When the U.S. invaded Iraq, the Bush administration promised that Iraqi oil profits would pay for reconstruction. Instead, five years and billions of American taxpayer dollars later, the U.S. is still funding projects that should be the purview of the Iraqi government.
A local council in Baghdad offers an example of what money is available for public works and who supplies it. District councils like one in Karrada were set up after the invasion of Iraq by the U.S. occupation authority.
The idea was to have local community involvement in the reconstruction process. While the councils would have no legal standing, and therefore no budget, they would seek funds from the U.S. government, charities and eventually the Iraqi government.
Mohammed al-Rubaie, the head of the Karrada district council, showed off a gift — a Texas branding iron that he was recently given by a departing American colonel. He says proudly that it was a sign of the deep respect the American had for him because the branding iron is used on the most important things he says a Texas rancher owns — horses and cattle.
Behind him is a wall filled with the certificates and plaques that rotating U.S. Army units have bestowed on Rubaie. Since 2003, he's worked with a steady succession of them.
He says it's crucial to have a good relationship with the U.S. military for one simple reason.
"Until, the Iraqi government opens up its pockets, we need them," he says. "In terms of money, we still need the American forces because the Iraqis do not give us funds."
A Local Shortfall of Money
The district councils have yet to be legitimized. They still function the same way they did after the invasion, and council leaders like Rubaie have to beg or borrow whatever they can.
"We've only gotten [$5,500] from the Iraqi government in the last two years," Rubaie says. "We have promises only. Yesterday, we had a meeting with the provincial council which promised to give us $250. That is not even enough for the office stationary!"
To make up that shortfall, his first port of call is the Americans. Every Monday, the local U.S. military commander and civilian advisers come to the Karrada council for meetings.
Karrada is a mostly Shiite middle-class neighborhood that is also home to many important Iraqi politicians, including Abdelaziz Hakim, the leader of a major Shiite party. The neighborhood's main road is a bustling commercial center, with electronic goods piled high in front of family-run stores.
While the Karrada council may not have enough money, it does have lavish digs — it is housed in the former palace of one of Saddam Hussein's daughters.
Turning to the U.S. Military for Funding
Kathryn Herhusky, who has been coming here for the past year as a member of a provincial reconstruction team attached to the American unit responsible for Karrada, helps Rubaie deal with finance issues.
"With the coalition forces here he's been able to take projects to [the] military to get support for sewer and electric, even schools, which has put millions of dollars into the local areas," Herhusky says. "We've tried to do it with them taking the credit."
But she acknowledges, "It's still been our money. It's not been Government of Iraq money."
Billions in Oil Money Unspent
According to the U.S., Iraq's government has $48 billion in oil revenue sitting in its bank accounts outside of Iraq. Very little of that money is being spent.
The reasons are many: There is no electronic banking system to get the money where it needs to go; the accounting system in Iraq is stymied by bureaucracy; and there is corruption.
But critically, the Americans say the Iraqis don't feel that they need to spend their own money when U.S. pocketbooks are perceived to be wide open.
One American adviser recalls how the governor of a southern province demanded that the Americans provide furniture for a new prison that the U.S. had already paid $80 million to build.
Herhusky says that Iraqis have come to expect American help as a matter of course.
"We can only hope that [the Iraqis become] less dependent on us," she says. "It's up to us to back off and do that. And it's very hard. They count on us. Well, we like to be needed, you know. So ... we are here to make a difference. It's a fine line ... it's a fine line."
And the need is still great.
In one of the meeting rooms of the Karrada council, the department heads for water, electricity, public works and sewage are gathering. Everyone seems angry.
The head of the local water authority is upset because the provincial water authority has told him that he must repair a burst water pipe in the neighborhood. He says he told them that it wasn't his responsibility. The back and forth lasted for days, he says.
Another councilman asks the group, "Who approves the contracts we make, the Iraqis or the Americans?"
A man snaps, "the American side obviously."
Changing the Message to Iraqis
A U.S. Agency for International Development field worker and two U.S. military officers sit quietly taking notes. One of them is Lt Col. Rick Burns — a civil affairs officer attached to the 10th Mountain Division.
He was here last time in 2003, just after the invasion. He says back then the Americans had seemingly limitless funds. A lot of that money was mismanaged or squandered. He says that now the message he is sending the Iraqis has changed.
"We are in kind of a tough-love situation now, where we don't have the money we had before," Burns says. "We are not spending the money that we used to spend."
But Rubaie, the council chairman, hasn't seemed to notice.
At the end of the day, he sits down with Burns and lays out his latest project. He wants to pay local artists to make statues with peace as a theme — this in a district that has trouble fixing water pipes. Burns says he can possibly find the money from an aid agency.
Afterwards, Burns says he doesn't want to discourage Rubaie from dreaming big. But the colonel says, "The government of Iraq is going to have to start taking ... fiduciary responsibility for taking care of their own people. As long as we're spending lots of money, obviously there's no impetus for the Iraqi government spending more money. There justifiably needs to be a backing off, I think, of American dollars going into these things."