New York Times

Tuesday 30 September 2003

Washington Insiders' New Firm Consults on Contracts in Iraq

Author: DOUGLAS JEHL 

A group of businessmen linked by their close ties to President Bush, his family and his administration have set up a consulting firm to advise companies that want to do business in Iraq, including those seeking pieces of taxpayer-financed reconstruction projects.

The firm, New Bridge Strategies, is headed by Joe M. Allbaugh, Mr. Bush's campaign manager in 2000 and the director of the Federal Emergency Management Agency until March. Other directors include Edward M. Rogers Jr., vice chairman, and Lanny Griffith, lobbyists who were assistants to the first President George Bush and now have close ties to the White House.

At a time when the administration seeks Congressional approval for $20.3 billion to rebuild Iraq, part of an $87 billion package for military and other spending in Iraq and Afghanistan, the company's Web site, www.newbridgestrategies.com, says, " The opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq."

The site calls attention to the links between the company's directors and the two Bush administrations by noting, for example, that Mr. Allbaugh, the chairman, was "chief of staff to then-Gov. Bush of Texas and was the national campaign manager for the Bush-Cheney 2000 presidential campaign."

The president of the company, John Howland, said in a telephone interview that it did not intend to seek any United States government contracts itself, but might be a middleman to advise other companies that seek taxpayer-financed business. The main focus, Mr. Howland said, would be to advise companies that seek opportunities in the private sector in Iraq, including licenses to market products there. The existence of the company was first reported in The Hill, a Congressional newspaper.

Mr. Howland said the company was not trying to promote its political connections. He said that although Mr. Allbaugh, for example, had spent most of his career "in the political arena, there's a lot of cross-pollination between that world and the one that exists in Iraq today."

As part of the administration's postwar work in Iraq, the government has awarded hundreds of millions of dollars in contracts to American businesses. Those contracts, some without competitive bidding, have included more than $500 million to support troops and extinguish oil field fires for Kellogg, Brown & Root, a subsidiary of Halliburton, which Vice President Dick Cheney led from 1995 until 2000.

Of the $3.9 billion a month that the administration is spending on military operations in Iraq, up to one-third may go to contractors who provide food, housing and other services, some military budget experts said. A spokesman for the Pentagon said today that the military could not provide an estimate of the breakdown.

Administration officials, including L. Paul Bremer III, the top American official in Iraq, have said all future contracts will be issued only as a result of competitive bidding. Already, the Web site for the Coalition Provisional Authority,
http://cpa-iraq.org/, lists 36 recent solicitations, including those for contractors who might sell new AK-47 assault rifles, nine-millimeter ammunition and other goods for new army and security forces.

New Bridge Strategies was established in May and recently began full-fledged operations, including opening an office in Iraq, its officials said. They added that a decision by the Governing Council of Iraq to allow foreign companies to establish 100 percent ownership of businesses in Iraq, an unusual arrangement in the Mideast, had added to the attractiveness of the market.

Mr. Howland is a principal of Crest Investment in Houston and was president of American Rice, once a major exporter to Iraq. Richard Burt, ambassador to Germany in the Reagan administration and a former assistant secretary of state, and Lord Powell, a member of the British House of Lords and an important military and foreign-policy adviser to Prime Minister Margaret Thatcher, are among the 10 principals.

Mr. Allbaugh, the chairman, spent most of his career in Texas politics before Mr. Bush appointed him to head the federal disaster agency. Mr. Allbaugh, who now heads his own consulting firm here, did not return calls to his office today.

Mr. Rogers, the vice chairman who was a deputy assistant to the first President Bush and an executive assistant to the White House chief of staff, is also vice chairman of Barbour Griffith & Rogers, one of the best-connected Republican lobbying firms in the capital. Mr. Rogers founded it in 1991 with Haley Barbour, who became chairman of the Republican National Committee and is now running for governor of Mississippi.

Shortly after leaving the White House, Mr. Rogers was publicly rebuked by the first President Bush after he signed a $600,000 contract to represent a Saudi, Sheik Kamal Adham, who was a main figure under scrutiny in a case that involved the Bank of Commerce and Credit International. Mr. Rogers canceled his contract to represent the sheik, former head of Saudi intelligence.

Mr. Griffith, a director of the new company, is chief operating officer of Barbour Griffith & Rogers, which he joined in 1993. He was special assistant for intergovernmental affairs to the first President Bush and later worked under him as an assistant secretary of education.

Until November, Mr. Rogers's wife, Edwina, was associate director of the National Economic Council at the White House. Reached by telephone today, Mr. Rogers said he did not want to speak for the record and referred a reporter to Mr. Howland.

The company Web site says the company was "created specifically with the aim of assisting clients to evaluate and take advantage of business opportunities in the Middle East following the conclusion of the U.S.-led war in Iraq."