Democracy by the Dollars

By Pratap Chatterjee, CorpWatch. Posted July 19, 2004.

What can a North Carolina firm teach Iraqis about democracy? Not much, as it turns out – not when it spends millions of dollars making life comfortable for its own staff rather than the Iraqis.

In March 2003, the U.S. Agency for International Development awarded the Research Triangle Institute (RTI) International of North Carolina a $167 million contract to help 180 Iraqi cities and towns "foster efficient, transparent, and accountable sub-national government that supports the country's transition to sovereignty."

More specifically, the RTI staff in Iraq were charged with setting up local neighborhood councils, providing technical advice for municipal services such as garbage collection and water supply, and funding new local community organizations and initiatives.

Little of the above was achieved in reality, however.

Three former RTI employees who worked on the project say that the company instead spent 90 percent of the money on expensive expatriate staff, gave out lots of advice and held lots of meetings, but did little to provide support for local community organizations or councils.

Services Not Elections

According to RTI Iraq chief Ronald Johnson, his company's mission was to teach Iraqis how to establish local governments that would eventually provide basic services to citizens. In an interview with Canadian reporter Naomi Klein, he explained that holding elections too early often lead to violence. Basic services were instead safer ground encourage civic participation.

"There really is not a Sunni way to pick up the garbage vs. a Shiite way vs. a Syrian way to pick up the garbage," said Johnson. "There's a lot of politics about how much you do, and there's certainly politics about picking up the garbage in one neighborhood and not picking it up in another neighborhood," he said.

To account for this, RTI held neighborhood meetings. According to Johnson, "Announcements are distributed, people are invited, they're urged to bring people and you have kind of a town meeting – only it's a town meeting that in a lot of cases covers a small geographic area. But its potential is for a lot of the adult residents of that neighborhood to actually physically come together in a meeting, in person."

According to RTI press releases, these initiatives were a tremendous success: "Throughout the first year, our in-country team of roughly 2,000 Iraqis and 200 international development specialists worked in 18 governorates on a wide range of locally selected priorities ranging from increasing access to basic utilities and healthcare to establishing and training local governing councils,"

Spending on the Good Life

But former RTI employees paint a very different picture of the institute's operations, which they say spent over 90 percent of its allocated funding on its own staff rather than the Iraqis. Despite all the meetings, there was little real funding for the local programs.

Three former RTI employees – Jabir Algarawi, an Iraqi-American from Arizona; Jerry Kuhaida, a former Tennessee mayor; and Jim Beaulieu, a former provincial deputy minister from Canada – all went to work with hopes of building democracy in Iraq.

Algarawi, a Shiite from Diwaniya, had fled Iraq in 1991 after taking part in an uprising to overthrow Saddam Hussein as called for by the first President Bush. Last December, Algarawi, who supported the 2003 invasion of Iraq, quit his job as executive director of the Arizona Refugee Community Center in Phoenix, and took a position with RTI, which flew him to Al Amarah, the capital of Maysan province in southeastern Iraq, to help Iraqis establish local governance.

At first, he says, "almost 95 percent of the people [in the south] supported us. Now there are only a few, and those who do don't have the courage to say it." He believes that the lack of tangible support for local communities is one of the principal reasons for the withdrawal of popular support.

Algarawi says that the only project he was able to finish was the creation of a women's organization, for which RTI allocated $90,000 in spending money.

"We spent more than that on entertainment for our staff alone, bringing in satellite television," he said. "Many of the expatriate staff individually earned twice or three times as much money as the annual budget of this organization. Probably we spent 90 percent of our money on RTI staff and very little on the community."

Algarawi also said that the RTI expatriate staff spent most of their time at their protected compound. "Some of my colleagues never left the compound; they spent all their time filling out forms for the United States government. It seemed like our main objective was satisfy our funders not to help people in Iraq," he said.

"Those of us who did go outside, were told we could not go anywhere without our four Australian bodyguards, but that made the local people afraid of us. Many people said we were CIA and especially since we were not supposed to speak to the media, this did nothing to dispel the rumors," Algarawi says.

He added that the company, whose supervisors stayed at the posh Sheraton Hotel in Kuwait, bought supplies, from food to televisions, from Kuwait, not Iraq. "[We] gave no money to Iraqi organizations, [so] local people started to say that they needed to get Saddam to get the Iraqi money back from Kuwait," Algarawi says.

In early April, Algarawi and all the other expatriate staff were told to evacuate Iraq because of the escalating violence. Then in late May, he heard that what little he had achieved might soon be undone. Dr. Kifaya Hussein, a staff member of the women's organization he had helped establish, was gunned down in front of the office. "When she was killed, RTI didn't pay out the money they had promised, so now all the women are just volunteers," he said.

The paucity of resources for actual community initiatives was confirmed by Jerry Kuhaida, the former mayor of Oak Ridge, Tennessee, who had also resigned from his job in the United States to work for RTI in late 2003. He was assigned to Karbala, a city of 500,000 people about 60 miles south of Baghdad.

Kuhaida was put in charge of determining how money had been spent in the south central region, which covers four of Iraq's 18 governorates. He calculated that RTI had given away eight to 10 grants of between $5,000 and $50,000 each. "It was all fluff," Kuhaida said. "We weren't really doing anything for the local organizations."

But Patrick Gibbons, a spokesperson for RTI in Baghdad, disagreed with Algarawi and Kuhaida, arguing that the local grant-making program was successful: "The original LGP (local governance program) budget had $10 million allocated for grants to support local projects. The grant program was so successful that LGP, with USAID approval, reallocated budgeted funds to administer more grants. To date, nearly $15 million worth of grant-funded projects have been approved, and almost all are completed or nearing completion."

Statistically speaking, the $15 million was slightly less than 10 percent of the total $154 million paid out to RTI for the first year of work, which suggests that 90 percent was spent on company staff and administration expenses.

What's the Plan?

Kuhaida also complained that RTI lacked a serious plan for delivering democracy. "We can't even get our own people in the United States to vote, how are we going to do that in Iraq?" he wondered. "We needed to at least do some strategizing and thinking, but I saw no evidence that we were doing that."

"There was no plan at all after the war," he added. "The whole thing was running on a whim, basically. There wasn't even a bad plan out there. I am totally disturbed by my government and the lies that were told to me. I take them personally."

In response, Gibbons told CorpWatch that the situation was "challenging for everyone involved."

"Our efforts to date have been successful by any reasonable standard, and we are looking forward to continuing to improve municipal government's service delivery, to ensure that councils are representative, to promote the role of local government in sovereign Iraq, and to promote public participation in national and local political processes," he said. "Is it easy? No."

Not all the former employees who spoke with CorpWatch blame RTI. Jim Beaulieu, a former deputy minister of urban affairs in the Canadian province of Manitoba, was hired by RTI in September 2003 to help the governor of Najaf, the highest-ranked politician in the region.

Beaulieu said this work was more challenging than that of the military contractor Bechtel, which was charged with helping rebuild and protect Iraq's infrastructure. "RTI had to deal with people, ordinary Iraqis, who had no fundamental concept of democracy," he said. "We needed expatriates to teach these concepts."

The problem, he believed, lay with the American occupation authorities in Baghdad, who had given the governor and the governing council "no money, no authority over anything other than their own offices, and no support staff. They were just a shell. They were trying hard to do things, but how can you do anything without money or authority?"

Gibbons countered that the councils did have some power. "It is not true that the roles and responsibilities of councils have been largely advisory during (the occupation)," he said. "Local councils across the country have been planning and developing priorities for their constituents and communities, and funding flows exceeding $2 million per province that are spent only on projects selected by the council have enabled councils to choose and then implement important projects. The system, of course, is not fully developed, but councils to date have played critical roles in conflict resolution, selecting governors/mayors, and implementing projects."

But by spring, disenchanted with the company and frustrated by the little work being done, all three men quit their jobs and returned to North America. Beaulieu explained his motives: "I resigned because it became obvious we could not do what we were hired to do," he explained. "There was simply no credible evidence that the United States had a plan of what they want to do."

Gibbons claims that the three men do not represent the views of all RTI staff. "A lot of people have come out to Iraq to accomplish important personal missions," he said. "In the face of (difficult) circumstances, some have left earlier than they originally planned, in frustration. Others have extended well beyond their original commitment and feel they are accomplishing critical tasks."

Algarawi, however, does not blame the realities on the ground for his disenchantment with RTI: "They went there to make a profit, not to help the people."

Liked this story? Get top stories in your inbox each week from AlterNet! Sign up now »