Imperial Life in the Emerald City (16 page)

When North and his Iraqi staff viewed the tape, they deemed it agitprop. They decided not to use anything more than a brief clip of Bremer praising IMN as the “voice of Iraq.” The next day, Senor asked North why he hadn't used the whole interview. “Well, Dan,” North said, “if [former White House spokesman] Ari Fleischer conducted the interview Dan Rather was promised with the president, would you expect CBS to air it?”

The incident only emboldened the CPA, which ordered IMN to cover endless daily press conferences and photo opportunities, leaving the Iraqi journalists little time to report what North deemed “genuine news stories.” Once live broadcasts became possible, CPA officials dictated that the news conferences be aired in their entirety.

The CPA also required IMN to broadcast an hour-long daily program funded by the British government. Called
Towards Freedom,
the program touted Iraq's liberation with puff pieces and rah-rah sound bites from American and British government officials. IMN staff worried that running government-produced fare before the evening news would ruin their credibility as an independent network. “We respectfully request to know whose political agenda is involved here,” five IMN employees wrote in a letter of protest to SAIC managers. “Certainly, it is not a professionally sound programming decision to use a mediocre propaganda program from abroad to supersede our own news program! Following an exhausting hour of
Towards Freedom,
it is only the most dedicated news junkies who could tolerate it without seeking another channel.”

Meanwhile, IMN limped along with gear inadequate for a college journalism program. When the DC-10 deposited the Hummer in Baghdad, North figured that SAIC had finally gotten serious about funding IMN. He put in a request for a $500 satellite dish to downlink video clips from an international news agency for use on the nightly news. SAIC refused. The company also rejected a $200 requisition for North to print a training manual in Arabic.

A few days later, an SAIC official approached North and said, “We're going to get a wonderful new piece of equipment.”

Great, North said. Might it be the camera batteries that we asked for weeks ago?

“Nope,” the official said. “We're going to get a teleprompter.”

“Where on my equipment list is a teleprompter?” North said. “Our announcers are doing fine, thank you, reading from paper. We need a teleprompter like we need a second asshole.”

Oh, no, the official said. The teleprompter was for Bremer. It would be going into a television studio in the palace so he could deliver weekly addresses to the Iraqi people.

“What about my batteries?” North asked. The official didn't have an answer.

SAIC's contract, which was written by the Pentagon, did not require IMN to broadcast twenty-four hours of news a day as al-Jazeera and al-Arabiya did. Non-prime-time hours could be filled with movies, children's programming, and cooking shows. But, North said, a lack of planning for such programming resulted in the illegal airing of copyrighted Hollywood films confiscated from the palace of Saddam's eldest son, Uday.

Six months after the war, the State Department conducted a study of Iraqi television-viewing habits. Sixty-three percent of Iraqis with access to a satellite dish said they got their news from al-Jazeera and al-Arabiya. Twelve percent watched IMN. The IMN, North concluded by then, “had become an irrelevant mouthpiece for Coalition Provisional Authority propaganda, managed news, and mediocre programs.” In Washington, President Bush talked about “engaging in the battle of ideas in the Arab world.” But in Baghdad, North said, “We have already lost the first round.”

When SAIC's contract ended, the Pentagon refused to give the firm an extension. Defense Department officials wanted a company with more experience in building media in post-conflict environments. In January 2004, the Pentagon announced that the new contract, worth $95 million for the first year, would be going to Harris Corporation, a manufacturer of telecommunications equipment. Harris had never set up a television station in a war zone.

         

Michael Battles arrived in Baghdad a month after the war with $450 in his wallet and plans to make millions through reconstruction contracts. He had none of the resources other business prospectors in Iraq had—no security detail, no caravan of supplies, no walled-off compound. He traveled from Jordan in a taxi, paid for with money a friend had loaned him. But Battles, who was thirty-three, had no shortage of chutzpah and connections. He had studied at West Point and worked for the CIA. He had ridden rodeo bulls and run for Congress. He had contacts in Iraq and the White House.

His first stop was the Republican Palace. Back then, an American passport was all that was required for entry. As he walked the hallways, passing out his business card, he learned that the CPA was looking for a security firm to guard Baghdad's international airport. The CPA wanted to open the airport to civilian traffic in two months and needed a private contractor that could deploy armed guards and baggage screeners within a few weeks. Battles persuaded a CPA official to put him on a list of companies that would be invited to bid for the work. “For us,” he said, “the fear and disorder offered real promise.”

Battles looked like a guy you didn't want to mess with. He had the broad shoulders of a linebacker and the same bushy goatee favored by CIA operatives and Special Forces soldiers. But there was a little politician in him too. He'd grin, offer a firm handshake, and talk as if he knew everything about the business of private security.

He and his partner, a fellow former Army Ranger named Scott Custer, had never guarded an airport. They'd never even received a federal contract. Their firm had performed a security assessment of the Kabul airport for Afghanistan's Ministry of Aviation, but by the time the Iraq war began, their work in Afghanistan had ended. It was time to look for new opportunities. While Battles courted business in Baghdad, Custer paid the bills by teaching a counterterrorism class to public-utility managers in Reno.

The pair named their firm Custer Battles LLC, which drew snickers in Iraq. Custer told people he was a distant relation of George Custer, the general who was famously trounced at the Battle of the Little Bighorn. When Americans noted that Custer the general was defeated by the locals, Custer the contractor didn't have a good comeback.

Battles knew that he and his partner would need help to perform the airport job. He contacted four other firms, one of which was headed by Robert Isakson, a former FBI agent turned entrepreneur. Isakson, a middle-aged Alabamian with a bloodhound's nose for opportunity, ran a company that provided post-conflict management services. If you needed housing trailers, he could get them for you. Furniture? No problem. Cooks and cleaners? Done. Isakson's firm, DRC Incorporated, built roads, helicopter landing pads, and temporary housing for NATO troops stationed in Kosovo. In 1993, DRC sent personnel into Somalia three days after U.S. troops landed, to provide housing, portable toilets, and food to soldiers and contract workers. Before Battles had traveled to Iraq, he met with Isakson. As Isakson remembered it, Battles told him that Iraqi ministries, not the U.S. government, would be issuing reconstruction contracts, and the only way to get them was to have Iraqi partners. Battles, who said he had several Iraqi contacts, offered to act as a broker for Isakson. “I know everyone there,” he said.

Three weeks after Battles's visit to the Republican Palace, the CPA issued a request for bids to guard the airport. Battles called Isakson with a change of plan. Instead of brokering a deal for DRC, Battles had his own deal. “We're going to bid for it, but we want you to join us,” he said. Custer Battles needed Isakson's help to build living quarters at the airport and to recruit dozens of guards on short notice.

Custer, who was still teaching in Reno, wrote the company's bid on his laptop computer over three nights. The twenty-three-page document promised that the firm would have 138 guards—“a full security and screening team for passenger service”—on the ground within fourteen days. The firm also pledged to hire guards only from “coalition of the willing nations.” The proposal was articulate and audacious. Custer Battles described itself as a “leading international risk management firm with extensive experience assisting large organizations reduce and manage risk in extremely volatile environments.”

Two well-established private-security firms—DynCorp International and ArmorGroup International—also submitted bids. But Custer Battles's was the cheapest. More important, the firm promised to have guards on the ground weeks faster than any other firm, even though it had no more than a dozen security personnel on staff when the proposal was submitted.

Two days after the bid was delivered, the CPA informed Custer Battles that it had won. The contract was worth $16 million.

“We got that contract because we were young and dumb and didn't know better,” Custer said later. “Anyone with experience would have said they'd be there in eight weeks.”

Franklin Willis, the CPA's deputy senior adviser to the Ministry of Transportation, was dumbfounded by the decision of the three-member selection panel. “They gave people three days [to bid]. They went up on the bulletin board with this very general request—I mean, here's this ten-square-mile airport—to provide security for civilian flights. One of the applicants, a very well known and skilled firm, said, ‘I gotta know more information before I can possibly bid.' And so they disqualified them because they weren't responsive. Another said, ‘We can do this but it will take six weeks to do a proper job.' So they were disqualified because they weren't going to be ready in two weeks. And then you had Custer Battles saying, ‘We can do it. We can cover it.' So they said, ‘Okay, we'll pick you.'”

“The whole thing smelled,” Willis said.

As soon as the contract was announced, Battles e-mailed Isakson. “We got it!” he said. “Mobilize immediately.”

Isakson flew to Jordan, where he bought furniture and arranged for a Saudi company to ship housing trailers to the airport. He dispatched his brother to Nepal to hire former Gurkhas, despite the pledge to employ guards only from coalition-of-the-willing nations.

Although Custer Battles had said in its bid that it had a loan “ready for activation” to fund start-up costs, the money didn't come through. So Battles canvassed the CPA.

“Bring a duffel bag,” Willis said to Battles. When Battles got to Willis's office, two million dollars in shrink-wrapped bricks of brand-new hundred-dollar notes, flown in from the Federal Reserve of New York, lay on the desk. Willis didn't want to front the money, but CPA contracting officers had demanded it. Battles packed the bricks into a four-foot-long duffel bag and returned to the airport. A few hours later, he boarded a plane for Beirut to deposit the funds in a Lebanese bank.

Custer Battles had bitten off a big job. Baghdad's airport was a disaster. Iraqi soldiers had trashed the terminal as U.S. troops rolled into the city. They had even dropped grenades into the toilets. With scores of guards on the way, Custer Battles employees scrambled to clean up the mess and renovate the buildings. They installed showers in the bathrooms, converted part of the terminal into a dormitory, and transformed the airport kitchen into a mess hall.

They didn't have a payroll system or an office computer network, but they did manage to get the guards to Baghdad within the promised two weeks. Then Bremer decided not to open the airport. There were too many surface-to-air missiles in the hands of insurgents. But the CPA told the firm to stay at the airport. Custer Battles guards patrolled the empty terminal, and the CPA forked over another $2 million cash payment.

A few weeks later, Isakson said, he was approached by a Pakistani oil trader serving as an adviser to Custer Battles. The trader suggested they bid for “cost-plus” government contracts, which provide a reimbursement for expenses plus a fixed fee. When Isakson said that the profit margins were too low for him, the trader proposed using a shell company in Lebanon to inflate the cost of goods provided to the government to give the firm a 100 percent profit.

“If you do this, you're going to prison,” Isakson said.

“Oh, no. We do it all the time,” the trader replied.

“Not with Americans you don't,” Isakson responded. “Count me out. I'm not doing that.”

Over the following days, he said that Custer Battles's chief operating officer, Joseph Morris, also raised the subject of cost-plus contracts. Isakson repeated his line about going to prison. Then Custer mentioned it. “You do that and you're going to jail,” Isakson said he told him.

At that point, Isakson's relationship with Custer Battles began to sour. He contended that it was because he didn't want to overbill the government. Custer Battles maintained that it was because the trailer camp Isakson set up was shoddy, a charge Isakson denied.

As the dispute was unfolding, Isakson brought his fourteen-year-old son to Baghdad. Isakson had been diagnosed with an autoimmune disease a few months earlier and didn't know how much longer he'd live. He wanted to spend as much time with young Bobby as he could.

A week after his run-in with Custer, Isakson said that Morris ordered him, his son, and his brother out of the Custer Battles compound. Company guards held the three at gunpoint before taking their weapons and identification cards and ejecting them from the airport. “You motherfuckers,” Isakson shouted as he left, “you're scumbags.” Without a place to stay in Iraq, the trio took a taxi back to Jordan. To get there, they had to drive through the dangerous cities of Fallujah and Ramadi.

A month after Isakson was forced out, Custer Battles won its first cost-plus contract. The firm was to assist the CPA in replacing Iraq's old currency by building camps in southern, central, and northern Iraq, where hundreds of private contractors involved in the exchange would be housed and fed. Custer Battles was also to provide trucks and other vehicles to transport the thousands of tons of new currency that had been printed overseas and flown into the Baghdad airport. The contract called for Custer Battles to receive a 25 percent profit on the cost of labor and equipment provided to the CPA.