Senator Harry Reid made particular criticism of the government's former occupation administration in Iraq on Monday.

And civilian witnesses said Washington had protected an American contractor accused of fraud. They also accused the US of media censorship.

"This is a scandal," said Reid, who heads the opposition Democrats in the US Senate. "We are close to 24 months into this conflict with Iraq, and the administration still can't seem to get it right."

Reid spoke during hearings in Congress into the management of the so-called Coalition Provisional Authority's (CPA) multi-billion dollar reconstruction programme. 
  
Bags of cash

In the hearings, civilians compared operations to the Wild West, saying bags full of cash were tossed freely about.

Franklin Willis, who supervised aviation for the CPA in late 2003, accused the organisation of "poor execution" and called it "naive".
  
He said millions of dollars stored in the basement of the CPA offices were casually distributed to favoured contractors with little accounting discipline.
  
Another witness accused the government of hampering an investigation into alleged fraud by US-based Custer Battles, which had contracts worth as much as $100 million in Iraq for airport security and other jobs. 
  
Fraud accusation

Custer Battles was accused of repainting old airport equipment and billing the CPA for new equipment, among other schemes.
  
"We estimate that the government's total losses are tens of millions of dollars," said lawyer Alan Grayson, who represents former employees of the company.
  
"Yet for more than a year, the Bush administration has done nothing to recover these ill-gotten gains."
  
Censorship

Don North, a journalist hired by the CPA to create a new independent Iraqi television station, said he was scandalised by the censorship imposed on the operation.
  
Instead of covering stories of consequence to Iraqis, the station had to cover CPA publicity events, he said.
  
"It resulted in our newscasts appearing to be a laundry list of CPA activities," North, who formerly worked with leading US television networks, said, adding, "I left after four months of frustrations."