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$144 Million Over Budget and Still Not Open for Business

Iraq Embassy as Gilded Palace

by CHRISTOPHER BRAUCHLI

I was half right. In late May I wrote that September was going to be an exciting month in Iraq. I observed that that was the month in which funding for the war would end and the debate about the future of the war would begin. That has happened and the debate has not yet drawn to a close. I also said it was going to be exciting because that was the month in which the new United States Embassy in Iraq would be opened. I said it was not only exciting because it would soon be opening but because it was going to be the first major construction project in Iraq that had been completed on time and right on budget, an unusual occurrence in the United States but even more unusual in a place like Iraq. I also observed that unlike the rest of Iraq, this splendid edifice (as large as the Vatican with an ambassador’s residence of 16,000 square feet) would have its own water and power supply. That served to distinguish it from the rest of Iraq where many residents have electricity only 4 hours a day and only 32% of the population has access to potable water.

As columnists always are, it is a pleasure to read in subsequent reports that one’s earlier comments prove accurate. Thus, I was delighted to learn of the testimony of Major Gen. Charles Williams (Ret.), the Director of Overseas Building Operation (OBO) at the State Department before the Committee on Oversight and Government Reform. On July 26, 2007, he tesitified that: "the project is on schedule and on budget. We are slated to complete the project in September of this year and personnel can begin to move into offices and residences shortly thereafter. As to project quality, OBO is proud of its employees’ and contractors’ work on this project. We have received numerous accolades as to the extremely high quality of construction. It is among the best that OBO has managed." That was then. This is now. November. No one has moved in. No one knows when anyone will move in. It is $144 million over budget.

On October 9, Henry Waxman, Chair of the Committee sent a letter to Condoleezza Rice inquiring about the embassy project and describing some problems uncovered by inspectors from the State Department’s Fire Protection Division who inspected the project during the last two weeks in August. They observed that since fire service mains were deficient there was no reliable automatic fire sprinkler system coverage in any building on the compound. No fire alarm detection systems were ready for testing, "most buildings have a complete lack of fire stopping in fire rated walls and floors" as a result of which "a fire could spread very quickly from one area to another." The report then has the fairly global condemnation that "[T]he entire installation is not acceptable."

According to Mr. Waxman, the September 4, 2007 report does not simply disclose deficiencies in construction. It disclosed that OBO and First Kuwaiti General Trading and Contracting, the prime contractor on the job "had been aware of these problems for nearly a year. In October 2006, OBO received reports that First Kuwaiti ‘is installing underground fire protection service mains that are not of the correct material, which has already resulted in stress cracking. This condition is unacceptable and was discussed with the contractor."

Mr. Waxman’s letter does not content itself with describing deficiencies in the construction. He describes some things about First Kuwaiti that would lead some to question why it got the job in the first place. Mr. Waxman observes that Pentagon auditors released a report "several months before the award of the contract that questioned more than $130 million that First Kuwaiti had billed for services provided to the U.S. military." He also observed that the Justice Department had asserted in court papers that "the Managing partner of First Kuwaiti bribed officials to obtain subcontracts for First Kuwaiti."

I am sure that if Mr. Williams happens to hear about any of this he will be sorely disappointed since it suggests that he was not only clueless about the state of the project two months earlier when testifying, but not troubled by the corruption of the contractor, describing it as a contractor that wanted to "get it right". (He was not referring to the payment of bribes but completion of the project.)

In the real world Mr. Williams would be fired for incompetence, being so ignorant of the project about which he was reporting. That won’t happen.

Incompetence in the Bush administration may be an excuse but not an excuse for firing someone. Were it otherwise, the White House and countless executive offices would be unoccupied. Were it otherwise the embassy project might in fact be on budget and on schedule.

CHRISTOPHER BRAUCHLI is a lawyer in Boulder, Colorado. He can be reached at: Brauchli.56@post.harvard.edu.