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Crossing the Lines

How a top Pentagon official and a host of influential Republicans almost made sure that one American company gained a key stake in Iraq's lucrative wireless market.

Toward the end of 2003, Shaw even asked the Pentagon and the National Security Council to replace the Iraqi minister of communications with Sheik Sami al-Majoun, the Iraqi minister of labor, who, according to a CPA document, was a participant in the Qualcomm consortium bid. "Strong medicine but necessary if we are to succeed," Shaw wrote in a December email to a Pentagon colleague. "I need hardly add that this will allow the telecom system to develop with the kind of speed and focus that is essential to the entire development of Iraq."

Around that same time Shaw also pressed the case for the Qualcomm consortium when Daniel Sudnick, the senior American adviser to the Iraqi Ministry of Communications, visited Washington, D.C. Shaw invited him to dinner at the exclusive Metropolitan Club, located across the street from the White House, took him to meet Senator Burns, and then hosted a meeting at his office on January 12 with representatives of Nana Pacific and the Qualcomm consortium.

For all the work Qualcomm's supporters did to arrange for its entry into Iraq, the final authority over Iraq's telecom future still rested with the American advisers, like Sudnick, working in Saddam's former palace in Baghdad. Although Sudnick met with Shaw and Senator Burns, he told colleagues that he remained determined to not effectively award a new cellular phone license for Iraq under the cover of a network for the nation's police and fire officials. In January, he defined the scope of the Iraqi needs in a report to the White House's Office of Management and Budget. The first-responder network, he wrote, "will not compete with commercial mobile cellular operators."

In March, this dispute reached a critical turning point when Sudnick and other advisers in Baghdad discovered that Nana Pacific had added language to a contract for a pilot first-responder program that would allow such competition, opening the door for the consortium to establish a CDMA network. Sudnick and his colleagues promptly challenged Nana officials about the new provision. Within hours, they received a blistering phone call from Shaw, who shouted at Sudnick's deputy, Bonnie Carroll, that there would be "hell to pay" if they did not sign off on the additional language, according to Carroll.

Within days, Sudnick received an email from Shaw: "If you can't lead or follow get the hell out of the way." The first-responder system, Shaw wrote, was "the last opportunity to install a viable cellular network that is responsive to our needs and requirements." And in another email, Shaw added that Sudnick's actions "rightly raised the concerns of the Qualcom [sic] folks."

Also shortly after the contentious phone conversation between Shaw and Carroll, Sheik Sami al-Majoun and his entourage paid a visit to CPA headquarters, says Carroll, recalling that they entered her office and that Majoun appeared upset. He told her that he had spoken with Shaw and asked her to come meet with him outside the CPA offices, presumably to discuss the Nana Pacific contract; after she declined the invitation, he left. When Mother Jones interviewed Majoun this summer at his home, he denied that he had any stake in the Qualcomm consortium, despite the document that lists him as a participant. Then he turned to a translator in the room and said in Arabic, "Of course I am involved in contracts, but I'm not going to talk about any of it."

Unmoved by Shaw's demands, Sudnick decided to recommend stopping the first-responder pilot program in its tracks. He quickly sent a memo to CPA administrator Bremer. "I have observed a series of events I consider to be highly irregular," Sudnick wrote on March 9, explaining his decision. It would be a fateful one for Sudnick and others in the office, who suddenly had an enemy high in the Pentagon. "In 48 hours, [Shaw] goes from [Sudnick's] biggest defender to his biggest fucking adversary," says a Defense Department official familiar with the incident. Over the next several weeks, the Pentagon had a new team relieve Sudnick of many of his responsibilities. He and his deputy Carroll resigned within a month. By June, Shaw had added Sudnick's name to his report about improprieties with the initial cellular bids. Citing "unsubstantiated" allegations from Iraqi sources, Shaw told Defense Department investigators that Sudnick may have taken bribes and kickbacks, details that were soon leaked to Newsweek and the Washington Times. Sudnick has denied the allegations.

With a new team of advisers at the Communications Ministry, plans for the Iraqi first-responder network have moved forward—though they are now months behind schedule. In addition, the Pentagon has given the design authority for the system to Lucent Technologies, which was included as a principal supplier in Qualcomm's bid to bring CDMA to Iraq. Although the company is one of the world's leading makers of CDMA equipment, John Procter, who works for the Pentagon's contracting arm in Baghdad, says that the contract does not call for CDMA cell phone technology, but instead will solely involve building a police and fire radio system. While a June 4, 2004, cost-benefit analysis prepared by Lucent and obtained by Mother Jones estimated the cost of establishing a nationwide first-responder system at $450 million, Procter says only about $90 million has been appropriated for the job.

But the infighting over the first-responder system has cost the Iraqi people more than money. The negotiations over the Nana Pacific proposal were a waste of precious time. Because of the delay in establishing the new emergency-response system, said a former CPA technical adviser, "people have died."

Bonnie Carroll has been back in the U.S. for months now, visiting her family and working with TAPS, a support group for military families she founded in 1994, after her husband died in an Army National Guard plane crash. Nothing about her résumé would suggest that she was destined to become a whistleblower. She worked in the West Wing for President Ronald Reagan, and then as an aide to the White House counsel for President Bush's father. After September 11, she returned to government service at the Department of Veterans Affairs before accepting a detail in the office of Deputy Undersecretary Shaw and then traveling to Baghdad to work for the CPA.

Early this summer, she sat down for a midday omelette at the Hamburger Hamlet in Crystal City, Virginia, a mall frequented by military officers from the nearby Pentagon. Sipping hot water with lemon, she worried that the effort to influence the first-responder award has caused irreparable damage—the delay in bringing first-responder radios to Iraq, the attempts to smear the integrity of her and Sudnick in the press, the added costs to Iraq and the U.S. "I like to believe in people," she said, looking very much the Republican stalwart, dressed in a pastel sweater and pearls. "And this is a deputy undersecretary of Defense. You would hope he has integrity."

Since returning to the United States, Carroll has devoted herself to clearing the names of those who advised the Communications Ministry in Baghdad. She has met with Pentagon officials and congressional staffers at their request. And she provided Senator McCain with a packet of documents detailing an expansive "web of those who stood to benefit had the deal gone through."

"Simply stated, we were used in an attempt to 'rig' a contract," Carroll wrote. "This is truly not my Defense Department."

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