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On Iraq, U.S. Turns to Onetime Dissenters

By Rajiv Chandrasekaran
Washington Post Staff Writer
Sunday, January 14, 2007

First of an occasional series

Timothy M. Carney went to Baghdad in April 2003 to run Iraq's Ministry of Industry and Minerals. Unlike many of his compatriots in the Green Zone, the rangy, retired American ambassador wasn't fazed by chaos. He'd been in Saigon during the Tet Offensive, Phnom Penh as it was falling to the Khmer Rouge and Mogadishu in the throes of Somalia's civil war. Once he received his Halliburton-issued Chevrolet Suburban, he disregarded security edicts and drove around Baghdad without a military escort. His mission, as he put it, "was to listen to the Iraqis and work with them."

He left after two months, disgusted and disillusioned. The U.S. occupation administration in Iraq, the Coalition Provisional Authority (CPA), placed ideology over pragmatism, he believed. His boss, viceroy L. Paul Bremer, refused to pay for repairs needed to reopen many looted state-owned factories, even though they had employed tens of thousands of Iraqis. Carney spent his days screening workers for ties to the Baath Party.

"Planning was bad," he wrote in his diary on May 8, "but implementation is worse."

When he returned to Washington, he made little secret of his views. They were so scathing that his wife lost a government contract. He figured his days of working on Iraq were over.

Until a phone call on Tuesday.

David Satterfield, the State Department's Iraq coordinator, was on the line with a question: Would Carney be willing to go back to Baghdad as the overall coordinator of the American reconstruction effort?

The decision to send Carney back to Iraq -- and to abandon the policies that so rankled him in 2003 -- represents a fundamental shift in the Bush administration's approach to stabilizing the country. Desperate for new approaches to stifle the persistent Sunni insurgency and Shiite death squads that are jointly pushing the country toward an all-out civil war, the White House made a striking about-face last week, embracing strategies and people it once opposed or cast aside.

Indeed, Carney's rushed selection came just days after the administration announced two other key Baghdad appointments from among the ranks of dissenters in 2003: Ambassador designate Ryan Crocker and Lt. Gen. David H. Petraeus, who will take over command of all coalition forces in Iraq.

Crocker, who spent the summer of 2003 helping to form Iraq's Governing Council, left the country frustrated with the CPA's reluctance to reach out to minority Sunnis. Even before the invasion, he wrote a blunt memo for then-Secretary of State Colin L. Powell warning of the uncontrolled sectarian and ethnic tensions that would be released by the overthrow of Saddam Hussein.

Petraeus, who spent 2003 commanding the 101st Airborne Division in Mosul, grew dismayed by the heavy-handed tactics fellow military commanders were using to combat insurgents. He also opposed the methods by which Bremer disbanded the Iraqi army and fired Baathists from government jobs. And he chafed at the way reconstruction funds, personnel and decision-making were centralized in Baghdad. The CPA's policies, he said in 2004, should have been "tempered by reality."

It's a view the White House now seems to accept.

The plan unveiled by Bush last week calls for many people who lost their jobs under Bremer's de-Baathification decree to be rehired. It calls for more Sunnis, who were marginalized under the CPA, to be brought into the government. It calls for state-owned factories to be reopened. It calls for more reconstruction personnel to be stationed outside the Green Zone. It calls for a counterinsurgency strategy that emphasizes providing security to the civilian population over transferring responsibility to local military forces.

Carney believes such measures could have been effective three years ago. Today, he worries they will be too little, too late.

During the phone call, Satterfield told him that the new reconstruction effort might not succeed. The two men agreed that if it was to have a chance, Americans would have to work more closely and collaboratively with Iraqis.

To Carney, it suggested "a sense of reality."

"It's certainly different than anything I saw out of the CPA or the aftermath of that," he said. "It seemed a little refreshing, actually."

He paused.

"It's been a long time coming."

A Plan in Need of a Leader

Bush and his national security team began working on their new Iraq strategy in earnest shortly after the Nov. 7 midterm elections, which amounted to a rebuke of the president's war policy. They met among themselves. They talked to diplomats and military commanders in Iraq. They conducted a videoconference with Iraq's prime minister. They consulted with retired generals, experts at think tanks and academics.

By late December, the president and his closest security advisers -- Vice President Cheney, new Defense Secretary Robert M. Gates, Secretary of State Condoleezza Rice and national security adviser Stephen J. Hadley -- had coalesced around the need for more troops in Iraq. They had settled on Crocker to handle political strategy on the ground, replacing Ambassador Zalmay Khalilzad. And they had picked Petraeus to take over from Gen. George W. Casey Jr., whom they deemed to be too focused on the handover of responsibility to the Iraqis instead of on restoring peace to Baghdad's strife-torn neighborhoods.

But it wasn't until Monday, when Bush was going over a draft of the address he planned to deliver on television Wednesday, that they confronted the issue of who would coordinate the administration's new economic initiatives for Iraq.

Bush was planning to propose increasing the number of province-level reconstruction teams operating outside the Green Zone from 10 to 18. There would be new efforts to help the Iraqi government improve budgeting and management functions. And, most important, there would be a significant new emphasis on putting unemployed Iraqis to work. The strategy also included an implicit reversal of Bremer's policy on state-owned factories.

Scores of Americans ensconced in Baghdad's Green Zone would be involved: The U.S. Embassy has an economic section. There's a U.S. Agency for International Development mission. And there's the Project and Contracting Office, which manages reconstruction funded by an $18.4 billion U.S. aid package.

"Who's going to coordinate this?" Bush asked as he read through the economic initiatives, according to two people with knowledge of the meeting.

When Satterfield got back to his State Department office, he told his staff to "give me names."

The next day -- less than 36 hours before Bush addressed the nation -- Satterfield called Carney.

Idle Factories, Idle Workers

Before Carney left Iraq in June 2003, he tried one last time to persuade Bremer to rethink his refusal to repair more than a handful of state-owned factories. Iraq's government-run businesses employed more than 100,000 people before the U.S. invasion. To Carney, it was a no-brainer: Fixing the factories would allow thousands of Iraqis to get back to work, not only allowing them to provide for their families, but also keeping them occupied. He knew from his time in other post-conflict societies that the idle and unemployed are the best recruits for insurgencies.

But Bremer and his chief economic adviser, Peter McPherson, didn't want to pour money into inefficient state-run firms. They believed private investors would buy Iraq's government factories and set up new businesses to employ the populace. So they refused to give Carney money to reopen the plants.

The day before he left, Carney sent a note to McPherson titled "Fatal Flaws in Budget Policy towards State-Owned Enterprises." He argued that the CPA was violating the Geneva Conventions by undermining "assets of the Iraqi people." He also accused McPherson of drawing up policy "without adequate Iraqi participation."

"Instead of transparency, with major concerned Iraqi Ministries and academics engaged," he wrote, "the policy seems to be the thinking of a small group in the Coalition Provisional Authority."

"We need to rethink this," he wrote in closing.

Petraeus also opposed the immediate privatization of state-run firms. "What happens when you have privatization is . . . you end up with a hell of a lot less workers in the short term," he told an interviewer in 2004. "If you want to increase unemployment en route to greater employment and greater productivity and greater a lot of other things, that's great, but you've got to survive in the short term."

For almost three years, the policy didn't change. Although the Iraqi government reopened a small fraction of its 148 factories and began operating them at a diminished capacity, the efforts to sell them to private investors were unsuccessful.

When Lt. Gen. Peter W. Chiarelli, at the time the top U.S. field commander in Iraq, sought to increase production at a state-owned tractor factory south of Baghdad early last year, a State Department official in Baghdad refused to pay for the necessary repairs, even though the rehabilitated facility would have been able to provide employment for many of the 10,000 people who worked there before the invasion. Chiarelli used money from a different program -- for small-scale reconstruction projects -- to fund the construction.

It wasn't until June that the Bush administration began to reevaluate its approach. Paul A. Brinkley, who had recently taken over as deputy undersecretary of defense for business transformation, returned from a trip to Iraq convinced that quelling violence depended on increasing employment. To Brinkley, a former corporate executive, the most effective way to create jobs was to reopen state-run factories.

Brinkley persuaded Deputy Defense Secretary Gordon England to authorize funding to repair as many as 200 factories. England's predecessor, Paul D. Wolfowitz, was among the administration officials who opposed resuscitating state-owned firms in 2003.

It's not clear how effective Brinkley's initiative will be. Many of the factories are in dangerous, Sunni-dominated areas of the country. Electricity remains in short supply. Raw materials can be hard to come by. And given the intensity of the sectarian conflict, giving Iraqis jobs may not be enough to get them to put down their weapons.

Even if the odds are slim, the Bush administration wants to give it a try. Brinkley's team is focusing on 10 factories that it thinks could be open and employing more than 11,000 Iraqis by the end of this month.

"Any counterinsurgency strategy has to have an economic component to it," said Celeste Ward, who spent last year in Iraq as Chiarelli's political adviser. "It might give us a marginal increase in stability by getting some people off the street. You want people to start saying, 'Hey, we're a normal country where people go to work.' "

De-Baathification

"This is a big mistake," Carney thought in May 2003, when Bremer told senior CPA officials that he would soon issue an edict prohibiting many former members of Hussein's Baath Party from holding government jobs. The one-and-a-half-page decree, which was drafted in the Pentagon office of then-Undersecretary of Defense Douglas J. Feith, banned anyone who had been in the party's top four ranks; it also banned hundreds of thousands of rank-and-file members from holding senior management positions in government ministries. Bremer's stated goal was to cleanse Iraq's government of the former president's cronies.

Carney and the other Americans tapped to run Iraq's ministries knew that the senior managers in almost all government departments were Baathists. Hussein's government had forced them to join the party, but that didn't mean they all had blood on their hands or that they were all close associates of the former leader. And without them, it would be much more challenging to get the government running again.

With unemployment at more than 40 percent, Carney also knew that anyone kicked out of a government job wasn't going to find work elsewhere. They would be unemployed and angry.

Carney was one of many CPA officials to object. But Bremer refused to soften the policy.

The de-Baathification expert in the CPA's headquarters was Meghan O'Sullivan, then an aide to Bremer and now a deputy national security adviser working on Iraq. Although she voiced initial misgivings, she quickly became a vigorous and uncompromising enforcer of the edict.

From the moment the order was issued, most of Carney's time was devoted to de-Baathification. He held long meetings with the industry ministry's management, first to explain the policy and then to comb through records to identify people who were ineligible for future employment.

"It was a terrible waste of time," Carney said. "There were so many more important things we should have been doing, like starting factories and paying salaries."

After a few months, the CPA began to receive reports that 10,000 to 15,000 teachers had been fired because of the de-Baathification order. In some Sunni-dominated areas, entire schools were left with just one or two teachers.

Bremer eventually concluded that the policy had been applied "unevenly and unjustly." But instead of rescinding his edict, he announced that appeals would be handled by a de-Baathification commission headed by Ahmed Chalabi, a controversial former exile whose informants had helped the Bush administration make the case for war. Chalabi, a Shiite, saw little need to accommodate former Baathists, most of whom are Sunnis.

By the summer of 2004, as the United States was relinquishing sovereignty of Iraq, many officials handling Iraq policy in Washington had concluded that Bremer's initial edict was a mistake. But it was too late for the Americans to do anything other than urge Iraq's Shiite-led interim government to rehire ex-Baathists. The CPA no longer had the power to issue edicts.

U.S. officials in Baghdad and in Washington leaned on the governments of prime ministers Ayad Allawi and Ibrahim al-Jafari, but the country's powerful Shiite and Kurdish leaders were unwilling to embrace the changes sought by the Bush administration. As far as they were concerned, Bremer enacted a sound policy in 2003, and there was little need to change it.

Finally, in 2005, the Shiites and Kurds agreed to reexamine the de-Baathification rules as part of a compromise to get Sunni political parties to support Iraq's new constitution. The agreement called for a revised de-Baathification law to be enacted by parliament.

But that still hasn't happened.

In an attempt to get the process moving, Bush used his televised address last week to call on Prime Minister Nouri al-Maliki to embrace the reintegration of former Baathists. Maliki told Bush recently that he supports a revised de-Baathification law -- but the issue isn't in the prime minister's hands. It's still with Chalabi.

Chalabi is the chairman of the Supreme National Commission for De-Baathification, which continues to have ultimate authority to decide which ex-Baathists can return to work and which cannot. He has prepared draft legislation that calls for easing some elements of Bremer's policy, but he said parliament has been unable to act on it because a majority of the members of the legislature's de-Baathification committee belong to radical cleric Moqtada al-Sadr's political party, which walked out in November to protest a meeting between Maliki and Bush.

Speaking by telephone from Baghdad, Chalabi said he expects progress "pretty soon."

But he said the law will not contain a key demand of the U.S. government: a sunset clause that would abolish the commission, effectively depriving Chalabi of political influence. He called it unconstitutional.

Chalabi said he heard Bush's call for swift action on the de-Baathification law, but he emphasized that he and his fellow Iraqis, not U.S. officials, are in charge of the legislative timetable.

"We don't feel any pressure," he said.

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