US fraud found in Iraq reconstruction

A special investigator tracking money spent by the US on reconstruction in Iraq has said he found millions of dollars worth of fraud by US officials and companies.

Last Modified: 28 Jul 2005 20:23 GMT
Bowen: Reconstruction ongoing but nowhere close to finished

A special investigator tracking money spent by the US on reconstruction in Iraq has said he found millions of dollars worth of fraud by US officials and companies.

Stuart Bowen, the special inspector-general for Iraq
reconstruction, said on Thursday that the US Justice Department was looking into fraud that he had uncovered. 

Giving details of his latest report, which is to be released
on Saturday, Bowen also told National Public Radio (NPR) that US-backed reconstruction projects in Iraq were speeding ahead. 

"The reconstruction for Iraq is peaking, 1000 projects are
completed and 1000 more are ongoing," he said. 

The US has allocated $23 billion for new infrastructure and Bowen's previous reports have already highlighted huge sums of missing money. 

He said his latest report looks at four water projects and "the
results are all over the map". 

He also told how $7 million intended for the troubled Hilla region south of Baghdad had disappeared. The money
came from the Development Fund for Iraq, money from oil sales that the US-run former Coalition Provisional Authority used for development projects. 

No accountability

"There was no accountability, no records," Bowen said. "Unfortunately there were possible fraudulent activities

Bowen said US officials and contractors were involved but would not identify them as the Justice Department was now leading an investigation into the fraud. 

The so-called "rapid response construction dollars" were intended for projects that were hurriedly started in the months
before the US handed over sovereignty to an interim Iraqi
government in June last year. 

Bowen pointed to security as the
top hindrance to reconstruction

"They were sent to Hilla to accomplish quick term projects like a police station in Kerbala or a library in Hilla. We found out that not only were the projects not completed but the money that was allocated for these projects was missing," Bowen said. 

The special auditor, who reports to the US Defence and State
departments, said when the contractors were asked "they didn't have much to say as the lack of records spoke volumes". 

The United States has promised $23 billion out of the $60
billion that the World Bank has said will be needed to build functioning infrastructure in Iraq. 

"Our mission in Iraq is to make a significant step towards
rebuilding the country, but it is not the rebuilding of Iraq - it
had been left in such a state of decay. We have made a good strong step towards bringing oil, water and electricity online," he said. 

When asked if US taxpayers were getting value for money, Bowen said security had cost more than expected and the project priorities had changed three times.

"I don't think anyone could have anticipated the level of
insurgency and the diversity of its sources. The number one drag on this entire project has been the security problem." 

"Reconstruction is moving rapidly along but we are by no means close to being finished," he said. 

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