Crossing the Lines How a top Pentagon official and a host of influential Republicans almost made sure that one American company gained a key stake in Iraq's lucrative wireless market. Michael Scherer September/October 2004 Issue http://www.motherjones.com/news/feature/2004/09/09_801.html The auctioning off of Iraq began in the summer of 2003 in a packed conference room at the Grand Hyatt in Amman, Jordan. More than 300 executives had gathered from around the world to vie for a piece of one natural resource Saddam Hussein never managed to exploitbthe nation's cellular phone frequencies. With less than 4 percent of Iraqis connected to a phone, the open spectrum could earn billions of dollars for the eager executives working the room. Conference organizers tried to keep everyone focused on the prize. "Iraq needs a mobile communications system and it needs it now," stressed Jim Davies, a British expert with the Coalition Provisional Authority (CPA) who was leading the effort. "We want quick results." But back in Washington, D.C., the focus had already turned from the needs of Iraq to the bottom lines of a select few corporations. "The battle for Iraq is not over oil," said one Defense Department official involved in communications. "It's over bandwidth." And no one was fighting harder for a piece of the spectrum than the consortium led by American cellular giant Qualcomm with such business partners as Lucent Technologies and Samsung of South Korea. They wanted to follow U.S. troops into Iraq with Qualcomm's patented cellular technology, called CDMA, a system no nation in the Middle East had yet been willing to adopt. Even as the bombs fell over Baghdad, Rep. Darrell Issa (R- Calif.), whose district includes many Qualcomm employees, had tried to wrap his favored company in the flag. He denounced the cellular system used by Iraq's neighbors as "an outdated French standard," and proposed a law that would effectively mandate Qualcomm on Iraq. "Hundreds of thousands of American jobs depend on the success of U.S.- developed wireless technologies like CDMA," Issa wrote in a March 26, 2003, letter to Defense Secretary Donald Rumsfeld. A swarm of lobbyists rallied to the companies' cause, including William Walker, a former protC)gC) of Rumsfeld from the Ford White House, and Stacy Carlson, who ran President George W. Bush's California campaign in 2000. At the conference in Amman, CPA officials promised an apolitical selection process that would accept any workable technology. In the weeks that followed, Col. Anthony Bell, the chief military procurement officer in Iraq, personally oversaw the selection of three cellular companies, assigning a panel of Iraqi and Coalition experts to a locked room where they reviewed blind proposals. "No names, only a number," said Bell, who handled $1.9 billion in contracts during his nine months in Baghdad. On October 6, Iraq's new minister of communications, Haider al-Abadi, announced the winnersbtwo Kuwaiti firms and one Egyptian company. Not one of them used the Qualcomm standard. If any officials in Baghdad or Washington thought such a decision would be the end of Qualcomm's quest, the next six months would prove them wrong. Like dozens of American corporations looking to influence U.S. policybshaping everything from the banking and insurance markets to foreign-investment rulesbQualcomm, Lucent, Samsung, and their partners would only expand their efforts and broaden their reach into the CPA. With the guidance of a deputy undersecretary of Defense, John Shaw, this effort became one of the most brazen lobbying campaigns of the postwar reconstruction, one that has brought Shaw under investigation for potentially breaking federal ethics rules. According to documents provided to Senator John McCain (R-Ariz.), the companies' supporters in Washington, D.C., attempted to sneak a new cellular license into an unrelated contract for Iraqi police and fire communications, tried to oust the CPA officials who resisted their efforts, and ultimately caused the delay of plans for a badly needed Iraqi 911 emergency system. "The American corporate leaders would not let a system be built that they couldn't make an obscene amount of money off of," said one former technical adviser to the Iraqi Ministry of Communications, who has since returned to the United States. Senator Conrad Burns felt the sting of Qualcomm's defeat in October. As chairman of the Communications subcommittee, the Montana Republican had strong ties to the company: Qualcomm was Burns' 12th-largest campaign donor, and one of the company's founders, Klein Gilhousen, had recently given $5 million to Montana State University. Gilhousen also sits on the board of the Burns Telecom Center, an academic research program, of which the senator is chairman. During a trip to Iraq in October, Burns spoke with officials one-on-one about the process that had denied the Qualcomm consortium a license. "I think the bidding was open, transparent, and fair," he said upon his return on October 14. That same day, however, one of his chief aides began working behind the scenes to plan a new way to get Qualcomm into Iraq, a plan described in the aide's internal emails, which were obtained by Mother Jones. "As you know, Senator Burns is taking flak for defending the CPA on Iraqi telecommunications contracts which ignore CDMA," wrote Burns aide Myron Nordquist to one of the Pentagon's chief networking officials. "The Senator remains determined to support CDMA." And Burns had a powerful motivation. The stakes for Qualcomm, and by extension Burns, were far larger than just the Iraqi market of 25 million people. For nearly a decade, Qualcomm had been engaged in an international battle with the non-American companies pushing GSM, a rival technology that had been developed in Europe and now controlled 72 percent of the world market. A CDMA beachhead in Iraq would set the stage for an expansion throughout the region, with Lucent and Samsung well positioned to prosper as leading makers of the CDMA switches and phones. As Nordquist explained to the Pentagon last fall, Iraq could provide a "communications link between Turkey and the Gulf." Deputy Undersecretary Shaw, an old Republican hand who had served in the Nixon, Ford, and Reagan White Houses, quickly became the point man for the initiative to bring CDMA to Iraq. Shaw and other officials in the Pentagon and Congress reasoned that establishing CDMA in the Middle East would be possible if they could find a way for Qualcomm and its partners to offer cellular service in Iraq under the rubric of the police and fire communications system that the CPA planned to purchase for the Iraqis. "The CDMA system could then morph into a commercial service with our having total control over it," Shaw wrote in a November email to a Coalition adviser in Baghdad. [snip] ------------------------------------------- Archives: http://v2.listbox.com/member/archive/247/=now RSS Feed: http://v2.listbox.com/member/archive/rss/247/ Powered by Listbox: http://www.listbox.com ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE