After years of following the paper trail of $51 billion in U.S. taxpayerdollars provided to rebuild a broken Iraq, the U.S. government can say withcertainty that too much was wasted. But it can't say how much.
In what it called its final audit report, the Office of the Special InspectorGeneral for Iraq Reconstruction Funds on Friday spelled out a range ofaccounting weaknesses that put "billions of American taxpayer dollars atrisk of waste and misappropriation" in the largest reconstruction projectof its kind in U.S. history.
"The precise amount lost to fraud and waste can never be known," thereport said.
The auditors found huge problems accounting for the huge sums, but one smallexample of failure stood out: A contractor got away with charging $80 for apipe fitting that its competitor was selling for $1.41. Why? The company'sbilling documents were reviewed sloppily by U.S. contracting officers or werenot reviewed at all.
With dry understatement, the inspector general said that while he couldn'tpinpoint the amount wasted, it "could be substantial."
Asked why the exact amount squandered can never be determined, the inspectorgeneral's office referred The Associated Press to a report it did in February2009 titled "Hard Lessons," in which it said the auditors — much likethe reconstruction managers themselves — faced personnel shortages and otherhazards.
"Given the vicissitudes of the reconstruction effort — which was doggedfrom the start by persistent violence, shifting goals, constantly changingcontracting practices and undermined by a lack of unity of effort — a completeaccounting of all reconstruction expenditures is impossible to achieve,"the report concluded.
In that same report, the inspector general, Stuart Bowen, recalled whatthen-Defense Secretary Donald H. Rumsfeld asked when they met shortly afterBowen started in January 2004: "Why did you take this job? It's animpossible task."
By law, Bowen's office reports to both the secretary of defense and thesecretary of state. It goes out of business in 2013.
Bowen's office has spent more than $200 million tracking the reconstructionfunds, and in addition to producing numerous reports, his office hasinvestigated criminal fraud that has resulted in 87 indictments, 71 convictionsand $176 million in fines and other penalties. These include civilians andmilitary members accused of kickbacks, bribery, bid-rigging, fraud,embezzlement and outright theft of government property and funds.
Much, however, apparently got overlooked. Example: A $35 million Pentagonproject was started in December 2006 to establish the Baghdad airport as aninternational economic gateway, and the inspector general found that by the endof 2010 about half the money was "at risk of being wasted" unlesssomeone else completed the work.
Of the $51 billion that Congress approved for Iraq reconstruction, about $20billion was for rebuilding Iraqi security forces and about $20 billion was forrebuilding the country's basic infrastructure. The programs were run mainly bythe Defense Department, the State Department and the U.S. Agency forInternational Development.
A key weakness found by Bowen's inspectors was inadequate reviewing ofcontractors' invoices.
In some cases invoices were checked months after they had been paid becausethere were too few government contracting officers. Bowen found a case in whichthe State Department had only one contracting officer in Iraq to validate morethan $2.5 billion in spending on a DynCorp contract for Iraqi police training.
"As a result, invoices were not properly reviewed, and the $2.5 billion inU.S. funds were vulnerable to fraud and waste," the report said. "Wefound this lack of control to be especially disturbing since earlier reviews ofthe DynCorp contract had found similar weaknesses."
In that case, the State Department eventually reconciled all of the oldinvoices and as of July 2009 had recovered more than $60 million.
The report touched on a problem that cropped up in virtually every major aspectof the U.S. war effort in Iraq, namely, the consequences of fighting an insurgencythat proved more resilient than the Pentagon had foreseen. That not only madereconstruction more difficult, dangerous and costly, but also left the U.S.military unprepared for the grind of multiple troop deployments, the tactics ofan adaptable insurgency and the complexity of battlefield wounds. It also leftthe U.S. government short of the expertise it needed to monitor contractors.
Although the audit was labeled as final, a spokesman for Bowen's office,Christopher M. Griffith, said several more will be done to provide additionaldetails on what the U.S. got for its reconstruction dollars and what waswasted.