U.S. 'Money Weapon' Yields Mixed Results

By Ernesto Londoño
Washington Post Foreign Service
Monday, July 27, 2009

BAGHDAD, July 26 -- Shortly after the U.S. Army turned over control of the business center and a restaurant of a multimillion-dollar hotel it built near Baghdad's airport to the Iraqi government last year, flat-screen television sets, computers and furniture vanished.

The looting unwittingly kept the military in the hotel business because officers were concerned that the rest of the hotel would be stripped bare. As the U.S. government is ceding control of hundreds of projects and facilities to the Iraqi government, the conundrum raised questions about the sustainability of billions of dollars worth of projects funded through the Commander's Emergency Response Program (CERP) that encourages commanders to think of "money as a weapon."

U.S. lawmakers and the Office of the Special Inspector General for Iraq Reconstruction, which has released a report about the Caravan Hotel, are increasingly scrutinizing the use of CERP and urging the Pentagon to be more vigilant in its selection and oversight of projects.

The success stories and cautionary tales of CERP initiatives in Iraq are shaping the way commanders in Afghanistan use the program as they place greater emphasis on counterinsurgency and keeping the civilian population safe.

Since 2003, the U.S. Congress has appropriated more than $10 billion in CERP funds for the wars in Iraq and Afghanistan.

"CERP was meant to be walking-around money for commanders to achieve a desired effect in their battle space," said the office's deputy inspector general, Ginger Cruz. "Slowly, it has become a de facto reconstruction pot of money."

Earlier this month, Rep. John P. Murtha (D-Pa.), chairman of the House Appropriations defense subcommittee, asked the Pentagon for a list of all pending projects worth more than $1 million. Murtha said the Pentagon has failed to fully explain how it is using CERP. He added that the military is taking on too many large-scale projects that should be handled by civilian agencies with reconstruction expertise.

"A fundamental review of CERP, its purpose, use and scope, is overdue," Murtha wrote in the July 15 letter to Defense Secretary Robert M. Gates. Murtha said he was disturbed by reports from Iraq suggesting commanders were in a "rush to spend" hundreds of millions of dollars by the end of the fiscal year. Murtha himself has come under scrutiny for backing projects important to constituents that critics call wasteful.

U.S. military officials say CERP has been invaluable in helping commanders get things done quickly, with little red tape. In recent years, they have used it to put insurgents on payroll, award micro-grants to business owners, compensate families of civilians killed in combat, and build schools and clinics.

"We think we've been pretty successful," said Brig. Gen. Peter Bayer, the chief of staff of the U.S. command that oversees CERP projects in Iraq. He said commanders in Iraq have approved few large CERP projects this year.

One of the most notable CERP-funded initiatives was the Sons of Iraq program started in 2006, under which the U.S. military put tens of thousands of insurgents on payroll and mobilized them to fight hard-line extremist groups. Last year the government spent $300 million on Sons of Iraq salaries, but it stopped paying them this year and turned over the program to the Iraqi government, which has often failed to pay the fighters on time.

As the U.S. military has withdrawn from the cities, several CERP-funded projects, such as neighborhood parks, civic centers and swimming pools, have not been successfully adopted by local or national government entities because they either don't have the capacity or interest to keep them running, U.S. and Iraqi officials say. For example, an outdoor performance hall built in Sadr City that cost hundreds of thousands of dollars and was completed several months ago has never been used, according to U.S. officials.

As U.S. troops have largely left the cities, U.S. officials say they have been more judicious in the number and types of CERP projects they approve.

U.S. commanders in Iraq were given $747 million in CERP funds this year, down from $1 billion allocated in 2008. So far this year, the military has spent $235 million of its CERP allocation in Iraq. Realizing they couldn't spend the remaining funds responsibly by the end of September, when the fiscal year ends, U.S. commanders decided to return $247 million.

"Our application has been deliberate and judicious," Bayer said.

The Caravan Hotel, a $4.2 million project, was completed in August 2008. U.S. military officials deemed it a worthwhile investment because there are few hotels in Baghdad that foreign investors would consider safe enough.

After the equipment was looted shortly following the Caravan's inauguration, the military hired a contractor to operate the $225-a-night hotel, fearing that officials at the Ministry of Transportation, which is run by members of the Sadr political block, would shut it down and steal valuables, inspector general officials said.

A spokesman for the ministry said he was not familiar with the hotel project or the allegations of looting. Bayer said the military considers the project successful and is working on a plan to hand it over to the Iraqis.

"Ultimately when you transfer a property to someone, it's theirs and they use it for their purposes," Bayer said. "That's a decision the government of Iraq makes."

Special correspondent Qais Mizher contributed to this report.

Jakarta Blasts Renew Security Fears

By TOM WRIGHT

JAKARTA -- The explosions that ripped through Jakarta's JW Marriott and Ritz Carlton hotels on Friday raised new concerns about the growing sophistication of terrorists in Asia and the possibility that suicide bombers may have been purposefully targeting a meeting of largely Western businessmen.

Police are still investigating the nearly simultaneous suicide attacks, which killed nine people and injured 53 others after the bombers apparently smuggled bomb parts into the hotel disguised as laptops. Although police haven't officially named any suspects, intelligence experts, analysts and investigators say that Noordin Mohammad Top, a 40-year-old member of the al- Qaeda-backed Jemaah Islamiyah network, or terrorists linked to him, are now the leading suspects in masterminding the attacks.

The Associated Press Sunday cited reports that the Indonesian government was intensifying efforts to find Mr. Noordin and had enlisted help from authorities in Malaysia, where Mr. Noordin lived until earlier this decade.

The attack had many of the hallmarks of a Jemaah Islamiyah operation, analysts said, and Indonesian police said an undetonated bomb found in room 1808 of the JW Marriott -- which police believe the bombers used as their base -- was almost identical to a cache of bombs found recently at a house owned by Mr. Noordin's father-in-law in Cilacap, central Java. The Marriott room was booked under the name Nurdin Azis, which is similar to aliases Mr. Noordin has used in the past.

The unexploded bomb showed "strong indications" that Mr. Noordin or terrorist cells linked to him were involved in Friday's events, said Ansyaad Mbai, head of counterterrorism at Indonesia's Coordinating Ministry for Political and Security Affairs, in an interview on Saturday. "The bomb in the Marriott was similar to ones we found in Cilacap," he said.

Indonesian police have yet to identify the perpetrators of the blasts at two Jakarta hotels, but police said Monday the regional militant group Jemaah Islamiah could be behind the attacks. Video courtesy of Reuters.

Attempts to identify the two suicide bombers, who were among the nine dead, were continuing, with police believing at least one of them was Indonesian. Both of their bodies were decapitated in the blasts, making it difficult to verify their identities.

Whatever the investigation reveals, the terrorists' success in smuggling bomb parts into the JW Marriott underscores their growing ability to beat tactics employed by security experts in recent years to keep them at bay. Because of past bouts with terrorism in Indonesia, including bombings in Bali in 2002 that killed more than 200 people, major Jakarta hotels have some of the tightest security in the world, with airport-style metal detectors and heavily guarded driveways with roadblocks.

The bombers appeared to have no trouble getting past those security measures, though, smuggling bomb parts into the hotel disguised as laptops, police said. The ability to assemble bombs inside hotels is "definitely a step up in their tactics," said Paul Quaglia, an analyst in Bangkok at PSA Asia, a security consulting company that has done an audit for the Ritz Carlton in Jakarta. "It's definitely something that was well planned."

Fears were also rising that the bombers were targeting elite businessmen specifically. Noke Kiroyan, an Indonesian citizen and former local chairman of mining company Rio Tinto PLC, was one of 19 executives breakfasting in a small lounge in the JW Marriott, which a local consulting group hires each Friday for its meetings. Mr. Kiroyan, who lost part of his right ear in the attack, said he believes that the bomber who hit the hotel would have chosen the main restaurant on the other side of the JW Marriott's lobby, where most guests were breakfasting and which was the target of a 2003 attack on the same hotel, if they had wanted to inflict the maximum number of casualties. "I think we were targeted," he said.

Other Western executives in Jakarta repeated concerns over the possible targeting of business elites, which they said may lead foreign businesses to be more cautious about how they operate in Indonesia and possibly recalibrate expansion plans. In recent years, Indonesia has made strides in arresting terrorists, making Westerners feel more secure. ExxonMobil Corp. and other foreign resource companies had recently planned to increase the number of expatriate staff in Indonesia.

Just before the blast, early Friday morning, the hotel's closed-circuit television caught images of the suicide bomber, wearing a backpack on his chest and wheeling a suitcase, turning left in the lobby and walking purposefully toward the lounge.

The bomber was challenged by a hotel security guard as he approached the room but was waved through after saying he was delivering a package to his boss, local media reported. Moments later, while at the entrance of the lounge, which was cordoned off with rope, he detonated his bomb, which police said was packed with nails.

Mr. Kiroyan was sitting at a conference table with his back to the lounge's entrance and was partly shielded by a pillar. The last thing Mr. Kiroyan remembers before the blast is reading a long message from his wife on his mobile phone. "Suddenly there was a loud bang and a blinding flash," he said. "My first thought was that my mobile phone exploded. You hear stories about mobile phones exploding. But then I realized it couldn't be that."

Suddenly, Mr. Kiroyan was lying on the floor in pitch darkness with his clothes soaking wet. What he at first took to be blood turned out to be water from the hotel's emergency sprinkler system. People were crying out that they couldn't see.

Mr. Kiroyan then made his way out of the room, where he was met by two hotel staff and guided outside to wait for an ambulance. "I feel angry but relieved that I am alive," Mr. Kiroyan said.

Although he didn't directly observe the suicide bomber, Mr. Kiroyan said other colleagues at the meeting later recounted that some of the people in the room remember seeing an unknown Indonesian man at the entrance just before the explosion.

The four foreigners who have so far died in the Marriott explosion -- three Australians and a New Zealander -- were all sitting at the far end of table from Kiroyan, nearest the entrance. An Indonesian waiter and the suicide bomber also were killed in the explosion.

Indonesian terrorists have failed in recent years to kill a large number of Westerners in suicide bombings. The 2002 Bali nightclub attacks killed 202 mainly Western tourists through two bombs, one in a car and the other carried in a backpack by a suicide bomber. But an earlier attack on the JW Marriott in Jakarta in 2003, by a car bomb, killed 12 people, two-thirds of them Indonesians, and injured more than a hundred. Attacks against the Australian embassy in 2004 and again in Bali in 2005, killed mainly Indonesians.

Foreign expatriates living in Jakarta said none of the previous attacks so directly targeted foreign business interests. The idea that the meeting Friday may have been a focus was "a scary thought" said William Reed Rising, a U.S. citizen who works in real estate and normally attends the briefing but was absent last week.

—Patrick Barta contributed to this article.

Write to Tom Wright at tom.wright@wsj.com

Indonesian Police Say Jakarta Bombings Are Work of Jemaah Islamiyah

By Brian Padden Jakarta 19 July 2009

Indonesian Police say the bombings of two hotels in Jakarta on Friday was the work of Jemaah Islamiyah, a terrorist group with al-Qaida ties. Analysts say it is likely that Noordin Top, a Malaysian fugitive who leads an affiliated group within a Southeast Asian militant network, planned and organized the attacks. The two blasts killed nine people, including the two suspected attackers, and wounded 50, many of them foreigners.

Indonesian national police spokesman Nanan Soekarna says the bombing attacks on the Marriott and Ritz Carlton Hotels in Jakarta on Friday were the work of Jemaah Islamiyah. The group with ties to Al-Qaida, has carried out dozens of bombings in Indonesia in the past decade, including a 2002 attack in Bali that left more than 200 people dead, mostly foreign tourists.

A poster bearing image of Southeast Asia terror ringleaders Noordin M. Top, left, and Azhari bin Husin is put on a tree in Jakarta (File)

He told reporters Sunday an unexploded bomb left in a guest room of the Marriott hotel, which was attacked along with the nearby Ritz-Carlton, resembled explosives used in Bali and one discovered in a recent raid on an Islamic boarding school.

Sidney Jones, an analyst with the International Crisis Group, says Noordin Top, a Malaysian who leads the most militant faction of Jemaah Islamiyah, is the likely organizer of the attacks.

"Noordin is the only person of the various leaders of radical groups in Indonesia who is continued to be determined to attack western targets and particularly American targets," said Jones.

Jones says Noordin has used suicide bombers in the past like the ones used in Friday's attacks. And she says before the bombing police had some intelligence indicating Noordin may have been planning something.

"It was clear in the last two weeks that something was afoot. And the police were very actively searching this area in South Central Java called Cilacap because they believe some of Noordin's associates were active there," said Jones. "And we now know there is linkage between explosive materials used in these hotel bombings with some of the materials found in Cilacap by police."

But Jones says Noordin Top may have split from the main Jemaah Islamiyah organization, or JI, which had recently turned away from violence because it was turning public opinion against them.

"The bulk of JI members are not interested in violence now because they regard this kind of bombing as counter-productive," added Jones. "They need to rebuild their organization and they do that by recruiting new members through religious outreach. This kind of bombing does not bring you any new members, it creates outrage in the community."

Jones says bombing the Marriott Hotel, which was also attacked in 2003, was probably meant to demonstrate that their group is still active and able penetrate the increased security.

Bombing Suspects Spent Two Days at Hotel

By TOM WRIGHT

JAKARTA -- The suspects in the two deadly bombings here Friday checked into one of the targeted hotels two days earlier and assembled explosives in their room, evading the kind of tight security that has helped convince foreigners it is again safe to do business in Indonesia.

Suicide bombers at the JW Marriott and nearby Ritz-Carlton hotels killed eight people and injured 53, striking at the heart of corporate Indonesia.

The Ritz-Carlton and JW Marriott are seen as symbols of the country's new economic strength and growing appeal to foreign investors. They have marble floors and gold-plated columns, and Indonesia's rich and famous dine at their restaurants and hammer out business deals in their lounges, adorned with spacious armchairs and grand pianos. Nearby are some of the city's most expensive restaurants, which often have Ferraris parked outside.

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Both hotels have security measures intended to prevent terrorists from driving a car full of explosives toward their lobbies, as Islamist radicals did at the JW Marriott in 2003, killing 12 people. Since Indonesia's last terrorist attack in Bali in 2005, new security measures and a major crackdown on Islamic terrorists by U.S.-trained Indonesian antiterrorism police made Westerners feel more secure.

On Friday, some of Jakarta's best-known Western and Indonesian business figures gathered for a regular 8 a.m. breakfast meeting at the Marriott hosted by Jim Castle, an American who runs CastleAsia, a prominent local consulting firm.

Mr. Castle, who has lived for almost 30 years in Indonesia and regularly appears on cable news shows, was at the Marriott during the 2003 blast. He wasn't injured then, and has expressed a cautious optimism about the country's prospects. Among topics for discussion at the conference: The success of President Susilo Bambang Yudhoyono, a former army general who was re-elected a week earlier on a platform of restoring law and order.

Bombings Shake Jakarta: Photos

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Violence Strikes: Past Attacks

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A Restive Region: Map

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• Earlier: Deadly Blasts Rock Jakarta Hotels

Upstairs, in Room 1808, a number of guests had checked in Wednesday under aliases -- including one similar to the alias of Southeast Asia's most-wanted terrorist suspect. A police spokesman declined to say how many people had checked in or to give their nationalities.

Shortly before 8 a.m. Friday, security video footage showed, a man wearing a cap and pulling a bag on wheels crossed the lobby of the JW Marriott, walking toward the restaurant. A flash followed, and smoke filled the air.

A few minutes later a blast went off at the restaurant of the Ritz-Carlton. Cho Insang, a South Korean who runs a modeling agency and was organizing a fashion show in the hotel in August, was having breakfast when the bomb exploded. He was knocked to the floor, and was able to run out into the lobby. "The room was full of smoke and people panicking," he said. He suffered minor facial injuries.

The lobby areas of both hotels were left a mangled mess of steel and glass, full of damaged furniture and other debris. The sidewalks outside were caked with blood.

The blasts sent workers running into the street, many in their nightclothes or underwear. Local television showed images of mangled and bloodied bodies slumped on the floor. Plumes of smoke from the blasts shrouded the area as the injured were laid out on a nearby square of undeveloped land.

When the dust settled, two well-known expatriate business leaders attending the CastleAsia breakfast were dead: Timothy Mackay, a New Zealander who headed Swiss cement maker Holcim Ltd.'s local operations, and Nathan Verity, an Australian who ran his own Jakarta-based recruitment company.

Authorities didn't release the identities of all of the other six people killed, and it remained unclear whether the suicide bombers were among them

The injured who were at the breakfast included Noke Kiroyan, an Indonesian former chairman of miner Rio Tinto's local operations; Andy Cobham, an American who previously headed cellphone company Motorola Inc. in Indonesia; and David Potter, an executive at Phoenix-based Freeport-McMoRan Copper & Gold Inc.

Mr. Castle's hearing was affected after the blast but he was in a stable condition, his assistant said.

Authorities later found a third, unexploded bomb in Room 1808. An Indonesian bomb squad detonated the device, the police spokesman said.

The attacks appeared to be the work of highly capable bomb makers, security experts said. The investigation is focusing on Islamist terrorists, primarily, Noordin Mohamed Top, who is considered an expert bomb maker from Jemaah Islamiyah, a local affiliate of al Qaeda.

In a televised address, a visibly angry Mr. Yudhoyono said the bombings were attempts to destabilize the country after the elections. "I'm confident just like when we have uncovered [terrorists] in the past, the perpetrators and those who moved this act of terrorism will be caught and brought to justice," Mr. Yudhoyono said, pausing for seconds at a time to control his emotions.

Write to Tom Wright at tom.wright@wsj.com

Indonesian President Calls Hotel Bombings Acts of Terror

By Brian Padden Jakarta 17 July 2009

Indonesian President Susilo Bambang Yudhoyono says the two bombs that went off in the Marriott and Ritz Carlton hotels in Jakarta, killing eight people and wounding at least 50 more, are acts of terrorism.

Rescuers evacuate the body of a victim of the bomb explosion outside J.W. Marriott hotel in Jakarta, Indonesia, 17 Jul 2009

Police pushed back crowds as paramedics carried out the bodies of five people who died in the blast at the Marriott hotel in an upscale business district in south Jakarta. A second bomb exploded at the nearby Ritz-Carlton hotel.

Witnesses say they heard loud explosions and saw clouds of smoke and dust shortly before eight in the morning.

Iwan, a waiter who was working at a Ritz-Carlton restaurant where one bomb was reportedly detonated, survived unharmed. He says he does not know whether it was a bomb or not in the restaurant, but there was a powerful explosion.

Police say the bombs exploded inside the hotels. The perpetrators were somehow able to avoid extensive hotel security. Jakarta's police chief says several suspects were staying at the Marriott hotel, on the 18th floor where undetonated explosives were found.

The two hotels are connected by an underground tunnel but the president's spokesman, Dino Pati Djalal says it is too early to speculate on how the bombs were planted.

"The minister for security affairs has stated that this is something of, a bomb of a high explosive, that is how he described it," he said. "But exactly what kind, what type, and how was it exploded and what is the modus operandi, that all remains to be determined."

Although those responsible have not yet been identified, Indonesian President Susilo Bambang Yudhoyono called the bombings terrorism. He says no matter what nation or religion, terrorism cannot be justified, whatever the motive or reason.

This is the first terrorist attack in Indonesia in four years and the second time the Marriott Hotel was bombed. That last attack in 2003 was blamed on the Islamic terrorist group Jemaah Islamiyah, which also was responsible for attacks around the country that claimed more than 230 lives over the past nine years.

The president, who won re-election last week, also said security officials had received intelligence of plots to disrupt the election and prevent him from being inaugurated. He says there were plans to take over the election committee headquarters and statements that there will be a revolution if Yudhoyono wins.

He did not say what group made these threats.

A number of international business leaders who were meeting in the Marriott, including American James Castle, were injured in the blast. A New Zealand businessman was killed and an Australian trade official, Craig Senger, is missing and feared dead.

The British soccer club Manchester United, which was booked to stay at the Ritz Carlton starting Saturday, has canceled its visit to Jakarta.