Money’s Place in the Peace Arsenal

Stephen DeAngelis

August 27, 2008

Anyone with a little common sense understands that it takes kinetic weapons to win wars and non-kinetic options to secure the peace. The conundrum in Iraq has been that military personnel are often fighting an insurgency in one block and trying to secure the peace in the next. According to Dana Hedgpeth and Sarah Cohen, one of the best tools in the soldier’s kit for securing the peace may be cash [“Money as a Weapon,” Washington Post, 11 August 2008]. Not everyone believes that cash is a good “weapon” however. Hedgpeth and Cohen begin their article by explaining how cash got into the toolkit in the first place.

“In the five-year struggle to finish the war in Iraq, military leaders and their troops have said a particular weapon is among the most effective in their arsenal: American cash. … The money comes from the Commander’s Emergency Response Program, which has so far spent at least $2.8 billion in U.S. funds. It is not tied to international standards of redevelopment or normal government purchasing rules. Instead, it is governed by broad guidelines packaged into a field manual called ‘Money as a Weapon System.’ The program is intended for short-term, small-scale ‘urgent humanitarian relief and reconstruction.'”

It’s clear why the Money as a Weapon System program is so highly regarded among the troops. Using that cash they can make an immediate impact on the lives of those they meet; thus, helping win the “hearts and minds” (as the military likes to say) of the people with whom they come in contact. The evidence of the CERP’s effectiveness, however, is anecdotal and that is part of the problem.

“Soldiers and their commanders say the program works because there is little red tape, allowing them to fill immediate needs in their assigned towns and cities. On Capitol Hill and in the Pentagon, the program has become a ‘sacred cow,’ as one government auditor calls it. Few will openly criticize the popular program for fear of alienating the troops. CERP was recently given an additional $1.2 billion — to be split between Iraq and Afghanistan — according to a July report by the Office of the Special Inspector General for Iraq Reconstruction. That money brings the program’s total to $3.5 billion. Lawmakers also have proposed to exempt it from restrictions on the spending for large reconstruction projects in Iraq in the future.”

Some lawmakers want to lift spending restrictions because the military has already exceeded those limits in some cases.

“About $1 billion of the money spent so far has gone to 605 projects that exceed the Army’s definition of ‘small scale,’ or more than $500,000 each. And $880 million was spent on projects that took longer than 6 months, considered the definition of ‘short term’ by many commanders.”

Commanders argue that winning the hearts and minds of local populations requires more than dole. It requires commitment and that is best demonstrated through larger and longer-term projects. With Iraqi coffers beginning to fill with oil money, some members of Congress are starting to question whether CERP funds are really necessary. Those in field continue to argue that they are.

“Gen. Peter W. Chiarelli, who is vice chief of staff for the U.S. Army and in 2006 served as commanding general of the Multi-National Corps — Iraq, said that he and commanders in the field have all seen violent incidents in certain areas decline when CERP spending goes up. He said CERP is, in fact, a reconstruction program in addition to being a counterinsurgency weapon. After the firefights of the initial invasion, Chiarelli said, ‘you’ve then got somebody coming around to a commander, handing him a bag of $25,000 cash and saying to go rebuild Iraq.’ But Chiarelli added that the military may not be equipped to maintain the schools, clinics and water projects it builds with CERP money. In one case in 2005, he said, he brought water to 220,000 houses in the Sadr City section of Baghdad using CERP funds. But when he went back a year later to check on whether the program had been expanded to more houses, it hadn’t. ‘The problem is follow-through,’ he said.”

My colleague Tom Barnett has argued for years that the “follow-up” should be conducted by a System Administration (SysAdmin) force that is more civilian than military. Since no such force exists, the military is left to do the best it can. With the Iraqi treasury becoming flush with oil money, follow-up is an obvious task for the central government to undertake. That, however, does not mean that CERP funds aren’t critical for troops in the streets.

“When Army Gen. David H. Petraeus led the 101st Airborne Division’s occupation of Mosul and northern Iraq in 2003, posters hung in barracks reading, ‘What have you done to win Iraqi hearts and minds today?’ Then he and his troops started spending money — $58 million from an early CERP fund that came from seized Iraqi assets. Petraeus, now the top U.S. commander in Iraq, was well-schooled in the use of money in counterinsurgency. He wrote his Princeton University dissertation on the lessons of Vietnam, where the U.S. military used a tool for ‘pacification’ that looked a lot like CERP. At the start of the U.S. occupation, many of Iraq’s villages experienced few results from the large-scale rebuilding efforts managed from Baghdad. But a quick influx of cash from soldiers to fix urgent problems brought goodwill, military leaders and experts said. ‘You can’t shoot yourself out of an insurgency,’ said Marine Col. John A. Koenig, who oversaw $160 million worth of CERP projects in Anbar province last year. ‘A rifle only gets you so far. It shows you have some force. CERP allows you to develop our answer to al-Qaeda.’ The program gives military leaders the flexibility to move quickly in an unstable, cash-only war zone.”

The U.S. military is not the only organization that uses cash as a weapon. The reason that Osama bin Laden and his al Qaeda organization were welcomed in Afghanistan is that they brought cash and helped the local population. The tactic has also been used in Lebanon and Palestinian territories.

“The tactic [is] similar to the way Hezbollah operates in Lebanon, said Koenig, who was an adviser to one of the Marine generals in charge of large-dollar CERP projects. ‘Hezbollah shows up after an Israeli airstrike with cash and fixes the neighborhood,’ he said. Iraqi insurgents, including al-Qaeda in Iraq, ‘never did that,’ he said. ‘They would come in and take charge of an area, but they didn’t come back and say, “We’re going to help you out here.”‘ Paying outright bribes is prohibited. But in Iraq, nepotism is a common practice and can help keep projects and troops safe.”

So far CERP funds for small, short-term efforts seem safe. It is money for large, longer-term projects that is coming under fire.

“When CERP funds have been used for far bigger projects, the results can be problematic. Management and accountability of large contracts can be difficult for military personnel who are fighting a war, said James ‘Spike’ Stephenson, a former U.S. Agency for International Development director in Iraq. ‘Their major job became not just fighting the war but becoming the de facto reconstruction guys. But they’re not trained to run and sustain them. They are learning it on the battlefield.’ Outside Kirkuk, in northern Iraq, an $8.3 million water treatment project completed in February with CERP funds took more than two years and was $1.7 million over budget — and it is not far from another water treatment system that USAID paid $4.1 million to build two years ago, according to a top State Department official involved in the broader reconstruction efforts. He spoke on condition of anonymity because he did not want to undermine his relationships with his colleagues.”

Hedgpeth’s and Cohen’s article underscores the fact that interagency coordination is critical for tasks carried out in a post-conflict state. In fact, collaboration must go well beyond interagency cooperation to include international organizations, NGOs, local leaders, and private citizens. The authors go on to report that one of the most important tasks faced by everyone in Iraq is reducing unemployment.

“With unemployment hovering at 60 percent in some areas of Iraq, CERP’s highest priority is creating local jobs. Along the highway leading to Baghdad International Airport, long considered one of the most dangerous roads in the country because of the constant threat of improvised explosive devices, workers were hired to paint a $900,000 mural depicting the progression of Iraq from fishing villages with seagulls and boats to oil refineries. Millions more were spent to plant and cultivate date palms, a crop decimated over the past two decades. Installing awnings worth $687,000 in a market in Baghdad was justified partly because, documents say, ‘adding the awnings will create 35 jobs for 3 months.’ In the violence-prone city of Ramadi, Army Capt. Nathan Strickland and his battalion used CERP money to hire day laborers to clear away trash and rubble. The military strategy: Get young men to pick up shovels instead of guns.”

Enterra Solutions’ Development-in-a-Box™ work in Iraq also has job creation as part of its focus. It has been known for years that getting people back to work and getting children back in school are two of the fastest ways to bring peace and stability to a region. Hedgpeth and Cohen report that when coordination breaks down between military units there can be unexpected consequences. One unit, they noted, couldn’t figure out why no one was showing up for their work project until they learned that another U.S. unit was paying $2 more a day to work on their project. The military must also work closely with the local government so that job creation programs help the local economy rather than hurt it by fostering inflation and taking people away from jobs at which they are already working.

“The largest jobs program began in 2007. Sons of Iraq, as it is now called, has paid more than 100,000 Iraqis $5 to $26 per day to guard checkpoints and patrol neighborhoods. The United States has spent more than $250 million on the program so far, records show. Petraeus has told Congress that ‘the salaries paid to the Sons of Iraq alone cost far less than the cost savings and vehicles not lost due to the enhanced security in local communities.’ But members of Congress, military strategists and government auditors said the problem is that there is no obvious way to end the program. In their latest report, auditors at the special inspector general’s office said the program is considered a ‘temporary security measure’ but that only 14,000 Sons of Iraq members have transitioned to become part of the Iraqi Security Force.”

Transitions are always the trickiest and most difficult part of any program and this is obviously true for military reconstruction programs as well. The Iraqi government is going to have to step up if the foundations laid by the CERP are going to have a lasting positive effect. With the Iraqi president now urging some kind of timetable for the withdrawal of U.S. troops, now would be a good time for them to spend some of Iraq’s newly acquired wealth to make temporary programs more permanent. The problem, of course, has been that factional feuding has precluded the Iraqi central government from being as effective as it could be. Patience might be a virtue, but lots of people in Baghdad and Washington, DC, are running out of patience. CERP funds may ultimately become victims of impatience and that would not be good news for soldiers on the ground or the people they are trying to help.