FORMER TURKISH HOSTAGE ALLEGES MALFEASANCE IN

C O N F I D E N T I A L SECTION 01 OF 02 ISTANBUL 000502

SIPDIS

E.O. 12958: DECL: 03/30/2015
TAGS: EAID ECON IZ PTER TU
SUBJECT: FORMER TURKISH HOSTAGE ALLEGES MALFEASANCE IN
BASRA CONTRACTING


Classified By: Consul General David Arnett. Reasons 1.4 (b and d).


1. (C) Summary: In an Istanbul meeting with Ambassador
Edelman, Turkish businessman Kahraman Sadikoglu, who was held
hostage in Basra from December 15, 2004, to February 15,
2005, made serious allegations regarding malfeasance in USAID
contracting in Basra in 2003. Sadikoglu, who was working
under a UNDP contract to clear the harbor at the time,
alleged that Suleiman Sakhlh, the local "USAID
Representative," had sought money and favors from him, and
promised him a USAID contract in the future. In addition,
Sadikoglu claimed that massive waste and fraud occurred in
various USAID projects in Basra, pointing especially to the
Bechtel Corporation's dredging operation, which he charged
simply involved shifting sand back and forth between
different sides of the channel and triple-charging the U.S.
government. End Summary.


2. (C) Hostage Experience: Sadikoglu's meeting with the
Ambassador came after several meetings with Assistant Legal
Attache to discuss his kidnapping in Iraq. (Note: LEGATT has
reported on those conversations separately in its own
channels. End Note.) In his meeting with the Ambassador,
Sadikoglu briefly recounted his experience, and reiterated
his belief that the hotel where he had been forced to stay on
the night of December 15, 2004, had "sold him" to the
kidnappers. "Something should be done about that hotel," he
argued. He opined that his kidnapping was not politically
motivated, but that the gang involved was simply motivated by
money.


3. (C) Mr. "Sam": Most of Sadikoglu's comments concerned the
actions of the purported USAID Representative in Basra in
2003, whom he identified as Suleiman Sakhleh, aka "Sam."
(Note: To date LEGATT has been unable to confirm this
individual's identity. End Note.) Sadikoglu noted that he
had loaned this individual 10,000 USD in the summer of 2003,
when he indicated that he was having difficulty accessing his
bank account. Subsequently, when he learned Sakhleh was
planning a trip to Turkey, Sadikoglu arranged the program,
paying for hotel accommodations for Sakhleh and his wife and
the friends who accompanied him, and putting his car and
driver at his disposal for a week in Istanbul and for a
subsequent week in the south of Turkey as well, where
Sadikoglu, who is the scion of two prominent Turkish shipping
companies, arranged a vacation cruise for the party.
According to Sadikoglu, Sakhleh told him he would get a USAID
salvage contract in the future. Subsequently, however,
Sakhleh disappeared from Basra in September 2003, without
thanking him or repaying the 10,000 USD loan.


4. (C) Dredging: During this period in Basra, Sadikoglu
alleged, the prices being paid by USAID for various projects
were a standing joke among other members of the international
community. He noted that under a UNDP contract that
originally stemmed from the Oil for Food Program, he had
agreed to remove 32 ships from Basra harbor for a fee of 20
million USD. In contrast Bechtel, he later learned, had
removed one ship for 8.5 million USD. Similarly, he charged,
Bechtel's dredging operation made no contribution to clearing
the channel. Instead, Bechtel simply moved sand to one side
of the channel, and then backed up and moved it back again.
Sadikoglu conceded that he had not personally seen the
invoices for this operation, which he said were approved by
Sakhleh, but had heard that they were for some 75 million USD
per week. He said that he had witnessed the dredging,
however, and that at no time did Bechtel follow the standard
practice of measuring the channel's depth and barging removed
sand to an area far from the channel.


5. (C) Other allegations: Sadikoglu also made less detailed
allegations regarding the activities of Halliburton, which he
did not believe had accomplished as much as it could have in
getting Basra's pumping stations back into working order. He
did acknowledge that some stations have been repaired,
however, and that oil is being loaded on to ships in Basra.
Overall, he strongly criticized the overall reconstruction
process in Basra, noting that even his successful work to
remove 32 ships from port at Umm Qasr has had little real
impact since the scrap metal from the ships has not been
removed from the jetty, and continues to impede access to it.
(Note: Such removal was not part of his contract, he noted,
given the additional expense involved, but was necessary
after Kuwait objected to moving the ships to another location
in the water because of pollution concerns. End Note.) He
also noted more general problems with the reconstruction
process that embittered the local population. Sakhleh, he
alleged, had a practice of having people line up each day for
work, and would often only inform them at noon that none was
available, after they had been waiting in the hot sun for
eight hours. All of this, he suggested, has alienated the
population, and he contrasted it to his own experience, where
he hired some 400 locals for 250 USD a month. Those workers,
he said, often slept near his headquarters, to protect him
from attack and thereby protect their employment as well.


6. (C) Comment: The passage of time and the fact that
Sadikoglu clearly feels not a little resentment at the
difference between his contract terms and those received by
American companies make it difficult for us to evaluate his
information. Given that his allegations involve possible
criminal activity by USG employees and contractors, however,
we pass it on for consideration by appropriate agencies.
Legatt has reported separately on Sadikoglu's abduction,
captivity, and ultimate release in its own channels. End
Comment.
ARNETT