Waste, fraud in Iraq being repeated in Afghanistan

WASHINGTON — Waste and corruption that marred Iraq's reconstruction will be repeated in Afghanistan unless the U.S. transforms the unwieldy bureaucracy managing tens of billions of dollars in infrastructure projects, government watchdogs warned Monday.
The U.S. has devoted more than $30 billion to rebuilding Afghanistan. Yet despite the hard lessons learned in Iraq, where the U.S. has spent nearly $51 billion on reconstruction, the effort in Afghanistan is headed down the same path, the watchdogs told a new panel investigating wartime contracts.
"Before we go pouring more money in, we really need to know what we're trying to accomplish (in Afghanistan)," said Ginger Cruz, deputy special inspector general for Iraq reconstruction. "And at what point do you turn off the spigot so you're not pouring money into a black hole?"
Better cooperation among federal agencies, more flexible contracting rules, constant oversight and experienced acquisition teams are among the changes urged by the officials in order to make sure money isn't wasted and contractors don't cheat.
Cruz, along with Stuart Bowen, the top U.S. official overseeing Iraq's reconstruction, delivered a grim report to the Commission on Wartime Contracting. Their assessment, along with testimony from Thomas Gimble of the Defense Department inspector general's office, laid out a history of poor planning, weak oversight and greed that soaked U.S. taxpayers and undermined American forces in Iraq.
Bowen, who has made 21 trips to Iraq since he was appointed in October 2004, said the U.S. has financed 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 commission at its first public hearing, but many did not. Violence in Iraq and 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. "For the last six years we have been on a steep learning curve."
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 in Iraq, Afghanistan and Kuwait, said Gimble, the Pentagon's principal deputy inspector general.
Gimble 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 said. "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 cited 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 said. "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 said 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."