Rampant corruption 'threatens' Iraqi democracy

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Corruption is permeating Iraq's government and its day-to-day life, according to a U.S. investigative report that also details how constant violence is delaying health, water and oil projects.

"Corruption threatens to undermine Iraq's democracy," said the report, released yesterday by Stuart W. Bowen, the special inspector general for Iraq reconstruction.

He also reported some good news for the Iraqi people: Production of electricity and oil climbed for the first time in more than a year above prewar levels.

Mr. Bowen said Iraq's "endemic" corruption is costing the country $4 billion a year. The Iraq Commission on Public Integrity, set up after the 2003 fall of Saddam Hussein to root out corrupt government officials, reports that it has more than 1,400 criminal cases involving $5 billion in suspected thefts.

Mr. Bowen's staff has helped the Iraqis establish several anti-corruption units, which include the commission, a criminal courts system and inspectors general for each ministry.

But the tide still seems to favor the corrupt -- a trend that began when the old U.S.-created Coalition Provisional Authority distributed huge sums of cash from Iraqi oil money to get the country going again. Billions of dollars were stolen, and some key figures, such as the former Iraqi defense minister, are wanted on arrest warrants.

Mr. Bowen said a poll of Iraqis this summer found that one-third reported paying bribes for products or services this year.

Added to the corruption is insurgent violence that targets reconstruction projects and Iraqi workers in an effort to defeat the U.S.-led coalition and the fledgling democratic government of Prime Minister Nouri al-Maliki.

"Recurring violence in Iraq continues to impede reconstruction efforts, slowing progress on projects, restricting the movement of personnel and diverting dwindling resources," the Bowen report said.

Mr. Bowen said the "lethal environment" is thwarting the provincial reconstruction teams set up by the State Department to modernize each region.

"Iraq's new unity government now faces many daunting tasks, including improving security, sustaining the infrastructure and fighting corruption," Mr. Bowen said.

"We're talking about the Defense Ministry missing over $1 billion," said James P. Mitchell, Mr. Bowen's spokesman. "It's corrupt public officials."

Congress has approved about $19 billion in direct reconstruction funds, of which about $14 billion has been spent.

Mr. Bowen also released a report on "lessons learned" regarding how the Bush administration planned for postwar Iraq and awarded reconstruction contracts since 2003.

The report detailed a litany of errors, from a lack of prewar planning for any significant reconstruction to creation of program offices on the fly to distribute billions of dollars once officials realized Iraq's infrastructure was in bad shape. The report also noted that there were only three contracting officers at the start of the effort and that administrators stayed too long with sole-source contracts, creating suspicion.

"Things are getting done," said Mr. Mitchell, but he noted: "We don't think the U.S. should have to invent these systems on the ground again."

The Defense Department originally oversaw the reconstruction effort but gave way to the State Department, which made U.S. Ambassador to Iraq Zalmay Khalilzad the rebuilding czar.