March 22, 2007: Senate Finds Nearly $400 Billion Wasted in Iraq Reconstruction Effort

A Senate panel finds that billions of taxpayer dollars have been wasted in reconstruction efforts throughout Iraq through fraud, corruption, incompetence, and outright theft. The panel, led by independent Democrat Joseph Lieberman and moderate Republican Susan Collins, say they are considering legislation to create a commission to help fix problems after investigators found confusion and disarray in the four-year-old Iraq reconstruction effort. Lieberman observes, "Where we’ve seen failure is when the US government failed to plan projects carefully and then failed to keep a close watch over contractors and now we’ve seen billions of dollars wasted—a cost measured not just in dollars but in the undermining of the overall US mission in these war-torn countries." Inspector General Stuart Bowen’s latest report on the occupation’s reconstruction efforts found that nearly $400 billion had either been wasted or simply disappeared, though Bowen’s report was careful not to make allegations of outright criminality. Bowen’s report primarily blames confusion, disarray, and incompetence in joint efforts between the rival Defense and State Departments. "Anyone who has spent appreciative time in the Iraq reconstructive effort understands the tension that exists between the two," Bowen says. Bowen’s latest report finds, among other things, that a Defense Department agency charged with running the reconstruction effort never developed a fully coordinated plan upon members’ arrival in 2003, leading to confusion and duplication of effort. "We were bumping into one another as we tried to solve the same problem,” a former agency official is quoted as saying. Money flowed to reconstruction projects before procedures, training and staffing were fully in place, resulting in a "lack of clearly defined authorities" and little accountability in terms of how dollars were being spent. There was little oversight to ensure that Iraqi companies hired to do reconstruction work operated according to international standards. Earlier this year, federal investigators determined that the Bush administration had squandered as much as $10 billion in reconstruction aid in part because of poor planning and contract oversight, resulting in contractor overcharges and unsupported expenses. [Associated Press, 3/22/2007]