City awash with tales of corruption and cronyism

Soon after the fall of Baghdad last year, an Iraqi working for a US organisation found that the private American security company under contract to the Pentagon to protect him showed decreasing interest in his safety. He discovered the reason was that his guards had become arms dealers.

Soon after the fall of Baghdad last year, an Iraqi working for a US organisation found that the private American security company under contract to the Pentagon to protect him showed decreasing interest in his safety. He discovered the reason was that his guards had become arms dealers.

The Iraqi, a returned exile, was living in a house in the Green Zone, the heavily fortified US headquarters in the centre of Baghdad. It was formerly Saddam Hussein's headquarters. The security company guards had discovered caches of valuable high-quality weapons abandoned by his presidential guard. "They were taking the weapons and storing them in our house before selling them," complained the returned exile. "There were so many explosives there that I did not even dare smoke in the house and I am a chain smoker." He and a companion took photographs of the heaps of weaponry and later showed them to officials in the Pentagon but they were not interested.

Baghdad is awash with stories of the corruption, cronyism and incompetence of the US-led Coalition Provisional Authority, which was dissolved this week.

Many of its officials were in Iraq because they were ideological neo-conservatives or were simply well connected to the Republican Party or the White House.

Some were paid astonishing salaries. Ahmed al-Rikaby, in charge of re-establishing Iraqi television, discovered that he was to be assisted by three Iraqi-American media advisers paid $21,000 (£11,600) a month. He recalls: "They had no expertise and never helped me or anybody else." They got the jobs because they had influential friends in the Pentagon.

US officials were extraordinarily arrogant. Few things mattered more to American credibility in Iraq than restoring the electricity supply.

Ordinary Iraqis are infuriated by the continuing black-outs. They repeatedly ask why the nation which could send a man to the moon cannot supply Baghdad with more than 12 hours of electricity a day. "The Americans tried to do everything themselves and they failed," says Raad al-Haref, the deputy Electricity Minister. "We had to renegotiate with all our foreign suppliers through American companies and this took about eight months."

Iraqis often say they were astonished by the level of cronyism in Washington's appointments. Privatisation was a high priority for the US administrator, Paul Bremer. But his chief aide in developing the private sector was a Republican businessman from Connecticut called Thomas Foley who was an assiduous fund-raiser for his party but otherwise had little experience useful in Iraq.

The CPA might also, given the political background of its senior members and their ideological commitment to private enterprise, be expected to have encouraged the reopening of the Baghdad stock exchange. In fact it remained shut for over a year at the insistence of the CPA, though an Iraqi stockbroker Hussain Kubba said: "There was no reason it should not have opened soon after the war."

One of the main reasons the stock exchange, which used to employ 5,000 people, stayed shut could be that the CPA had appointed a 24-year-old Republican to oversee it. He had originally applied for a political job at the White House and had, so far as the Iraqis who dealt with him could see, very limited knowledge of stock exchanges. Mr Kubba says that what happened to the Baghdad stock exchange "shows the miserable performance of the CPA as a whole and how brilliantly Iraqis can do things when they are allowed to". He adds proudly that as soon as Iraqis were put back in control they were able to reopen the stock exchange in a few weeks.

Many CPA officials spent short but remunerative tours in Iraq. Others, surprisingly, have returned, evidently smelling money still to be made. Mr Kubba says: "They think they can use the connections they built up before and the fact that they are Americans."

AFTER 425 DAYS OF AMERICAN RULE

Audit of war

42 days of war

425 days of occupation

The death toll

855 US servicemen

60 UK servicemen

58 other Allied servicemen

2,500 Iraqi soldiers (estimated March/April 2003)

11,300 Iraqi civilians (estimate from anti-war research)

104 civilian contractors

21 journalists

The bill

£70bn: total cost to US ( £2,000 for each US family)

£6bn: total cost to UK ( £250 for each UK family)

The political impact

George Bush's approval rating (Washington Post/ABC News)

76%: March 2003

46%: June 2004

Tony Blair: the best PM? (Telegraph/Yougov)

36% March 2003

30% June 2004

Oil production

300,000 barrels/day: May 2003

1.9m: June 2004

2.8-3m: estimated pre-war

Electricity

Nationwide:

3,193MW: June 2003

4,000: June 2004

4,400: estimated pre-war

Baghdad:

2,500: May 2003

1,198: June 2004

2,500: estimated pre-war CURRENCY

2,000 dinar/$1: Oct 2003

1,455 dinar/$1: June 2004

Unemployment

50-56%: June 2003

28-45%: May 2004

1% of Iraq's workforce of 7 million is involved in reconstruction projects

Security forces

7,000-9,000: May 2003

83,789: June 2004, (32% partly or fully trained)