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Context of 'April 2003 and After: CPA Reopens Baghdad Stock Exchange with 24-Year Old American in Charge'

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Jay Garner.Jay Garner. [Source: US Army]The Office of Reconstruction and Humanitarian Assistance (ORHA) is created by the Pentagon to direct the post-war administration of Iraq, and signed into existence by President Bush. Its head, retired Army General Jay Garner, ostensibly reports to Undersecretary of Defense Douglas Feith (see Fall 2002), but Garner will later say that once he is in Iraq proper, General Tommy Franks of the US Central Command (CENTCOM) “will be my boss.” ORHA is later renamed the Coalition Provisional Authority (CPA). David Kay, a senior fellow at the Potomac Institute for Policy Studies and a former UN weapons inspector, had initially been selected to head the office, but he declined the invitation. Associates of Kay tell the New York Times that Kay felt the new agency seemed relatively uninterested in the task of promoting democracy. [New York Times, 2/23/2003; New York Times, 4/2/2003; Roberts, 2008, pp. 126, 134] Garner is considered an excellent selection, having led the relief effort for the Kurds of northern Iraq after the 1991 Gulf War. But he faces an uphill battle, as ORHA’s functionality is plagued from the outset by a severe lack of time, uncertain funding, and incessant interdepartmental strife, particularly between the State and Defense Departments. Most ORHA workers will not have reported for duty by the time the invasion begins. And attempts to recruit experts from other agencies will be blocked by Feith and Defense Secretary Donald Rumsfeld, who impose strict ideological and bureaucratic restrictions on Garner’s selections for his staff. [Roberts, 2008, pp. 126, 134]

Entity Tags: US Department of Defense, Office of Reconstruction and Humanitarian Assistance, US Department of State, George W. Bush, Jay Garner, Thomas Franks, David Kay

Timeline Tags: Events Leading to Iraq Invasion, Iraq under US Occupation

Jay Hallen, a 24-year old Yale graduate, is bored with his job at a real-estate firm. He is fascinated with the Middle East, and has taken some Arabic classes and read some history books about the region. He contacts Reuben Jeffrey, an adviser to CPA head L. Paul Bremer whom Hallen had met in 2002 when trying to land a job at the White House, and asks if there is a job for him in Baghdad.
'I Don't Have a Finance Background' - Three weeks later, Hallen is in Baghdad, and meets with Thomas Foley, the CPA official in charge of privatizing Iraq’s state-owned enterprises. Foley, a former classmate of President Bush and a major Republican donor, says he is putting Hallen in charge of Baghdad’s stock exchange. Hallen is shocked. “Are you sure?” Hallen asks. “I don’t have a finance background.” No problem, Foley responds. He will be the project manager; his subordinates will do the actual work. Before the invasion, Baghdad’s stock exchange was primitive by American standards; author Rajiv Chandrasekaran will describe it as loud, boisterous, and, despite all appearances, quite functional. After the invasion it was looted to the bare walls and ignored by the first wave of US economic reconstruction specialists. But Iraqi brokers and businessmen want it reopened, so the CPA acquiesces.
Revamping the Exchange - Hallen launches an ambitious, if almost entirely ignorant, plan to modernize and upgrade the stock exchange to make it the most technologically sophisticated exchange in the Arab world. He also wants to implement a new securities law that would make the exchange independent of the Finance Ministry. The Iraqi brokers and businessmen who clamored for the exchange to reopen are horrified at Hallen’s plans. “People are broke and bewildered,” broker Talib Tabatabai—a graduate of Florida State’s business department—tells Hallen. “Why do you want to create enemies? Let us open the way we were.” Tabatabai, like other brokers, believes Hallen’s plan is ludicrously grandiose. “It was something so fancy, so great, that it couldn’t be accomplished,” he will later recall. But Hallen is unmoved.
Hallen's View - “Their laws and regulations were completely out of step with the modern world,” Hallen will later say. “There was just no transparency in anything. It was more of a place for Saddam and his friends to buy up private companies that they otherwise didn’t have a stake in.” To just reopen the exchange the way it was, Hallen will insist, “would have been irresponsible and short-sighted.” Hallen recruits a team of American volunteers, most with no more experience or knowledge of finance than he has, to rewrite the securities laws, train the brokers, and purchase the necessary computers. By the spring of 2004, CPA head Bremer approves the new laws and appoints nine Iraqis hand-picked by Hallen to become the exchange’s board of governors.
No CPA Role - The new exchange board names Tabatabai as its chairman. The new laws have no place for a CPA adviser as a decision-maker; immediately a conflict between Hallen and the board arises. Hallen wants to wait several more months for the new computer system to arrive and be installed; unwilling to wait, Tabatabai and the board members buy dozens of dry-erase boards for the exchange floor, and two days after Hallen’s tour ends, the exchange is open for business. Without CPA oversight, the exchange quickly begins functioning more or less as it did before the invasion. When asked what would have happened had Hallen not been assigned to reopen the exchange, Tabatabai will answer: “We would have opened months earlier. He had grand ideas, but those ideas did not materialize.… Those CPA people reminded me of Lawrence of Arabia.” [Washington Post, 9/17/2006]

Entity Tags: Rajiv Chandrasekaran, Reuben Jeffrey, Talib Tabatabai, Thomas Foley, Iraq Finance Ministry, Coalition Provisional Authority, Jay Hallen, L. Paul Bremer

Timeline Tags: Iraq under US Occupation

Jay Garner, a retired general selected by the Pentagon a month before to direct reconstruction efforts in Iraq, is replaced by diplomat Paul Bremer III as head of the Coalition Provisional Authority (CPA). Bremer is thought more capable of dealing with the increasing rebellion and lawlessness in Iraq. [CNN, 5/11/2003]

Entity Tags: Jay Garner, L. Paul Bremer

Timeline Tags: Iraq under US Occupation

L. Paul Bremer, the head administrator of the Coalition Provisional Authority, abandons a goal put forth by Jay Garner and Zalmay Khalizad to assemble a meeting by the end of May in order to establish an interim Iraqi government. Bremer instead chooses to go with a “step-by-step” approach whereby the constitution would be drafted before elections are held. [Gordon and Trainor, 3/14/2006, pp. 479]

Entity Tags: L. Paul Bremer

Timeline Tags: Iraq under US Occupation

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