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An American law firm with ties to the Bush administration has been hired to help set up a legal system in Iraq.
The firm, Squire, Sanders & Dempsey, has been drafted in by USAID to advise on privatising former government-held industries, structuring government economic and regulatory agencies, and developing a tax structure.
The legal deal is part of a larger package worth up to $79.6 million taken on by Bearingpoint, formerly called KPMG consultants, to advise on the restructuring of Iraq. The deal is expected to lead to several million dollars of work for Squire, Sanders, effectively as sub-contractor.
It was also announced on Friday that the administration in Iraq has appointed a JP Morgan-led consortium that includes France's Credit Lyonnais to set up and manage a trade bank for Iraq.
The Coalition Authority in Baghdad created the bank to allow Iraqi ministries and oil concerns to begin making big-ticket purchases abroad.
The purchases are likely to start at an average of about $100m a month but the bank's overall business could balloon to $500m a month as Iraq's oil industry gets back on its feet.
The number of contracts awarded to companies with close connections to the Bush administration is increased by the Squire, Sanders' deal. The firm donated $41,350 to George W Bush's election campaign in 2000, and earlier this year a Sanders partner, Ronald James, was made personnel chief of the new Department of Homeland Security.
James used to work for Donald Rumsfeld, now Defence Secretary, when Rumsfeld was a member of Congress, and during the Nixon administration he shared a White House office with Dick Cheney, now Vice President.
Recipients of contracts in Iraq already include Kellogg Brown & Root, a subsidiary of Halliburton which was run by Cheney and is a major Republican Party donor.
The company has been given more than $1 billion dollars worth of contracts to reconstruct postwar Iraq and help repair its oilfields. The decision to award these contracts to Halliburton became even more controversial after it emerged that they were given without competition.
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