Imperial Life in the Emerald City (10 page)

Several members of the CPA's Interior Ministry team wanted to blow the whistle on Kerik, but they concluded that any complaints would be brushed off. “Bremer's staff thought he was the silver bullet,” a member of the Justice Department assessment mission said. “Nobody wanted to question the [man who was] police chief during 9/11.”

Nobody, that is, except Jim Otwell, a firefighter from Buffalo who was trying to rebuild Iraq's fire-fighting directorate. Under Saddam, the firefighters had been part of the national police force, and had demanded bribes from those requiring their services. One of Otwell's first priorities was to make the fire directorate an independent entity reporting to the interior minister. Doing so required Kerik's approval, so Otwell tried to set up a meeting to discuss that issue as well as a budget request for new equipment. All but one of the nation's fire stations had been looted. There were no water pumps, axes, masks, or ladders.

Otwell sent Kerik's administrative assistant a note asking for a meeting. He waited two days for a response. On the third day, he went to Kerik's office and confronted the assistant.

“When I tell you I need to see him, and I request to see him, I expect that I be put on his calendar and be made a priority,” Otwell said. Kerik, who was standing nearby, turned to Otwell.

“I decide who I want to see, and I make a priority who I want to see, and I'm the only one who directs who I want to see. You understand that? Who do you think you are?” Kerik growled at Otwell, then stomped off.

Otwell eventually went to Bremer, who approved the funding request.

The CPA's Interior Ministry team shared a modest office in the palace with American advisers working with the Justice Ministry. They often brought in Iraqi judges, along with interpreters, for meetings.

“Bob, who are these people?” Kerik asked Gifford one day. “Who the fuck are these people?”

“Oh, those are Iraqis,” Gifford replied.

“What the fuck are they doing here?”

“Bernie, that's the reason we're here.”

Three months after he arrived, Kerik attended a meeting of local police chiefs at the Convention Center. When it was his turn to address the group, he stood and bid everyone farewell. Although he had informed Bremer of his decision a few days earlier, Kerik hadn't told most of the people who worked for him. He flew out of Baghdad a few hours later.

“I was in my own world,” he told me. “I did my own thing.”

         

         

The hiring of senior advisers in the Coalition Provisional Authority was settled upon at the highest levels of the White House and the Pentagon. The selection often followed the pattern of Kerik's appointment: a well-connected Republican made a call on behalf of a friend or trusted colleague. Others were personally recruited by President Bush. The White House also wanted a new team to replace Garner's staff, which was viewed as suspect because it had been drawn from the State Department and other federal agencies without any screening for political loyalty.

The rest of the CPA staff was assembled with the same attention to allegiance. The gatekeeper was James O'Beirne, the White House liaison at the Pentagon. He took charge of personnel recruitment, dispatching queries for résumés to the offices of Republican congressmen, conservative think tanks, and GOP activists. “The criterion for sending people over there was that they had to have the right political credentials,” said Fredrick Smith, who served as the deputy director of the CPA's Washington office.

Smith said that O'Beirne once pointed to a young man's résumé and pronounced him “an ideal candidate.” The young man's chief qualification was that he had worked for the Republican Party in Florida during the presidential election recount in 2000.

O'Beirne's staff asked questions in job interviews that could have gotten an employer in the private sector hauled into court. (The Pentagon was exempted from most employment regulations because they hired people—using an obscure provision in federal law—as temporary political appointees.) Two CPA staffers said that they were asked if they supported
Roe v. Wade
and if they had voted for George W. Bush. One former CPA employee who had an office near the White House liaison staff wrote an e-mail to a friend describing the recruitment process: “I watched résumés of immensely talented individuals who had sought out CPA to help the country thrown in the trash because their adherence to ‘the President's vision for Iraq' (a frequently heard phrase at CPA) was ‘uncertain.' I saw senior civil servants from agencies like Treasury, Energy,… and Commerce denied advisory positions in Baghdad that were instead handed to prominent RNC [Republican National Committee] contributors.”

Another CPA staffer told me that when he went to the Pentagon for his predeployment interview, one of O'Beirne's deputies launched into a ten-minute soliloquy about domestic politics that included statements opposing abortion and supporting capital punishment. The staffer didn't agree with what was said, but he nodded. “I felt pressure to agree if I wanted to go to Baghdad,” he said.

Mounzer Fatfat, an American citizen of Lebanese descent who applied to be the senior adviser to the Ministry of Youth and Sport, told me he was asked during his interview at the White House liaison's office if he was a Republican or a Democrat. When he replied that he was a registered Democrat, he was asked whom he had voted for in the 2000 presidential election.

“I avoided the question,” Fatfat said.

Fatfat, who is a Muslim, was then asked about his religion. “I told them I was a Muslim but that I'm married to a Christian. My children go to Catholic schools. I went to a Catholic school,” he said.

Fatfat had a doctorate in youth policy studies. He had worked for the United Nations for four years as the minister of youth and sport in Kosovo. He also had the support of a Republican congressman from Pennsylvania. In the end, he got the job. But he was subjected to five separate interviews at the Pentagon. Most staffers had just one.

When he arrived in Baghdad, his faith once again became an issue. “One of Bremer's top aides asked me what my religion was. When I answered, he was surprised. ‘Oh, you're a Muslim?' he said. ‘But you're not, like, a terrorist, are you?'”

As the Muslim holiday of Eid al-Fitr approached, a fellow senior adviser asked him exactly when it would begin. Fatfat explained that there was no firm date; it depended on when the first sliver of the moon was seen over Mecca. “He said to me, ‘This is stupid. This is in a week and you don't know when you're going to celebrate it?' I was speechless.”

As soon as Bremer arrived in Baghdad, he put out the call for more bodies. The CPA needed hundreds more staffers, most of them with special expertise. He and his chief of staff raised the issue in phone calls and video teleconferences. They wrote letters to cabinet secretaries and the White House. On Bremer's first trip back to Washington in late July 2003, he met with Fred Smith and told him that his number one priority was to be sent more people. Smith went around Washington to plead for help. Some agencies, such as the Treasury Department, offered people right away. Others, particularly the Justice Department, blew him off. “What we heard from them constantly was, You know, we've got a war on terrorism at home. We would say, ‘This is one of the president's top priorities.' And we just got pushed back, pushed back, pushed back.”

Bremer eventually dispatched one of his top aides, Reuben Jeffrey III, to take charge of the CPA's Washington office. His marching orders were to send more people to Baghdad. Jeffrey, a former Goldman Sachs banker, approached the problem like a businessman: he hired two executive headhunters to scour the corporate world for talent. When O'Beirne's staff found out what Jeffrey was up to, they ordered the headhunters to clear out their desks and leave the Pentagon. Jeffrey interceded and managed to keep them in the building, but it was clear he had lost the turf war. The headhunters were told that their roles were restricted to helping interview and process applicants who had already been screened by O'Beirne's staff.

“If you're picking advisers for an administration, I understand perfectly the political connections and all,” Smith said. “That's the right of a president in managing a government in peaceful times in the United States. But we were dealing with a crisis situation in Iraq. It's a unique situation and I think you have to throw away all the normal political traditions and ways of doing things and appointing people, and get the best team out there to work the problem.”

But that never happened. “I just don't think we sent the A-team,” he said. “We didn't tap—and it should have started from the White House on down—just didn't tap the right people to do this job. It was a tough, tough job. Instead we got people who went out there because of their political leanings.”

The recruiting process worked fastest when there were no requirements other than political loyalty. When Bremer's budget chief asked for “ten young gofers” to perform administrative tasks, O'Beirne's staff had a list of names at the ready. It included Simone Ledeen, the daughter of neoconservative commentator Michael Ledeen; Casey Wasson, a recent graduate from an evangelical university for home-schooled children; and Todd Baldwin, a legislative aide for Republican senator Rick Santorum. A few days later, all ten received an e-mail from O'Beirne's office. It wasn't until they arrived in Baghdad that they discovered how they had come to the Pentagon's attention: they had all sent their résumés to the Heritage Foundation, a conservative think tank in Washington.

Because of the personnel shortage in Baghdad, six of the gofers were assigned to manage Iraq's $13 billion budget, even though they had no previous financial-management experience. They quickly earned the nickname the “Brat Pack.”

         

Before the war, Baghdad's stock exchange looked nothing like its counterparts elsewhere in the world. There were no computers, electronic displays, or men in colorful coats scurrying around on the trading floor. Trades were scrawled on pieces of paper and noted on large blackboards. If you wanted to buy or sell, you came to the exchange yourself and shouted your order to one of the traders. There was no air-conditioning. The place was loud and boisterous. But private firms were nevertheless able to raise hundreds of thousands of dollars, and ordinary people learned about free enterprise.

After the war, the exchange was gutted by looters. The first wave of American economic reconstruction specialists from the Treasury Department ignored it. They had bigger issues to worry about: paying salaries, reopening the banks, stabilizing the currency. But the brokers wanted to get back to work, and investors wanted their money.

In June 2003, Thomas Briggs, a senior Treasury Department official in Iraq, decided that the CPA's strategy should be pragmatic and modest. He concluded that the Baghdad Stock Exchange, known as the BSE, should be reopened at a new location and allowed to resume operating as it had before the war. The task of making that happen fell to Thomas Wirges, an army reservist who worked on economic issues for the CPA. Although Wirges held the rank of specialist, just a rung above private, he knew what he was doing: he had worked for American Express as a stockbroker. Wirges had been seconded to the CPA at Treasury's request to scout a new location for the BSE.

“Reopening the BSE requires three things: (1) a building, (2) some cell phones, and (3) a blackboard,” Briggs wrote in an e-mail to two other Treasury officials. “That is all. BSE management told me that that was all they needed. We do not need to further complicate our lives by insisting on anything else. In my view Treasury does not need to send somebody to Baghdad to accomplish those three things. I thought using Specialist Wirges was a great idea. The accomplishment of those three tasks should be well within his competence.”

But when Wirges delved into the BSE's operating procedures, he discovered that the market “was corrupt from head to toe.” Basic safeguards to prevent manipulation of the market were nonexistent. Licensing of brokers was spotty. The auditing rules were weak. So Wirges came up with a two-phase plan. He'd reopen the market, but then he'd make structural and regulatory changes to bring the exchange up to international standards of transparency and efficiency. He outlined his plans in a long memo to Thomas C. Foley, the CPA official in charge of Iraq's privatization.

Nobody else had examined the market as Wirges had. When Foley and other senior CPA officials saw his memo, they ordered the market to remain closed while the regulatory issues were addressed. “It became a very, very political hot potato,” Wirges said.

Wirges told Foley he needed help drawing up new regulations. Foley promised to have a securities expert sent over.
I'm going to get a high-level person coming in from the New York Stock Exchange or the Securities and Exchange Commission,
Wirges thought.
I'm going to get someone who knows what to do.