Contract Quagmire in Iraq

Corpwatch: Rioting and threats of work stoppages at critical transportation hubs needed to rebuild the war-torn Iraq have erupted in recent months following payment
disputes between contractors originally hired by the U.S.-led Coalition Provisional Authority and Iraqi officials skeptical of the billings and the CPA's handiwork.

The contractors include the world's largest shipping company managing Iraq's second largest port, a security contractor responsible for protecting Baghdad International Airport and a major Pentagon supplier hired to install new air traffic control equipment.

All have clashed with the Iraqi government, which has refused to pay the companies.

Backing up the contractors' demands for payment, the U.S. State Department says the billing disputes stem from the transition of control from the CPA, which ran the country for 15 months, to the Iraqis. There is no cause for alarm, say the US officials: "patient firms have been rewarded."

Critics, including one Iraqi official who supervises the contractors, say the disputes are widespread and much more serious: many contracts were signed by CPA bureaucrats without proper paperwork or procedures. In addition many companies have overcharged for work done or failed to deliver on their promises. Link