Audit: U.S.-Led Occupation Squandered Aid

Audit: U.S.-Led Occupation Squandered Aid
By JIM KRANE, Associated Press Writer
42 minutes ago



Iraqi money gambled away in the Philippines. Thousands
spent on a swimming pool that was never used. An
elevator repaired so poorly that it crashed, killing
people.

A U.S. government audit found American-led occupation
authorities squandered tens of millions of dollars
that were supposed to be used to rebuild Iraq through
undocumented spending and outright fraud.

In some cases, auditors recommend criminal charges be
filed against the perpetrators. In others, it asks the
U.S. ambassador to Iraq to recoup the money.

Dryly written audit reports describe the Coalition
Provisional Authority's offices in the south-central
city of Hillah being awash in bricks of $100 bills
taken from a central vault without documentation.

It describes one agent who kept almost $700,000 in
cash in an unlocked footlocker and mentions a U.S.
soldier who gambled away as much as $60,000 in
reconstruction funds in the Philippines.

"Tens of millions of dollars in cash had gone in and
out of the South-Central Region vault without any
tracking of who deposited or withdrew the money, and
why it was taken out," says a report by the Special
Inspector General for Iraq Reconstruction, which is in
the midst of a series of audits for the Pentagon and
State Department.

Much of the first audit reports deal with contracting
in south-central Iraq, one of the country's
least-hostile regions. Audits have yet to be released
for the occupation authority's spending in the rest of
Iraq.

The audits offer a window into the chaotic U.S.-led
occupation of Iraq of 2003-04, when inexperienced
American officials — including workers from President
Bush's election campaign — organized a cash-intensive
"hearts and minds" mission to rebuild Iraq's
devastated economy.

But the corruption and incompetence documented in the
reports reveal that much of the effort, however
well-intentioned, was wasted.

The failure of the rebuilding effort has been borne
out most vividly by the rise of a virulent
anti-American insurgency that has claimed most of the
2,237 U.S. military lives lost since the war began.

In some cases, auditors could find no trace of cash,
much of which came from Iraqi oil revenues overseen by
the occupation authority.

"Those deficiencies were so significant that we were
precluded from accomplishing our stated objectives,"
the auditors said of U.S. officials in Hillah being
unable to account for $97 million of the $120 million
in Iraqi oil revenues earmarked for rebuilding
projects.

An October 2005 audit found documentation for the
spending of just $8 million of that money.

Negligence proved deadly in at least one case. Three
Iraqis plummeted to their deaths in an elevator in the
Hillah General Hospital that was certified to have
been replaced by a contractor who received $662,800.

Also in Hillah, occupation officials spent $108,140 to
replace pumps and fix the city's Olympic swimming
pool. But the contractor merely polished the old
plumbing to make it look new and collected his money.

When the pool was filled, the water came out a murky
brown and the pool's reopening had to be canceled. The
reports did not identify the contractors involved.

Auditors have asked the U.S. ambassador to recover a
total of $571,823 that the reports describe as
overpaid funds.

In some cases, cash simply disappeared.

Two occupation authority field agents responsible for
paying contractors left Iraq without accounting for
more than $700,000 each. When auditors confronted
their manager and asked where the money was, the
manger tried to clear one of the agents through false
paperwork.

"This appears to be an attempt to remove outstanding
balances by simply washing accounts," the auditor
said. The two agents were not identified and there was
no word on whether the pair were referred for
prosecution.

One report describes mismanagement of more than 2,000
small contracts in south-central Iraq worth $88
million. Occupation staffers or those they supervised
handed out millions to companies that never submitted
required competitive bids or that were paid for
unfinished work.

Other examples cited in the reports:

_Only a quarter of $23 million entrusted to civilian
and military project and contracting officers to pay
contractors ever found its way to those contractors.

_One contractor was paid $14,000 on four separate
occasions for the same job.

_Of $7.3 million spent on a police academy near
Hillah, auditors could account for just $4 million.
They said $1.3 million was wasted on overpriced or
duplicate construction or equipment not delivered.
More than $2 million was missing.

_U.S. personnel "needlessly disbursed more than $1.8
million" of the estimated $2.3 million spent for
renovating the library in the Shiite holy city of
Karbala.

_The library contractor delivered only 18 of 68
personal computers called for and did not install
Internet wiring or software. The computers worked only
as stand-alones.

_The U.S.-led security transition command spent
$945,000 for seven armored Mercedes-Benzes that were
too lightly armored for Iraq. Auditors were able to
account for only six of the cars.

_At one point, several paying agents kept cash inside
the same filing cabinet in the Hillah vault. One agent
took $100,000 from another's stack of cash to clear
his own balance. "This was only discovered because the
other paying agent had to make a disbursement that day
and realized that he was short cash," the report says.


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On the Net:

Special Inspector General:
http://www.sigir.mil/audit(underscore)reports.html

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