- The Washington Times - Wednesday, March 12, 2008


Iraq isn’t spending much of its own money, despite soaring oil revenue that is pushing the country toward a massive budget surplus, auditors told Congress yesterday.

The expected surplus comes as the U.S. continues to invest billions of dollars in rebuilding Iraq and faces a financial squeeze domestically because of record oil prices.

“The Iraqis have a budget surplus,” said U.S. Comptroller General David Walker. “We have a huge budget deficit. … One of the questions is who should be paying.”

Mr. Walker and the other auditors did not give a figure for the surplus. U.S. officials contend that Iraq’s lack of spending is due primarily to Baghdad’s inability to determine where its money is needed most and how to allocate it efficiently. Two senators have called for an investigation into the matter.

Democrats say the assessment is proof that the Iraq war is a waste of time and money. The U.S. has spent more than $45 billion on rebuilding Iraq, and while officials in Iraq contend that much progress is being made, many projects remain unfinished and U.S. troops are still needed to provide security.

“They ought to be able to use some of their oil to pay for their own costs and not keep sending the bill to the United States,” said Sen. Patrick J. Leahy, Vermont Democrat.

In recent months, Iraq experienced its highest oil production and export levels since the war began five years ago, said Stuart Bowen, special inspector general for Iraq reconstruction.

That spike in revenue, combined with the highest oil prices in history, “coalesce into an enormous revenue windfall for the Iraqi government,” Mr. Bowen told the Senate Appropriations Committee.

Whereas Iraqi officials estimated $35 billion in oil revenue last fall, Mr. Bowen said the final number is likely to be closer to $60 billion.

“That certainly gives them resources to carry forward with an extensive reconstruction plan,” Mr. Bowen said.

But according to other U.S. officials, a major problem is that Iraq does not have the capacity to allocate the money without it being wasted or pocketed by corrupt officials.

“I think they are beginning to do more,” particularly in improving its military and buying new weapon systems, said Claude Kicklighter, the Pentagon’s inspector general. “And I think that’s certainly the trend that we should be following.”

The Government Accountability Office estimates that the U.S. has designated $6 billion to rebuild Iraq’s energy sector and $300 million to develop Iraq’s government ministries, but the GAO contends that the U.S. doesn’t have a strategic plan on how to accomplish either goal.

The State Department told investigators it thinks the Iraqis should be responsible for devising such a plan. The GAO disagreed.

“In our view, it’s a shared responsibility. U.S. taxpayer money is involved,” Mr. Walker said.

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