US audit finds 'spectacular' waste of funds in Iraq

"That is what The Australian says an audit by the the US Special Inspector-General for Iraq Reconstruction of the former Coalition Provisional Authority office in Hilla, Iraq, has uncovered. The newspaper says the report details bundles of money stashed in filing cabinets, a US soldier who gambled away thousands of dollars, and stacks of newly minted notes distributed without receipts.

The findings come almost a year after Stuart Bowen, the Inspector-General, found that more than $9 billion of Iraq's oil revenues, which was disbursed in 2004 by the then US-led CPA, could not be accounted for.

The audit, released on Wednesday ... describes a country in the months after the overthrow of Saddam Hussein awash with US dollars and a "wild west" atmosphere where even multi-million-dollar contracts were paid for in cash ...
The huge sums in cash were paid out with little or no supervision and often without any paperwork, the reconstruction spending audit found. The report found problems with almost 2000 contracts worth $US88.1 million.

The New York Times reports that the new audit found problems "in an area that includes half the land mass in Iraq, with new findings in the southern and central provinces of Anbar, Karbala, Najaf, Wasit, Babil, and Qadisiya."

Some of the misuse details in the report: Agents from the inspector general's office found the living and working quarters of American officials "awash in stacks of $100 bills" known as bricks. In another case, a soldier gambled away $40,000 of reconstruction money when he accompanied the Iraq boxing team to the Philippines. One contractor received more than $100,000 to completely refurbish an Olympic pool but only polished the pumps. In a more tragic case, three people plunged to their deaths in a Hilla hospital elevator that had been rebuilt and improperly certified as safe.
"What's sad about it is that, considering the destruction in the country, with looting and so on, we needed every dollar for reconstruction," said Wayne White, a former State Department official whose responsibilities included Iraq from 2003 to 2005, and who is now at the Middle East Institute, a research organization. Instead, Mr. White said, large amounts of that money may have been wasted or stolen, with strong indications that the chaos in Hilla might have been repeated at other provisional authority outposts.
Others had a similar reaction. "It does not surprise me at all," said a Defense Department official who worked in Hilla and other parts of the country, who spoke anonymously because he said he feared retribution from the Bush administration. He predicted that similar problems would turn up in the major southern city of Basra and elsewhere in the dangerous desert wasteland of Anbar province. "It's a disaster," the official said of problems with contracting in Anbar."
CSMonitor