Millions in Iraq reconstruction aid wasted, investigators say

By HOPE YEN and PAULINE JELINEK
Associated Press Writers

WASHINGTON — Major U.S. companies with multimillion-dollar contracts for Iraq reconstruction are being forced to devote 12.5 percent of their expenses for security due to spiraling violence in the region, investigators said Wednesday.

Meanwhile, tens of millions of U.S. dollars have been wasted elsewhere in Iraq reconstruction aid, some of it on an Olympic-size swimming pool ordered up by Iraqi officials for a police academy that has yet to be used.

The quarterly audit by Stuart Bowen Jr., the special inspector general for Iraq reconstruction, is the latest to paint a grim picture of waste, fraud and frustration in an Iraq war and reconstruction effort that has cost U.S. taxpayers more than $300 billion and left the region near civil war.

According to the report, nine of the largest U.S. contractors in Iraq reported paying significant amounts of money for personal security for their workers, protection against violence at their construction sites and elsewhere.

Contractor security costs ranged from 7.6 percent to 16.7 percent, or an average of 12.5 percent, the report said.

“The security situation in Iraq continues to deteriorate, hindering progress in all reconstruction sectors and threatening the overall reconstruction effort,” according to the 579-page report.

Calling Iraq’s sectarian violence the greatest challenge, Bowen said in a telephone interview with the Associated Press that billions in U.S. aid spent on strengthening security has had limited effect. He said reconstruction now will fall largely on Iraqis to manage — and they’re nowhere ready for the task.

Former Rep. Lee Hamilton, co-chairman of the Iraq Study Group, said Wednesday that the report shows the uphill battle for the United States and the international community in their efforts to bring stability in Iraq.

The audit comes as President Bush is pressing Congress to approve $1.2 billion in new reconstruction aid as part of his broader plan to stabilize Iraq by sending 21,500 more U.S. troops to Baghdad and Anbar province.

Democrats in Congress have been skeptical. Sen. Jim Webb, D-Va., has suggested the U.S. is spending too much on Iraq reconstruction at the expense of Hurricane Katrina rebuilding in New Orleans, while California Rep. Henry Waxman plans in-depth hearings next week into charges of Iraq waste and fraud.

According to the report, the State Department paid $43.8 million to contractor DynCorp International for the residential camp for police training personnel outside of Baghdad’s Adnan Palace grounds that has stood empty for months. About $4.2 million of the money was improperly spent on 20 VIP trailers and an Olympic-size pool, all ordered by the Iraqi Ministry of Interior but never authorized by the U.S.

U.S. officials spent another $36.4 million for weapons such as armored vehicles, body armor and communications equipment that can’t be accounted for. DynCorp also may have prematurely billed $18 million in other potentially unjustified costs, the report said.

Responding, the State Department said in the report that it was working to improve controls. Already, it has developed a review process that rejected a $1.1 million DynCorp bill earlier this month on a separate contract because the billed rate was incorrect.

Bowen, whose office was nearly eliminated last month by administration-friendly Republicans in Congress, called spending waste in Iraq a continuing problem. Corruption is high among Iraqi officials, while U.S. contract management remains somewhat weak.

With the United States’ $21 billion rebuilding effort largely finished, it will be up to the international community and the Iraqis to pitch in to sustain reconstruction, Bowen said in the interview. “That will be a long-term and very expensive process,” he said.

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