US embassy cable - 05ISTANBUL502

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, Istanbul 
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