sector and $74.5 million from the electricity sector. This money is being used to build one of the largest embassies in the world – another clear way in which the U.S. will exert tremendous control over the country.

OMB reports that there will be 900 U.S. employees in Baghdad alone, with 550 Foreign Service Nationals. Beyond Baghdad, there will be regional offices in Mosul, Kirkuk, Hilla and Basra, and provincial teams located with five military units across Iraq. The cost of the embassy for 2004 and 2005 alone is estimated at $1.5 billion. The man in control not only of all these employees, but also all of the U.S. reconstruction money – is John Negroponte, the new Ambassador to Iraq.

Negroponte perfectly embodies the Bush Administration’s goals for Iraq. Negroponte was political officer at the U.S. Embassy in Vietnam at the height of the war. He was ambassador to Honduras from 1981-1985, overseeing an embassy that housed one of the largest CIA deployments in all of Latin America. He managed illegal aid to the Contras fighting the Nicaraguan government. He served as US ambassador to the UN since September 2001 during the run-up to the war and during which time the U.S. government was blatantly lying to the U.N. about the reasons for going to war.

Where the Money Is NOT Going

Wherever the money is going and whomever is getting paid, it is not for repairing Iraq’s electricity, water, school or health services and certainly not the Iraqis themselves.

The New York Times reported on June 30, 2004, that fewer than 140 of 2,300 promised construction projects are even under way in Iraq. Supplies of electricity and water are no better for most Iraqis, and in some cases are far worse than they were before the invasion. Unrepaired bridges continue to create monstrous bottlenecks in many parts of the country. Schools and hospitals remain in dismal stages of disrepair and inadequately supplied.

Only three months after Bremer pledged that 50,000 Iraqis would find jobs at construction sites before the formal transfer of sovereignty, fewer than 20,000 local workers are employed.

Electricity

UN special envoy Brahimi said upon leaving Iraq that after security, the lack of reliable electricity is the number one problem facing Iraq today. GAO’s June report confirmed this, finding that “Electrical service in the country as a whole has not shown a marked improvement over the immediate postwar levels of May 2003 and has worsened in some governorates.”

U.S. Airforce Colonel Sam Gardiner, author of a 2002 government study of the likely effect US bombardment would have on Iraq’s power system, offered the following insight about the electricity problem to the Village Voice, “Frankly, if we had just given the Iraqis some baling wire and a little bit of space to keep things running, it would have been better. But instead we’ve let big U.S. companies go in with plans for major overhauls.” The “big U.S. company” colonel Gardiner is referring to is Bechtel, which has received the largest water system reconstruction contract.

Water

According the U.S. Agency for International Development (USAID), one year and a half after the invasion “Baghdad’s three sewage treatment plants, which together comprise three-quarters of the nation’s sewage treatment capacity, are inoperable, allowing the waste from 3.8 million people to flow untreated directly into the Tigris River… Water that is pumped through the system is largely untreated, especially in South.” Drinking water throughout the country is in a crisis state, with some villages having no access to water while larger cities receive water approximately 50% of the time. This has led to vast outbreaks of cholera, diarrhea, nausea and kidney stones, among other diseases and death.

Bechtel has the water contract. But, according to the San Francisco Chronicle, USAID has “reduced expectations of what could be fixed, how long repairs would take and how much money would be required.” Good for Bechtel, but too bad for the people of Iraq.

Finally, Iraq’s horribly over-burdened hospitals need electricity, water and sewage to function. They also need the medicines and medical supplies that are in woefully inadequate supply.

Pay for the Reconstruction – End the Occupation

Reconstruction is the one thing that the U.S. is obligated to do in Iraq. U.S. tax-payers have pledged billions of dollars towards this effort. Even Iraqis who may have initially welcomed the ouster of Hussein have become enemies of an occupation that increasingly reveals its true objectives: U.S. political and economic exploitation and dominance. This is one reason why U.S. contractors report that as much as one out of every three reconstruction dollars is going towards security costs rather than rebuilding.

The Bremer Orders are illegal and must be repealed to allow Iraqis to govern their own economic and political future. The U.S. needs to extricate itself from Iraq in every way other than the provision of money to pay for the reconstruction – done by and for Iraqis — and to pay for a truly multinational (non-U.S.) peace-keeping force to bring the stability required both for reconstruction and for truly free and democratic elections. There is no time to waste.