War Stories

More Dinars, Please

We’ve spent Saddam’s stash, now let’s have at Rummy’s slush fund.

Here’s another reason for transferring sovereignty to the Iraqis as soon as possible: We’re running out of peacekeeping money.

To the extent that U.S. armed forces have been able to keep order and build good will—to pay the bribes and rev up the projects that make many Iraqis tolerate or even welcome the occupation—it is because of a special fund called the Commanders’ Emergency Response Program.

But within a couple weeks, if it hasn’t happened already, CERP will dry up.

The program started in May, shortly after President Bush declared the war over, when American soldiers in Baghdad unearthed mounds of cash that Saddam Hussein and his two sons had hidden away. Occupation authorities decided to put Saddam’s stash to good purpose. They distributed it to U.S. military commanders, who used it to clean sewers, fix water pumps, buy medicine, paint schools, reopen factories, fill urgent needs—in short, to make possible all the good-news stories in Iraq.

And, except for certain rules (for instance, no money could be spent on goods or services for American personnel), the commanders spent this money at their own discretion.

In the six months since its discovery, the stash—totaling nearly $100 million—has funded 12,000 projects. Maj. Gen. David Petraeus, commander of the 101st Airborne Division, who spent nearly a third of the sum in the area around Mosul, said, “Money is the most powerful ammunition we have.” Lt. Col. David Couvillon, a Marine reservist who found himself serving as provisional military governor of the Wasit province until three months ago, called the stash “essential to our success” and credited it for the fact that not a single Marine in the province died under enemy fire. “As funding and the discretion to spend money where and when needed becomes bogged down in government red tape,” Couvillon recently wrote, “it will create problems for the guys who are still there.”

It may be coincidence, but last month’s attack in Mosul—where two soldiers with the 101st were shot in their jeep and possibly (the Pentagon denied initial Iraqi reports) bashed with bricks and dragged through the street—took place right after Gen. Petraeus ran out of Saddam’s money.

Congress, of course, recently appropriated $18.6 billion for reconstruction aid. This money will soon begin to flow. However, it is earmarked for specific programs, most of them run by American contractors. And it will be centrally administered from Paul Bremer’s Baghdad palace, if not from Washington. Some U.S. officials in Iraq worry that this inflexibility—which goes with congressional mandates—will minimize the role of local input or insight, and thus reduce the aid’s effectiveness.

Anthony Cordesman, a senior defense analyst at the Center for Strategic and International Studies in Washington, D.C., wrote after a recent fact-finding trip to Iraq:

It is clear that the CPA [Bremer’s coalition provisional authority] is not yet ready to formulate effective aid requests and programs in many areas, that the contracting procedure is sometimes flawed to the point of being broken, and that far too much responsibility is being turned over to prime contractors in the middle of a low-intensity war. … It is also striking that the CPA has made so inadequate an effort to realistically measure the impact of its aid programs on stability and regional perceptions.

Cordesman listed a dozen ways that the United States could lose the ongoing war for Iraq. One of them was “a failure to maintain CERP funds to allow effective civil-military aid and engagement programs.”

One official in Iraq says there is some discussion of refurbishing CERP’s coffers with some of the congressional money, but even if this happens, it will be very hard—and Bremer seems disinclined—to give the commanders so much freedom to decide how to spend taxpayers’ dollars.

There is one possible way out to keep the fund—and its vital on-the-ground discretion—going. Buried inside President Bush’s $87 billion defense supplemental bill, which Congress passed last month for military operations and economic assistance in Iraq and Afghanistan, is a $9.3 billion “transfer fund” that Secretary of Defense Donald Rumsfeld can move around from one program to another at his discretion. Much of this discretion applies only to money for combat supplies or construction projects. However, one clause of the bill reads:

Upon the determination that such action is necessary in the national interest, the Secretary of Defense may transfer between appropriations up to $5 billion the funds made available in this title.

Elsewhere, the bill notes that the president may transfer “any appropriation made available in the title,” as long as the amount does not exceed $200 million.

Two months ago, before Congress passed the bill, I denounced these hidden clauses as “Rumsfeld’s slush fund,” noting that the secretary could invoke them to extend and enlarge the already-lavish no-bid contracts for Halliburton, Bechtel, and the like.

This critique still holds. Congress didn’t delete or alter the “transfer fund” clauses. But Rumsfeld and Bush have an opportunity for budgetary redemption. Transfer some of that money to CERP. Instruct Bremer to give a wink and a nudge to the commanders who used the first stash wisely.

Might such discretion create the potential for corruption? Yes. But no reports of abuse surfaced during the first round. And if some miscreant officer does skim a few bucks off the top, the loss would be trivial compared with the price-gouging that Pentagon-approved contractors have routinely practiced in the course of rebuilding Iraq.

So dip into the slush fund now. Time is running out.