Lost Iraq Funds

by Brian Beutler, The Media Consortium: Thu., May 22, 2008

An Inspector General report released today confirms what just about everybody already knew–that the Department of Defense has squandered billions of American dollars due to contracting fraud and abuse in Iraq.

In response, House Oversight and Government Reform committee chairman Henry Waxman held a hearing today to spell out some of the reports findings, which include:

* That of the $8.2 billion in contracting funds audited by the IG between April 2001 and June 2006, 95 percent were improperly accounted for, and $1.4 billion in payments “were missing critically important documentation.” Some commercial payments were distributed without the documentation of any promised service. As a result IG officials have referred 28 suspicious cases to criminal investigators
* That of the $2.7 billion congress has appropriated for the Commander’s Emergency Response Program (CERP)–created to help foreign agents to provide humanitarian relief–the IG found that $134.8 million was distributed without a complete audit trail. The IG was “unable to ensure that CERP funds provided to Coalition Partners have been used for their intended purposes. In other words, the money was handed to foreign governments without any meaningful strings.
* That none of the $1.8 billion in seized Iraqi assets–intended for humanitarian purposes, and audited by the IG–was adequately accounted for.

To these findings, Waxman intoned that “there is something very wrong when our wounded troops have to fill out forms in triplicate for meal money while billions of dollars in cash are handed out in Iraq with no accountability.”

Though concerned with the potential for corruption and waste, Republicans on the committee sought to downplay the importance of the IG’s findings, and to divorce the issue of waste from any questions about the conduct of the war itself.

“Few people operating in an active combat zone would refer to the documentation requirements…as ‘mission critical’ work,” said Ranking Member Tom Davis. “Similarly,” he went on, “no one should deny the imperative to tell American taxpayers how their money is being spent. So we need to balance these two truths…. We should not let a focus on the war blind us to the government-wide need for veteran finance officials to watch over large, and growing, expenditures.”

Waxman invited Defense officials to testify at today’s hearing, but the department refused to cooperate. At the end of the hearing, Rep. John Tierney–who chairs the National Security subcommittee–suggested that the committee consider compelling their appearance. “I think we have subpoena power, and I’d ask [Chairman Waxman] and the ranking member at some point in time to consider using it where appropriate so the Department of Defense wouldn’t think they can avoid… public scrutiny.”

Perhaps in an echo of hearings to come, Waxman responded: “I think you make an excellent point. I think we need to hear from the Defense Department. “