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Iraq rebuilding fraud, waste cost U.S. $1.5B

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By McClatchy Newspapers
Tuesday, July 9, 2013, 9:54 p.m.
 

The $40 million shell of an unfinished prison in Iraq's Diyala province; $2 million in laundered cash pocketed by government officials and contractors in Hilla; an $80 invoice on a $1.41 piece of PVC piping from a Defense subcontractor near Baghdad.

Those are just three examples of fraudulent and wasteful spending that plagued U.S. reconstruction efforts in Iraq, according to the Special Inspector General for Iraq Reconstruction, which, on Tuesday, issued its final report on the government's $60 billion reconstruction program for that country.

The report identified at least $1.5 billion in wasted or questionable spending during the period from 2004 to 2013. It urged Congress to form an agency, the Office for Contingency Operations, which would oversee and coordinate such reconstruction in the future, prospectively avoiding some of the worst excesses.

Such an office would be critical to better spending and contracting practices if, for example, the United States were to get involved in reconstruction in Syria, where the country's civil war has devastated entire cities.

“Experience has shown that we need a corps of dedicated civilian professionals in order to conduct these stabilization operations well,” said John Herbst, the director of the Center for Complex Operations at the National Defense University in Washington, who testified before the House Foreign Affairs Committee.

Inspector General Stuart Bowen also used the example of potential reconstruction in Syria to explain how such an agency would prove more effective than addressing each effort as it arises.

“It's impossible to project the cost, but we do know the devastation in Syria is massive. And thus the stabilization and rebuilding of the country will take time,” Bowen said. Were the Office of Contingency Operations in existence, he added, it already would be “identifying the contractors, the personnel, the IT system, the oversight, how money would be managed, the controls ... to ensure that we avert fraud, waste and abuse of the kind that we saw in Iraq.”

Such an office would bring accountability to a process that in Iraq was handled largely by military officers or government civilians who rotated in and out of their posts before any of the projects were completed.

He cited the example of the Federal Emergency Management Agency's mishandling of Hurricane Katrina to make his point.

“There was no one in charge for Iraq specifically,” he said. “Mike Brown was there to fire when FEMA failed.”

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