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U.S. Probe Says Iraq Reconstruction Effort Marred By Vast Waste

Iraqis work on a reconstruction project in Baghdad in August.
Iraqis work on a reconstruction project in Baghdad in August.
U.S. government investigators have compiled a comprehensive report on Washington's reconstruction efforts in Iraq. In preliminary reports and congressional testimony, there have been previews of the conclusions of the Office of the Special Inspector General for Iraq Reconstruction, which are damning.

The final document is said to conclude that the effort not only didn't restore Iraq to normality, but also wasted billions of dollars in the process.

To put the report into perspective, RFE/RL correspondent Andrew F. Tully spoke with Anthony Cordesman, a former Pentagon and State Department intelligence analyst who now specializes in Middle East security issues at the Center for Strategic and International Studies, a Washington policy research center.

Anthony Cordesman
I understand that this report was prepared by the U.S. government itself, but its criticism of the way the reconstruction effort was carried out seems scathing, and I'm tempted to ask whether it's fair criticism or not.

Anthony Cordesman: The report is not some sudden discovery. There have been very detailed quarterly reports which provide the evidence for several years. There are very few areas in the work of the special inspector-general [Stuart Bown] which, at this point, are controversial. And many of these same points have been made by the [U.S. Government] Accountability Office and in separate testimony to Congress. The fact is that we had an immense amount of money go into Iraq that was supposed to provide stability, reconstruction, and help defeat the insurgency. And a great deal of that money was wasted or was simply consumed in corruption, or by contractors which failed to deliver meaningful performance.

RFE/RL: The report refers repeatedly to a lack of oversight for how the money was spent. Has it been historically common for the U.S. government to skimp on oversight this way?

Cordesman: The answer is no, but what is not common is taking on trying to rebuild a failed state in the middle of a war. We didn't have the instruments to deal with this; we didn't have the experience. The [U.S. Agency for International Development], which used to be a separate agency, was cut way back, folded into the State Department, was far too small to take on the job, effectively had to turn over a good part of the actual management to the U.S. Army and the [Army] Corps of Engineers, neither of which was organized to try to audit, effectively building Iraq in the middle of a war zone.

People grossly underestimated the amount of money that was going to have to be spent. They didn't provide the staffs that were necessary. They didn't bring accounting tools or methods into the aid process. In fact, they poured the aid out to meet urgent war-fighting needs. So what we have is a unique case, although in many ways you see the same problems being repeated or even worse in Afghanistan.

RFE/RL: Several times over the years, in discussing the U.S. approach to the Iraq war, you've referred to what you called an "ideological" approach to the war. I took that to mean that you believe the Bush administration waged the war believing it would be easy. Is that miscalculation at least partly responsible that what we're seeing in the inspector-general's report?

Cordesman: I think part of it was the belief that, really, this would be almost a turnkey operation. We'd get rid of Saddam Hussein, there'd be a wealthy oil state, people would welcome the overthrow of the dictator, there'd be a government and military forces that could provide security, and the United States could rapidly leave. None of these things turned out to be true.

Ambassador [J. Paul] Bremer was confronted with trying to improvise a plan to rebuild Iraq, where there'd been almost no plan whatsoever before the fall of Saddam Hussein. A lot of people, I think, did a great deal of good in trying to rush forward and find ways to deal with the problems that were exposed after the invasion. But in the process, were they qualified to convert a state economy controlled by a dictatorship into anything approaching a modern economy? The answer is no.

Stuart Bowen, special inspector-general for Iraqi reconstruction
But the U.S. government had many well-run, well-equipped companies to turn to as subcontractors, didn't it?

Cordesman: But U.S. contractors in general had no regional or area experience of this kind either, so they turned it over, in turn, to subcontractors, many of them local, most of them unqualified. Over time, this process, which began with the assumption that there wouldn't be an insurgency, found a whole new set of problems. And people were very reluctant to admit the scale of the insurgency, what was happening in terms of resistance in Iraq, and as a result, nobody really provided initially the proper security for the aid effort, much less accountability. As a result, people running eight contracts were often pushed into executing the programs only where they could be safe, or having used vast amounts of money simply to provide protection.

RFE/RL: Did the Bush administration pick the wrong contractors, or are the right contractors simply not available in the United States?

Cordesman: Really from the beginning to the present, we've been constantly trying to catch up with the fact that we simply don't have the levels of skills and people that can run this large an effort effectively. This doesn't mean there haven't been some extraordinary people serving in Iraq. There have. Some have managed to accomplish almost an incredible amount for what they were given.

But I think it's very clear from the special inspector-general's report, from the reports from the General Accountability Office, from virtually everyone who's examined this, that somewhere between 50 and 75 percent of the money -- and we're talking [about] tens of billions of dollars -- was not used effectively, was wasted, or was simply stolen.

RFE/RL: You've referred a couple of times to trying to reconstruct Iraq during a war, or in a war zone, or to the insurgency. How much of the financial loss can we attribute to operating in such a difficult climate?

Cordesman: [Nothing about] being in a war zone really excuses a lack of accountability, of management of the money, of planning for the fact you're in a war zone, of dealing realistically with the security problems, [of] the lack of any meaningful measures of effectiveness. If you look at any of the documents issued by the [U.S. Army] Corps of Engineers or [US]AID or the Department of Defense or the Department of State, you can find a great deal of detail on how the money was allocated, but you can't find any meaningful measures of effectiveness, you can't find any form of accountability.

The only way you can begin to find that is in this set of reports by the special inspector-general. And if you read those reports in detail, what you find is that very often, no matter what they did, they couldn't figure out where the money went, and there was no way to measure whether the people making claims that projects were successful had actually done what they said.

RFE/RL: President-elect Barack Obama's administration takes office in a little more than a month. Is there anything it can do to rectify the situation?

Cordesman: At this point in time, very little, because in Iraq, we are not budgeting to spend substantial aid funds from fiscal 2009 -- which began this October -- onwards. Whatever happens in Iraq is now up to the Iraqis. Now, it's very clear from the inspector-general's report that many of the aid projects that were contemplated are not going to be picked up by the Iraqis. They don't have the plans or the capability to do it.

At the same time, the Iraqis are having major problems spending their own budget, managing their own funds, developing their own project requirements, and now they confront the fact that, all of a sudden, their oil revenues may be something like a quarter next year of what they were this year, which means they'll face a major spending and budget crisis, and one they're going to have to manage, at best, with limited amounts of U.S. advice.

Can the United States at least get something out of this mess? A lesson of how to change its behavior on Iraq reconstruction?

Cordesman: If there's any lesson to be learned here that we can apply, it won't be really in Iraq as much as in Afghanistan. Now, we have established another inspector-general for Afghanistan, but the Congress didn't really fund it. And that won't be really functioning, probably, till late in 2009. But what we know is that Afghanistan has been far worse than Iraq. People estimate that about 40 percent of the aid money never really touches Afghanistan. It's consumed in overhead, in spending outside the country.

There are vast amounts of corruption not only within the Afghan structure that uses this aid, but in international bodies. And when you look at the U.S. aid section, you'll find that we don't have anything like the number of qualified civilians we need to really use that money effectively. We're relying on our military to be aid experts in the middle of having to fight an insurgency, where we have stated quite clearly that we're short three to five brigades of the troops we need, much less the people to staff aid projects.

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