December 7, 2005

The U.S. has allocated more than $250 billion for Iraq to date. Yesterday, Rep. John Murtha (D-PA) said that the military had told him the Pentagon would ask for another $100 billion next year. The war in Iraq is "rapidly shaping up to be the third-most expensive war in United States history," and Linda Bilmes of Harvard's Kennedy School of Government estimates that if the war lasted five more years, the total cost could reach $1.4 trillion. With all this money flowing into Iraq, one would think tracking its whereabouts would be one of the Bush administration's top priorities. But despite Bush's claims that they are working with Iraqis to "demand transparency and accountability for the money being invested in reconstruction," the truth is that spending is not being monitored effectively. A recent report by the Congressional Research Service (CRS) found that "confusing Pentagon accounting procedures, as well as bookkeeping lapses, have complicated the legislative branch's ability to track billions of dollars that have been spent on military contracts and operations." CRS said the Defense Department "has not provided an overall reckoning of these funds by mission or military operation." It is time for the Bush administration to come clean about their failure to provide proper oversight on Iraq spending. 

A HISTORY OF COST MISCALCULATIONS WITHOUT ACCOUNTABILITY: If the past is any guide, the White House is unlikely to demand accountability from top officials over spending in Iraq. Former USAID Administrator Andrew Natsios, who retired last week after more than five years in the Bush administration, claimed a month after the initial Iraq invasion that the reconstruction would cost around $1.7 billion. The United Nations and World Bank now put the estimated reconstruction costs through 2007 at $55 billion, while the Congressional Budget Office (CBO) says the total costs be fall anywhere from $50 to $100 billion. Former Deputy Secretary of Defense Paul Wolfowitz famously said that with $5ues Iraq would "0 billion to $100 billion in oil revenfinance its own reconstruction, and relatively soon."

PLACING CORRUPTION BLAME SOLELY ON IRAQIS: "Throughout Iraq, we're also seeing challenges common to young democracies," Bush said yesterday. "Corruption is a problem at both the national and local levels of the Iraqi government." Bush failed to mention that Stuart Bowen, the Special Inspector General for Iraq Reconstruction (SIGIR), has referred around a dozen cases of American corruption to federal prosecutors. A SIGIR report "also found fifty-four instances of corruption, related to no-bid contracts and billing discrepancies resulting in millions of dollars lost." The New York Times reported recently on an Iraqi engineer who "grumbled that the Americans hired contractors and handed out projects without consulting the local institutions involved." "[T]he money isn't going to the right places," he said.

NO PLAN FOR CITIES: As an example of progress in Iraq, Bush pointed to Mosul and Najaf and said the "progress of these cities is being replicated across much of Iraq -- and more of Iraq's people are seeing the real benefits that a democratic society can bring." The truth is, Bush does not have a plan to rebuild Iraq's cities, let along someone to implement it. USAID recently put out a $1 billion up for grabs for anyone with an idea for an "economic stabilization program impacting ten Strategic Cities" in Iraq. The only restriction placed on applicants is that they be "qualified sources." 

CONGRESS NEEDS TO TAKE RESPONSIBILITY FOR OVERSIGHT: Some members of Congress are demanding accountability from the administration, but much remains to be done. Rep. Stephen Lynch (D-MA) said it was "about time we adopt a real system of accountability," and he introduced a bill to require more review of reconstruction spending. Rep. Christopher Shays (R-CT) recently issued a warning about what happens when funds are misspent in Iraq: "Limited visible progress improving basic services frustrates Iraqis who wonder why a liberating coalition that conquered their nation in less than two months can't keep the lights lit after two years." Unfortunately, CRS found that "Congress has yet to receive a 'transparent accounting' of money it has already allocated to the war effort," and they urged Congress to do more ''to ensure accurate accounting in the future."