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USA: General/Defense Contractor to Rebuild Iraq

Conflict of Interest?

by David LazarusSan Francisco Chronicle
February 26th, 2003

The retired general tapped by the Bush administration to oversee rebuilding of post-war Iraq was, until just a few weeks ago, an executive at a leading defense contractor working on missile systems that would be used to bomb Baghdad.

Although a Pentagon official said Jay Garner's new role as head of the Office of Reconstruction and Humanitarian Assistance does not constitute a conflict of interest, ethics experts say the appointment raises troubling questions.

Why, they ask, would the White House pick a man from a company directly concerned with attacking Iraq to spearhead the country's aid and restoration?

"It's very curious," said Ben Hermalin, a professor at UC Berkeley's Haas School of Business who studies professional ethics. "You have to wonder what the Iraqis will think of this guy and how much trust they'll place in him."

He added: "If it's not a conflict of interest, it's certainly being tone deaf."

Garner, 64, a former three-star Army general and friend of Defense Secretary Donald Rumsfeld, served until last month as president of SY Coleman, a division of defense contractor L-3 Communications specializing in missile-defense systems.

The division was a Southern California missile-defense contractor, SY Technology, until L-3 acquired it last year for $48 million. Garner, with virtually no private-sector experience, was named president of that firm in 1997 after retiring as assistant vice chief of staff of the Army.

His 34-year military career included a stint as commanding general of the Army's Space and Strategic Defense Command -- part of the Star Wars program begun by President Ronald Reagan and more recently embraced by President Bush.

Garner could not be reached for comment. Pentagon officials say he's too busy for interviews.

But Garner said in a statement when he was hired by SY Technology that the company "is a superb organization" enjoying "a great reputation with its customers."

Evan Goetz, an L-3 spokesman in New York, told me that L-3 and its SY division concentrate on communications and targeting systems for missiles, as opposed to rockets and other forms of hardware.

"We don't make the planes and tanks and submarines," he said. "We make the systems that go inside them."

Jack Tyler, SY's vice president for business development, said the company has a wide variety of military contracts, including for missile systems that would see action in a war with Iraq.

"I can't get into any of the details," he said.

However, Tyler said one key aspect of SY's service is immediately analyzing data from missile flights to improve guidance and targeting.

In other words, if a missile goes astray, SY and L-3 play a key role in making sure the next one hits what it's supposed to.

David Kirp, a professor at UC Berkeley's Goldman School of Public Policy who focuses on ethics, said the Bush administration is sending a profound message to Iraqis by placing a man with Garner's background in charge of reconstruction and humanitarian aid.

"This is a lovely example of our indifference to the people of Iraq," he said. "It truly bespeaks a lack of serious thinking on the administration's part."

The Office of Reconstruction and Humanitarian Assistance falls under the control of the Defense Department. Its purpose is to coordinate relief and rebuilding efforts by foreign and Iraqi agencies.

Bush administration officials said Monday that a new Gulf War could produce 2 million Iraqi refugees. Garner's deputy, Ronald Adams, told reporters that the government is "stockpiling blankets, water, ladders, shelter supplies, medicines and other relief items at this point to serve about a million people."

Garner, who was one of the military's top men in providing aid to northern Iraq after the first Gulf War, would oversee reconstruction, civil administration and civilian aid in the wake of new hostilities. He would work closely with remaining Iraqi officials.

Of course, there's a long history of military figures overseeing a nation's reconstruction once fighting ends. Gen. Douglas MacArthur's rule of occupied Japan is only one example.

But it may be unprecedented for someone from a defense contractor partly responsible for the destruction to be handed the mandate for rebuilding and humanitarian aid.

"War is a bottom-line business," Garner told Air Force magazine in 1992. "The bottom line on Desert Storm is that the United States and its allies won."

More recently, he wrote an enthusiastic article in Army magazine last year about the use of sophisticated lasers on the battlefield.

"While the idea that lasers could be used effectively to conduct lethal engagements was promoted vigorously during the heyday of President Reagan's Star Wars program in the 1980s, the reality of using high-energy lasers in killing systems has finally come of age," Garner wrote.

During his watch as president of SY Technology, Garner faced allegations from another retired military officer that the company had received $100 million in defense contracts without undergoing competitive bidding.

Biff Baker, a former lieutenant colonel at Army Space Command, alleged that SY landed the contracts solely because of Garner's Pentagon connections. SY subsequently sued Baker for defamation and causing loss of privacy for Garner.

Garner told an interviewer last summer that none of Baker's allegations were true. In any case, the lawsuit was settled out of court last month and, as part of the settlement, neither side can discuss the matter with reporters.

In late January, L-3 said revenue in the most recent quarter had soared to $1.3 billion from $705 million a year ago. The company attributed the windfall to a doubling of military communications and electronics sales.

L-3 said last week that it expects sales and earnings this year to rise by 20 percent.

That won't be much solace to Iraqi civilians caught in the crosshair of U.S. missiles. On the other hand, they can always explore investment opportunities with their new czar of reconstruction and humanitarian aid.





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