Waste and fraud lead to millions squandered in Iraq aid

TENS of millions of dollars have been wasted in Iraq reconstruction aid, some of it on an Olympic-sized swimming pool ordered by Iraqi officials for a police academy that has yet to be used, investigators say.

The quarterly audit by Stuart Bowen Jr, the special inspector general for Iraq reconstruction, is the latest to paint a grim picture of waste, fraud and frustration in an Iraq war and reconstruction effort that has cost taxpayers more than $300 billion and left the region near civil war.

“The security situation in Iraq continues to deteriorate, hindering progress in all reconstruction sectors and threatening the overall reconstruction effort,” according to the 579-page report.

Calling Iraq’s sectarian violence the greatest challenge, Bowen said billions in US aid spent on strengthening security has had limited effect. He said reconstruction now will fall largely on Iraqis to manage — “and they are nowhere ready for the task”.

The audit comes as US President George Bush is pressing Congress to approve $1.2bn in new reconstruction aid as part of his broader plan to stabilise Iraq by sending 21,500 more US troops to Baghdad and Anbar province.

Democrats in Congress have been sceptical. Senator Jim Webb has suggested the US is spending too much on Iraq reconstruction at the expense of Hurricane Katrina rebuilding in New Orleans, while Rep Henry Waxman plans in-depth hearings next week into charges of Iraq waste and fraud.

According to the report, the State Department paid $43.8 million to contractor DynCorp International for the residential camp for police training personnel outside of Baghdad’s Adnan Palace grounds that have stood empty for months. About $4.2m of the money was improperly spent on 20 VIP trailers and an Olympic-sized pool, all ordered by the Iraqi Ministry of Interior but never authorised by the US.

US officials spent another $36.4m on weapons such as armoured vehicles, body armour and communications equipment that cannot be accounted for. DynCorp also may have prematurely billed $18m in other potentially unjustified costs, the report said.

Responding, the State Department said in the report that it was working to improve controls. Already, it has developed a review process that rejected a $1.1m DynCorp bill earlier this month on a separate contract because the billed rate was incorrect.

Bowen called spending waste in Iraq a continuing problem. Corruption is high among Iraqi officials, while US contract management remains somewhat weak.

With America’s rebuilding effort largely finished, it will be up to the international community and the Iraqis to step up funds to sustain reconstruction, Bowen said.