US program may have given millions to insurgents

The top U.S. aid agency has suspended a $644 million Iraq jobs program after two outside reviews raised concerns about misspending, including an inspector general's audit that found evidence of phantom jobs and money siphoned to insurgents. The stalled Community Stabilization Program, launched in 2006, was designed to curb the insurgency by paying Iraqis cash to do public works projects such as trash removal and ditch digging. International Relief and Development (IRD), a Virginia-based non-profit, ran the program. It is rare for the U.S. Agency for International Development to suspend an ongoing aid program, particularly one run by a major contractor. More than 80% of IRD's $500 million annual budget comes from USAID, company tax filings show. The program "is generally thought of as one of the most effective counterinsurgency efforts in Iraq," Deputy Secretary of State Jacob Lew told USA TODAY. In a little-noticed March 2008 audit, however, USAID's inspector general reported evidence that the program was being defrauded through overbilling and payments to non-existent Iraqi employees.