Money as a Weapon

INTERACTIVE

CERP Spending in Iraq

Search individual projects from the Commander's Emergency Response Program recorded in the Iraq Reconstruction Management System.

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So far, nearly $50 million in condolence payments has gone to the families of killed and injured Iraqis. Last year, the United States paid $1.6 million to families of those injured in what documents call a "horrific" improvised explosive device attack in central Baghdad, documents show.

Property damage has brought smaller payments. Col. Joe Rice, an Army reservist who has served three tours in Iraq, said soldiers in his unit peeled off $50 for a ruined door of an Iraqi's house. A couch or window was worth $25. Residents "were amazed we would help them," Rice said of his most recent tour, in Baghdad. "They just weren't used to someone taking care of them, helping them."

The tactic was similar to the way Hezbollah operates in Lebanon, said Koenig, who was an adviser to one of the Marine generals in charge of large-dollar CERP projects. "Hezbollah shows up after an Israeli airstrike with cash and fixes the neighborhood," he said. Iraqi insurgents, including al-Qaeda in Iraq, "never did that," he said. "They would come in and take charge of an area, but they didn't come back and say, 'We're going to help you out here.' "

Paying outright bribes is prohibited. But in Iraq, nepotism is a common practice and can help keep projects and troops safe.

Now-retired Army Lt. Col. John A. Nagl, who served in Khalidiyah in 2004, hired a local contractor for $20,000 to build a new barracks for the Iraqi national guard. But the project was repeatedly bombed, and workers couldn't finish it. Nagl said he told an Iraqi commander of his problem.

"He tells me: 'It so happens my brother is a contractor. You hire him; my soldiers will provide the security,' " Nagl said. He hired the commander's brother, Iraqis guarded the site while it was under construction, and it was finished. "I didn't have to have as many Americans out there," said Nagl, who later went on to write the foreward to the Army's new counterinsurgency manual. "The barracks got built. You're using cash in a way that kept American soldiers alive."

But when CERP funds have been used for far bigger projects, the results can be problematic. Management and accountability of large contracts can be difficult for military personnel who are fighting a war, said James "Spike" Stephenson, a former U.S. Agency for International Development director in Iraq. "Their major job became not just fighting the war but becoming the de facto reconstruction guys. But they're not trained to run and sustain them. They are learning it on the battlefield."

Outside Kirkuk, in northern Iraq, an $8.3 million water treatment project completed in February with CERP funds took more than two years and was $1.7 million over budget -- and it is not far from another water treatment system that USAID paid $4.1 million to build two years ago, according to a top State Department official involved in the broader reconstruction efforts. He spoke on condition of anonymity because he did not want to undermine his relationships with his colleagues.

When auditors for the Office of the Special Inspector General for Iraq Reconstruction examined 173 projects of all sizes from 2006, they could find only 122 files. Many of the rest were missing key documents. In May, Pentagon auditors said they couldn't fully account for how $135 million of CERP money, mostly funds funneled through South Korean and Polish coalition forces, was used. It often takes months to enter CERP projects in the database that is supposed to track them. That database is missing key elements for one-sixth of the money, such as the year, location or the amount actually spent.

"You have this question of what is the money really trying to achieve," said Ginger Cruz, principal deputy inspector general for Iraq reconstruction. "When it was a little money, that was one thing. Now that we're talking $3.5 billion with another pot of $1 billion coming down the road, that's a lot of money."

Creating Jobs

With unemployment hovering at 60 percent in some areas of Iraq, CERP's highest priority is creating local jobs.

Along the highway leading to Baghdad International Airport, long considered one of the most dangerous roads in the country because of the constant threat of improvised explosive devices, workers were hired to paint a $900,000 mural depicting the progression of Iraq from fishing villages with seagulls and boats to oil refineries. Millions more were spent to plant and cultivate date palms, a crop decimated over the past two decades. Installing awnings worth $687,000 in a market in Baghdad was justified partly because, documents say, "adding the awnings will create 35 jobs for 3 months."