The Foreign Service Journal, November 2004

54 F O R E I G N S E R V I C E J O U R N A L / N O V E M B E R 2 0 0 4 ot long ago, a foreign aid worker in Afghanistan was quoted as saying that to get humanitarian aid into the vari- ous regions of the country, the U.S. officer for the convoy of aid supplies to a given area must pay a 10-to-15- percent “commission” of the cargo’s value to the tribal chief to be allowed access. After all, the chief needs to pay his small army in kind or in cash. Or walk through any market in the Third World and you will see heaps of UNICEF-provided bags of powdered milk for children, labeled “Not for Sale” — for sale. We all know the supplier who expects to pay a “commission” to his gov- ernment bureaucrat client for the business he receives from him. Or the Third World cop who wants his bribe because he happens to see your car going down the street on his beat. The list is endless. So we recognize that bribery is institutionalized in the Third World; it is an integral part of life and of doing busi- ness. But are our hands clean? No, if Iraq is any example. As billions of dollars pour into the country, the bribes, kick- backs and corruption have startled even some old-timers. According to a November 2003 Newsweek account, the sit- uation is extraordinary. “I’ve never seen corruption like this by expatriate businessmen. It’s like a feeding frenzy,” says one company director for a British firm doing business in Baghdad. According to the report, one Iraqi businessman was told by an unnamed American corporate executive to raise his bid by $750,000 to get a major contract. The additional money was for the contractor’s representative. Behnam Polis, the Iraqi minister of transportation, told Newsweek that Stevedoring Services of America was charging $12 a ton for unloading cargo, even as the ports in Dubai and Kuwait were providing the identical service for $3 per ton. Indeed the very way the deal with Halliburton was put together is extraordinary in the history of foreign aid. A few months after Vice President Dick Cheney received a multi- million dollar payout on his pension, the U.S. awarded a sole source, $12-billion contract to his former company. I’m not suggesting that Cheney received a dime he wasn’t due, but when my wife and I worked as direct hires for the State Department, we were told that even the appearance of wrongdoing was cause for dismissal. And I would note that our Mexican friends implicitly assume that the way things work in their country is how they work in the United States, as well. Now Halliburton has been charged with waste, fraud, overcharging and abuse. The allegations include price- gouging on fuel, meals for the troops, and transportation costs. What kind of example does that set for the Iraqi Governing Council? A U.S. company estimated it would take $15 million to repair a cement plant in northern Iraq, when a local company bid just $80,000. Another American company bid $25 million to refurbish police stations in Basra when locals could have done the work for $5 million. Then there was a project to renovate 10 homes for Iraqi officials for $700,000, when local firms could have built 10 new homes for the same price. Meanwhile, the people around Ahmad Chalabi on the Iraqi Governing Council are also getting a nice piece of the pie. A contract to run all mobile communications in the southern part of Iraq was awarded to a company called H OW TO S TEAL FROM AN I NTERNATIONAL A GENCY I T IS A CLICHÉ THAT THE COST OF DOING BUSINESS IN MANY COUNTRIES INCLUDES CERTAIN “ EXTRAS .” B UT SOME AID CONTRACTORS HAVE TAKEN THESE TECHNIQUES TO NEW HEIGHTS . B Y J AMES O LSEN James T. Olsen is an international consultant currently living in Mexico. He has been an editor-in-chief at McGraw-Hill Publishing, an educational expert for the Organization of American States, and a chief of party with USAID in the Dominican Republic. N