U.S. Faces Iraq 'Reconstruction Gap'

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By Griff Witte
Washington Post Staff Writer
Wednesday, October 19, 2005

The federal official overseeing spending to rebuild Iraq told Congress yesterday that the U.S. government faces a multibillion-dollar "reconstruction gap" that separates its plans from what it can afford.

Stuart W. Bowen Jr., special inspector general for Iraq reconstruction, said administration promises to use $18 billion Congress allocated to rebuild water, electricity, health and oil networks to prewar levels or better are running into cold reality. "We are going to provide something less than that," he said.

Investigators with Bowen's office reported over the summer that various rebuilding programs had been scaled back or scrapped, mainly because of increased security costs. A hearing yesterday by a House Government Reform subcommittee, however, was the most comprehensive look at the issue.

It included testimony from six internal government monitors of U.S. spending in Iraq, all of whom cited some progress but said significant problems remain. Chief among them is security. The State Department's inspector general, Howard J. Krongard, said that in some extreme cases, 80 percent of a project's cost is spent on security. The hearing came with uncertainty over who will be watching over future spending in Iraq. Bowen's office could disappear as soon as next year, though pending legislation would extend its life. Krongard said he has not yet received funding for 2006 to provide oversight in Iraq. And the Defense Department's acting inspector general, Thomas F. Gimble, revealed that his office does not have a single staff member in Iraq.

Citing budgetary pressure, Gimble said his office does all its Iraq-related work in the United States.

Members of Congress from both parties criticized that decision, expressing concern that $142 billion in military spending in Iraq is not getting the same scrutiny as reconstruction funds.

"To have no one on the ground is just inexcusable, sir," Rep. Stephen Lynch (D-Mass.) told Gimble.

Rep. Christopher Shays (R-Conn.), the subcommittee's chairman, said that while the recent constitutional referendum in Iraq was an auspicious sign on the political front, problems with the reconstruction and its oversight are damaging prospects for success.

"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," he said.

Rep. Henry A. Waxman (D-Calif.), went further, saying that efforts to rebuild Iraq are "failing." He blamed "the administration's flawed contracting strategy. Instead of maximizing competition, the administration opted to award no-bid, cost-plus contracts."

Bowen said his office is looking at the Bush administration's use of big, vaguely defined rebuilding contracts after the 2003 invasion and has already referred several cases of potential fraud to prosecutors.

Pentagon spokesman Bryan Whitman said in a written statement that the administration always knew that "reconstructing Iraq's infrastructure would require enormous resources beyond what the Congress appropriated -- after 30 years of neglect, decay and corruption."

Whitman said the United States is working to ensure it is "not starting any project without finishing it."

Bowen said the government has improved some aspects of the reconstruction he has criticized before. For instance, he said officials have made progress in developing systems for training Iraqis to take over the operation of water, electricity and health care facilities once they are built.

Reconstruction efforts in Afghanistan also are under scrutiny. Gimble's office released a report last week that criticized the Pentagon for failing to get competitive bids for several reconstruction contracts in Afghanistan. The report suggested that at least one of the contracts, a deal with Arlington-based Contrack International Inc. worth up to $300 million, should be canceled because of the lack of competition.

Contrack's president, Karim Camel-Toueg, told Bloomberg News that the contract has been replaced.


© 2005 The Washington Post Company

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