Pentagon Seeks to Void Iraqi Telecoms Deal-Report

[Barrett808]

WASHINGTON (Reuters) - The Defense Department has urged the U.S.-led Iraqi provisional government to void three contracts for Iraqi cell phone service because of fraud, the Washington Times reported on Tuesday, citing an agency memorandum.

The winning bidders, Orascom, Atheer and AsiaCell, are believed to have rigged the bids for the contracts, Deputy Undersecretary of Defense for International Technology Security John Shaw said in the memorandum obtained by the newspaper.

Provisions of the contracts forbade them from direct or indirect ownership by anyone who supported or benefited from the Saddam Hussein regime but there were ties, according to the report.

The contracts are worth up to about $500 million annually, the newspaper said.

Shaw sent his recommendation to Paul Bremer, head of the U.S.-led Coalition Provisional Authority, who turned the matter over to the CPA's general counsel, the Times reported.

(more)

http://story.news.yahoo.com/news?tmpl=story&u=/nm/20040622/pl_nm/iraq_usa_telecoms_dc

[gratuitous]

1. Now THAT's full sovereignty, baby!

You can't write your own contracts, but you have full sovereignty.

And what's this new provision that contracts in Iraq can't be awarded to anyone who "supported or benefited from the Saddam Hussein regime"? That would certainly let Halliburton out, seeing as how one of its subsidiaries did $23 million worth of business with Saddam in 1998, wouldn't it? Doesn't it also mean that Dick Cheney should be liable to hand back some of the $175,000 he pocketed from Halliburton last year?

How long will the media continue to stare slack-jawed at this kind of corruption? When will they rouse themselves to report what's happening right before their eyes?

[Tempest]

2. Non-U.S. companies using non-U.S. technology

They all use competing technology to U.S. standards.

[klook]

3. What's behind this story?

As you may recall, there was a push last year to make sure Iraq's cell phone industry would rely on American "CDMA" cell phone technology. According to this article -- http://siliconvalley.internet.com/news/article.php/2171271 -- "Congressman Darrell Issa (R.-Calif.) Wednesday introduced a bill based on a letter to the Pentagon, the U.S. Agency for International Development (USAID) and other lawmakers demanding that the Department of Defense and USAID show favor to CDMA technology made by San Diego-based QUALCOMM."

According to an article in eWireless News (see p. 17), the partnership of Kurdish provider AsiaCell, Orascom Telecom of Egypt, and a consortium including Kuwait’s National Mobile Telecommunications and Atheer Tel of Saudi Arabia were chosen instead of Qualcomm last fall. The partnership uses GSM technology, not Qualcomm's CDMA.

I don't mean to suggest that this finding of bid rigging is a dirty deal on behalf of Qualcomm. But it will be interesting to see who ends up getting the contract.

[Old and In the Way]

4. I expect Halliburton to announce any minute-

that they have diversifed into the cellular networks industry.

[pinniped]

5. Heaven forbid there be any "fraud" in the bidding process...

The easiest way is to not have to bid at all.

These Iraqi companies don't know how to play the game well.