More US money wasted in Iraq, audit finds

Millions of dollars originally slated for the reconstruction and security of Iraq have been squandered on luxury items like an Olympic-sized swimming pool, VIP trailers and buildings that were never or rarely used, a US government watchdog says. In eight new audits carried out over the past quarter alone, the US Special Inspector General for Iraq Reconstruction (SIGIR) Stuart Bowen indicated that "corruption continues to plague Iraq" and that "the security environment has continued to deteriorate." The audits, submitted to Congress on Jan. 31, reviewed US efforts to support the capacity development of Iraq's ministries, as well as the State Department's management of funding for Iraqi police training, a study of medical equipment purchased to support the primary healthcare centers, and a statistical summary of security costs for major US contractors in Iraq. Among the examples of waste documented in the 579-page report is that as part of a contract awarded to DynCorp International between July 2004 and June 2006, the State Department paid $43.8 million for manufacturing and temporary storage of a residential camp that has never been used. That sum included $4.2 million for unauthorized work that included relocating the residential camp to outside of the Adnan Palace grounds, building an additional 20 VIP trailers, and constructing an Olympic-size swimming pool on the palace grounds. The State Department may have also spent another $36.4 million on weapons and equipment, including armored vehicles, body armor and communications equipment, that cannot be accounted for because "invoices were vague and there was no backup documentation." The audit also found that a project for the Baghdad Police College suffered a variety of shortfalls, including poor construction quality, budget overruns and the delivery of unfinished facilities. "Anti-corruption institutions in Iraq are fragmented, and there does not appear to be an internal Iraqi consensus about how these institutions should interact," said the report. The report also pointed a finger at the deteriorating security situation, saying it is "hindering progress in all reconstruction sectors and threatening the overall reconstruction effort." It concludes that infrastructure security remains vulnerable. Power lines are attacked regularly, and the northern oil pipelines are largely inoperable because of sabotage. Iraqi repair crews are frequently unable to work because of repeated attacks. The investigation faulted "inconsistent coordination" among the many US agencies supporting Iraq's reconstruction for hampering the effective execution of US assistance. The report comes at a particularly sensitive time for President Bush, who is asking the US Congress to approve $1.2 billion in new money for the reconstruction of Iraq. On Jan. 10, President Bush presented a new strategic direction for US efforts in Iraq, which includes more US investment in Iraq's economic recovery. It comes also at a sensitive time for other international donors such as the United Nations, the World Bank and Iraq's regional neighbors. The United States is trying to convince them that Iraq, because of the security situation, requires a "new phase of investment" through the International Compact for Iraq. But corruption and waste have undermined reconstruction efforts in the occupied nation since 2003, with a long list of reports documenting the abuses. In December, the Government Accountability Office, the watchdog arm of the US Congress, released a report which found multiple deficiencies in the Army's oversight of contractors in Iraq, including "limited visibility over contractors," lack of "adequate contractor oversight personnel," and "little or no training on the use of contractors." The now defunct Coalition Provisional Authority (CPA) also delivered more than $8.8 billion in cash to Iraqi ministries but several later audits found there was virtually no tracking of this money, much of which went to "ghost employees." Members of Congress here have been seeking information on contracts entered into by the Bush administration for reconstruction and development work in Iraq, including several billion-dollar contracts with a subsidiary of Halliburton. Some US lawmakers have raised concerns about the process of awarding and overseeing government contracts, including questions about the apparently inflated prices charged by Halliburton to import gasoline from Kuwait into Iraq and Halliburton's admission of kickbacks to company officials. SIGIR investigators say they are still working on 78 open investigations, including 23 cases under direct Justice Department supervision, implying the possibility of major criminal charges. Since the invasion of Iraq in March 2003, the Bush administration has spent more than $30 billion in US taxpayer funds and another $20 billion in Iraqi funds under its control for the reconstruction effort. The war in general has reportedly cost more than $450 billion. Many lawmakers here, however, say that despite the vast expenditures, the reconstruction effort has produced little of lasting value either for the US or for Iraq. Democratic Representative Henry Waxman, who has been particularly vocal in his criticism of waste in Iraq, will convene a hearing next week about fraud and corruption there. Paul Bremer, former head of the CPA, has been asked to testify. Stuart Bowen and Timothy Carney, coordinator for Iraqi Transitional Assistance, are also expected to appear.