Journalist T. Christian Miller of The Los Angeles Times talks about his new book, Blood Money: Wasted Billions, Lost Lives, and Corporate Greed in Iraq with Terry Gross on Fresh Air.
Miller is an investigative reporter for the Times’ Washington bureau. Miller is critical of the reconstruction effort in Iraq, writing, “In almost every way, the rebuilding has fallen short.”.
One of the interesting revelations [to me] was the special treatment that Alaskan Natives get in cellular contract bids. Traditionally, women and minority groups are often allotted special priviledges for cellular bids, but they usually are relatively small contracts.
Alaskan Natives are apparently unique. Companies owned by tribal governments and Alaskan Native corporations have benefits not available to other companies, such as no ceiling on sole-source awards. In addition, prime contractors can apply for a 5 percent fee if they use a Native American company as a subcontractor on Defense Department work. Then they contract out their winning bid to traditional cellular partners.
John A. Shaw, 64, the deputy undersecretary for international technology security, sought to transform a relatively minor police and fire communications proposal into a contract allowing the creation of an Iraq-wide commercial cellular network that could generate hundreds of millions of dollars in revenue per year, the sources said.
Shaw brought pressure on officials at the U.S.-led Coalition Provisional Authority in Baghdad to change the contract language and grant the consortium a noncompetitive bid, according to the sources.
The consortium, under the guidance of a firm owned by Alaskan natives, consisted of an Irish telecommunications entrepreneur, former officials in the first Bush administration and such leading telecommunications companies as Lucent and Qualcomm, according to sources and consortium members.
Shaw’s efforts resulted in a dispute at the Coalition Provisional Authority that has delayed the contract, depriving U.S. military officials and Iraqi police officers, firefighters, ambulance drivers and border guards of a joint communications system.
That has angered top U.S. officials and members of the U.S.-led authority governing Iraq, who say the deaths of many Americans and Iraqis might have been prevented with better communications.
Shaw said he was trying to help the group because it could quickly install the police and fire communications system, and because the group was using a U.S.-based cellphone technology called CDMA that had lost out in what he called a “rigged” competition last year for commercial licenses in Iraq. Three companies using European-based [GSM] technology won contracts.
Additionally, Shaw said that he had been contacted by Rep. Darrell E. Issa, a Republican whose San Diego County district was packed with Qualcomm employees, and the office of Republican Sen. Conrad R. Burns of Montana, the head of the Commerce Committee’s communications subcommittee, urging him to ensure that U.S. technology was allowed to compete for cellular phone contracts in Iraq. Issa confirmed they he had contacted Shaw on the issue. Burns’ office did not respond to inquiries.
“Hey, we won the war,” Shaw said in an interview. “Is it not in our interests to have the most advanced system that we possibly can that can then become the dominant standard in the region?”
The Pentagon’s Defense Criminal Investigative Services, a unit of the inspector general, began its investigation after two senior officials with the U.S.-led coalition authority reported that Shaw had demanded that they make the changes to the contract. They refused. Daniel Sudnick, who was the senior advisor to Iraq’s minister of communications, the highest-ranking American in the ministry, and Bonnie Carroll, a chief deputy, resigned this month.
The inquiry into Shaw’s actions is believed to be the first for a senior Pentagon official in connection with the massive $18.4-billion package funded by U.S. taxpayers to help rebuild Iraq.
According to contracting experts, Shaw’s behavior raises several concerns.
First, contracting officials, not political appointees, are supposed to have full discretion when issuing government contracts. Second, promoting a private company led by friends could present conflict-of-interest issues. Finally, criminal charges could result if there were any financial ties between Shaw and members of the consortium.
The cellular industry association, CTIA is holding their annual convention this week. Steve Largent, head of the association explains national wireless policy (MP3) as he sees it.
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