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Published on Monday, February 2, 2009 by the Associated Press

Commission Gets Grim Report on Wartime Spending

by Richard Lardner

A new commission examining waste and corruption in wartime contracts got a grim report from government watchdogs who say poor planning, weak oversight and greed combined to soak U.S. taxpayers and undermine American forces in Iraq and Afghanistan.

Stuart Bowen, the special inspector general for Iraq reconstruction, says the U.S. has committed nearly $51 billion for a wide array of projects in Iraq - from training the Iraqi army and police to rebuilding the country's oil, electric, justice, health and transportation sectors.

Some of these projects succeeded, Bowen told the Wartime Contracting Commission at its first public hearing Monday, but many did not. Violence in Iraq along with constant friction between U.S. officials in Washington and Baghdad were also major factors that undercut progress.

A 456-page study by Bowen's office, "Hard Lessons: The Iraq Reconstruction Experience," reviews the problems in an effort the Bush administration initially thought would cost $2.4 billion.

The U.S. government "was neither prepared for nor able to respond quickly to the ever-changing demands" of stabilizing Iraq and then rebuilding it, said Bowen, who has made 21 trips to Iraq since he was appointed in October 2004. "For the last six years we have been on a steep learning curve."

Unless the government greatly improves the way it handles relief and rebuilding programs, the same mistakes will be made in Afghanistan where more than $30 billion is U.S. money has been devoted to reconstruction.

"The next time is upon us. It's in Afghanistan," Bowen said.

Overall, the Pentagon, State Department and U.S. Agency for International Development have paid contractors more than $100 billion since 2003 for goods and services to support war operations and rebuilding projects in Iraq and Afghanistan.

Congress created the bipartisan panel a year ago over the objections of the Bush White House, which complained the Justice Department might be forced to disclose sensitive information about investigations.

There are 154 open criminal investigations into allegations of bribery, conflicts of interest, defective products, bid rigging and theft stemming from the wars, Thomas Gimble, the Pentagon's principal deputy inspector general, said in his written testimony.

Gimble, who is scheduled to testify before the panel later today, noted that contracting scandals have gone on since the late 1700s when vendors swindled George Washington's army.

"Today, instead of empty barrels of meat, contractors produced inadequate or unusable facilities that required extensive rework," Gimble says. "Like the Continental Forces who encountered fraud, the (Defense Department) also encounters fraud."

Gimble's office found that a small number of inexperienced civilian or military personnel "were assigned far-reaching responsibilities for an unreasonably large number of contracts."

He cites an account tapped frequently by U.S. military commanders in Iraq and Afghanistan to build schools, roads and hospitals. More than $3 billion was spent on these projects, which were not always properly managed.

"In some instances, there appeared to be scant, if any, oversight of the manner in which funds were expended," Gimble says. "Complicating matters further is the fact that payment of bribes and gratuities to government officials is a common business practice in some Southwest Asia nations."

In "Hard Lessons," Bowen says his office found fraud to be less of a problem than persistent inefficiencies and hefty contractor fees that "all contributed to a significant waste of taxpayer dollars."

Styled after the Truman Committee, which examined World War II spending six decades ago, the eight-member panel has broad authority to examine military support contracts, reconstruction projects and private security companies.

In addition to examining flawed contracting, the commission will also study whether battlefield jobs handled by contractors such as aircraft maintenance and motor pools should be reserved for military and government employees.

The panel has until August 2010 to produce a final report. It can refer to the Justice Department any violations of the law it finds.

Sen. Claire McCaskill, D-Mo., who pushed for formation of the commission, urged members to be aggressive and to hold people accountable.

"Harry Truman has been rolling in his grave for the last five years," said McCaskill, referring to the former Missouri senator (and later president) who led the Truman Committee. "A report is not going to be enough. You're going to need a two-by-four."

 

© 2009 Associated Press
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