Iraq: The Billions of Disappearing US Reconstruction Dollars

I'll be appearing on Al Jazeera English's Inside Story today at 1730 GMT to talk about the latest revelations in the far-from-new story of US reconstruction funds in post-war Iraq. Within weeks of the "liberation", stories were circulating of truckloads of US dollars being carried around the country, with no apparent control or accountability.

Tarek el-Tablawy writes today for Associated Press:

A U.S. audit has found that the Pentagon cannot account for over 95 percent of $9.1 billion in Iraq reconstruction money, spotlighting Iraqi complaints that there is little to show for the massive funds pumped into their cash-strapped, war-ravaged nation.

The $8.7 billion in question was Iraqi money managed by the Pentagon, not part of the $53 billion that Congress has allocated for rebuilding. It's cash that Iraq, which relies on volatile oil revenues to fuel its spending, can ill afford to lose.

"Iraq should take legal action to get back this huge amount of money," said Sabah al-Saedi, chairman of the Parliamentary Integrity Committee. The money "should be spent for rebuilding the country and providing services for this poor nation."

The report by the Special Inspector General for Iraq Reconstruction accused the Defense Department of lax oversight and weak controls, though not fraud.

"The breakdown in controls left the funds vulnerable to inappropriate uses and undetected loss," the audit said.

The Pentagon has repeatedly come under fire for apparent mismanagement of the reconstruction effort — as have Iraqi officials themselves.

Seven years after the U.S.-led invasion, electricity service is spotty, with generation capacity falling far short of demand. Fuel shortages are common and unemployment remains high, a testament to the country's inability to create new jobs or attract foreign investors.

Complaints surfaced from the start of the war in 2003, when soldiers failed to secure banks, armories and other facilities against looters. Since then the allegations have only multiplied, including investigations of fraud, awarding of contracts without the required government bidding process and allowing contractors to charge exorbitant fees with little oversight, or oversight that came too late.

But the latest report comes at a particularly critical time for Iraq. Four months after inconclusive elections, a new government has yet to be formed, raising fears that insurgents will tap into the political vacuum to stir sectarian unrest.

In a sign that insurgents are still intent on igniting sectarian violence, at least six people were killed and dozens more wounded when a female suicide bomber blew herself up near a checkpoint in the holy city of Karbala, local police said. They spoke on condition of anonymity because they were not authorized to speak to the media.

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Comments

[Catherine]

War is Theft: Pentagon cannot account for $8.6 Billion of Iraq’s Reconstruction Funds
http://www.juancole.com/2010/07/pentagon-cannot-account-for-8-6-billion-of-iraqs-reconstruction-funds.html" rel="nofollow">http://www.juancole.com/2010/07/pentagon-cannot...

[Christina]

What time are you on?

[WitteKr]

Inside Story is on at 18.30 (Central European Time - 17.30 GMT).