Iraq Embassy Scandal Expands: Contractor May Have to Repay $130 Million

A new State Department audit zeroes in on a politically-connected Kuwaiti company over shoddy work in constructing the world's largest embassy By Jeremy Scahill The extent of the massive waste and abuse surrounding the construction of the monstrous US embassy in Baghdad continues to expand. The State Department has just released another audit of the embassy's construction and suggests that the Kuwaiti contractor hired by the Bush administration to do most of the construction work may have to repay more than $130 million to US taxpayers as a result of construction deficiencies, incomplete and undocumented design work, inadequate quality control and interest on unauthorized payments.

First a bit of background: The Baghdad embassy--the largest of any nation on planet earth and ten times bigger than any other US embassy--is striking evidence indicating a continued US presence in the country for many years to come. The structure cost more than $700 million and is the size of 80 football fields. It is bigger than the Vatican, six times larger than the United Nations compound in New York and is about two thirds the size of the National Mall in Washington. It has space for 1,000 employees who are guarded by scores of paramilitary mercenary forces. In other words it is the perfect structure for a nation that claims to be leaving Iraq very soon. The embassy is more like a fortress and hardly sends a message of warm diplomacy. "What kind of embassy is it when everybody lives inside and it's blast-proof, and people are running around with helmets and crouching behind sandbags?" said Edward Peck, the former US ambassador to Iraq when the embassy was first being constructed. The company that was contracted to build the embassy was First Kuwaiti General Trading & Contracting (FKTC). It's run by Mohammad I. H. Marafie, "a member of one of the most powerful mercantile families in Kuwait," according to CorpWatch. "FKTC’s general manager and co-owner, Wadih al-Absi jets back and forth to the United States, dreaming of magazine covers celebrating his rise to a global player in large-scale engineering and construction... FKTC is one of the many Middle East companies that collectively ship tens of thousands of cheap day laborers to Iraq's war zones where they are paid just dollars a day." In 2006, David Phinney reported: "Several other contractors that competed for the embassy contracts... believe that a high-level decision at the State Department was made to favor a Kuwait-based firm in appreciation for Kuwait's support of the invasion and occupation of Iraq. 'It was political,' said one contractor." FKIT has been plagued by allegations from whistleblowers who worked on the embassy that say the company "brought workers, mostly South Asians and Filipinos, to Baghdad under false pretenses, then abused and threatened them while there." The company, predictably, denies those charges.

Rory Mayberry, who first worked with First Kuwaiti in March 200 as a medic on the embassy construction site, "alleges that when he showed up at the Kuwait airport for his flight into Baghdad, there were 51 Filipino employees of First Kuwaiti also waiting for the same flight — except the Filipinos believed they were going to Dubai," reported NBC News. "He says the Filipinos were told to proceed to "GATE 26" at the Kuwait airport — but no Gate 26 existed. There was only a door to a staircase that led to a white plane on the tarmac:"

First Kuwaiti is now back in the spotlight as the State Department Inspector General on October 22 released an audit of the company's five Iraq embassy contracts worth some $470 million. The audit suggests that First Kuwaiti may be asked to repay more than $130 million--more than a quarter of the total project money paid to the company-- to the US government. According to the audit:

Among the allegations against First Kuwaiti in the State Department audit are:

The audit also found that First Kuwaiti had an "inadequate quality control program," while some contracted tasks "either were not performed or were performed incorrectly."

The audit also examines the conduct of the Emergency Project Coordination Office (EPCO), an ad hoc organization set up to coordinate the embassy's construction. EPCO administered the First Kuwaiti contracts. According to the audit:

What makes this story all the more outrageous is that the Obama administration is moving forward with a plan to build a $736 million massive US embassy in Islamabad, Pakistan that is modeled after the Baghdad embassy.