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Official Report Faults Iraq Reconstruction
Draft Cites Massive Waste, Bad Planning

By Karen DeYoung
Washington Post Staff Writer
Monday, December 15, 2008

As the United States prepares for a major expansion of its development and reconstruction programs in Afghanistan and Pakistan, government investigators have described the U.S. reconstruction effort in Iraq as a failure that wasted billions.

Planning and execution of what has become "the largest foreign relief and reconstruction for any one country in U.S. history," with costs totaling $50 billion and counting, lacked an overall strategy and clear lines of authority and cooperation among U.S. government departments, according to a near-final draft of a 508-page official history of the reconstruction.

Answering whether the program met its goals to rebuild Iraq and modernize its infrastructure, the report concludes, "Generally no."

Nonmilitary federal staffing for the program was woefully inadequate in numbers and expertise, the report said. Oversight and central control, in Baghdad and in Washington, were deemed nearly nonexistent. Massive infrastructure projects were undertaken -- usually by private contractors with cost-plus contracts -- with little coordination or input from Iraqis and were sometimes abandoned because of bad planning or security concerns. The cost of some major projects increased by more than 50 percent as the growing insurgency prompted the hiring of security contractors to protect private reconstruction workers, the report said.

Questioning whether contractors can be a "capable surrogate for the government on the scale that was attempted in Iraq," the report concludes that the federal government "is unprepared to manage significant outsourcing." Although "some of the initiatives succeeded," it says, "many did not."

Basic services such as electricity and water, as well as oil production, remain at prewar levels or, in some cases, below.

The report documents partisan political interference in U.S. reconstruction appropriations, haphazard distribution of tens of millions of dollars in unaccounted-for cash to contractors, and projects that were paid for several times over but were left incomplete or were poorly executed.

In one example, the U.S. Embassy in Baghdad designated the construction of a wastewater treatment plant in Fallujah, where U.S. Marines were battling Sunni insurgents, as a "key national reconciliation issue." The plant, designed to serve 180,000 people, was budgeted at $32.5 million and was to be completed within 18 months. The plant finally opened more than three years later, required 45 additional contracts, cost nearly $100 million and served one-third of the targeted population.

The report assesses the development of Iraq's security services -- some of which have been funded out of money for the reconstruction -- as generally successful.

Much of the information in the report, titled "Hard Lessons: The Iraq Reconstruction Experience," has appeared in audits and investigations published over the past four years by the congressionally mandated Office of the Special Inspector General for Iraq Reconstruction, or SIGIR. The new compilation, to be published by SIGIR in February, coalesces the reports and draws broad conclusions about what went wrong.

SIGIR has documented some cases of fraud over the years. But the new report describes those instances as minor compared with the massive sums lost to waste, incompetence, and bad planning and supervision. The draft was first reported yesterday by the New York Times and ProPublica, an online investigative journalism project, both of which posted the document on their Web sites.

"Of the many lessons to be drawn from Iraq reconstruction," the report says, "the most compelling speak to the need to develop an agreed-on doctrine and structure for contingency relief and reconstruction operations that can guide the use of military and economic power so that the U.S. is ready when it next must -- as inevitably will occur -- intervene in a failed or failing state or in the aftermath of an armed conflict between states."

As a senator, President-elect Barack Obama (D-Ill.) co-sponsored a bill introduced by Sen. Joseph R. Biden Jr. (D-Del.), now the vice president-elect, to provide $7.5 billion in development money to Pakistan over the next five years. The bill was unanimously approved by the Senate Foreign Relations Committee but did not make it to the floor by the end of this year's session.

Development in war-torn Afghanistan -- where violence has increased sharply this year and where there is little infrastructure, no oil revenue, widespread government corruption, and rampant drug production and trafficking -- is seen by many as even more problematic than in Iraq.

The United States has spent $32 billion on Afghan reconstruction since 2001, and the international community has contributed $25.3 billion. Obama has pledged more resources for the effort, along with an expanded military presence.

Although Congress established an Office of the Special Inspector General for Afghanistan Reconstruction, or SIGAR, in January, it has barely gotten off the ground. Its leader, retired Marine Maj. Gen. Arnold Fields, was not sworn in until late July, and $20 million in initially authorized funding was never disbursed. A supplemental war appropriation in the summer allotted $2 million for SIGAR; Congress subsequently made an additional $5 million available.

In his first quarterly report to Congress in October, Fields said that "due to current funding restraints, SIGAR does not expect to reach full operational capacity until the 4th quarter of fiscal year 2009." Of an anticipated 90 employees, he said, 21 have been hired.

In a clear evocation of the problems SIGIR found in Iraq, Fields noted that "the evolving political and security dynamics of the Afghan reconstruction agenda has challenged the implementation of a coherent and enduring strategy.

"As a result," Fields said, "clear lines of command and control appear to be lacking, setting the conditions for diffused responsibility and accountability."

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