Delahunt To Seek An End To Iraq Reconstruction Grant Funding

03/28/2007

WASHINGTON, DC – Congressman Bill Delahunt announced today that he would mount an effort in Congress to terminate open-ended grant funding for the Iraq reconstruction effort after his oversight panel confirmed that the Iraqi government is sitting on more that $12 billion in cash.

“The American taxpayer is once again being asked to help Iraq rebuild its roads, bridges and hospitals, while we cut funds for these programs here in America.  The taxpayer is getting robbed --- and this time it’s by our own government,” Delahunt said today.

Delahunt made the comments after a joint hearing of the House Foreign Affairs Subcommittees on International Organizations, Human Rights, and Oversight (chaired by Delahunt) and on the Middle East and South Asia (chaired by Congressman Gary L. Ackerman of New York. The hearing, entitled “Can Iraq Pay for Its Own Reconstruction?” confirmed that the Iraqi government has a $12 billion surplus available for reconstruction. 

At the hearing, Delahunt chronicled a series of costly miscalculations by the Bush Administration in Iraq Reconstruction financing following the overthrow of Saddam Hussein.  He noted that exactly four years ago – to the day – then-Deputy Secretary of Defense Paul Wolfowitz assured Congress that “there's a lot of money to pay for this. It doesn't have to be U.S. taxpayer money…We are dealing with a country that can really finance its own reconstruction, and relatively soon.” 

Since then, the Administration and Congress have given oil-rich Iraq almost $21 billion in American taxpayer-funded grants for reconstruction. The White House is requesting another $4 billion in assistance over the next two years.  It has refused to allow any of this funding to be used in the form of loans, even as evidence mounts that Iraq has substantial cash reserves available to pay for some of this work.

“I recognize that we have a moral obligation to help repair the damage resulting from our invasion and occupation,” said Delahunt, “But if the Iraqis have the resources to pay for their own reconstruction, why aren’t they using all of their available money?  And why is the Administration committing more American taxpayer dollars as grants to pay for what the Iraqis could pay for?”

The witnesses at the hearing, the State Department’s Senior Adviser and Coordinator for Iraq David Satterfield and Special Inspector General for Iraq Stuart Bowen Jr., verified that Iraq has roughly $12 billion available.  Ambassador Satterfield argued that these funds were unspent because Iraq lacked the capacity to manage the money itself, and therefore new US assistance was needed to train Iraqis for that purpose.  However, Delahunt observed that a recent audit by Bowen had detailed how the continuing turmoil in Iraq and repeated changes in government had undercut such efforts: “senior officials not only purged the remaining skilled ministerial staff but replaced them with persons hired more for their ethnic loyalty and/or familial relationship than their qualifications.”

Delahunt proposed that – given Iraq’s immediate needs but also its potential oil wealth – future US assistance to Iraq should be in the form of loans, not grants.

Bowen confirmed that, in fact, this is how most other countries have provided their assistance to Iraq. Afterwards, Delahunt said that he would seek to mount a bipartisan effort towards that end.

To view Congressman Delahunt’s opening statement, please click here.

To view the testimony of Special Inspector General for Iraq Reconstruction Stuart Bowen, please click here.

To view the testimony of Ambassador David Satterfield, please click here.

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