U.S. Official: Iraq Has 'Good Start' in Reconstruction

Steve Inskeep talks with Stewart Bowen, an independent inspector general, who released his latest quarterly assessment Monday. Bowen says the money allotted for Iraq reconstruction has put the country's infrastructure on the road to restoration.

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JOHN YDSTIE, host:

When he gives his State of the Union speech tonight, President Bush will almost inevitably spend time on the State of Iraq. The Administration has committed billions to Iraq's reconstruction. It also appointed an independent inspector general, Stuart Bowen. He has praised some parts of the reconstruction and criticized others. He spoke with Steve Inskeep about his latest quarterly assessment released yesterday.

STEVE INSKEEP reporting:

When you talk about Iraq reconstruction in general, what can the Administration fairly claim credit for?

Mr. STEWART BOWEN (Inspector General, Iraq Reconstruction): A substantial start towards the restoration of Iraq's infrastructure. Almost three years ago, the World Bank took a look at the state of Iraq's infrastructure and estimated that it was in a severe state of deterioration. The number that they came up with was $55 billion to bring it back up to an operational point. The Iraq Relief and Reconstruction Fund, the United States' share of that $55 billion, has put Iraq onto a good start to restoring their infrastructure.

INSKEEP: A start. Has the Administration reached all of its goals?

Mr. BOWEN: No. And it will be a while before we reach the goals that we've set. We have an audit that we just released, and it's in our quarterly report out this week, that notes that we are certainly not going to reach the goals we set when Congress initially appropriated the $18.4 billion for Iraq's reconstruction.

INSKEEP: $18.4 billion, how much of that money in the end actually went towards reconstruction projects?

Mr. BOWEN: Well over half of it. But a substantial portion of it ended up going to fund security initiatives that we didn't anticipate. An insurgency arose that has been lethal and insistent. It has required substantial investment of our taxpayer dollars in standing up the Iraqi security forces.

INSKEEP: And it's not just security, is it? There's also the question of money that simply disappeared. You've told us in previous visits here about an issue involving an office in Hilla, Iraq. And you have more details about that in your latest report. What happened?

Mr. BOWEN: That's right. Well, first let me say that this last quarter we arrested four individuals connected with the crimes committed down there. And what happened was a substantial series of wrongful acts. A scheme, a criminal scheme, by both government and private sector contractors that resulted in the improper misallocation, and really, the theft of hundreds of thousands and millions of dollars.

INSKEEP: Now, we should say that these folks have not been convicted. But based on your allegations, what is the scheme? How did they get the money and make off with it?

Mr. BOWEN: A combination of contractors and government personnel coordinated a corruption scheme wherein those contractors received preferential treatment in allocation of very large contracts in Hilla. And in exchange for that bribes were paid.

INSKEEP: So, you've got Americans here looking for work in Iraq, and if they got a lucrative contract they were willing to pay back some of the money to the person who got them the contract?

Mr. BOWEN: That's right.

INSKEEP: You do point out that billions of dollars have been spent on reconstruction, not all the money has been wasted.

Mr. BOWEN: Yes. Yes.

INSKEEP: But when you look at the end of that, and the fact that security is still so bad in Iraq and the insurgency is still so strong, have we really gotten anything of strategic value for our money?

Mr. BOWEN: Yes, we have, because without the relatively restored infrastructure that now exists, admittedly not where we want it to be, but it is, we are making progress, the new government would not have a sound foundation from which to work. It needs to have a reasonably well operating economy and a reasonably effective starting point, infrastructure-wise.

INSKEEP: Do they have a sound foundation now?

Mr. BOWEN: It should be better. It needed to be better. But it is a starting point from which this new government can work.

INSKEEP: Stewart Bowen is the special Inspector General for Iraq reconstruction.

Good to talk to you again.

Mr. BOWEN: Thank you, Steve.

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