Welcome to Loudon, USA, where rebuilding has sparked a goldrush

Julian Borger in Washington
Saturday December 2, 2006
The Guardian

Some of the billions of dollars that Congress earmarked to be spent on Iraq have ended up much closer to home, in the plush Washington suburbs of northern Virginia.

This year Loudoun county, a mix of sleek silver office buildings and bucolic hills to the west of the capital, emerged as the wealthiest county in the country with a median household income of nearly $100,000 (£50,500). The country's second poshest place to live, Fairfax County, is right next door.

Not long ago, at the height of the dot.com boom, the big money was on the west coast. In Bush's post 9/11 America it has migrated to the east, forming a golden arc around the Pentagon which has privatised much of the war on terror and has been handing out multimillion-dollar contracts to the burgeoning defence industry.

The giant corporations that have been paid much of the $18bn set aside for Iraq reconstruction are more evenly spread around the country. Parsons is in California. Bechtel and Halliburton are in the president's home state, Texas.

But a big bite of security costs involved in every reconstruction contract has found its way to Loudoun and Fairfax, where many private security contractors have set up shop to recruit officers and defence officials as soon as they walk out of the Pentagon's doors in search of a more lucrative private career.

As the Special Inspector General for Iraq Reconstruction has found, conditions there have been so difficult that on some projects more than half the expenditure has been on overheads, such as paying high-earning contract employees to stay in Baghdad for months awaiting the start of construction. That money tends not to stay in Iraq but to go back to the US, to places such as Loudoun and Fairfax, where huge new private homes, known locally as "McMansions", are popping up each day, clustered around the many golf courses.

<>However, the gravy train may have "just jumped the tracks", wrote Washington Post columnist Steven Pearlstein. "It's not only that the war in Iraq will start to wind down, along with all the logistical support and reconstruction work that goes with it. Even more significantly, the Democratic Congress is about to lift the veil on the orgy of contractor waste, fraud and abuse that has gone unchecked at the Pentagon, the intelligence agencies and the homeland security
department."