posted September 20, 2004 11:41 PM              

On CBS's "Face the Nation," Sen. Chuck Hagel (R-Neb.) announced that he is going to make nearly two dozen policy suggestions to the State Department and national security adviser Condoleezza Rice to improve the situation in Iraq. In particular, he suggested starting training camps for security forces in the region surrounding Iraq and offering economic development initiatives throughout the region.

"The fact is, we're in trouble. We're in deep trouble in Iraq," Hagel said. "And I think we're going to have to look at some recalibration of policy."

perhaps he's talking about THESE economic development policies........

U.S. troops use cash to woo Iraqis http://www.chron.com/cs/CDA/printstory.mpl/world/2701213

TIKRIT, IRAQ - Cash has become the U.S. military's first line of defense in some parts of Iraq, where U.S. soldiers are distributing money to encourage good will and to counter their enemies' offers of money to unemployed Iraqis willing to attack Americans, officers say here
"Even patrol leaders now carry envelopes of cash to spend in their areas. The money comes from brigade commanders, who get as much as $50,000 to $100,000 a month to distribute"
Commanders have the go-ahead to dish out tens, hundreds and thousands of dollars with little more paperwork than a signed receipt.
For more than a year, the Commanders Emergency Response Program was funded with $105 million taken from Iraqi reconstruction funds. But the Defense Department will begin paying for the program and has requested $300 million as part of its fiscal 2005 budget request to Congress.

posted January 28, 2006 04:47 PM              

American officials in charge of reconstruction spending in Iraq kept millions of dollars in cash in their bathroom lockers and filing cabinets, according to the latest audit of financial practices in the country.

One officer went to the Phillipines and gambled away thousands of dollars of tax payer's money on a junket with the Iraqi Olympic Team.

Incidents of waste, unregulated spending and contracts that went nowhere fill a 48-page audit released yesterday by the US Special Inspector General for Iraq Reconstruction (SIGIR), the watchdog appointed to oversee the $18.4 billion allocated to the Iraq’s Coalition Provisional Authority to rebuild the country.

More than 2,000 contracts with a total value of $88.1 million, were examined by the report. Many of the projects lacked documentation, any evidence of a competitive bidding and were not followed up to see if they were completed.

The audit covered projects awarded to contractors in the South Central region of Iraq, which includes the cities of Najaf and Karbala and al-Hillah. The report comes a week before the Inspector General's office gives its official six monthly update to the US Secretaries of State and Defence.

Among the irregularities recorded by the auditors was the case of a contracting officer who kept $2 million in cash in a safe in his bathroom.

A paying agent was found storing $678,000 in an unlocked filing cabinet in his office. Officers were described bickering over a missing $100,000 and one soldier was known to have accompanied Iraqi athletes to the Phillipines, where he gambled away between $20,000 and $60,000.

A spokesman for the Inspector General's office told Reuters that discoveries made by the auditors have already led to the arrest of four US officials on fraud charges and that more arrests were expected.

The New York Times said most of the loose accounting centred on the city of al-Hillah, the provincial capital of Babil that is made of the ruins of ancient Babylon.

Among the projects that took place in the city was the $108,140 rebuilding of a swimming pool for the Iraqi Olympic team. After polishing the pumps, the contractor reported the job done and was paid in full.

Another flawed project was the renovation of the al-Hillah General Hospital. A contractor was paid $660,000 to restore the facility, but stopped work before the job was done. A lift that should have been replaced then fell in its shaft, killing three people.

The audit also described a fleet of 160 vehicles, paid for with $3.3 million, whose location was unknown because there was no paperwork relating to its purchase. In Ramadi, officers started paying out on a $473,000 contract to install the internet in the city before realising they could not oversee it.

posted April 16, 2006 08:45 PM              

By Farah Stockman, Globe Staff | April 16, 2006

WASHINGTON -- American contractors swindled hundreds of millions of dollars in Iraqi funds, but so far there is no way for Iraq's government to recoup the money, according to US investigators and civil attorneys tracking fraud claims against contractors.

Courts in the United States are beginning to force contractors to repay reconstruction funds stolen from the American government. But legal roadblocks have prevented Iraq from recovering funds that were seized from the Iraqi government by the US-led coalition and then paid to contractors who failed to do the work.

A US law that allows citizens to recover money from dishonest contractors protects only the US government, not foreign governments.

In addition, an Iraqi law created by the Coalition Provisional Authority days before it ceded sovereignty to Iraq in June 2004 gives American contractors immunity from prosecution in Iraq.

''In effect, it makes Iraq into a 'free-fraud zone,' " said Alan Grayson, a Virginia attorney who is suing the private security firm Custer Battles in a whistle-blower lawsuit filed by former employees. A federal jury last month found the Rhode Island-based company liable for $3 million in fraudulent billings in Iraq.

Even the United Nations panel set up to monitor the use of Iraq's seized assets has no power to prosecute wrongdoers.

''The Iraqi people are out of luck, the way it stands right now," said Patrick Burns, spokesman for Taxpayers Against Fraud, a watchdog group that helps US citizens file cases such as the Custer Battles action.

Iraqi leaders, paralyzed by political deadlock in forming a new government, have so far made no formal complaint about funds that were paid out to dishonest contractors. But US officials say the need for Iraq to recoup the stolen money has become more urgent as it faces a budget shortfall of billions of dollars.

The problem has become so acute that an interagency working group, which includes officials from the State Department and the Department of Justice, has been set up to try to come up with a mechanism to return the funds, according to two US officials who are involved.

The issue dates to the earliest days after the March 2003 invasion, when US officials thought Iraqi money would cover the costs of reconstruction. As the Coalition Provisional Authority took control just after the fall of Saddam Hussein, it seized Iraq's oil revenues, money found in bank accounts and in Hussein's palaces, and the balance from the UN's oil-for-food program.

The coalition ultimately controlled more than $20.7 billion in Iraqi funds. The money was deposited into an account called the Development Fund for Iraq, or DFI, which was set up, in the words of the US administrator at the time, L. Paul Bremer III, ''for the benefit of the Iraqi people."

The fund represented the first cash reservoir US officials turned to as they worked to rebuild roads, bridges, and clinics. It carried fewer restrictions than the $18.4 billion in US funds appropriated around that time for reconstruction because those funds could only be used in ways designated by Congress.

But the Coalition Provisional Authority lacked basic controls and accounting procedures to keep track of the billions in Iraqi money it was doling out to contractors, according to a series of audits issued in 2005 and 2006 by the Special Inspector General for Iraq Reconstruction, a temporary office set up by Congress to oversee the use of reconstruction funds. One review of the files relating to 198 separate contracts found that 154 contained no evidence that goods or services promised by contractors were ever received, according to an April 2005 audit by the inspector general.

In some cases, contractors were paid twice for the same job. In others cases, they were paid for work that was never done.

In June 2004, the Coalition Provisional Authority handed power and control of the DFI back to an Iraqi government. By then, the coalition had spent or disbursed about $14 billion of the Iraqi fund on reconstruction projects and on the administration of the government, according to the audits.

Among the contracts paid for out of the Iraqi fund was Halliburton's controversial no-bid contract to restore Iraq's oil infrastructure, worth $2.4 billion. The Pentagon's auditors found $263 million in excessive or unsubstantiated costs for importing gasoline into Iraq, but the Pentagon said in February that it had agreed to pay a Halliburton subsidiary all but $10 million of the contested charges.

The special inspector general's investigations have resulted in the arrests of five suspects on criminal charges and is investigating 60 more cases involving alleged fraud and corruption in Iraq involving both US and DFI funds, according to James Mitchell, a spokesman for the inspector general.

In addition, at least seven more cases against contractors have been filed in US civil courts under the federal False Claims Act, according to two private lawyers who have personal knowledge of the suits. The act, which dates to the Civil War, allows citizens to sue on behalf of the government when they suspect fraud in federal contracting. The cases are currently under seal until the Justice Department investigates them to determine whether the government will join the suit.

The cases eventually could help the US Treasury recover hundreds of millions of dollars from corrupt contractors, according to Grayson, the attorney suing Custer Battles, the first such case to reach the courts and become public.

But the False Claims Act has not helped Iraq. Last month, a federal judge in Virginia ruled that it only protects the US government from fraud and that the United States suffered no direct economic loss from fraud involving Iraqi funds.

The result is a victory for American taxpayers, but a loss for Baghdad: In the first phase of the fraud claim involving Custer Battles, the jury ruled in March that the company should pay triple damages to the US Treasury for the $3 million it was paid for delivering a fleet of trucks that didn't work and old, spray-painted Iraqi cranes that were passed off as new imports. But the company, which has denied the charges in court and in other statements, does not have to repay any of the $12 million that came from the Development Fund for Iraq on the same contract, according to the judge's ruling.

Grayson said the injustice surrounding wasted Iraqi funds has helped fuel the insurgency.

''The DFI was essentially treated as a 'slush fund' for various quasi-military projects, run by US contractors over whom Iraqis had no control," he said. ''Like a colonial power, the Bush administration took Iraq's oil money, and wasted it. The Iraqis well know that. That's one reason why they're shooting at US soldiers."

Representative Henry A. Waxman, Democrat of California, has urged the administration to repay Iraq for the money paid to Custer Battles. ''This was Iraqi money, and it should be returned to the Iraqi people," he said in a statement.

The Justice Department, which is pursuing criminal cases against contractors, says there is a chance that Iraq eventually could receive some restitution.

In February, Robert J. Stein Jr., a North Carolina man who issued contracts on behalf of the Coalition Provisional Authority, pleaded guilty to conspiring with at least three others to steal more than $2 million from the Iraqi fund. The money, earmarked for refurbishing a police academy and library in the town of Hillah, was spent on expensive cars, machine guns, jewelry; hundreds of thousands of dollars in cash was also smuggled into the United States.

As part of a plea deal, Stein has agreed to pay $3.6 million in restitution, but Bryan Sierra, a spokesman for the Department of Justice, said it is too early to say whether Iraq will receive the money as part of that deal.

''It is possible that some of the money could go back to the Development Fund for Iraq," he said. ''But that hasn't been determined yet."

http://www.boston.com/news/nation/washington/articles/2006/04/16/us_firms_suspected_of_bilking_iraq_funds/

posted April 17, 2006 10:09 PM            

Of course, Saddam ripped off Iraqi citizens for billions through the Oil for Food Program with the complicity of United Nations personnel, French, Germans and Russians but they get a pass....because they're not the United States.

posted April 20, 2006 10:51 PM              

By T. Christian Miller in Washington
April 20, 2006
AdvertisementAdvertisement

A CONTRACTOR in Iraq has pleaded guilty to providing money, sex and designer watches to US officials in exchange for more than $US8 million ($10.8 million) in reconstruction contracts.

Philip Bloom faces up to 40 years in prison after admitting paying more than $US2 million in bribes to US officials with the Coalition Provisional Authority, which ruled Iraq after the US-led invasion in 2003.

Bloom's guilty plea on bribery and money-laundering charges is the latest development in a widening corruption scandal centred on a network of US civilians and military officials who worked out of a coalition outpost in the south-central Iraqi town of Hillah.

Under the plea agreement, Bloom must pay $US3.6 million in restitution and forfeit $US3.6 million in assets. His guilty plea "sends a message to Iraqis that US oversight will track down, arrest and prosecute American citizens who committed crimes in Iraq involving Iraqi money", said Stuart Bowen, who heads the office of the Special Inspector-General for Iraq Reconstruction.

The scheme began in January 2004, when Bloom began paying bribes to Robert Stein, a civilian contractor who controlled $US82 million in reconstruction funds as the comptroller for the coalition's headquarters in Hillah.

Stein, who had a previous conviction for fraud when he was hired, pleaded guilty to accepting bribes in February. He funnelled money and favours from Bloom to other officials in Hillah, all of whom helped direct contracts to a group of companies controlled by Bloom, court documents say.

Two officers in the US Army Reserve, Lieutenant-Colonel Michael Wheeler and Lieutenant-Colonel Debra Harrison, have already been arrested in connection with the case and more arrests are expected, investigators said.

From January to June 2004, when the coalition government was replaced, Bloom provided Stein and officers with first-class air tickets, real estate lots, weapons, new four-wheel-drive vehicles, cigars, designer watches, alcohol, prostitutes at Bloom's Baghdad villa and cash bribes.

In return, Bloom's company, Global Business Group, received $US8.6 million in contracts to refurbish a police academy in Hillah, a library in Karbala and other reconstruction projects. In some cases the work was never done, and in others it was shoddy, audits by the inspector-general reveal.

The contracts were paid with Iraqi funds held in the Development Fund for Iraq, which has been at the centre of many of the corruption scandals in Iraq.
http://www.smh.com.au/news/world/sex-and-money-bought-iraq-contracts/2006/04/19/1145344153774.html

posted April 21, 2006 09:49 PM              

Jonathan Weisman / Washington Post

WASHINGTON -- With the expected passage this spring of the largest emergency spending bill in history, annual war expenditures in Iraq will have nearly doubled since the U.S. invasion, as the military confronts the rapidly escalating cost of repairing, rebuilding and replacing equipment chewed up by three years of combat.

The cost of the war in U.S. fatalities has declined this year, but the cost in treasure continues to rise, from $48 billion in 2003 to $59 billion in 2004 to $81 billion in 2005 to an anticipated $94 billion in 2006, according to the Center for Strategic and Budgetary Assessments. The U.S. government is spending nearly $10 billion a month in Iraq and Afghanistan, up from $8.2 billion a year ago, a Congressional Research Service report found.

Annual war costs in Iraq are outpacing the $61 billion a year that the United States spent in Vietnam between 1964 and 1972, in today's dollars.

"If you look at the earlier estimates of anticipated costs, this war is a lot more expensive than it should be based on past conflicts," said Steven Kosiak, the Center for Strategic and Budgetary Assessments' director of budget studies.

The Senate takes up the issue next week. http://www.detnews.com/apps/pbcs.dll/article?AID=/20060421/NATION/604210341/1020

posted April 22, 2006 11:31 AM              

Politicians are crying crocodile tears about deficit spending but their actions demonstrate that they remain addicted to big government. The latest example is a $106.5 billion Senate supplemental spending package.

The stated purpose of this latest round of supplemental funding was to support the Department of Defense operations in Iraq and the Department of Homeland Security. According to President Bush, "the funds support US Armed Forces and Coalition partners [...] fight the terrorists and insurgents," and "unanticipated needs to help relieve human suffering associated with a number of humanitarian crises." Senate appropriators approved the bill after adding $15 billion over the President's request.

But many of the projects will not even to be spent in Iraq or in the region devastated by Katrina. For instance:

* $400,000 for the Pappajohn Higher Education Center in Des Moines, Iowa;
* $250,000 for the University of Vermont Small Enterprise Research Initiative;
* $200,000 for the Genesis of Innovation in Rapid City, South Dakota;
* $500,000 for the Wisconsin Security Research Consortium,
* $500,000 for the Rowan University Technology Center and Business Incubator;
* $1,500,000 for the Vermont Center for Emerging Technologies;
* $820,000 for the Central Michigan University Center for Applied Research and Technology;
* $1,100,000 for the University of Arkansas' Research and Technology Park;
* $600,000 for the Maryland Technology Development Corporation for the Minority R&D Initiative;
* $200,000 for the University of Nevada Las Vegas to study and operate the international air trade show;
* $250,000 for the Oregon Department of Consumer and Business Services' One-Stop Permitting Portal and much more.

One wonders what $3.9 billion for farm and rancher subsidies or $594 million for highway projects unrelated to the Gulf Coast have to do with the war or hurricane relief. The bill also contains $700 million to move a perfectly functioning rail line a couple of miles to allow private developers build a casino where the line is now.

To make matter worse, a number of floor amendments are awaiting Senators to return from Spring break hoping to add billions in milk subsidies, VA health care and more coastal restoration.

How did these spending abuses get so bad? At the heart of the problem is the concept of an emergency supplemental bill. Under the Budget Enforcement Act of 1990, emergency spending bills are given special exceptions from budgetary rules. And even though there are no limitations on the amount or type of spending that can be designated an emergency requirement, there has been an understanding that emergencies are:

1) sudden, urgent, unforeseen, and temporary; and
2) events posing a threat to life, property, or national security.

But for years now, Congress has abused its power in funding emergency spending bills, and their number and size have drastically increased in the last 20 years. According to the Congressional Research Service, such "emergencies" have recently reached an all time high, with FY2004 and FY2005 -- respectively $115.6 and $170.8 billion -- accounting for 62 percent of the emergency spending of the last 10 years. The White House also deserves a lot of blame, particularly since costs for Iraq and Afghanistan are not now exactly unexpected emergency outlays and thus should be part of the annual budget request.

But both the Administration and Congress prefer the fiction of using the "emergency" loophole. These bills have become a magnet for pork and other projects that wouldn't be funded on their own merits.

posted April 24, 2006 07:40 PM              

Cam Simpson
Chicago Tribune
Apr. 24, 2006 12:00 AM

WASHINGTON - The top U.S. commander in Iraq has ordered sweeping changes for privatized military support operations after confirming violations of human-trafficking laws and other abuses by contractors involving possibly thousands of foreign workers on American bases, according to records obtained by the Chicago Tribune.

Gen. George Casey ordered that contractors be required by May 1 to return passports that have been illegally confiscated from laborers on U.S. bases after determining that such practices violated U.S. laws against trafficking for forced or coerced labor. Human brokers and subcontractors from South Asia to the Middle East have worked together to import thousands of laborers into Iraq from impoverished countries.

Two memos obtained by the Tribune indicate that Casey's office concluded that the practice of confiscating passports from such workers was both widespread on American bases and in violation of the U.S. trafficking laws.

The memos, including an order dated April 4 and titled "Subject: Prevention of Trafficking in Persons in MNF-I," or Multinational Forces-Iraq, say the military also confirmed a host of other abuses during an inspection of contracting activities supporting the U.S. military in Iraq. They include deceptive hiring practices; excessive fees charged by overseas job brokers who lure workers into Iraq; substandard living conditions once laborers arrive; violations of Iraqi immigration laws; and a lack of mandatory "awareness training" on U.S. bases concerning human trafficking.

posted May 01, 2006 09:04 PM              

U.S. Pays for 150 Iraqi Clinics, and Manages to Build 20

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By JAMES GLANZ
Published: April 30, 2006

A $243 million program led by the United States Army Corps of Engineers to build 150 health care clinics in Iraq has in some cases produced little more than empty shells of crumbling concrete and shattered bricks cemented together into uneven walls, two reports by a federal oversight office have found.

The reports, released yesterday, detail a close inspection of five of the clinics in the northern city of Kirkuk as well as a sweeping audit of the entire program, which began in March 2004 as a heavily promoted effort to improve health care for ordinary Iraqis. The reports say that none of the five clinics in Kirkuk and only 20 of the original 150 across the country will be completed without new financing.

Written by the Special Inspector General for Iraq Reconstruction, an independent office, the reports cite a wide range of factors, including disputes among Iraqi construction companies and problems with local materials, that have contributed to the program's failures. The American company Parsons, the prime contractor for the work, also comes in for stiff criticism.

But the reports' main finding is that lax oversight by the Army corps is responsible for the failure of the overall program. Cowed by security fears that the reports suggest may have been overblown, the corps sometimes inspected the work only through what it called "windshield surveys" — hasty drive-bys.

Poor cost accounting and a rapid turnover of United States government personnel in Iraq also contributed to the problems, the reports say.

Whatever the causes, the impact of the failure on the American effort to rebuild Iraq is enormous, said the inspector general, Stuart W. Bowen Jr.

"This was the most important program in the health sector," Mr. Bowen said in an interview. "It sought to fulfill a strategy to get health services to rural and remote poor in Iraq."

But he said it was not until the fall of 2005, a year and a half after the program began, that the corps began focusing on the shortcomings of the work by Parsons and its Iraqi subcontractors. By then, Mr. Bowen said, "the chasm was so wide that the remedial actions were unable to salvage the overall program."

Because most of the clinics are more than half finished, Mr. Bowen added, it is still possible that with new money many of the program's original goals could be realized.

But the criticisms in the reports have created deep disagreements between Mr. Bowen's office and the gulf region division of the Corps of Engineers, which is responsible for the program. In a series of objections included in the reports, the division's commander, Brig. Gen. William H. McCoy Jr., rejected many of the findings and tried to shift much of the blame to American and Iraqi contractors.

"Contractor performance and lack of openness in addressing schedule and budget issues in a timely fashion obscured the severity of the financial problem," General McCoy wrote.

"It should be noted that until the fall of 2005, the contractor insisted their schedules were correct and that they would finish up to 114 P.H.C.'s by the end of December 2005," he wrote, using an abbreviation for primary health care centers.

The reports, however, say that in effect, the buck stopped with the Army corps.

"It is the government's responsibility to oversee the contract and, given that the government was aware of problems with the project for quite some time, we believe the effective government contract oversight was not provided," the report covering all 150 clinics says.

The reports describe a series of baffling managerial decisions by the Army corps. For example, Parsons estimated that completing all the clinics would take two years, but the corps ordered the company to complete them in one year. Parsons also asked that the construction take place region by region in order to husband the company's thin supervisory staff in Iraq, but the corps directed that all 150 clinics be started simultaneously.

Some of the most remarkable observations appear in the inspection reports on the five clinics in Kirkuk. Interior photographs of the structures show bare walls made of brick fragments through which sunlight streamed and stairs made of concrete already crumbling into dust.

And when inspectors compared what they saw to progress reports, some of the numbers seemed suspiciously high. One structure, essentially a rickety shell of uneven bricks, had been declared 56 percent complete. The second floor of another shell held up by little more than wooden sticks — a standard method of bracing unfinished floors in Iraq — had been declared half complete.

Late Friday, the inspector general also released an audit report on a $147 million United States-led program to train and equip thousands of Iraqis to protect oil pipelines, electrical transmission lines and hundreds of key installations in both sectors.

Begun in September 2003, the effort, called Task Force Shield, was so disorganized that the auditors were never able to determine basic facts like how many Iraqis were trained, how many weapons were purchased and where much of the equipment ended up, the report says.

Of 21,000 guards who were to be trained in protecting oil equipment, for example, probably only about 11,000 were, the report says. And of 9,792 automatic rifles purchased for those guards, auditors were able to track just 3,015.

Even more severe shortcomings plagued the program to protect the electricity infrastructure, which ended almost as soon as it had begun.

In an echo of management problems that have hobbled nearly every noncombat effort in Iraq, the training in both programs was partly controlled by three different entities: the American military, the civilian-run Coalition Provisional Authority and an Army Corps of Engineers initiative to restore Iraq's oil infrastructure.
http://www.nytimes.com/2006/04/30/world/middleeast/30reconstruct.html?_r=2&oref=slogin&oref=login