US officials stashed cash, wasted money in Iraq

US officials in charge of reconstruction spending in Iraq kept millions of dollars in cash in their bathroom lockers and filing cabinets, according to the latest audit of financial practices in the country. One officer went to the Philippines and gambled away thousands of dollars of taxpayers' money on a junket with the Iraqi Olympic Team. Incidents of waste, unregulated spending and contracts that went nowhere fill a 48-page audit released on Jan. 24 by the US Special Inspector General for Iraq Reconstruction, the watchdog appointed to oversee the $18.4 billion allocated to the Iraq's Coalition Provisional Authority to rebuild the country. More than 2,000 contracts with a total value of $88.1 million, were examined by the report. Many of the projects lacked documentation, any evidence of a competitive bidding and were not followed up to see if they were completed. The audit covered projects awarded to contractors in the South Central region of Iraq, which includes the cities of Najaf, Karbala and al-Hillah. The report comes a week before the Inspector General's office gives its official six monthly update to the US Secretaries of State and Defense. Among the irregularities recorded by the auditors was the case of a contracting officer who kept $2 million in cash in a safe in his bathroom. A paying agent was found storing $678,000 in an unlocked filing cabinet in his office. Officers were described bickering over a missing $100,000 and one soldier was known to have accompanied Iraqi athletes to the Philippines, where he gambled away between $20,000 and $60,000. A spokesperson for the Inspector General's office told Reuters that discoveries made by the auditors have already led to the arrest of four US officials on fraud charges and that more arrests were expected. The New York Times said most of the loose accounting centered on the city of al-Hillah, the provincial capital of Babil that is made of the ruins of ancient Babylon. Among the projects that took place in the city was the $108,140 rebuilding of a swimming pool for the Iraqi Olympic team. After polishing the pumps, the contractor reported the job done and was paid in full. Another flawed project was the renovation of the al-Hillah General Hospital. A contractor was paid $660,000 to restore the facility, but stopped work before the job was done. An elevator that should have been replaced then fell in its shaft, killing three people. The audit also described a fleet of 160 vehicles, paid for with $3.3 million, whose location was unknown because there was no paperwork relating to its purchase. In Ramadi, officers started paying out on a $473,000 contract to install the internet in the city before realizing they could not oversee it. In an internal document, dated April 2005, officials wrote: "There is no way to verify this project was ever completed, because we don't even know where exactly in Ramadi it was supposed to take place. It appears the contractor was paid."