Most accounts have focused on the political and military mistakes made in invading and occupying Iraq. These errors have become somewhat familiar: the failure to plan for an occupation, even a short-term one; the U.S. proconsul L. Paul Bremer's careless destruction of all that remained of order in Iraq -- the Baath Party and the army -- in one fell swoop; and above all, Defense Secretary Donald Rumsfeld's persistent refusal to acknowledge that an Iraqi insurgency was growing and to raise U.S. troop levels accordingly.

Miller, an investigative reporter for the Los Angeles Times, fills in the missing piece: the staggering incompetence and corruption of the U.S.-led reconstruction effort, which may have done almost as much as anything else to turn the Iraqi population against its occupiers. Despite headlines in recent years about Halliburton's hefty revenues, this has been, in general, the less-covered dimension of the Iraq adventure. At its heart, Blood Money is the tale of how Washington left a country desperately in need of rebuilding to the whims of money-hungry private contractors, and of how the lack of clear lines of authority doomed efficiency, effectiveness and accountability from the start.

The result? "In almost every way the rebuilding has fallen short," Miller writes, despite some successes, such as the reconstruction of thousands of Iraqi schools and the vaccination of tens of thousands of Iraqi children. "After three years Iraqis have less power in their homes than under Saddam. Hospital neonatal units lose electricity, and doctors watch children die . . . . Oil production is far below its prewar peak. Poor Iraqis in Baghdad slums suffer through outbreaks of easily preventable diseases like hepatitis for lack of clean water or health care." And what bothers him most now, he says, is that the Bush administration seems about to give up on the reconstruction, slashing its funding even as it extends the U.S. troop presence in Iraq.

How did the country that authored the Marshall Plan botch Iraq? By way of explanation, Miller brings to life the villains and heroes of the often arcane reconstruction effort. His villains include politically connected contractors such as Mike Battles and Scott Custer, whom the former inspector general of the U.S. Army's Fifth Corps calls "rip-off artists" and who, Miller reports, never endured "any serious effort" from the Bush administration to recover the taxpayer dollars they were responsible for; senators such as Ted Stevens (R-Alaska), who, Miller writes, inserted language into the $18.4-billion Iraq-reconstruction bill of November 2003 guaranteeing "special contracting privileges for a group of constituents [the Alaska Native Corporations] that supplied Stevens . . . with votes" ; Coalition Provisional Authority (CPA) administrator Bremer, whom Miller accuses of simply not paying attention while such depredations were happening under his nose; and even Laura Bush, who championed an extravagant showcase hospital on the outskirts of Basra that Miller reports drained money and attention away from the small-scale health clinics that Iraqis really needed.

Miller's heroes are the ordinary soldiers and administrators who went to Iraq with the best intentions and tried desperately to make life better for the Iraqis -- and almost always failed. Some, Miller writes, such as Army Lt. Col. Ted Westhusing, a security trainer assigned to oversee one suspect U.S. contractor, may have been driven to suicide because of it. None of these stories is more engrossing -- and as full of the high drama that only true-life villainy and heroism can supply -- than Miller's account of the outrageous tale of Jack Shaw, a senior Pentagon official who brazenly interfered with the creation of Iraq's mobile-phone network. Miller writes that even though contracts had already been handed out, Shaw, a deputy undersecretary of defense described as someone who "could have been a caricature of the Beltway insider," sought to benefit a company linked to a friend of his. According to a November 2003 e-mail from Shaw that Miller cites, the Pentagon official tried to use a new contract for a police mobile network as a "back door" for his friend's company to set up its own commercial cellphone network. Then, Miller adds, Shaw used Sen. Stevens's legal loophole, intended to award Iraq contracts to "native Alaskans" on a no-bid basis, to sneak in his favored consortium.

When a brave and honest CPA official, Daniel Sudnick, tried to blow the whistle, Miller reports that Shaw spread stories around the Pentagon suggesting that Sudnick was corrupt, resulting in the latter's being forced to resign. Shaw's actions were finally exposed, but because of the confusion he created, it took more than two years before a police mobile-phone network was installed in Iraq. "During that time thousands of American soldiers and Iraqi police officers were killed, at least some of whom could have been saved had they been able to pick up a phone and call for help," Miller notes. Shaw was finally fired in December 2004, but Miller reports that -- in keeping with the Bush administration's unblemished record of never holding a senior official responsible for any lapse of judgment -- his departure was not explained and he was never held accountable.

Miller also tells the inspiring story of Shaw's mirror opposite, Stuart Bowen, the inspector general for Iraq reconstruction, who, despite his own insider GOP connections, turned into an indefatigable investigator and truth-teller. And the book provides the best account yet of the pitfalls of contracting security out to private companies. Miller obtained documents from the Army Corps of Engineers that show that "private security contractors played a leading role in the daily violence of Iraq" but never faced the penalties served up to, say, the military abusers at Abu Ghraib prison. Often acting without any coordination with U.S. forces, Miller writes, contractors would fire at Iraqi cars even when they hadn't been obviously provoked. This arbitrary treatment enraged Iraqis, especially since the contractors were effectively immune from criminal or civil charges.

Miller doesn't always give us the full picture: His chapter on Iraq's electricity problem, probably the single biggest setback to reconstruction, seems like an afterthought. It is also hard not to feel sympathy for contractors who worked in horrific conditions: About 500 of them have lost their lives in Iraq. But one of the many virtues of Miller's book is its balance. Halliburton, for example, comes off better than you might expect: The firm almost unfailingly supplied the promised services to troops (as anyone who has eaten at one of its subsidiary Kellogg Brown & Root's well-stocked dining facilities can attest) even as it gouged taxpayers for oil profits. "The company delivered, but wasted a lot of money doing it," Miller says. That, sadly, is more than one can say about the rest of the reconstruction effort, which for the most part didn't deliver at all.

Reviewed by Michael Hirsh
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