U.S. Is Hit on Iraq, Afghan Outlays


WASHINGTON—After spending $150 billion on controversial development projects in Iraq and Afghanistan, the U.S. has made minimal progress in ensuring its money won’t be squandered in future efforts, a final audit of wartime contracting procedures found.

The report warns that the government’s failure to enact substantive safeguards poses a “strategic national-security weakness” for the U.S. The 150-page report, by the special inspector general for Iraq reconstruction, is being released on Wednesday. The Wall Street Journal reviewed a copy.

The report refers to findings over the past decade of misspent money, corruption and contracting abuses, and serves as a reminder that Washington has pursued only modest changes in oversight of its increasing reliance on private contractors in overseas war zones.

The last U.S. troops left Iraq in 2011. As the war in Afghanistan winds down, advocates are pushing for changes to prevent the misuse of money spent on efforts to help transform volatile nations into stable countries.

Stuart Bowen, who served as the special inspector general, said incremental changes are likely to fall short unless the government creates a new umbrella office to coordinate future redevelopment programs.

“No one wants to do a 10-year stability and reconstruction operation again,” he said in an interview. “The remedy to avoid such challenges is to develop interagency capacity that ensures unity of command and unity of effort.”

His proposal has been greeted with resistance from administration officials who say new safeguards negate the need for a new bureaucratic operation.

Given increasing budgetary constraints and a decreasing appetite for major military operations, Mr. Bowen’s push for creation of the new body faces an uphill battle.

“With the improvements State has made based on the findings and recommendations of all our oversight entities, we believe that State and USAID, along with other U.S. government agencies, can successfully deal with future stabilization and reconstruction efforts,” one State Department official said.

Mr. Bowen’s office will end its operations in September. The office produced 220 audits and 170 inspections that led to prosecutions resulting in 82 convictions.

Investigators found instances in which military officials accepted bribes from contractors, major construction projects had fallen short of expectations and government disarray hampered progress in Iraq.

For the final report, Mr. Bowen interviewed dozens of American and Iraqi officials, who generally concluded that America’s $60 billion reconstruction program in Iraq had fallen short of expectations. He said at least $8 billion was lost to waste, fraud and abuse.

The audit report is the latest in a series of highly critical examinations of American operations in Iraq and Afghanistan.

In 2011, a special Commission on Wartime Contracting concluded that the U.S. had wasted or misspent $34 billion in Iraq and Afghanistan.

Separately, military and congressional researchers have concluded in recent years that U.S. funding for development programs in Afghanistan was being diverted to fund anti-American insurgents. And the U.S. government has sued contractors for failures including developing a power plant in Kabul and providing security guards in Iraq.

The administration and Congress have taken modest steps to address concerns.

This year, President Barack Obama signed the most substantial revisions yet approved by Congress. Pushed by Sen. Claire McCaskill (D-Mo.), the changes strengthen oversight and require government agencies to develop long-term plans to prevent major projects from failing when U.S. funding dries up.

Sen. McCaskill said more needs to be done, including efforts to prevent U.S. development money from being diverted to insurgents.

Beyond the targeted overhauls, critics like Sen. McCaskill question whether U.S. military operations benefit from spending billions of dollars on major infrastructure projects that often fail when they are turned over to local officials.

“If we are going to spend billions and billions of dollars on infrastructure in places like Iraq and Afghanistan—especially if we can’t get this country to invest a single dime on infrastructure in the United States—we have an obligation to show the American people that it works,” Ms. McCaskill said. “And I don’t think that it does.”

Courtesy:  The Wall Street Journal