Financial Dispute May Disrupt Iraq Airport Security
Current Firm Has Not Been Paid; Iraqis Want Local Group to Take Over

By Jonathan Finer
Washington Post Foreign Service
Saturday, July 1, 2006

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Twice since last summer, Global has withdrawn its employees and threatened to abandon the project because it was not being paid.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.

In part because Iraq's volatile security climate makes highway travel dangerous, the Baghdad airport is the country's only viable point of entry for business travelers and visiting officials and a primary hub for the shipping of reconstruction materials. Since it opened in the months after the U.S. invasion, it has gradually expanded its civilian passenger services, with charter flights and the government-owned Iraqi Airways now serving a host of Arab capitals.

But the airport -- which still requires arriving planes to make a steep, corkscrew descent to avoid potential missile fire -- has not been certified by the International Civil Aviation Organization, a step that would be required to attract major international airlines. Losing its security contractor would be a major step back for what has become one of the few enduring symbols of Iraq's development.

"What this says is we're not ready for the big time yet," said a U.S. reconstruction official, who spoke on condition he not be named. "I could not in good faith, because of the security situation, begin to promise a secure international airport that meets security standards until this is all worked out."

Built in 1985, the airport itself is something of a relic, its decor, similar to so many Iraqi buildings, seemingly from a bygone era. On an unused arrivals board on the lower level are the names of cities that haven't dispatched a flight to Iraq in decades: Helsinki, Chicago, Athens, Barcelona.

A recent tour of the airport's security apparatus showed that Global's responsibilities extend from inside the terminal, where its employees screen baggage and pat down passengers, to a guardhouse more than a mile down the airport road, the first of 13 such checkpoints that travelers must clear before boarding a flight.

Its arsenal of security equipment includes metal detectors, explosives-sniffing dogs and trailers, mounted on pickup trucks, that X-ray vehicles as they pass. About 2,000 cars pass through the gauntlet each day.

"This is probably one of the safest airports in the world because of the security measures," said Rayson Pritchard, Global's project manager, who said it would take almost an entire army infantry battalion to replace Global's guards if the company withdrew.

The U.S. official said Global erred by not pushing the government harder to grant assurances that it would be paid going forward.

"I don't think it's even a handshake agreement. They're just staying on with the hopes of being paid in the future," the official said. "It's a very strange way of doing business. We made it very clear we did not approve of this."

Staff writer Thomas E. Ricks in Washington and special correspondent Naseer Nouri in Baghdad contributed to this report.

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