Defense Skirts State in Reviving Iraqi Industry

Overseeing business development for the Pentagon, Paul Brinkley, carrying helmet, has sought to restart state-run factories in Iraq.
Overseeing business development for the Pentagon, Paul Brinkley, carrying helmet, has sought to restart state-run factories in Iraq. (Department of Defense photo)
By Rajiv Chandrasekaran
Washington Post Staff Writer
Monday, May 14, 2007

Paul Brinkley, a deputy undersecretary of defense, has been called a Stalinist by U.S. diplomats in Iraq. One has accused him of helping insurgents build better bombs. The State Department has even taken the unusual step of enlisting the CIA to dispute the validity of Brinkley's work.

His transgression? To begin reopening dozens of government-owned factories in Iraq.

Brinkley and his colleagues at the Pentagon believe that rehabilitating shuttered, state-run enterprises could reduce violence by employing tens of thousands of Iraqis. Officials at State counter that the initiative is antithetical to free-market reforms the United States should promote in Iraq.

The bureaucratic knife fight over the best way to revive Iraq's moribund economy illustrates how the two principal players in the reconstruction of Iraq -- the departments of Defense and State -- remain at odds over basic economic and political measures. The bickering has hamstrung initiatives to promote stability four years after Saddam Hussein's fall.

Under pressure from Congress to demonstrate progress on the ground, the military often favors immediate solutions aimed at quelling violence. That has prompted objections from some at State who question the long-term consequences of that expeditious approach.

In recent months, the two departments have squabbled over the degree to which Iraqi farmers should be aided by subsidies and tariffs. They also remain at odds over State's desire to deploy reconstruction teams to two Shiite-dominated provinces in central Iraq. Defense officials are balking at providing robust security for the teams, preferring to deploy as many troops as possible in Baghdad. State contends that well-protected American civilians in those provinces will build relationships with future Shiite leaders.

"There has been a surprising degree of venom and hostility" between the departments, said a senior U.S. government official involved in Iraq policy.

The dispute between State and Brinkley has become so pitched that he has effectively stopped working with the U.S. Embassy and is setting up his office elsewhere in Baghdad's fortified Green Zone.

"We tend to not deal with them very often," Brinkley said of embassy officials. "We have our own mission, and we do our own thing."

Although the embassy's chargé d'affaires, Daniel Speckhard, said Brinkley "has the support of the embassy," Brinkley travels to factories without embassy personnel in tow and holds his own meetings with Iraqi trade, commercial and banking officials. He has also organized trips for U.S. business executives to Iraq and has encouraged deals between Iraqi state-owned firms and U.S. corporations.

Brinkley, who was interviewed in Washington, said he expects several factories to reopen this summer. By year's end, he envisions Wal-Mart stores selling made-in-Baghdad leather jackets and other U.S. retailers stocking Iraqi loafers, hand-stitched carpets and pinstripe suits.

Disagreements among Americans about how to deal with Iraq's government-run businesses began shortly after U.S. forces arrived in Baghdad in April 2003. The first U.S. adviser to Iraq's Ministry of Industry and Minerals, retired ambassador Timothy Carney, wanted to reopen many of the country's 192 state-owned factories, which, according to the World Bank, employed more than 500,000 people before the war.

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