Financial Dispute May Disrupt Iraq Airport Security

BAGHDAD, June 30 -- In a standoff threatening to again disrupt security at Iraq's main airport, the multinational firm guarding the facility has not been paid since December, and Iraqi officials say they intend to replace it with a local force.

The dispute between the Global Strategies Group and Iraq's Transportation Ministry over Baghdad International Airport, which abuts a major U.S. military base, has hardened over nearly two years. The company won a security contract from the U.S.-led administration that governed Iraq after the 2003 invasion. But when Iraq regained sovereignty, the contract was never formally renewed and the company has struggled to collect outstanding fees, now estimated at $25 million, or roughly $3 million a month.

Twice since last summer, Global has withdrawn its employees and threatened to abandon the project because it was not being paid. Its actions halted civilian air traffic for several days. During the first work stoppage, in September, U.S. soldiers were deployed to secure the airport. The company returned to work only after it was paid more than $20 million -- not by the Iraqi government, according to U.S. officials and company executives, but by the U.S.-controlled Development Fund for Iraq, a pool of cash seized when Iraqi President Saddam Hussein was ousted.

"We want to be paid for the work we've done," said Dale Davis, a managing director in Global's Dubai office who said the Transportation Ministry recently solicited bids for a new 12-month security contract. "We'd like to get this settled and to stay on this job."

Complicating the dispute, company and U.S. officials say, is that the Transportation Ministry is run by political allies of Shiite cleric Moqtada al-Sadr, an outspoken opponent of the U.S. presence in Iraq who runs one of Iraq's largest Shiite militias. U.S. forces, who consider Sadr's fighters a major security threat, use the same access road as civilian traffic and must pass through a checkpoint run by Global before entering their own compounds.

The Transportation Ministry has long considered Global's fees too high and has pressured the company, which once employed a workforce drawn primarily from countries in Africa and Asia, to hire more Iraqis. Now, of Global's 550 employees at the airport, Davis said, more than 85 percent are Iraqi. He also said the company is willing to settle for less money than it is owed if it is awarded a guaranteed contract.

But a Transportation Ministry official said in a telephone interview that although Minister Karim Mahdi intends to pay Global what it is due, he will then sever ties with the firm.

"Global will be paid. They will get all the money they deserve," said Ahmed al-Moussawi, press officer at the ministry. "But then we would like them to finish their work and leave. Iraq is able to control the whole thing. It's an Iraqi matter. We will ask Global to leave very soon."

Moussawi said the ministry had not determined what sort of security force would replace the company. According to three airport administrators who spoke on condition they not be named, ministry officials have said they could secure the airport with a combination of Iraqi police officers, soldiers and the ministry's own security officers. Many of the ministry officers also belong to the Mahdi Army, Sadr's militia, according to several airport administrators.

"Without question, it's important to us. It's right in our immediate proximity," said Maj. Todd Breasseale, a U.S. military spokesman based at Camp Victory, the base adjacent to the airport and the headquarters of U.S. ground forces in Iraq. "Whoever is doing security there, it has to be somebody who's not prone to violence."

If Global walks away from the job, or is replaced, it would take three weeks to three months to train a new security force, during which time the airport could be forced to close, according to a U.S. official in Baghdad involved in trying to broker a compromise, who also spoke on condition he not be named.

"These transitions can't just happen overnight," the official said.