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US Returns Reconstruction Money to Iraq


In March 2003, six years ago, the United States invaded Iraq to oust Iraqi leader Saddam Hussein. As Iraq has become more stable, the U.S. has been focusing more on reconstruction.

But an audit of American funds for reconstruction found millions of dollars lost to waste, fraud and abuse. Now the U.S. has returned $13 million to Iraq's government that was improperly held by the American army.

With increased security in Iraq, the United States has been focusing on reconstruction, ranging from clean water to building projects. But according to Stuart Bowen, the top U.S. investigator for Iraq reconstruction, many projects have been tainted by waste and compromised by poorly designed facilities.

"Millions wasted at the Baghdad police college because of extremely shoddy construction," Bowen said.

Bowen says the United States has returned $13 million of reconstruction money to Iraq's government. It was supposed to be used to improve Iraq's electrical infrastructure. And, if not used, it should have been returned to Iraq.

Instead, says Bowen, the U.S. Army Corps of Engineers found a way to hide the money.

"The money had been ferreted away into nameless accounts, if you will, that had no purpose, that weren't aimed at a project or a program," he said.

Bowen says the biggest waste has been on large reconstruction projects, including some that have not been finished.

Of $21 billion in the Iraq Relief and Reconstruction Fund, Bowen says a substantial amount has been lost.

"The actual reconstruction money, I estimate 15 to 20 percent has been wasted. Roughly $3-$4 billion," he said.

He also says money has been stolen by Iraqi officials. Iraqi president Nouri al-Maliki is promising a crack down.

"There continues to be huge problems at the Ministry of Oil, Ministry of Trade and Ministry of Defense," Bowen said. "But there's corruption across the board."

Bowen says he expects tens of millions more dollars in improperly held reconstruction funds will be discovered in Iraq.

"Whistleblowers are more willing to come forth at this stage, particularly since it's safer in Iraq," he said. "By the way, I think that there was a deterrence in the dangerous atmosphere to those coming forward."

He says $32 billion have been appropriated for reconstruction in Afghanistan. And he says the same problems will happen unless the money is spent more wisely, like on smaller projects.

"It's a very poor country whose population is diffusely dispersed across a very rugged countryside, so it's more difficult to manage," Bowen said. "And that means dealing with warlords directly and dealing at the tribal level."

But he says unless there is stricter oversight, both in Iraq and Afghanistan, widespread abuse will continue.

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