Auditors say $10B in aid to Iraq wasted

WASHINGTON — About $10 billion has been squandered by the U.S. government on Iraq reconstruction aid because of contractor overcharges and unsupported expenses, and federal investigators warned Thursday that significantly more taxpayer money is at risk.

The three top auditors overseeing work in Iraq told a House committee their review of $57 billion in Iraq contracts found that Defense and State department officials condoned or allowed repeated work delays, bloated expenses and payments for shoddy work or work never done.

More than one in six dollars charged by U.S. contractors were questionable or unsupported, nearly triple the amount of waste the Government Accountability Office estimated last fall.

"There is no accountability," said David Walker, who heads the auditing arm of Congress. "Organizations charged with overseeing contracts are not held accountable. Contractors are not held accountable. The individuals responsible are not held accountable.

"People should be rewarded when they do a good job. But when things don't go right, there have to be consequences."

Also testifying Thursday were Stuart Bowen, the special inspector general for Iraq reconstruction, and William Reed, director of the Defense Contract Audit Agency.

The appearance before the House Oversight and Government Reform Committee came as Congress prepares for a showdown with President Bush next month over his budget request of nearly $100 billion for the wars in Iraq and Afghanistan.

So far, the Bush administration has spent more than $350 billion on the Iraq war and reconstruction effort.

The Army, which handles most of the Iraq contracting, said Thursday it had not reviewed the latest contract figures.

Senate Democrats said recently cited cases of waste were "outrageous rip-offs of the American taxpayer" and introduced legislation Thursday to stiffen punishment for war profiteers and cut down on cronyism in contracting.

The investigators urged the Pentagon to reconsider its growing reliance on outside contractors in wars and reconstruction efforts.

Of the $10 billion in overpriced contracts or undocumented costs, more than $2.7 billion was charged by Halliburton, the oil-field services company once headed by Vice President Dick Cheney.

Rep. Tom Davis, R-Va., the top Republican on the panel, pointed to continuing "systemic" problems in Iraq contracting.

"This much is clear: Poor security, an arcane, ill-suited management structure, and frequent management changes have produced a succession of troubled acquisitions," Davis said.

Noting that auditors still have $300 billion of Iraq spending to review, committee Chairman Henry Waxman, D-Calif., said the total amount of waste, fraud and abuse "could be astronomical."