Report: U.S. Reconstruction in Iraq Poorly Planned

New reports from the Bush administration's watchdog for Iraq reconstruction show that U.S. officials wasted Iraqi money that was intended to help create jobs and revive the economy. A leaked document from the inspector general indicates the rebuilding effort was ill-planned and ill-coordinated from the start.

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MICHELE NORRIS, Host:

There is also news today about reconstruction efforts in Iraq. The Bush administration's watchdog for the rebuilding says that U.S. officials wasted Iraqi money intended to help create jobs and revive the economy. A leaked document from the special inspector general indicates the rebuilding effort was ill planned and ill coordinated from the beginning. The administration recently changed the management of the program, but critics say that may not be much of an improvement.

Here's NPR's Corey Flintoff.

COREY FLINTOFF: One of the latest reports from the Inspector General focuses on how the coalition provisional authority spent money from the development fund for Iraq which was amassed from Iraqi oil sales, money from the Oil for Food Program, and Iraqi funds that had been frozen in the United States. In its dry auditor-like prose, the report says CPA officials in South Central Iraq did not effectively manage more than 900 contracts worth about 88 million dollars. But the results were more than ineffective. Some were deadly. Jim Mitchell, the spokesman for the Inspector General, says auditors went to check a renovation job at the hospital in the Iraqi own of al-Hila which was to include new elevators.

Mr. JIM MITCHELL (Spokesman for the Inspector General) And the hospital administrator immediately took our auditors to the site of the elevators and told them that just a couple of days prior to their arrival, the elevator had crashed and three people died.

FLINTOFF: The auditors found that the contractor had tried to repair the old elevators rather than install new ones, and that he had been paid in full before the job was complete. The report describes officials wheeling and dealing with shrink-wrapped bundles of hundred dollar bills, often without documenting how the money was spent.

MITCHELL: These audits uncovered potential indications of criminal fraud and we have since arrested four people in connection with what was going on in Hila.

FLINTOFF: Jim Mitchell says the investigation is ongoing. Mitchell says the public should ignore a leaked report on the overall U.S. reconstruction effort that appeared in yesterdays New York Times, because it was a discussion paper that wasn't mean to for publication. Steve Ellis, a Vice President at Tax Payers for Common Sense, read the leaked document and says it shows there was initially no plan at all.

STEVE ELLIS: And there was a lot of in fighting among the bureaucracies about who was going to be in charge and who was going to control the process and what contracting procedures were going to be used, and so you had contracting anarchy.

FLINTOFF: Ellis says, among other things, the report details turf battles between the U.S. Agency for International Development and the Pentagon that didn't help the reconstruction process or the Iraqi people. Last month, amid congressional criticism that the 25 billion dollar reconstruction had failed to restore basic services to Iraqis, the Bush Administration made two important changes. President Bush said the focus of the program would shift from big infrastructure such as bridges and power plants, to smaller projects that would have a more visible impact at the local level. He also put the entire effort under the control of the Army Corps of Engineers.

ELLIS: The Corp of Engineers does a great job of building large infrastructure projects.

FLINTOFF: David Mack is the Vice President of the Middle East Institute.

DAVID MACK, Host:

What they do not do, it's not a part of their culture, is the kind of USAID projects that involve working on small projects with host institutions to develop their capacity for ongoing development.

FLINTOFF: Mack says the choice of the Army Corps seems an odd fit with the program's new goals. He's one of the authors of a State Department Plan for Reconstruction that the Pentagon largely ignored before the invasion of Iraq. The Inspector General's spokesman, Jim Mitchell, says there will be more official reports in the coming days, including one on the so-called reconstruction gap. The difference between what the U.S. planned to do in Iraq and what will actually get done.

Corey Flintoff, NPR News, Washington.

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