- The Washington Times - Sunday, October 30, 2005

Anti-corruption

summit urged

REUTERS NEWS AGENCY

Corruption continues to cost Iraq billions of dollars each year, and Washington and Baghdad should be doing far more to stop it, the top U.S. auditor for Iraq’s reconstruction said in a report released yesterday.

Stuart Bowen, special inspector-general for Iraq reconstruction, said U.S. efforts to help Iraq build strong anti-corruption institutions were urgently needed and called for an American-Iraqi summit to battle a legacy of corruption.

“Creating an effective anti-corruption structure within Iraq’s government is essential to the long-term success of Iraq’s fledgling democracy,” Mr. Bowen wrote in his seventh quarterly report to Congress.

It was released days after the United Nations concluded that 2,200 companies including DaimlerChrysler, Siemens and Volvo made illicit payments totaling $1.8 billion to Saddam Hussein’s government under the U.N. oil-for-food program.

Mr. Bowen’s office, which has 20 auditors and 10 investigators in Iraq plus staffers in the United States, has made significant progress on cases charging fraud, bribery and kickbacks involving U.S. citizens — government officials and contractors — in Iraq, he said.

The report said investigators had gathered “an enormous amount of evidence” in these investigations but gave no details on any prospective indictments.

Mr. Bowen said his office, created by Congress in November 2003 to oversee the Iraq Reconstruction and Relief Fund, recently transferred $2 million to the Justice Department to fund prosecution efforts, and four prosecutors were working full time on Iraq reconstruction cases.

He said it was crucial for the United States to strengthen Iraq’s new domestic anti-corruption agencies, noting that Iraq lost more than $2 billion each year in stolen gasoline and diesel fuel supplies.

The report said Iraq’s Bureau of Supreme Audit charged that up to $1.27 billion from about 90 contracts was lost from June 2004 to February because deals were given to “favored suppliers” and cash was given to third-party firms to work out contracts.

On Oct. 10, Iraqi authorities issued warrants for the arrests of five former ministers and 22 former Defense Ministry officials on criminal corruption charges, it said.

Overall, the report said, the United States had made steady progress in its $30 billion drive to rebuild Iraq, billed as the biggest U.S. foreign aid operation since the Marshall Plan helped rebuild Europe after World War II.

Of the 2,784 projects started, 1,887 were completed and 897 were still under construction, it said.

But it noted that oil production remained low, terrorist attacks on Iraqi pipelines continued to disrupt oil exports, fuel shortages were common, and the electricity supply remained limited for Iraq’s citizens.

In July, a report by Congress’ investigative arm, the Government Accountability Office, said that as of May, power generation in Iraq was at a lower level than before the U.S. invasion of Iraq in March 2003.

Iraq’s oil output, which U.S. officials initially said would help pay for rebuilding projects, also had dropped in the past two years, said the GAO’s report on Iraq reconstruction.

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