Security Progress in Baghdad Draws Entrepreneurs A small but growing number of what might be called adventure capitalists are going to Baghdad. The American entrepreneurs are defying ongoing insurgent attacks, the country's dysfunctional government ministries and the skeptics.
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Security Progress in Baghdad Draws Entrepreneurs

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Security Progress in Baghdad Draws Entrepreneurs

Security Progress in Baghdad Draws Entrepreneurs

Security Progress in Baghdad Draws Entrepreneurs

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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A small but growing number of what might be called adventure capitalists are going to Baghdad. The American entrepreneurs are defying ongoing insurgent attacks, the country's dysfunctional government ministries and the skeptics.


Oh, if you're fed up with the American stock market or the real estate market, consider this attractive business opportunity: plans for an amusement park, a four-star hotel, apartment buildings, an infrastructure for a dozen cities. But there are risks, namely mortar, rocket and small arms fire, occasional car bombings, and kidnappings. Baghdad is attracting a small, but growing number of what you might call adventure capitalists, as NPR's Eric Westervelt reports.

ERIC WESTERVELT: Al-Zawra Park and Zoo, the sprawling complex in the heart of Baghdad, is open again, it's ramshackle playgrounds and decrepit coffee shops slowly lurching back to life. But Los Angeles entrepreneur Llewellyn Werner has a bigger vision: a $500 million Disney-style water park. In a conference room in Zawra Park, he pitches his plan to a deputy Baghdad Mayor.

Mr. LLEWELLYN WERNER (Entrepreneur): In Disneyland, they shoot the water into the air as a mist, and they project pictures on the water, and the people go oh, my gosh. I can't believe this. We're going to do the same thing here. It's very exciting.

WESTERVELT: Deputy Mayor Ibrahim Hussain looks intrigued, yet a little skeptical. We'll have to check all the designs, he says. Werner is undeterred.

Mr. WERNER: One piece of market advice. The lagoons are very important.

Mr. IBRAHIM HUSSAIN (Baghdad Deputy Mayor): Yeah, yeah, I agree.

Mr. WERNER: They're integral…

Mr. HUSSAIN: I agree.

Mr. WERNER: …to the sex appeal, the sizzle. Anybody ever been to Disneyland?

Mr. HUSSAIN: We've seen it on TV.

Mr. WERNER: Okay.

Mr. HUSSAIN: At least we have an idea.

WESTERVELT: Sizzle? Sex appeal? Rockets and mortars still regularly fall near Zawra Park, more than half of which is inside the heavily protected Green Zone, a near daily target of Shiite militants and Sunni insurgents. Werner and his company, C3 Invest, recently purchased a 50-year lease from the city of Baghdad for the 50-acre park. It gives his company exclusive rights to hotel and housing development inside the park. Werner won't say what he paid for the lease as he strolls past the murky overgrown lagoons filled with half-sunken debris.

Mr. WERNER: But if you take a walk as you're doing right now, if you can imagine for a moment a little bit better site-scape, some attractions, down the road, maybe some mixed-use housing shops, kind of like a universal walkway concept. This is perfect.

WESTERVELT: Visionary, opportunist, or something else? Werner insists he's just an aggressive America businessman man eager to defy the skeptics.

Mr. WERNER: They go, what? But you begin to explain to them the enormous opportunity of a country of 26 million people who are going to be spending anywhere between $80 and $100 billion in the next five years rebuilding their society from the ground up.

WESTERVELT: Werner's company also is investing in new fiber optic lines here and a 500 megawatt power plant outside Baghdad. We're never going to shoot our way out of Iraq, Werner says. The only way out of here is to employ these young men, he says. Give them something to lose. Brigadier General Mike Milano agrees. The deputy commander of the 4th Infantry Division, which is in charge of Baghdad, says job creation is central to the U.S. counterinsurgency strategy.

Brigadier General MIKE MILANO (Deputy Commander, 4th Infantry Division, US Army): It's sustainable employment for military-aged males. It gives them something constructive to do with their lives, as opposed to, you know, putting IEDs in the road or taking, you know, sniper shots at soldiers and so forth.

WESTERVELT: Llewellyn Werner is one of eight American entrepreneurs who've set up new business ventures in Iraq after encouragement and help by the defense department's Paul Brinkley. He directs the Pentagon's task force to improve business and stability operations in Iraq.

Mr. PAUL BRINKLEY (Deputy under Secretary of Defense for Business): It's not combat tourism by any stretch. They're coming here. They're serious, want to start businesses. They want to invest. They want to get in on ground floor, 'cause it's going to be an extremely prosperous country.

WESTERVELT: Brinkley says Iraq today is an untapped prospect - in business jargon, a Greenfield opportunity.

Mr. BRINKLEY: This may be one of the last great Greenfield business opportunities in the world, you know, where there's huge potential return on investment if you get in early, if you have the appetite for risk.

WESTERVELT: Guys such as Rand Hultz do. A former U.S. Army Sergeant, Hultz reenlisted in the Army after 9/11 and fought in Iraq in 2004. He's now back as a civilian project manager for a veteran-owned $25 million hedge fund called the Iraq Fund. Hultz shows us around some of the properties his company's bought in central Baghdad.

Mr. RAND HULTZ (Project Manager, The Iraq Fund): There's 20 rooms in this building that we control. There's 34 in the building across the street, and then in the…

WESTERVELT: The former soldier is something of a high end fixer for U.S. and Arab-Gulf investors who want eyes and feet on the ground inside Iraq, just not their own eyes and feet. In addition to the Iraq Fund, Hultz is a lobbyist, business developer and manager for four other companies. For Hultz, that means a tricky balance, working with senior Iraqi government and business officials all while trying to keep a low profile and doing what you must in a county who's banking system is in tatters. If that means moving half a million dollars cash on the ground in a shoulder bag, so be it.

Mr. HULTZ: Unarmed with two people in an assault vehicle, downtown Baghdad -and I've done that on several occasions - a half million dollars, about 18, 19 pounds, anything more than that in a small bag gets a little bit difficult to manage if you have to leave the vehicle and go on foot.

WESTERVELT: Hultz is working to land some of the big infrastructure contracts in Iraq, but you have to have the basic networks to support them.

Mr. HULTZ: The problem is if Iraq doesn't have the infrastructure that it needs to move forward, the small things that you want to do and enjoy in the streets will be there. But, you know, being able to reprocess waste water, secure potable drinking water for the masses, to produce electricity for more than six or eight hours a day, those are the large concerns.

WESTERVELT: Watchdog groups are concerned too about Iraq's notoriously corrupt ministries and business culture, and the spotty track record of some America firms in Iraq. U.S. Congressional investigators allege that as much as $10 billion charged by U.S. contractors for Iraq reconstruction was ill-spent or questionable. As Scott Amey with the Project on Government Oversight put it, quote, "The question is whether a private company can do what the federal government can't - adequately oversee the contracts and reconstruction efforts to ensure that money isn't wasted and that the Iraqi people benefit from the investment," end quote.

And Iraqis investigating Iraqi government corruption here continue to be targeted. On Tuesday, the Director of the Iraqi Ministry of Labor was assassinated in a roadside bombing as he left his Baghdad home. Abdullah al-Lami was in charge of the ministries reconstruction department and was investigating corruption in the ministry.

Back at the business pitch meeting, Llewellyn Werner hopes to see a thousand skateboards bloom in Baghdad.

Mr. WERNER: One of the fastest growing sports in the world is called skateboarding.

WESTERVELT: The CEO of C3 tells the assembled group he plans to develop the new entertainment complex over five years, but he's starting off slowly, with thousands of free skateboards and big new skating ramps. Few Iraqis seem to know of the sport, but never mind, in July Werner will give the boards away, along with much needed helmets and kneepads.

Mr. WERNER: More people will come to this complex than you can ever imagine once it catches on.

WESTERVELT: After explaining skateboarding, Werner tells the assembled Iraqi business and government men, quote, "I'm a businessman. I'm not here because I think you're nice people. I think there's money to be made here."

Eric Westervelt, NPR News, Baghdad.

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