Billions For Iraq Reconstruction Lost To Fraud

As the end of the war in Iraq approaches its first anniversary, most Americans may not realize that billions of their taxpayer dollars are still being spent on Iraq “reconstruction” projects that are rife with waste, fraud and abuse.

In fact, the government has lost track of a large portion of the money and a special watchdog assigned to keep track of the never-ending scandal, the Special Inspector General for Iraq Reconstruction (SIGIR), has published a series of scathing reports documenting the corruption over the years.

The SIGIR’s latest audit, made public this month, reveals that at least $6 to $8 billion, earmarked for Iraq reconstruction, has been lost to fraud and waste. In all, Congress appropriated a whopping $51.4 billion to help the country recover from the war by, among other things, training local police, building schools, hospitals and transportation systems, but much of the money has literally vanished.

The funds were allocated to the Department of Defense (DOD), the State Department and the U.S. Agency for International Development (USAID). Tens of billions of dollars have been spent so far and there seems to be no end in sight to the rampant abuse of taxpayer money. There have been lucrative contracts that never got finished, weapons and sophisticated communication equipment that can’t be accounted for and an unused police housing camp with an Olympic-sized pool and lavish trailers.

Last summer the Pentagon admitted that it lost 6.6 billion in cash that had been flown into Iraq in turboprop military cargo planes for post-invasion reconstruction! The money was bundled in chunks of $100 bills with each aircraft carrying about $2.4 billion. In all 21 flights made trips, transporting a total of $12 billion in American currency. More than half vanished however, and SIGIR Stuart Bowen confirmed it was “the largest theft of funds in national history.”

Bowen’s most recent report, the final forensic audit of Iraq reconstruction funds, reiterates that that billions of American taxpayer dollars are at risk of waste and misappropriations though the precise amount lost to fraud and waste can never be known because of poor record-keeping. However, Inspector General Bowen assures that its “significant,” to the tune of billions of dollars.  

At least some of the players have been punished. As of last month, the SIGIR has helped federal prosecutors convict 71 individuals for fraudulent activities involving Iraq reconstruction funds, including bribery, inflating invoices and bid rigging. At least a dozen others have been indicted but the damage has been done and the funds will likely never be recovered. This is what happens when a bloated government program has unlimited funding and no oversight.