Imperial Life in the Emerald City (17 page)

It was then that Custer Battles created “sham companies” registered in the Cayman Islands and Lebanon to issue a series of false invoices that showed those companies were leasing trucks and other equipment to Custer Battles, according to a memo later written by the Pentagon's deputy general counsel. The prices were grossly inflated, allowing Custer Battles to reap profits far in excess of the 25 percent allowed under the contract, the memo said.

Two months later, Custer Battles representatives accidentally left a spreadsheet on a conference table after a meeting with CPA officials. There, in black and white, were the numbers showing that the company had billed the CPA $9,801,550 for work that had cost $3,738,592—a markup of 162 percent. There was the helipad in Mosul, for instance, that took $97,000 to build but was invoiced at $175,000. William “Pete” Baldwin, Custer Battles's facilities manager, wrote in an e-mail that “every line item on that invoice” was “false, fabricated, inflated.” Even the scrap heap was ripe for profit: the company repainted Iraqi Airways forklifts found at the airport and then billed the CPA thousands of dollars a month for use of the equipment, claiming it was leased from abroad. All told, Custer Battles received $21 million from the CPA for the currency exchange.

Baldwin wrote his superiors during the currency exchange to warn them about the fraudulent and inflated invoices. Peter Miskovich, the manager of the exchange, also sounded the alarm. In a memo to Custer Battles's country director, he wrote that a $2.7 million invoice was based on “forged leases, inflated invoices and duplication of invoices.” Records he had examined provided “prima facie evidence of a course of conduct consistent with criminal activity and intent,” he wrote.

A few days before Miskovich wrote his memo, Isakson and Baldwin filed a whistleblower lawsuit against the company on behalf of the U.S. government. Custer Battles called the allegations of wrongdoing a baseless claim brought by a “disgruntled employee.”

The lawsuit prompted the Pentagon to mount an investigation, and in September 2004, more than a year after Custer Battles was awarded the currency contract, the Defense Department announced that the firm would be barred from obtaining further military contracts. The department cited compelling evidence of “seriously improper conduct.”

By then, however, Custer Battles had already received more than $100 million in contracts from the U.S. government.

         

Ben Thomas had been struggling to support himself in Florida as an ultimate fighter—the sport is similar to boxing except there are no gloves and no rules—when a friend suggested he apply for a job with a company called Custer Battles.
Nice name,
Thomas thought. The firm had just won a contract to guard Baghdad's airport, his friend said, and there was plenty of work to be had. Thomas wanted to keep fighting, but he was broke. The next day, he called up the company's human resources office and said the magic words: “I used to be a SEAL.”

In the rush to hire private-security contractors in Iraq, nobody looked at résumés. If you had been in the army's Special Forces or been a Navy SEAL—the military's elite commandos—you were in. Word-of-mouth references were good enough.

Thomas was twenty-seven. He wasn't a hair over five foot six, but he looked as though he could take on a guy twice his size. He walked with a don't-mess-with-me swagger. On his rippled left biceps were tattooed the Japanese characters for sea-air-land commando; his forearm was emblazoned with a navy anchor. He cursed like a sailor but solicitously inquired about my mother's cancer treatment every time we talked. He was fascinated by Roman sculpture, but his laptop computer contained digital photos and videos of insurgent attacks and their bloody carnage. His online alias was DiabloBoy.

Before Thomas was hired, Custer Battles told him that he'd be performing “close protection,” which meant that he would be a glorified bodyguard for a senior official. It sounded more exciting than patrolling the airport.

When he arrived in Baghdad in July 2003, Custer Battles issued Thomas a pistol and an M4 rifle. He received seven magazines, each capable of holding thirty rounds. But he got only twenty bullets. “If we're in an ambush, twenty bullets won't be enough,” he said. An M4 can fire ninety bullets per minute on burst mode. With twenty bullets, he'd have just thirteen seconds of firepower.

“We've got a bullet shortage,” a Custer Battles supervisor told Thomas.

His flak vest was no better. Designed for police officers in the United States, it could withstand a bullet from a pistol but not from an AK-47 rifle. In Iraq, everyone and his brother had an AK-47.

“Has it occurred to anyone here that this armor won't stop any bullet fired in Iraq?” Thomas said as he received his vest.

By the time he was ready to head into the field, Custer Battles had lost the close-protection contract. But the company had another job for Thomas. It had received written authorization to collect weapons seized by the American military. Thomas and another employee were to visit Special Forces safehouses and SEAL team observation posts to haul away Iraqi weapons.

He and a colleague drove around central Iraq in a truck. They picked up four hundred AK-47s plus belt-fed machine guns, cases of grenades, and a half million bullets. They even grabbed a few Russian-made ZSU-23 anti-aircraft guns. When Thomas asked Custer why they were becoming arms recyclers, he said he'd been told that the firm was bidding on a contract to train the new Iraqi army and that the weapons were needed for training. Thomas suspected that Custer Battles was shipping the matériel out of Iraq and selling it, but he did as he was told.

The Custer Battles camp consisted of trailers parked in a dusty lot on the airport grounds, which it was being paid to guard at the time. By Iraqi standards, it was comfortable enough. Thomas bought bottles of vodka for nine dollars apiece from the airport duty-free shop. He hung out by a makeshift pool, smoking cigars and watching videos. Every now and then, he'd get called to make a run into the city, to pick up supplies or escort a company official to the Green Zone.

One September morning, Thomas and three fellow Custer Battles employees were heading into downtown Baghdad in a sport utility vehicle. They had exited the airport on a side road that fed into the main expressway leading to the city center when they came upon a police checkpoint. Instead of waving the foreigners through, as most policemen in Iraq did, the men manning the checkpoint ordered the vehicle to slow. As Thomas and his colleagues drove through, one of the policemen turned his head. It was a giveaway, but Thomas, who was driving, hadn't been in Iraq long enough to recognize the head movement as a signal.

Seconds after driving through the checkpoint, they came upon rocks, gas cans, and other debris scattered on the street. To get around the debris, Thomas had to veer off the road to the left, drive by a small building, and turn right to get back on the road. He didn't hesitate. As he drove off the pavement, he heard an unusual sound.
Whack! Whack! Whack!

Oh, shit,
Thomas thought.
We're getting shot.

He tried to hit the gas, but the SUV wouldn't move. It just made a loud banging noise. The three men with him bailed out and ran toward the building. Thomas rolled under the car. “This was before I learned the lesson that cars don't stop bullets,” he said later.

From his vantage under the vehicle, Thomas estimated that a half dozen bad guys were shooting at him and his buddies. He could see just one of them, though. The muzzle flash gave the man's position away.

Thomas grabbed his M4, pointed it at the man he could see, and pulled the trigger. He missed. Then he remembered a lesson from his military training. If you're trying to shoot someone from under a car, you've got to lie on your side to get a better angle. He rolled over, lined up the man's pelvis in his sight, and fired again. In the split second before he pulled the trigger, the man turned. Thomas shot him in the buttocks.

Thomas expected to fire again, but his target had crumpled in the dirt. “It was like God reached up and yanked him to the ground.”

The rest of the shooters scattered. When the coast was clear, Thomas and his buddies went over to examine the downed man.

His hip was shattered and his abdomen was pulverized where the bullet had exited. “His guts were spewed out like someone had uncoiled him and spread him out,” Thomas said.

It was then that Thomas confessed to his buddies that instead of the standard-issue ammunition used by the military and other security contractors, he had something special. The bullets he used were the same size as the standard ammunition—a little longer than an AAA battery—but they didn't have a copper finish. They were black. The company distributing the bullets, which had given Thomas a few boxes to take to Iraq, claimed that they were fundamentally different from the standard ammunition: instead of a lead core, these projectiles were made from a blend of several metals, including platinum, so they would pass through steel armor but would shatter in flesh, resulting in catastrophic injury.

The company's claims were disputed by several ballistics experts, including a surgeon at Stanford University who tested the bullets for the U.S. government. He maintained that the bullets had a lead core. What made them different, he said, was that they were packed with more gunpowder and had a soft point. Soft-point bullets, which lack a full metal jacket, are more likely to deform and mushroom as they enter flesh. Although the vast majority of police departments in the United States use soft-point bullets—because they are less likely to pass through the target and injure bystanders—their use on the battlefield was banned by the Hague Convention of 1899. The United States never signed the treaty, but the Pentagon has long abided by its provisions. Rank-and-file American soldiers use only full-metal-jacketed bullets.

If Thomas had been an active-duty soldier, he would have been court-martialed for having used nonstandard bullets. For private-security contractors, though, the rules were murkier. Custer Battles had a contract with the CPA. That contract didn't specify what bullets were permitted.

When military commanders heard about the bullets used in the shooting, they issued a memo to security firms warning against the use of nonstandard ammunition. But there was no effective way to enforce the rule—or any of the other regulations the military wanted to impose on security contractors. They were above the laws of war.

As word of the buttocks kill spread in the private-security community, so did demand for the bullets. Thomas gave away all he had. Others brought in more boxes in their suitcases.

“Out here, there are no rules,” Thomas said. “You do whatever you have to do to protect yourself.”

THE GREEN ZONE, SCENE VI

Books and magazines from back home were a precious commodity. It was considered bad form not to pass them on to friends when you were done. Mystery novels and thrillers were the most popular. Tomes about Iraq, the Arab world, and Islam gathered dust. After thinking about Iraq all day, the last thing you wanted to do was read about it at bedtime. But a few books on Iraq were well thumbed. A Halliburton employee found copies of the
Complete Idiot's Guide to Understanding Iraq
while cleaning out CPA staff rooms at the al-Rasheed. When an Iraqi American interpreter offered to loan a senior CPA staffer a copy of Hanna Batatu's
The Old Social Classes and the Revolutionary Movements of Iraq,
a seminal work of regional history, the staffer declined. He pointed to a small book on his desk. “Everything I need is in here,” he said. The interpreter picked up the book. It was a tourist guide to Iraq, written in the 1970s.

8

A Yearning for Old Times

“I DON'T KNOW HOW MUCH MORE
of this I can take,” Walid Khalid moaned. Beads of sweat dripped from his face onto the counter, precariously close to the pizza he was making for me. “Why did I ever come back here?”

It was 130 degrees outside, and the electricity was off again. Without air-conditioning or a fan, his wood-fired oven had turned his restaurant into the seventh circle of hell. Everyone outside the Emerald City was receiving just twelve hours of power a day the summer after the Americans arrived. The lights would be on for three hours. Then there would be a three-hour blackout.

The men who ran convenience stores next to the pizzeria stopped selling perishables because they couldn't keep them cold. They set up their checkout counters on the sidewalk and lent patrons flashlights to browse the aisles inside the stores. Business was terrible. They had spent hundreds of dollars to import cases of Coca-Cola, a beverage unavailable in Baghdad before the war. But who wanted a warm Coke?

Walid and his neighbors groused about the blackouts all the time. “It's like we're living in the Stone Age,” one of the shopkeepers remarked as he walked into the pizzeria.

“You're right,” Walid responded. “It was never like this before.”

Fifty yards away, inside the Green Zone, air-conditioners chilled buildings to a crisp sixty-eight degrees. The Emerald City wasn't connected to Iraq's electrical transmission grid. A diesel power station the size of a small house kept the appliances running in the Republican Palace. Others inside the walls—the private contractors, the CIA station, the military—had generators that were almost as big. The CPA deemed power to be “mission critical.” Fuel tankers arrived from Kuwait every day, and a team of electrical engineers was always on call. “We've got twenty-four/seven reliability,” one of the engineers boasted.

Electricity for those who lived outside the Green Zone came from plants across the country that fed into a national grid. The closest one to me was Baghdad South. After I ate my pizza, I wiped the perspiration off my brow and headed there.

Built in 1959 along the meandering Tigris River, Baghdad South told the story of Iraq's prosperity and poverty. Its four German-made, steam-powered generating units initially provided more than enough electricity to meet the capital's needs. As demand increased, Iraq turned in 1965 to the United States, acquiring two additional units from the General Electric Company. The plant's six towering smokestacks were symbols of the country's oil wealth. “Back then, we were the most advanced power plant in the Arab world,” said Bashir Khallaf, Baghdad South's director.

In 1983, before Saddam's war with neighboring Iran had drained the national coffers, the four German generating units were replaced with made-in-the-USA turbines from GE. At the time, Khallaf said, the plant never had to operate at its 350-megawatt capacity because Iraq produced more electricity than it needed. New power plants and high-voltage transmission lines sprouted across the desert, paid for with abundant oil revenue. The city's neo-Baathist architects took advantage of the power glut, building tall concrete-and-glass apartment complexes and office towers that required elevators and massive air conditioners. The city became as electricity dependent as any Western metropolis.

The plant sputtered to a halt in 1991, after being hit by six U.S. bombs during the Persian Gulf War. According to UN assessments, American bombing during the war damaged about 75 percent of the country's power-generating capacity. Khallaf and other workers brought Baghdad South back to life four months later, using spare parts and MacGyver-like ingenuity. But the plant was nowhere as efficient as before. Duct tape, baling wire, and scrap metal from the junkyard held the generating units together.

United Nations economic sanctions prevented Iraq from importing new equipment for five years. Even after the sanctions were revised to allow Iraq to sell its oil for humanitarian goods, including parts for power plants, bureaucratic hurdles still restricted the flow of needed supplies. As equipment broke, it either was not fixed or was replaced with jury-rigged gear. With power in ever-shorter supply, government officials didn't permit the plant to shut down for annual maintenance. The once-modern facility gradually became a collection of deteriorated pipes, broken gauges, and ramshackle devices. Leaks in the steam pipes transformed the generating complex into a giant sauna. The plant was one of the few places in Iraq where you couldn't smoke; there was too much leaked fuel. Before the 2003 war, Baghdad South was barely able to produce 185 megawatts. “We were like an old man losing his energy,” Khallaf said.

Baghdad's residents didn't notice. Saddam didn't want to deprive his two most important constituencies, his cronies and the generals who could launch a coup, all of whom lived in the capital, so he ordered Baghdad to receive as much power as it needed from the national grid. To meet the demand, other parts of Iraq, particularly the Shiite-dominated south, were starved of power.

         

On a trip to Baghdad in October 2002, four months before the war began, I met a stout, bespectacled Dutchman named Marcel Alberts. He worked for the United Nations Development Program, and his job was to ensure that power-plant equipment purchased with Oil-for-Food funds was indeed for power plants and not for making weapons of mass destruction. Alberts traveled to every Iraqi generating station. He took copious notes and kept them in large white binders in his office. He estimated that Iraq's national electricity demand was 6,200 megawatts during peak periods, but its maximum generating capacity was only 4,400 megawatts—less than half of what the country was able to produce in 1990. (One megawatt was enough to meet the needs of about 1,500 homes.) “When I see some of the power plants here, I'm surprised they're still running,” Alberts told me. “The conditions are terrible.”

Every three months, Alberts summarized his findings in reports that were sent to UN headquarters in New York and made available to every member nation. One such document, issued in 2002, noted that Iraq's generating units were “technically and economically obsolete,” resulting in a 2,500-megawatt nationwide power shortage and lengthy blackouts.

Alberts wasn't alone in warning of a catastrophe. The Future of Iraq Project's infrastructure report predicted that the power sector would need $18 billion worth of repairs, and the CIA's nighttime satellite images of southern Iraqi cities showed shockingly few lights. “The telltale signs were there,” said an American electrical engineer working in Iraq.

In March 2003, ten days after American tanks crossed into Iraq, the White House issued a press release proclaiming that Iraq produced 5,500 megawatts of power—1,100 megawatts more than Alberts's estimate. Before the war, the Bush administration set aside just $230 million for power-sector reconstruction in Iraq. “Iraq is a country rich with an educated populace, abundant and valuable natural resources like oil and natural gas, and a modern infrastructure system,” the White House press release stated. “The United States is committed to helping Iraq recover from this conflict, but Iraq will not require sustained aid.”

         

For the first two weeks of the war, Baghdad South chugged along as usual. Then one night, a massive power surge shut down the plant, as it did every other power station in central Iraq, plunging Baghdad into darkness and panic. Nobody—not U.S. military engineers, not Iraqi technicians—had any idea what had happened. Had Saddam ordered the lights out? Had the Americans bombed a power station? Months later, they would conclude that a loop of high-voltage lines encircling the capital was severed during the fighting, unbalancing the power grid and sending surges to every plant on the network.

With no idea what had caused the problem and with fighting raging around the capital, Khallaf and other employees decided to go home. They returned to work three days after Baghdad fell to find a contingent of marines hunkered down at the plant. A day later, officers from the U.S. Army Corps of Engineers arrived. They saw the broken pipes, frayed wires, and computerless control room, where the antiquated dials were the size of wall clocks. “When I first looked around, I said, ‘Holy moly. This is not good,'” recalled Lieutenant Colonel John Comparetto, who was the army's chief electrical engineer in Iraq. “I hoped it was an isolated incident. But it wasn't true. It was typical.”

It was then that Comparetto saw that the war planning had been far too optimistic. “We were underestimating how bad it was, no doubt about it,” he said.

With no power on the national grid, he and Khallaf realized that it would be impossible to restart Baghdad South quickly. Electrical plants, like cars, need power to get running. Baghdad South required about eight megawatts, far more than the capacity of the army's largest portable generator. The engineers eventually came up with a solution: divert power from a hydroelectric station, one of the few generating facilities in operation. Two weeks later, Baghdad South was operating again. But its output was 25 megawatts less than before the war. Once other plants started, they faced the same problem. The shock of the sudden shutdown, the lack of spring maintenance because of the war, and general fatigue had made an already ailing system even sicker. Although Iraqi and American engineers turned on as many units as they could, they could not get overall national output above 3,500 megawatts—well below the 6,500 megawatts needed to satisfy the nation's demand or even the 4,400 megawatts produced before the war.

Bremer hoped to increase generation to 4,400 megawatts by authorizing emergency repairs funded with the $230 million set aside before the war. He directed his electricity adviser to aim for that target, and he began promising Iraqis that power would soon return to prewar levels.

Then, with the stroke of his pen, he put the CPA into a no-win position. Some CPA staffers thought that instead of diverting the lion's share of power to Baghdad, Iraqis should share it equally. It made perfect sense to the Americans: in a democracy, the government doesn't pick favorites. The CPA's electricity team consulted Iraq's Electricity Commission. “They thought we were nuts,” said Robyn McGuckin, who worked on the electricity team. “They warned us that it would cause all sorts of problems.” But nobody listened. Bremer signed an edict mandating that power be allocated equally across Iraq.

Residents of Basra and Najaf and the rest of the south got a few more hours of electricity a day. People were pleased, but it didn't win the CPA any admirers. Baghdad, however, was short-circuited. The capital, which was accustomed to receiving uninterrupted power, found itself without it for at least twelve hours a day. The blackouts began to foster almost overnight nostalgia for Saddam among people who had cheered his fall. “We figured the Americans, who are a superpower, would at least give us electricity,” said Mehdi Abdulwahid, an unemployed oil engineer, as he sold drinks on a busy sidewalk. “Now we wish we had the old times back.” Saddam, Abdulwahid said with a sigh, “was a ruthless man, but at least we had the basics of life. How can we care about democracy now when we don't even have electricity?”

Bremer was unmoved. He insisted that doling out power equally was the right thing to do, and it pleased Shiite politicians from the south whom he was trying to woo onto the Governing Council. The shortage in Baghdad, Bremer reasoned, would end as soon as production increased.

But that never happened. The production figures he received every morning showed little movement above 3,500 megawatts. As summer temperatures surpassed 130 degrees, thousands of angry young men rioted in Basra, which was receiving just twelve hours of power a day. It was more than they had gotten before the war but nowhere near enough. Taps were running dry because there was no power to operate water-pumping stations. The blackouts shut down gasoline pumps, causing miles-long lines at fuel stations.

The riots alarmed Bremer, who decided he needed one person to oversee Iraq's infrastructure. He chose Steve Browning, the U.S. Army Corps of Engineers specialist who had headed four ministries in the first weeks of the occupation. Browning was no electricity expert. He was a disaster-response specialist, but he had a knack for organization and leadership. He also had Bremer's confidence. And unlike most other CPA officials, he spoke a little Arabic.

Browning was a trim man with thinning hair. More of a listener than a talker, when he did speak, his voice was soft and unfailingly polite. If he was offered tea, he drank it, and when Iraqis came to see him, he was one of the few Americans who served them tea. “We have to always remember that we are guests in their country,” he would say to his colleagues. “We have to respect their customs.”

His new title was director of infrastructure. Roads, water systems, phone lines—all were in his purview. But the top priority was electricity. His marching orders were simple: find out what's going wrong and fix it.

Browning asked the CPA's electricity team to show him their plan to restore power to prewar levels. There was no plan. Nor was there a budget to allocate the ministry's operating funds. Every other aspect of Iraq's government was being micromanaged. The education advisers were going through textbooks line by line to determine what should be expunged. The health-care team was studying every single prescription medication used by the Health Ministry. Americans assigned to Iraq's Foreign Ministry were vetting every single Iraqi diplomat. But the Ministry of Electricity had been left on its own. Iraqi managers and technicians had been allowed to resume control of power plants. An American contractor was conducting emergency repairs at a few power stations, but the overall challenge of increasing output had been inexplicably handed off to the Iraqis. The CPA's four-person electricity team was taking a hands-off, advisory role. The group was led by a hydropower expert from the Army Corps of Engineers, though only a few of Iraq's generating stations had water-powered units; most ran on oil or natural gas.