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U.S. Plans to Divert Iraq Money

Attacks Prompt Request to Move Reconstruction Funds to Security Forces

By Jonathan Weisman
Washington Post Staff Writer
Wednesday, September 15, 2004; Page A22

The Bush administration asked Congress on Tuesday for permission to transfer nearly $3.5 billion from Iraqi water, sewer and electricity projects to pressing security, economic and electoral programs, acknowledging that increasing violence has forced a sharp shift in its rebuilding effort.

Including previous reallocations, the administration hopes to redirect more than 20 percent of $18.4 billion in reconstruction funds to cope with an escalating insurgency and the glacial pace of rebuilding. With two weeks left in the fiscal year, and 11 months after Congress approved the money, only $1.1 billion of it has been spent, because of attacks, contracting problems and other unforeseen issues, according to figures released by the State Department.

Marc Grossman, the U.S. undersecretary of state for political affairs, concluded that "without a significant reallocation of resources for the security and law enforcement sector, the short-term stability of Iraq would be compromised and the longer-term prospects of a free and democratic Iraq undermined."

The redirected money would be used for, among other things, 82,000 more Iraqi security personnel, including an increase of about 65 percent in police forces and a near-doubling of the number of border agents.

The shift of funds "is a de facto recognition that [the occupation authority's] ambitious plans to restructure Iraq's entire economy have failed," said Anthony H. Cordesman, a security analyst at the nonpartisan Center for Strategic and International Studies, "and that . . . efforts to plan the long-term structure of Iraq's economic development have foundered in the face of insurgent attacks, theft and looting, [and] bad planning."

Even administration allies said the State Department has been slow coming to terms with a security environment radically different from what was envisioned when the reconstruction plans were drafted last fall.

In October, President Bush fought to preserve ambitious plans to repair Iraq's electrical and water systems, build hospitals and prisons, and construct roads, bridges, rail lines and ports.

About $7.1 billion has since been directed to contractors, but little of it has hit the streets. Of $4.2 billion designated for water and sanitation, $16 million has been spent, according to State Department documents sent to Congress. Of $786 million earmarked for health, $2 million has been spent. Only $7 million has been used from the $367 million designated for roads and bridges. Just $43 million of $1 billion designated has been spent on justice, public safety and civil society programs.

"I don't think anyone can deny we have not been as successful as we would have liked," said Rep. Jim Kolbe (R-Ariz), chairman of the House Appropriations Committee's foreign operations subcommittee, which has jurisdiction over the funds.

"Fewer people will get potable water. Fewer people will get the electricity they need in their homes or their businesses," Kolbe said. "But that's just a recognition of the reality that unless you have the security you need, you can't have reconstruction."

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