Corruption Plagues Iraq Reconstruction Effort The American government is spending billions of dollars every month to help rebuild and secure Iraq. But the reconstruction effort for the past several years has been plagued by waste and corruption.

Corruption Plagues Iraq Reconstruction Effort

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Today is the last on the job for American Ambassador to Iraq Zalmay Khalilzad. He told reporters today that he was cautiously optimistic about Iraq's future.

Ambassador ZALMAY KHALILZAD (American Ambassador, Iraq): Though difficult challenges lie ahead and it has a long way to go, Iraq is fundamentally headed in the right direction, and success is possible.

CHADWICK: While Ambassador Khalilzad is leaving to be the next ambassador to the U.N., 21,000 more U.S. troops should be in Iraq by May. This so-called surge plan also calls for more money for rebuilding.

BRAND: But, as NPR's Tom Bowman reports, reconstruction efforts have been plagued by waste and corruption.

TOM BOWMAN: The federal officials assembled to talk about Iraq reconstruction last week. Senator Joseph Lieberman of Connecticut got right to the point.

Senator JOSEPH LIEBERMAN (Independent, Connecticut): If you were grading Iraqi reconstruction, would you give it an A, B, C, D or F?

BOWMAN: Stuart Bowen is a special inspector general for Iraq reconstruction.

Mr. STUART BOWEN (Special Inspector General, Iraq): I would hesitate to give a grade, because we are still carrying out an oversight mission.

BOWMAN: Then it was David Satterfield's turn. He is the State Department's top coordinator for Iraq.

Mr. DAVID SATTERFIELD (Coordinator for Iraq, United States State Department): I, too, would hesitate to assign a gradeā€¦

(Soundbite of laughter)

BOWMAN: But it's no laughing matter. Satterfield says the next 12 months will be crucial for the Iraqi government, which has promised to spend another $10 billion on reconstruction.

Mr. SATTERFIELD: We see this year, 2007, as a critical transition period, a bridge period, to Iraqi self-sufficiency so that their monies, their capital resources can be spent instead of U.S. taxpayer monies on the civilian-assistance side.

BOWMAN: The American taxpayer continues to spend about $8 billion each month in Iraq. That's mostly for security. On top of that is some $21 billion in American money that has been used to help rebuild Iraq. Nearly all of that has been spent. Bowen, the inspector general, says there have been problems with the American-sponsored reconstruction program.

Mr. BOWEN: Fraud has not been a significant component of the U.S. experience in Iraq reconstruction. The real challenge has been waste.

BOWMAN: Consider the waste known to date. Fifty-two million dollars was lost because the U.S. government waited months to give a contractor specific projects. So those millions went to pay, house and feed idle workers. Another $75 million was spent in a matter of weeks on an oil-pipeline job with a faulty engineering plan.

Bowen is now mounting what he calls a forensic audit of the entire $21 billion in American money spent on Iraq reconstruction. In an interview with NPR, Bowen says perhaps $2 billion or more of that money has been wasted.

Mr. BOWEN: At the House Armed Services Committee, I was asked, pressed, for an estimate by a Chairman Skelton of what that number might be, and I ventured perhaps 15 percent.

BOWMAN: At the same time, both Bowen and Satterfield say there are even greater problems with the Iraq government and its own reconstruction efforts. Bowen recently returned from Iraq. He was told by the country's commissioner of public integrity that there are 2,000 ongoing investigations of Iraqi officials concerning $8 billion in missing funds.

Mr. BOWEN: Corruption has daunted the Iraqi efforts from the first government four years ago, but it certainly is as bad now as it's ever been.

BOWMAN: And Satterfield says the problem goes deeper. The Iraq government has not approved a budget for this year, and they have not spent billions of dollars in oil revenues from last year. It's still just sitting in the bank. That's why Satterfield finally told Senator Lieberman that the Americans are doing a better job in rebuilding Iraq than the Iraqis themselves.

Mr. SATTERFIELD: I would give U.S. efforts on these critical areas - sewage, water, electricity - high marks. I would not give similar marks to the process of transitioning over past years to full Iraqi responsibility for the maintenance and security of the investment we have made.

BOWMAN: The reconstruction problems raise serious questions about the future of Iraq. Even if the surge is successful in Baghdad and volatile Anbar Province, what would be the necessary follow-on reconstruction efforts? How much of that $10 billion in promised Iraqi reconstruction money will be spent on needed projects, and how much will wind up missing? Tom Bowman, NPR News, Washington.

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