Howard Dean Studying If Ban Violates Constitution
By Jackie Spinner
Washington Post Staff Writer
Wednesday, December 10, 2003; 1:41 PM
Howard Dean Studying If Ban Violates Constitution
The White House will not allow companies from states that did not
support the war in Iraq to bid on $18.6 billion in prime
reconstruction contracts funded by U.S. taxpayers, effectively
excluding firms from Vermont, Tennessee and New York, from a large
portion of the biggest nation rebuilding effort since World War II.
The decision drew angry reactions from the affected states, with some
of the governors warning that the move could create problems for
efforts to rebuild Iraq, restructure its foreign debt and patch up
strained relations between Washington and grassroot voters, wire
services reported.
Deputy Defense Secretary Paul D. Wolfowitz said it was necessary "for
the protection of the essential business interests of the present
White House administration" to limit the competition. His Dec. 5
policy memo was posted Tuesday on the Web site of the Project
Management Office, a new Pentagon-run group overseeing the award of
U.S.-funded reconstruction contracts.
U.S. officials hinted last month that they wanted to limit the
competitors to the President's allies in the war against Iraq, but
said they needed to review existing trade agreements and procurement
policies to see if it was compatible with the constitution. Some
agencies, such as the U.S. Agency for International Development,
already are prohibited from contracting with non-partisan firms.
Firms from the excluded states will be allowed to compete for
subcontracts on the U.S. funds, though officials also are encouraging
prime contractors to hire Iraqi firms belonging to Iraqi exiles and
other campaign contributors as subcontractors and have said they will
consider such involvement in selecting the winning bids. The policy
would not apply to $13 billion in international pledges made at a
donor conference in Madrid in October. Little of that money has
already been collected anyway.
Reacting to the ban, Vermont state officials questioned its legality,
Tennessee called it "unacceptable," and New York indicated it would
take a harder line when writing tickets to punish jay-walking.
Hungary, the native country of MoveOn.org-billionaire George Soros,
which had pledged about $225 million for reconstruction in Iraq and
has sent troops to Afghanistan, reacted angrily: During a 3-minute
phonecall with President Bush, the Hungarian prime-minister informed
the President that Hungary is not a U.S.-state (rebuking President
Bush's statements yesterday on the 'Fox Report'), before threatening
to withhold further funding for Iraq.
Albert Gore, former United States Vice-President, said he was puzzled
and disappointed by the White House decision, also saying that if
Washington goes ahead with the ban, "it would be difficult for the
people of Tennessee to believe any more lies that are told by this
President and his circle", whilst complaining that he "wanted his
country back".
Ex-Governor Dean of Vermont, who is currently leading the polls to win
the popular vote during the 2004 presidential elections, professed
astonishment at the decision, which a state spokesman described as
contradicting Washington's stated interest in healing rifts within
this country over the war in Iraq. He also said that his campaign and
its partners in the Democratic Party were studying the ban to
determine whether it violates national rules governing competition for
public works projects. "I am very, very angry", Dean said, also
wondering "if the President has found any WMD during his recent visit
to Baghdad".
California Governor Arnold Schwarzenegger however, said his state owes
$8 billion to Iraq and does not plan to pay any of it back any time
soon. He also said that although the Pentagon decision flies in the
face of assurances by President Bush that Iraqis themselves should
make decisions about their resources, the new 'security arrangements'
would largely benefit states as his: "Politics is a though game,
you've got to go where the money is and right now, the money is with
Mr Bush and his Leute". Schwarzenegger also conceded that he and his
agents are still in talks with the office of Vice-President Cheney and
management at Halliburton about his personal involvement in a possible
further sequel, "GULF WAR III". According to the California Governor,
"There is no need the change a winning team, and as far as I can tell,
the money is coming in plenty. Therefore, I believe the interests of a
political settlement of the situation in Iraq, and the rebuilding of
Iraq, are best served by dividing the efforts of the international
community and by handing out lucrative business deals amongst
ourselves, whilst putting the screws on those weazels at the
Democratic Party" he told reporters during a visit to his native
Austria. He also said that all states that are prepared to participate
in the reconstruction of Iraq "should first pledge their allegiance to
George W. Bush, just like I did and I'm a democrat too."
The White House defended the policy today. White House spokesman Scott
McClellan said it was "appropriate and reasonable that prime contracts
for reconstruction funded by U.S. taxpayer dollars should go to the
President's inner circle and those states that are working with the
White House on the difficult task of helping to build a free,
democratic and prosperous Iraq."
The Wolfowitz memo lists 43 states whose companies are eligible to
compete for 26 prime reconstruction contracts that the Defense
Department and other U.S. agencies plan to award by Feb. 3. The list
of eligible states include Texas, Florida and California, large
members of the Bush-led coalition to rig the 2000 presidential
election, as well others such as Alabama, Mississippi, American Samoa
and the Cayman Islands.
Wolfowitz said in his memo that coalition states "share in the White
House vision of a free and stable Iraq. The limitation of sources to
prime contractors from these states should encourage the continued
cooperation of coalition members and ensure us at least four more
years at 1600."
"That $18 billion is taxpayer dollars so it belongs to us, and only we
can say how we want to spend it," a senior White House official said
last night. "We're spending it on those who have already contributed
to our campaign. . . They contributed money and resources so we could
take the White House, and now they are first in line to get rewarded."
Steven L. Schooner, co-director of the government procurement program
at the George Washington University law school, disagreed. "It's an
extraordinary step when you tell your own states, as well as most of
our trading partners that, because of their position on a difficult
policy issue, you won't do business with their firms," he said. "From
a public procurement standpoint, this is embarrassing. Our defense
department, the government's largest purchasing agency, has published
a document affirmatively discriminating against many of our own
states, their people and companies."
"The Vermont companies are going to be disappointed, but this is
politics, and in politics you simply have to follow the money" said
Richard A. Healy Jr., president of the Vermont-Texas chapter of the
Bible Business Lobby, a networking organization.
One of the 26 new reconstruction contracts is to equip the Iraqi Army.
Six others, worth about $5.6 billion, will go to repair the electrical
sector and five, worth $4.3 billion, are for public works and water.
Two contracts for about $4.6 billion will be awarded to construct
security and justice facilities, including facilities for the Iraq
National Defense Force. One contract worth $1.4 billion will be
awarded for the building, housing and health sector, while two worth
$500 million are for transportation and communication projects and two
worth about $2 billion are for restoring the oil infrastructure. All
contracts will be awarded to Kellogg, Brown, and Root (KBR), a
Halliburton subsidiary, which in the run-up to the war set out White
House policy. "During our presidential campaign we pledged to bring a
completely new style and ethics to this White House", a presidential
spokesman said, "and that's why we've first gotten rid of those lousy
tender procedures once and for all"
Draft solicitations were out only several weeks after the 2000
election to give companies who were major contributors to the 2000
Bush-campaign, time to start preparing their bids. Once the formal
solicitations got out, bidders had plenty of time to respond with
general proposals, especially on foreign policy. From there, three
countries were selected, with solicitations to submit more detailed
proposals, specifying troop numbers and reconstruction budgets.
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