WASHINGTON—It would be too easy to say the U.S. Embassy in Baghdad is a metaphor for the arrested development of our highly anticipated new “strategic partnership” with Iraq, but in many ways it is the most poignant symbol we have.

Not only is it a symbol of the hubris with which Americans designed this 104-acre complex in the heart of the Iraqi capital—smack among Saddam Hussein’s old palaces in one of Baghdad’s busiest business districts—but it also stands for America’s once sweeping vision of rebuilding Iraq in its own image, big and bold and reliably accommodating to Washington’s interests.

Yet now American officials are suddenly talking about downsizing the U.S. civilian presence in Iraq, and the relationship between our diplomatic corps and the Iraqi government appears chillier than ever. The sprawling desert fortress looms as a reminder that a scaffolding of good intentions cannot forever hold up a house built on the sands of greed, mistrust, and competing narcissisms.

“The whole thing was designed around a fantasy,” says Peter Van Buren, a U.S. Foreign Service Officer who last year published We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People. Van Buren, who has been suspended from his job since posting a link on his personal blog to classified State Department material released by WikiLeaks, spent 2009 in Iraq on a Provisional Reconstruction Team (PRT) and is now a full-time critic of U.S. efforts there.

“Designed in 2003 as a symbol of America the Conqueror, the Baghdad embassy included buildings for an international school that never opened. A lawn was planted to beautify the embassy, outdoor water-misters installed to cool the air. Even the stark reality of the desert was not allowed to interfere with our plans,” Van Buren told TAC.

“Instead, our failure to resolve the demons unleashed by the fall of Saddam crushed us,” he added.

“Literally only days after the U.S. military withdrawal, the world’s largest embassy watched Prime Minister Maliki try to arrest his own vice president, who fled to Kurdistan where Iraqi government forces are powerless to intervene.”

Van Buren is referring to Sunni Vice President Tareq al-Hashemi, who is accused by the Shi’ite Maliki of running a death squad. The Sunnis fear a political which hunt, and the Kurds so far refuse to turn him over.

The embassy, says Van Buren, “is there for a symbolic reason. Maybe no one remembers what that symbolism is anymore.”

Construction on the embassy began in 2006 and was immediately assailed by critics: the complex was to be the largest U.S. embassy in the world, costing an estimated half-billion dollars—the final bill came in at $750 million—at a time when the insurgency and civil war in Iraq were escalating in ways Washington planners hadn’t anticipated. America the liberator had become the occupier, with the Iraqi people anticipating our plans to use their country as a permanent base in the Middle East.

They already blamed the U.S. for poor planning; for infecting Baghdad with self-serving political appointees, money-grubbing contractors, and dangerous mercenaries; and for failing to fulfill its promise to help restore basic services. (The story of how the reconstruction went wrong from the start is detailed by Rajiv Chandrasekaran in Imperial Life in the Emerald City, a scathing testimonial of his time as a Washington Post reporter covering Baghdad in the year after the 2003 invasion.) Now the U.S. was building a complex nearly the size of Vatican City in the center of town.

Even neoconservative hawks saw this as a monumental mistake. “I think it’s ridiculous,” Michael Rubin, senior fellow of the American Enterprise Institute, told this reporter five years ago. “You should have put the [the embassy] on the edge of the city, where it does not disrupt the main business districts of the city. The symbolism is this is not an embassy, but a palace.”

Quite right. Ensconced in the International Zone—formerly the Green Zone—the embassy compound boasts 21 buildings, including 619 apartments. Blueprints featured a swimming pool, a fire station, retail shopping, a cinema, a commissary, restaurants, its own power and water-treatment plants—more than what some Iraqi population centers can boast—and recreational facilities. As of now, according to estimates not confirmed by the State Department, there are some 16,000 people working there, including 2,000 Foreign Service Officers (out of 6,000 worldwide) and other State Department employees.

The remaining personnel include logistical and administrative contractors working for the U.S. government and an estimated 5,000 private security contractors, though officials decline to say just how many there are due to “security considerations.” The annual price of maintaining the embassy complex: $6 billion.

Every inch of the place is inhabited, according to a State Department source who agreed to talk to TAC only on background. Some two-thirds of the personnel working there are living two or three to each apartment.

This manpower buildup was all part of the “first phase,” the source said, in which the embassy rapidly recruited American civilian workers in anticipation of taking over all U.S. responsibilities in the country in the wake of the military’s withdrawal in December. Now the business of helping the Iraqis develop their fledgling democracy and its new relationship with the West could resume in earnest. But it hasn’t.

According to a Feb. 8 New York Times story, Ambassador James F. Jeffrey and other senior State Department personnel in Iraq are now “reconsidering the size and scope of the embassy.” Calling it a “remarkable pivot,” writer Tim Arango goes on to say that officials have come to think the embassy buildup was “ill-advised” and are “frustrated by what they see as Iraqi obstructionism” as the Americans “are now largely confined to the embassy because of security concerns, unable to interact enough with ordinary Iraqis to justify the $6 billion price tag.”

Arango reports that embassy personnel could be slashed as much as 50 percent, a figure the State Department has vehemently denied in subsequent briefings.

“It is a remarkable shift from the ambitions that filled the Green Zone back in 2003 and into the first half of 2004, before the insurgency reared its head in full force,” says Chandrasekaran, who spoke to TAC about the recent developments.

“At some point along the way, there was a determination by the U.S. government—at the White House, the State Department, and the Pentagon—that we would want an enduring presence of a certain size, and that led to the construction of this massive embassy complex,” he says. “Clearly that ambition does not comport with the new reality in Iraq.”

Now that American troops have departed, movement outside the embassy and in and out of the country has been restricted by the Iraqi government, with food shipments and other services held up by logistical logjams. Maliki also wants to limit the number of foreign security companies that can operate in Iraq at one time.

“I think a lot of the problems we have today go back to the original sins, in not only how we conducted the war, but how we fecklessly occupied the country,” says Brian Katulis, national-security analyst for the progressive Center for American Progress. “You never get a second chance to make a good first impression.”

According to Iraq Body Count, which tallies documented, verifiable civilian deaths, 114,629 Iraqis have died violently since the war began nearly a decade ago. Classified logs released by WikiLeaks last year detail how coalition soldiers killed more civilians accidentally—particularly at security checkpoints—than was admitted during the height of the occupation.

And almost from the outset, the reconstruction effort was rocked by scandals involving fraud, waste, and disappearing funds. As of this year, $17 billion in Iraqi oil money allocated to rebuild the country back in 2003 is still unaccounted for. Another $8.7 billion in oil and gas revenue was reportedly misplaced by the Department of Defense right after the invasion.

Those who have worked in the occupation bureaucracy, like Van Buren, speak of pallets of money being flown in before vanishing into unfortunate boondoggles. Even when reconstruction projects had half a chance of working, they were aborted or turned over to the Iraqis to die a slow death when the money ran out.

Michael M. O’Brien, a Bush/Cheney campaign fundraiser who served as a White House appointee in the Department of Homeland Security before shipping off as a military contractor to assist the Iraqi Ministry of Defense in 2006, says he is not surprised at the waning of U.S. influence.

“There’s been a degradation of the relationship over time,” said O’Brien, who wrote of his own experiences in America’s Failure in Iraq: Intervention to Withdrawal, 1991-2010. He told TAC about the venality of officials and contractors who wanted a piece of Iraq after the invasion, leading to “half-finished facilities, worthless to everybody.” Swaggering private security contractors and useless civilian planners known only for their loyalty to the last administration stained the reputation of all Americans irreparably.

“And we wonder why they’re not really crazy about us? I mean, who would be?” O’Brien asks.

Nonetheless, State Department officials have rushed to dispel the image of its diplomats as hunkered down behind barbed wire, hungry and afraid to conduct business outside the International Zone.

“We have a robust diplomatic presence. We have a diplomatic presence both up north and down south and in Baghdad,” assured Deputy Secretary of State Thomas R. Nides in a Feb. 8 briefing. “We have been fully and completely engaged on all of the political aspects” as well as training police, assisting with economic development, and working with the Iraq military through the Office of Security Cooperation (OSC). “We’re doing a better than fine job at accomplishing the goals we set out.”

The State Department has consulates in Basra, Erbil, and Kirkuk in semi-autonomous Kurdistan, and save for some “temporary, not long-term” logistical snags caused by the military-to-civilian transition in December and January, their people are getting their food and supplies and moving about just fine, a spokesman told TAC in February.

“There were a number of kinks that needed to be worked out and have been mostly worked out,” he said. “The embassy has not experienced any issue with its food supply,” and logistics, “have generally improved over the last month.”

As for interacting with the Iraqi government, he said, “there hasn’t been a reduction in direct engagements, in fact I would argue it’s the reverse—our movements have been increasing over the last couple of years.” Official diplomatic “movements” have increased from 900 per month in the last quarter of 2011 to 1,200 in January of this year, he said. To get to that number, however, the department includes diplomats shuttling to and from the ministry buildings inside the International Zone, the spokesman admitted.

Does all of this merit the $4.8 billion the embassy is requesting for fiscal year 2013? Skeptics like Sen. Patrick Leahy (D-Vermont), chairman of the Senate Foreign Relations Committee, think not. In a Feb. 28 hearing in which Secretary of State Hillary Clinton defended her department’s overall $54.7 billion diplomatic and development budget request, Leahy called the embassy “a symbol of grandiose and unrealistic ambitions in that country” and “too big and too expensive.”

Clinton replied that the department was in the midst of “right-sizing” the embassy staff as part of the second phase of the transition. This, according to officials, will be done by reducing the need for private contractors as the U.S. “footprint” is eventually and inevitably scaled back.

“This is nothing new,” the department spokesman insisted to TAC; it’s what they’d planned all along.

Van Buren says the abrupt nature of this “right-sizing,” months after the State Department finally took control of U.S. operations in the country—the New York Times story actually says that “many of the thousands of additional personnel have only recently arrived” in Iraq—suggests Washington has less of a handle on this story than it might want us to think. The negative comments offered to New York Times by embassy officials reinforce that impression.

A move toward “right-sizing” should indicate that the U.S. has already accomplished some critical goals there, but all evidence is to the contrary. “What have we done? There are no metrics,” charges Van Buren.

Given the tenuous security situation in Iraq and belt-tightening at home, there may be no second or third chance to do all of the things the U.S. promised the nascent Iraqi government—nor do the Iraqis appear interested in having us stick around to try.

“Iraqi politicians are responding to a popular desire, and again, it’s about [Iraqis] wanting to control their own country,” says Katulis. “I think we have been over-invested in Iraq for too long. That’s not an argument for saying let’s abandon the country … but it’s time to recalibrate.”

If the embassy staff numbers eventually “normalize”—down to, say, the number working at the U.S. embassy in Turkey, 55—there might soon be a lot of prime real estate available in the center of Baghdad. Ironically, our $750 million symbol of failure might someday be one of the last and greatest gifts we leave to Iraq.

Kelley Beaucar Vlahos is a Washington, D.C.-based freelance reporter.