[ey RYP - AEGIS not mentioned, bad luck ...uhh? ;-) dm+]

http://www.iht.com/articles/ap/2007/01/31/america/NA-GEN-US-Iraq-Reconstruction-Waste.php

Investigators find that millions of dollars wasted in Iraq 
reconstruction aid
The Associated Press
Published: January 31, 2007


WASHINGTON: The U.S. government wasted tens of millions of dollars in 
Iraq reconstruction aid, including scores of unaccounted-for weapons and 
a never-used camp for housing police trainers with an Olympic-size 
swimming pool, 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 (€231.3 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, which was 
being released Wednesday.

Calling Iraq's sectarian violence the greatest challenge, Bowen said in 
a telephone interview that billions in U.S. aid spent on strengthening 
security has had limited effect. Reconstruction now will fall largely on 
Iraqis to manage, and they are nowhere near ready for the task.

The audit comes as President George W. Bush presses Congress to approve 
$1.2 billion (€930 million) in new reconstruction aid as part of his 
broader plan to stabilize Iraq by sending 21,500 more U.S. troops to 
Baghdad and Anbar province.

Democrats in Congress have been skeptical. Sen. Jim Webb has suggested 
that the United States is spending too much on Iraq reconstruction at 
the expense of rebuilding New Orleans, Louisiana, from the devastation 
that Hurricane Katrina wrought 17 months ago. Rep. Henry Waxman plans 
in-depth hearings next week into charges of waste and fraud in Iraq.

According to the report, the State Department paid $43.8 million (€33.8 
million) to contractor DynCorp International for the residential camp 
for police training personnel outside of Baghdad's Adnan Palace grounds, 
which has stood empty for months. About $4.2 million (€3.2 million) of 
the money was spent improperly on 20 trailers for important visitors and 
an Olympic-sized pool, all ordered by the Iraqi Ministry of Interior but 
never authorized by the United States.

U.S. officials spent another $36.4 million (€28.1 million) for weapons 
such as armored vehicles, body armor and communications equipment that 
cannot be accounted for. DynCorp also may have prematurely billed $18 
million (€13.9 million) 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 $1.1 million (€850,000) DynCorp bill this month on a separate 
contract because the billed rate was incorrect.

A spokesman for DynCorp, Greg Lagana, did not immediately return a 
telephone message seeking comment.

Bowen, whose office was almost eliminated last month by 
administration-friendly Republicans in Congress, called spending waste 
in Iraq a continuing problem. Corruption is high among Iraqi officials, 
while U.S. contract management remains somewhat weak.

With America's $21 billion (€16.2 billion) rebuilding effort largely 
finished, it will be up to the international community and the Iraqis to 
step up with dollars to sustain reconstruction, Bowen said in the 
interview. "That will be a long-term and very expensive process," he said.

According to the report:

_Major U.S. contractors in Iraq, including Bechtel National and Kellogg, 
Brown and Root Services Inc., said they devoted an average 12.5 percent 
of their expenses for security.

_Bowen's office opened 27 new criminal probes in the last quarter, 
bringing the total number of active cases to 78. Twenty-three are 
awaiting prosecutorial action by the Justice Department, most centering 
on charges of bribery and kickbacks.

Still, "fraud has not been a significant component of the U.S. 
experience in Iraq," Bowen said.

As of the end of 2006, contracts had been let for all of the $21 billion 
(€16.2 billion) Congress put into the Iraq Relief and Reconstruction 
Fund it created in 2003. Some 80 percent of the money has been paid out, 
the report said.

Since 2003, use of the reconstruction aid changed several times as U.S. 
officials shifted priorities to spend more on security or programs 
critical to supporting elections or developing an Iraqi government.

For example, money was cut from what had been planned originally for 
electricity, water, oil projects and transportation and communication so 
it could be used to help pay for health care, elections, democracy 
programs, training Iraqi security forces.

Overall, the largest single expense was security. The total outlays were 
spent like this:

_34 percent for security and justice.

_23 percent to try to generate and distribute electricity. Still, the 
report noted, output in the last quarter averaged below prewar levels.

_12 percent for water.

_12 percent for economic and societal development.

_9 percent for oil and gas.

_4 percent for transportation and communications.

_4 percent for health care.

Auditors had "significant concern" about the way ahead, partly because 
of the Iraqi government's bad track record on budgeting for such 
projects, the report said. It said the Iraqi government had "billions of 
budgeted dollars (that) remained unspent at the end of 2006."

Unemployment remains high, contributing to the insurgency because it 
sours the population and leaves idle young men to their own devices, 
according to the report.

The government's "most significant challenge continues to be 
strengthening rule-of-law institutions — the judiciary, prisons and the 
police," the report said. "The United States has spent billions of 
dollars in this area, with limited success to date."

___

On the Net:

Special Inspector General for Iraq Reconstruction:

http://www.sigir.mil/Default.aspx

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