Iraqi security safeguards take money from projects

The United States has completed nearly 2,000 reconstruction projects in Iraq, but security demands are draining so much money that some will be discarded unless new funds are found, according to a report to Congress this week.

Stuart W. Bowen Jr., the special inspector general for Iraq, calls the shortfall a "reconstruction gap." He said of the $30 billion appropriated by Congress for rebuilding, more than 25 percent has been spent on security safeguards against an insurgency that regularly kidnaps and kills contractors.

Mr. Bowen, a former aide to President Bush, has dispatched 10 investigators across Iraq to monitor contract awards and construction sites. He concludes that workmanship is improving, but warns of fraud and kickbacks involving Iraqi oil money that could result in the U.S. Justice Department filing charges against U.S. citizens.

"Inspectors have spent the last four months fanning out across Iraq, examining the quality of the projects being built with taxpayer dollars," Mr. Bowen said in an introductory letter to his latest quarterly report. "They found that many of the projects demonstrated quality workmanship. In one instance, the inspectors suggested an engineering modification at an oil site that will result in millions of dollars in additional revenue for Iraq."

The report includes an impressive list of completed projects -- 762 schools, 12 hospitals, 68 village roads, 66 railroad stations, 23 postal facilities and nine primary health centers.

But hundreds of projects are in jeopardy because of cost overruns and persistent insurgent attacks.

"When the U.S.-led portion of Iraq's reconstruction concludes, many planned projects will remain on the drawing board," Mr. Bowen said.

All but 7 percent of the $30 billion has been committed to specific projects.

Mr. Bowen came under attack by a shoulder-fired missile as his aircraft flew over Iraq in December 2004.

His report provides anecdotes from individual construction sites where Iraqi skilled workers are threatened and killed by militants.

Mr. Bowen raised the possibility of significant criminal cases yet to emerge. He listed 31 ongoing criminal investigations into theft, bribery, kickbacks and procurement fraud.

A spokesman said most of the cases involve Iraqi money -- not U.S. taxpayer money -- turned over by the United Nations to Iraq.

"There is no real indication of fraud" with the U.S. money, the spokesman said.

In an audit released in January, Mr. Bowen said about $9 billion of the $30 billion Iraqi fund cannot be accounted for. Iraqi auditors are trying to trace the funds, and criminal charges are expected.

The fund originally was administered by the Pentagon's Coalition Provisional Authority (CPA), which went out of business in June 2004. The CPA disbursed most proceeds in cash, with little oversight.

The Iraqi government loses $2 billion a year alone through the theft of gasoline and diesel fuel.

Mr. Bowen is relying on a special investigative task force, with the acronym SPITFIRE, to combat fraud.