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U.S. Wasted Billions of Dollars on Iraqi Reconstruction

A report by the U.S. Special Inspector General for Iraq Reconstruction has concluded that the U.S. wasted billions of dollars rebuilding Iraq by farming projects out to unreliable contractors and failing to account for local needs and circumstances in planning projects.

Inter Press Service

Almost exactly a decade after the 2003 U.S. invasion of Iraq, Washington’s efforts to help reconstruct the country have fallen far short, according to the final report by the U.S. Special Inspector General for Iraq Reconstruction (SIGIR).

The Inspector General, Stuart Bowen, has previously estimated that between six and eight billion dollars of the more than 60 billion dollars U.S. taxpayers had spent on its stabilisation and reconstruction operation (SRO) in Iraq were lost to waste, fraud or other abuses.

In his final report, entitled “Learning from Iraq”, Bowen noted that at least another eight billion dollars of Iraq’s own money, which was effectively commandeered by the U.S.-led Coalition Provisional Authority (CPA) after the invasion, was also lost or wasted.

Despite the intervening decade, the report concluded that “the U.S. government is not much better prepared for the next stabilization operation than it was in 2003,” according to the report, which calls for the creation of a U.S. Office for Contingency Operations (USOCO) to better plan and prepare for future SROs.

The failure of hundreds of projects to achieve their potential – or in some cases to even be completed – has left “a legacy of bitter dissatisfaction among many Iraqis,” according to the 184-page report.

“With the all the money the U.S. has spent, you can go into any city in Iraq and you cannot find one building or project” built by the U.S. government, Acting Interior Minister Adnan al-Asadi is quoted as saying in the report. “You can fly in a helicopter around Baghdad or other cities, but you cannot point a finger at a single project that was built and completed by the United States.”

Based on SIGIR’s hundreds of audits, inspections and investigations, as well as interviews with nearly 50 top Iraqi and U.S. officials and lawmakers responsible for various aspects of Washington’s nation-building efforts, the report makes a number of other recommendations.

Rebuilding should only take place after sufficient security has been established and should, in any event, begin with small programmes and projects.

In addition, U.S. officials should ensure that local authorities are fully engaged in selecting projects and programmes and committed to completing them even after U.S. personnel have left.

Uniform contracting, personnel, and information management systems must also be established, while strict oversight of all SRO activities should be enforced from the outset.

The report noted that administration of former President George W. Bush was particularly ill-prepared for the kinds of stabilisation and reconstruction challenges that it faced after the invasion.

“The prevailing preference among Defense Department planners was to ‘liberate and leave’” based on what they viewed as a successful precedent in Afghanistan where U.S. forces allied with local forces helped drive out the Taliban in late 2001 and followed up with a very modest aid programme.

Once confronted with both the collapse of the state and a rapidly growing insurgency, however, the Bush administration and the CPA scrambling to come up with billions of dollars funnelled primarily, but not exclusively, through the military for a plethora of programmes in an approach the report calls “an adhocracy”.

“The Iraq reconstruction program’s improvised nature, its constant personnel turnover, and its shifting management regimes forced U.S. strategy to change speed and course continually, wasting resources along the way and exposing taxpayer dollars to fraud and abuse,” according to the report.

The largest individual healthcare construction project, for example, was the Basrah Children’s Hospital, a project in which then-First Lady Laura Bush took a special interest and which the U.S. Agency for International Development (USAID) awarded to the California-based Bechtel corporation in 2004 for 50 million dollars.

Envisioned as a 94-bed, state-of-the-art pediatric oncology hospital, construction was only completed in 2010 at a cost of 165 million dollars and opened for limited treatment. As of late last year, it was still awaiting critical equipment and staff training, according to the report which also noted that Prime Minister Nuri al-Maliki had brought up the fact that the hospital was not completely finished in SIGIR’s interview with him.

In another example, the CPA awarded a U.S. company, Parsons Delaware, an 80 million dollar contract to build the Khan Bani Sa’ad prison in Diyala province, which would add 3,600 beds to an existing facility. Three months after the scheduled completion date in 2006, Parsons asked for another two and a half years to complete the project.

Washington rejected the request and terminated the contract, citing, among other reasons, “massive cost overruns”, and proceeded to sign new contracts to complete the work. But those were suspended in 2007 when the project was transferred to Iraq’s Ministry of Justice despite the fact that the ministry said they did not plan to occupy the building.

Indeed, a major theme of the report is Washington’s repeated failure to consult adequately with Iraqi authorities and local communities regarding possible projects many of which have either been poorly constructed, maintained, or abandoned.

Finance Minister Rafi al-Eissawi noted in his interview that in his hometown of Falluja, residents gratefully remember the British presence in the 1920s because of their construction of the Euphrates River Bridge.

In contrast, the U.S.-built Falluja Wastewater Treatment Plant, which serves a fraction of those for whom it was intended, is now seen as largely a wasted opportunity. U.S. reconstruction managers, he said, made decisions “in a vacuum, so they were responsible for everything.”

Of the more than 60 billion dollars Washington devoted to reconstruction, according to the report, some 20 billion dollars on building the Iraqi Security Forces, both army and police. In 2006, it awarded a multi-billion-dollar contract for maintenance and supply services designed to change Iraq’s “use it till it breaks’’ culture.

SIGIR found that components of the contract totaling more than 600 million dollars had been modified no less than 161 times, adding 420 million dollars to the original cost. In the end, however, the effort “fell well short of achieving the goal of training Iraqi Army personnel to perform maintenance functions and operate a supply system. ‘Use it till it breaks’ lives on,” the report concluded.

As for what U.S. officials have hailed as one of their most successful efforts – the paid recruitment of Sunni tribal militias previously allied with Al Qaeda in Iraq into the “Sons of Iraq” (SOI) programme aimed at halting attacks on Coalition and Iraqi government forces – the report noted that it involved nearly 800 separate agreements covering almost 100,000 people in nine provinces.

Despite the effort’s size and strategic importance, according to the report, “program managers could not tell whether SOI members received their U.S.-funded salaries, and (the Department of) Defense was unable to provide any evaluations of the program’s outcomes.”

Jim Lobe’s blog on U.S. foreign policy can be read at http://www.lobelog.com.

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