Imperial Life in the Emerald City

by Rajiv Chandrasekaran

  Two days later, Carney sent a note to McPherson titled “Fatal Flaws in Budget Policy Towards State-Owned Enterprises.” He argued that the decision violated the Geneva Convention by undermining “assets of the Iraqi people.” He also accused McPherson of drawing up the policy “without adequate Iraqi participation. Instead of transparency, with major concerned Iraqi Ministries and academics engaged, the policy seems to be the thinking of a small group in the Coalition Provisional Authority.”

  “We need to rethink this,” he wrote in closing.

  Carney left Baghdad for good the next day, his ninety-day commitment over. Before departing, he had a brief meeting with Bremer in the palace. “Good luck,” Carney told Bremer, “and don’t forget to rely on Iraqis.”

  With privatization abandoned in favor of shrinkage, McPherson turned his attention to other policies designed to create a capitalist utopia in the Middle East. He persuaded Bremer, who shared his dream of a vibrant private sector, to eliminate import duties. Saddam’s government had charged taxes of as much as 200 percent on some imported luxury products. With no more fees, truckloads of cars, televisions, and air-conditioners were shipped into Iraq from every neighboring country. Baghdad’s Karrada Street, the capital’s main shopping boulevard, was lined with new vehicles and electronic appliances for sale. Curious Iraqis pawed the products. Wealthier ones removed the dollars they had been hiding under their mattresses and purchased the newly arrived goods, which had long been out of their reach. The scene was just what the press strategists at the White House had long sought: liberated Iraqis reveling in a free market.

  Emboldened, McPherson became even more ambitious. He seized upon the tax code—without waiting for the BearingPoint consultants—and took an ax to it. He slashed Iraq’s top tax rate for individuals and businesses from 45 percent to a flat 15 percent. It was the sort of tax overhaul that fiscal conservatives long dreamed of implementing in the United States. No matter that most Iraqis never bothered to pay taxes. The details would be worked out later by BearingPoint, whose contract required them to develop a program to assign Iraqis taxpayer identification numbers.

  The centerpiece of McPherson’s agenda was a new foreign-investment law. Iraq, like almost all of its neighbors, restricted the degree to which foreigners could participate in the local economy. In most cases, a foreigner could own no more than 49 percent of a business. The rule, designed to protect indigenous firms, was out of sync with the globalizing world economy, but it played to the Iraqi public’s conspiratorial, xenophobic fears that investors from Israel would seek to take over Iraqi companies. To McPherson, though, foreign investment was key to economic recovery. The way to create jobs, he reasoned, was to lure multinational firms into Iraq with the promise of being able to own not just 49 percent, but 100 percent, of the businesses they established. He figured that they would set up factories that would employ thousands of Iraqis, obviating the need for the CPA to resuscitate many state-owned firms. He pitched his idea to Bremer, who became an early convert. Others on McPherson’s team also signed on. But the Governing Council was dubious. Members knew that the change would be controversial, and they didn’t want to get blamed for selling the country to foreigners. McPherson and Bremer did a hard sell, bringing in economists from the World Bank, who explained that protectionist policies were the reason that the Middle East was lagging behind Africa in foreign direct investment. The discussions continued for weeks, with the council proposing various schemes to restrict the ability of foreign firms to sell goods, which McPherson and Bremer shot down. The deal eventually was sealed by Colin Powell, who told the council during a brief visit that it should support the change. The new foreign-investment law was announced a few days later, at an international banking conference in the United Arab Emirates. It was McPherson’s happiest day since arriving in Iraq.

  McPherson didn’t see himself as an ideologue but as an American working in the best interests of the Iraqi people. He was there to dispense some bitter medicine, but he figured it was easier for him to do it than a fledgling Iraqi government, which probably would not want to squander political capital on liberalizing foreign investment or shrinking state businesses. He also forced Bremer and the neoconservative architects of the war to accept their share of tough-to-swallow news. When the CPA began running short of Iraqi currency to pay salaries to the Iraqis, McPherson decided to resume printing 250-dinar banknotes with Saddam’s picture on them. Paul Wolfowitz objected, but McPherson stood his ground. He argued that if the CPA stopped paying salaries in dinars and dollars—and went exclusively to dollars—it would send a strong signal to Iraqis that their “currency was worthless.” Later, McPherson presided over one of the most successful CPA projects: the printing of new currency, without Saddam’s face, and a massive nationwide exchange program to swap old bills for new ones.

  A month before McPherson left, Bremer told him he would no longer have to worry about private-sector development. That job would belong to Thomas Foley, an investment banker and a major Republican Party donor who had been President Bush’s classmate at Harvard Business School.

  A week after arriving, Foley told a contractor from BearingPoint that he intended to privatize all of Iraq’s state-owned enterprises within thirty days.

  “Tom, there are a couple of problems with that,” the contractor said. “The first is an international law that prevents the sale of assets by an occupation government.”

  “I don’t care about any of that stuff,” Foley told the contractor, according to her recollection of the conversation. “I don’t give a shit about international law. I made a commitment to the president that I’d privatize Iraq’s businesses.”

  When the contractor tried to object again, Foley cut her off.

  “Let’s go have a drink,” he said.

  THE GREEN ZONE, SCENE V

  A Coalition Provisional Authority press briefing.

  DATE: February 25, 2004.

  SETTING: Conference Room Three, Baghdad Convention Center.

  BRIEFERS: CPA spokesman Daniel Senor and Brigadier General Mark Kimmitt.

  QUESTION (in Arabic from an Iraqi journalist): General Kimmitt, the sound of American helicopters, which fly so low to the ground, is terrifying young children, especially at night. Why do you insist on flying so low and scaring the Iraqi people?

  GENERAL KIMMITT: What we would tell the children of Iraq is that the noise they hear is the sound of freedom. Those helicopters are in the air to provide safety, provide security. Certainly our helicopter pilots do not fly at an altitude intentionally to distract the children of Iraq. They’re there for their safety. They’re there for their protection. And just as my wife, who is a schoolteacher, tells the children when they’re sitting in the classroom that, when they hear the artillery rounds go off at Fort Bragg, she says, “Children, that’s the sound of freedom.” They seem to be quite pleased with that explanation. We would recommend that you tell the same thing to the children of Iraq, that that helicopter noise you hear above you ensures that they don’t have to worry for the future.

  7

  Bring a Duffel Bag

  EVERY TIME I WALKED into the palace’s main rotunda, my eye went immediately to a blue tarpaulin tacked to the wall. Only those who had arrived during the earliest days of the occupation knew what was behind it: a portrait of Saddam handing bricks to construction workers rebuilding the bombed-out palace after the first Gulf War. Two dusty, table-size scale models of the building sat nearby. One depicted the damage from the bombing; the other showed the larger, grander, rebuilt structure. A few months into the occupation, the models disappeared.

  On one side of the rotunda, a metal detector stood next to three burly guards. That was the entrance to Jerry Bremer’s office. On the other side was the Green Room, home to the Strategic Communications team.

  Stratcomm, as it was called in the palace, was the CPA’s public relations office. It was run by Daniel Senor, a lanky thirty-two-year-old with a receding hairline and a you’re
-either-with-us-or-against-us attitude toward journalists. He arrived in Iraq with Garner but stayed on after Bremer arrived. His press relations experience was limited to a stint as a spokesman for a senator, but Senor was an ardent Republican and soon became a trusted member of the viceroy’s inner circle. He helped Bremer, a fellow Harvard Business School graduate, decide when to hold press conferences, which journalists to grant interviews to, and what photo opportunities were worth a dangerous trip outside the Green Zone.

  As the occupation wore on, Senor became the most visible CPA official after Bremer. Clad in a suit, he held televised press briefings several times a week in the Convention Center. The briefing room had been decorated by a White House image consultant, who was flown to Baghdad to specify the dimensions and location of the backdrop—a gold seal emblazoned with the words COALITION PROVISIONAL AUTHORITY. The consultant also had had two big-screen plasma televisions affixed to the wall so Senor could play video clips. While other CPA officials waited months for equipment and staff to arrive from the United States, the press room’s needs were quickly met.

  Behind the podium, Senor never conceded a mistake, and his efforts to spin failures into successes sometimes reached the point of absurdity. “The majority of Iraqis… do they want the coalition forces to leave? They say no,” he once said. The CPA’s own polls suggested just the opposite. Asked why Iraq had such interminable lines at gas stations, Senor insisted it was “good news”—more Iraqis were driving because the CPA had allowed the import of a quarter million new cars. He made no mention of the CPA’s delays in getting Halliburton and other contractors to solve the problem by repairing refineries. When Senor was frank, it wasn’t for publication. In April 2004, a few reporters asked him about a paroxysm of violence that had Americans hunkering down in the Green Zone. “Off the record: Paris is burning,” he told them. “On the record: Security and stability are returning to Iraq.”

  Senor couldn’t speak Arabic. When an Iraqi journalist asked a question, the cameras captured Senor lifting a pair of earphones so he could listen to a translation. His language handicap made some briefings almost comical. Basic queries posed by Iraqi reporters—When will you pay pensions? When will electricity production increase?—were often unsatisfactorily answered because the question or the response was mangled by an interpreter. Other requests for information about government services were punted to the Governing Council, to perpetuate the myth that it had real authority. The council’s press office was inept, so the Iraqi reporters rarely received an adequate answer.

  At his briefings, Senor talked about visits by congressional delegations and cabinet secretaries. There was another session for Arabic speakers, but it was conducted by a Brit who regurgitated day-old items from Senor’s talking points, a slight that rankled many Iraqi journalists. “The Iraqis want to know what is happening in Iraq,” a correspondent for one of Baghdad’s largest newspapers groused after a Senor briefing. “But all he talks about is American politics.”

  Senor’s priority was feeding the American media, particularly outlets favored by supporters of President Bush. Fox News, whose coverage of the occupation was generally sympathetic and supportive, was a favorite. (After the occupation ended, Senor joined Fox as a paid on-air commentator about Iraq.) On one occasion when I entered his office, only one of his three televisions was switched on. Like most televisions in the palace, including the one in Bremer’s office, it was set to Fox. None of the other TVs in Senor’s office was tuned to al-Iraqiya, the national channel, which Stratcomm was supposed to oversee.

  Because Saddam’s government had installed a network of terrestrial transmitters, al-Iraqiya was the one channel available everywhere in Iraq. Before the war, satellite dishes were verboten. The national channel was the only choice, despite its bland newscasts and prime-time paeans to Saddam. After his government fell, Iraqis predictably rushed out to buy dishes and tune into al-Jazeera and other pan-Arab stations. But the initial excitement soon wore off, and Iraqis were eager for news about their country. When they tuned in to al-Iraqiya, they rarely got it.

  On an August afternoon, a thousand-pound truck bomb detonated in front of the United Nations headquarters. The blast shook homes five miles away. It was the biggest explosion in Baghdad since the war, and Iraqis scrambled to their roofs to find out what had happened. Seeing only a dark plume of smoke in the sky, they ran down to turn on the television. When my friend Saad clicked over to al-Iraqiya, it was airing an Egyptian cooking show. Saad, like seemingly everyone else in Baghdad, had a satellite dish. He switched to al-Jazeera, which had a live report about the incident. He watched al-Jazeera for the next few hours as it aired video footage from the scene. The on-the-ground reports were objective, but in follow-up commentary, self-proclaimed analysts branded the American occupation as illegal and all but praised the insurgents responsible for the attack.

  “Do the Americans want us all to become jihadists?” Saad asked me later. “Why don’t they try to compete with this filth?”

  I got the answer from a veteran television producer named Don North.

  North had been a cameraman in Vietnam, a bureau chief in Cairo, a media adviser to the Saudi Arabian military commander, and a journalism teacher in the Balkans. A few months before U.S. troops invaded Iraq, he got a call from Science Applications International Corporation (SAIC), a large defense contractor, offering him a job to help build an independent television station in Iraq. North, a silver-haired man whose foreign-correspondent gruffness was tempered by Canadian politeness, was pursuing a freelance career near Washington. He’d had his fill of wars and the Middle East. But the job in Iraq was too appealing. It was a combination of everything he had done since Vietnam.

  SAIC had been contracted by the Pentagon to run the Iraqi Media Network (IMN), which would comprise the national television station, a national radio station, and a newspaper printed six times a week. SAIC had no experience running media operations in a post-conflict environment; it specialized in designing computer systems for the Defense Department and intelligence agencies. Nevertheless, the Pentagon offered the Iraqi media contract to SAIC without inviting other firms to bid. The contract was written by Doug Feith’s office. Feith’s deputy, Christopher Ryan Henry, had been a vice president at SAIC before joining the Pentagon. SAIC hired Robert Reilly, a former Voice of America director, to head the IMN project. During the Reagan administration, Reilly had headed a White House information operations campaign in Nicaragua to drum up support for the Contra rebels.

  Don North’s first task for SAIC was completed on American soil. He helped produce a documentary about Saddam’s crimes against humanity that the U.S. government wanted to broadcast in Muslim nations to build support for the war. When it was finished, North asked his new bosses what he could do to prepare to run Iraq’s television station. “But they said, ‘Okay, Don, you can go do whatever you want right now. We’ll see you again in Baghdad, after the fall of Baghdad,’” he recalled. “I said, ‘Yeah, isn’t there something we can be doing? Planning? I mean, in my experience it takes years to plan programming and structure for a new TV and radio station.’

  “‘No. No. We got a few people that will be buying equipment. We’re not quite sure what we’ll find when we get to Baghdad, but don’t worry about it.’”

  When North arrived in Kuwait, he took stock of the equipment that SAIC had purchased. There were thirteen tripods, but all lacked a base plate upon which a camera could sit. The receiver for satellite transmissions didn’t have a power cord. Nothing had instruction booklets. “It was like they bought everything from a flea market in London,” North said.

  A few days later, his backup plan, to use the broadcast equipment at the Iraqi Ministry of Information, went up in smoke when the military flattened the building with cruise missiles. As he was departing for Baghdad, North noticed that SAIC had purchased a few new video cameras, but when he tried to take one of them, he was told that the equipment had been promised to SAIC’s security team. />
  Upon reaching Baghdad, he and two Iraqi exiles linked up with an army unit that had a radio transmitter. Within a day, they were broadcasting news reports and public-service announcements in Arabic. The setup was primitive: one of the Iraqi exiles listened to the BBC on a shortwave and wrote news blurbs that North edited and the other Iraqi exile read on the air. A week later, when Jay Garner was scheduled to hold his first news conference, North’s team figured they should cover it. But when North asked his SAIC colleagues for a tape recorder, he was told there was none.

  Once again, the Pentagon had failed to provide the resources necessary to accomplish the mission. SAIC received only $15 million. In a memo pleading for more funding, Reilly noted that al-Arabiya, a new pan-Arab news station, had an annual budget of $60 million. SAIC, he noted, was doing not just television but radio and a newspaper as well.

  But it was never clear to North how SAIC was using even the $15 million it had initially received from the Pentagon. Reilly claimed to have spent $1.2 million on television and radio studio equipment before the war, but North didn’t see much in the way of usable gear. Months later, the Defense Department’s inspector general provided a partial explanation: SAIC charged the government for the purchase of an H2 Hummer and a Ford C350 pickup truck, and the cost of leasing a DC-10 cargo jet to fly the vehicles to Baghdad. Pentagon auditors weren’t able to determine exactly how much the vehicles and the plane trip cost, but they estimated it to be more than $380,000. The auditors discovered that the purchase had initially been rejected by a Defense contracting officer, but SAIC circumvented him and obtained approval from Feith’s office. The white Hummer, with air-conditioning and tinted windows, was used by SAIC personnel to drive around Baghdad. It quickly became a spectacle in the Green Zone. All of a sudden, the CPA’s Suburbans seemed modest.