March 11, 2008

Senate Appropriations Committee Hearing Sheds Light on Waste, Fraud and Abuse in Iraq

Today’s Senate Appropriations Committee hearing on waste, fraud and abuse shed new light on the extent of corruption in American contracting in Iraq. The hearing also exposed the rampant corruption and sectarianism within the Iraqi government. Most importantly, the hearing highlighted the ways in which corruption undermines our reconstruction efforts in Iraq. The Bush Administration has failed to hold the Iraqis or fraudulent contractors accountable for their corruption. Democrats are committed to enforcing accountability and rooting out waste, fraud and abuse.  

Lack of oversight and accountability in Iraq contracting has led to billions in waste, fraud, abuse and hurt U.S. mission:

IG Kicklighter Testified Poor Leadership and Oversight Allowed for Contractor Corruption and Waste. “One is that I think the problems that we had in contracting is that where that we had poor oversight, where we had poor leadership, where we had the lack of the proper level of leadership and the fact that we didn't have administrative support is what caused a lot of the problems for corruption and waste in the contracting world.” [Inspector General Kicklighter’s Testimony to the Senate Appropriations Committee, 3/11/08]

• IG Kicklighter Said He Identified At Least $840 Million in Wasted Funds. “We have 24 ongoing Iraqi-related audit projects.  And as a result of the findings and recommendations, we and the department have identified more than $840 million in funds that could be put to better use.” [Inspector General Kicklighter’s Testimony to the Senate Appropriations Committee, 3/11/08]

Comptroller General Said Inadequate Oversight and Accountability Hampered Iraqi Reconstruction Efforts. “The United States is entering its fifth year of efforts to rebuild and stabilize Iraq, but these efforts have neither consistently achieved their desired outcomes nor have they done so always in an economic and efficient manner. While specific facts and circumstances differed, a lack of well- defined requirements, poor business arrangements and inadequate oversight and accountability have affected reconstruction, stabilization and support efforts alike.” [U.S. Comptroller General David Walker’s Testimony to the Senate Appropriations Committee, 3/11/08]

Defense Dept. Failed to Manage and Oversee Contractors in Iraq, Said Comptroller. “Several long-standing and systemic problems continue to hinder the Department of Defense's management and oversight of contractors at deployed locations, including the failure to follow planned guidance, the failure to provide adequate numbers of contract oversight personnel, the failure to systematically collect and distribute lessons learned, and the failure to ensure predeployed training for military commanders and contract oversight personnel who have a role in connection with contractors.” [U.S. Comptroller General David Walker’s Testimony to the Senate Appropriations Committee, 3/11/08]

• Contracting Problems Within Defense Dept. Resulted in Billions of Waste Annually. “But secondly, I'd like to provide for the record, with the permission of the chairman -- I'd like to provide a listing of the 15 long-standing, systemic acquisition and contracting problems that exist within the Department of Defense.  They've been there for years. They result in billions of waste every year. And that waste is accentuated and increased when you're dealing with a contingency operation, and Iraq is a contingency operation, just as Katrina was one for domestic natural disaster and the Department of Homeland Security.” [Special Inspector General for Iraq Reconstruction Stuart Bowen’s Testimony to the Senate Appropriations Committee, 3/11/08]

Some U.S. officials contributed, aided and abetted corruption in Iraq qhile others did not cooperate with accountability efforts:

Judge Al-Radhi Said Some U.S. Officials Defended Corruption in Iraqi Ministries. “Yes, we do share a lot with the U.S. officials about such discussions (ph) because that is a U.S. representative or technical expert in each of the ministries…One of those experts came to me and did the opposite.  He tried to defend the corrupt Iraqi minister. And also in the Ministry of Reconstruction and Population, these experts came and defended those corrupt within the ministry.” [Judge Al-Radhi’s Testimony to the Senate Appropriations Committee, 3/11/08]

Comptroller General Asserted State Dept. Did Not Cooperate in Anti-Corruption Efforts in Iraq. “We've made certain recommendations to the State Department about putting together this strategic and integrated plan in connection with these two matters, as an example. They came back and said they felt that that was the responsibility of the Iraqi government. In our view, it's a shared responsibility. U.S. taxpayer money is involved. And while it's a shared responsibility to be successful, we think that the State Department needs to work with the Iraqi government to make these plans a reality.” [U.S. Comptroller General David Walker’s Testimony to the Senate Appropriations Committee, 3/11/08]

Corruption and waste are rampant in Iraqi government:

Comptroller General Walker Said Rampant Corruption and Sectarianism Plague Iraq. “The Iraqi government is challenged. There is rampant corruption. There also is -- there are problems with regard to capacity of their skills and knowledge. There are problems also with regard to factionalization that exists within a number of the ministries, especially the largest ministries.” [U.S. Comptroller General David Walker’s Testimony to the Senate Appropriations Committee, 3/11/08]

Iraqi Government Wasted $18 Billion of U.S. Taxpayer’s Money. In response to Senator Dorgan’s question whether $18 billion of musspent funds came from U.S. taxpayers, Judge Al-Radhi testified, “Yes, that is correct.  Because most of these monies came from the DOD (ph), so it is correct.” [Judge Al-Radhi’s Testimony to the Senate Appropriations Committee, 3/11/08]

SIGIR Bowen Said Corruption is a Serious Problem, U.S. Efforts to Bolster Anti-Corruption Institutions Within the Iraqi Government. “Dr. Basit recounted to me during our visit that his current audits reveal a continuing and serious problem of corruption within Iraqi ministries…Over the past five years, U.S. programs to bolster anti-corruption institutions in Iraq have been inconsistent, suffering from poor coordination, weak planning and limited resources.” [Special Inspector General for Iraq Reconstruction Stuart Bowen’s Testimony to the Senate Appropriations Committee, 3/11/08]

Corruption in Iraq contributes to violence:

Judge Al-Radhi Said Corruption Keeps Millions of Iraqis in Poverty and Funds Violence. “Corruption in Iraq today is rampant across the government, costing tens of billions of dollars, and has infected virtually every agency and ministries, including some of the most powerful officials. Corruption has been part of the failure of the government of Iraq to control the militia that control parts of government. Unfortunately, today in Iraq, corruption has infected our biggest source of money:  oil. Corruption has infected those who have the guns to restore law and order.  And corruption has infected the very government officials who promise a new, better Iraq. Corruption keeps millions of Iraqis in inhumane living conditions and it funds the killing of U.S. and Iraqi forces.” [Judge Al-Radhi’s Testimony to the Senate Appropriations Committee, 3/11/08]

• Smuggled Oil Financed Millitias that Killed Iraqis and American Soldiers. “The other aspect is that the oil is being smuggled in Baiji from the Sunni militias and in Basra through the Shiite militias. And, of course, they will use this to purchase weapons.  And, of course, these monies will target the killing of Iraqis and Americans.” [Judge Al-Radhi’s Testimony to the Senate Appropriations Committee, 3/11/08]

Al-Radhi Asserted Iraqi Oil Ministry Financed Terror and Supported Millitias. “Importantly, it has been impossible for CPI to simply and effectively investigate oil corruption where Sunni and Shia militia have control of the metering, transport and distribution of Iraqi oil.  This has resulted in the Ministry of Oil effectively financing terrorism through these militias. I am afraid that the commission itself will now be used as a tool of corruption.  I fear that the brightest and honest members of my CPI staff in Iraq are now facing a purge and being purged into silence.” [Judge Al-Radhi’s Testimony to the Senate Appropriations Committee, 3/11/08]

• IG Bowen Also Asserted That Iraqi Oil Sector is Corrupt. “The fact is, is that corruption has afflicted the Iraqi oil sector, particularly up at the Baiji refinery, with respect to the smuggling of refined fuels. And that was a symptom of the subsidy program that was there, that created an incentive for smuggling.  And I know that that continues to be a problem today, based on my recent visits with Iraqi authorities.” [Special Inspector General for Iraq Reconstruction Stuart Bowen’s Testimony to the Senate Appropriations Committee, 3/11/08]

IG Bowen Said Iraqi Rule of Law is Weak and Corruption Rampant. “That's the sign of a rule of law system that is not strong.  And, frankly, the corruption issue is a symptom of that weak rule of law system.” [Special Inspector General for Iraq Reconstruction Stuart Bowen’s Testimony to the Senate Appropriations Committee, 3/11/08]

The Iraqi Government has also been plagued by secretarianism, which has hurt reconstruction efforts:

Funds for Reconstruction Were Distributed to Iraqi Political Parties. “That is correct, because the ministries were distributed according to the various parties -- political parties. For instance, the Ministry of Health portfolio was given to one of the Shiite parties.  So if there was an ill person from a different sect ill and residing in a hospital, staying in a hospital, that ill person would be kidnapped from that hospital.  And this led to the loss of monies through such practices.” [Judge Al-Radhi’s Testimony to the Senate Appropriations Committee, 3/11/08]

Iraqi Government Has Failed to Rebuild, Relies on Sectarian Rule.  “If you visited Baghdad, you would see for yourself that there is no water, no electricity, no sewer systems, no streets.  Everything is destroyed…The problem is that this government has failed in performing and in doing its duties, for many reasons. One of the reasons is that this government has relied on blocs, on sectarian quotas, if you will.  It has distributed the ministries according to the various sects and confessions (ph). Instead of resorting to the help of technocrats, they designated to the various (inaudible) politicians from their various blocs, political blocs.” [Judge Al-Radhi’s Testimony to the Senate Appropriations Committee, 3/11/08]

Maliki Government Promoted Sectarian Agenda in Iraq. “Further, the prime minister and his government, he refuse to recognize the independence of the commission appoint qualified senior people in the ministries and foster honesty where the government has formally blocked actions against the presidencies (ph). The Council of Ministers and former interior ministers used the law to empower ministries and the prime minister to stop specific corruption cases and promoted sectarian agenda.” [Judge Al-Radhi’s Testimony to the Senate Appropriations Committee, 3/11/08]

Inspector General Bowen Testified Iraq Spent Less than 10% of Its Budget, Hurting Reconstruction Efforts. “Part of the problem, Senator Leahy, is that my information I have from my very capable staff is that, for the calendar year that ended on 2007, that, through November, they had spent less than 10 percent of their budget for several of the major ministries.” [Special Inspector General for Iraq Reconstruction Stuart Bowen’s Testimony to the Senate Appropriations Committee, 3/11/08]

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