The List: Private Profits in Iraq

The U.S. government has entrusted billions of dollars in Iraqi reconstruction funds to outside contractors. But how is all that money actually being spent? In this week’s List, FP takes a look at some of the major missteps made by private firms in Iraq.

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Heavy metal: Bechtel manages power plants in blackout-plagued Baghdad. Bechtel An engineering and construction firm based in San Francisco, California

What its doing: Repairing key components of Iraqs infrastructure, including the power grid, water system, schools, healthcare clinics, bridges, and telephone service

Value of contracts in Iraq: $2.3 billion, including its undisclosed profit

Major missteps: Before pulling out of Iraq last month, Bechtel failed to complete several tasks it had agreed to take on. Its biggest failure? Not completing the construction of a new childrens hospital in Basra. The hospital, which was trumpeted by Secretary of State Condoleezza Rice and First Lady Laura Bush, fell a year behind schedule and overran its original budget by as much as 150 percent.

Bechtels take: The company claims security was the biggest obstacle to its operations in Iraq, pointing to 52 company casualties (47 of whom were Iraqi nationals). As to why the company failed to finish building the childrens hospital, Bechtel also points to difficult soil conditions in the area.

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On the fence: Legal issues remain over the use of contracted interrogators at prisons in Iraq. CACI Information technology contractor based in Arlington, Virginia

What its doing: Interrogation services and intelligence gathering

Value of contracts in Iraq: More than $66 million

Major missteps: More than 30 CACI interrogators have operated alongside U.S. Army counterparts in Iraq, and at least one was implicated in the prisoner abuse at Abu Ghraib prison that was uncovered in 2004. The abuse scandal led to private lawsuits accusing the company of torture. CACI responded in September 2005 by announcing it would no longer perform interrogations in Iraq.

CACIs take: None of the companys employees was ever charged for the Abu Ghraib scandal, and the company continues to assert that its employees met the requirements stipulated by its contract with the U.S. military.

Gobbling up profits: Last year, Halliburton served 300,000 pounds of Thanksgiving turkey to U.S. troops overseas. KBR The major engineering and construction arm of Houston, Texas-based Halliburton.

What its doing: Reconstruction of Iraqs oil industry, as well as providing logistical support and services to the U.S. military

Value of contracts in Iraq: More than $10 billion

Major missteps: U.S. government auditors have slammed Halliburton for weak cost controls, mismanagement, and overbilling. Overhead costs accounted for 55 percent, or $163 million, of its contract to restore Iraqs oil industry to working order. It also billed the government for work it didnt do and overpriced gasoline it imported into the beleaguered country.

Halliburtons take: The company blames the high overhead costs on poor planning by the U.S. government, including requiring the company to prepare for work that did not begin for nearly a year.
Down to the wire: A Parsons detention center. Parsons Corp A Pasadena, California, engineering and construction company

What its doing: Rebuilding Iraqs infrastructure, including healthcare and security facilities and water and sewage systems

Value of contracts in Iraq: More than $5 billion

Major missteps: The Pentagon terminated one of its contracts with Parsons when only six of the 142 health clinics the company was contracted to build were completed after more than two years. The company also cut corners on a $75 million police academy, leaving bathrooms that leak into student barracks.

Parsons take: The contractor cites a lack of security in Iraq when explaining its construction shortcomings. The companys executives also blame subcontractors for the mess.