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Money Down the Drain in Iraq
When the full encyclopedia of Bush administration misfeasance in Iraq is compiled, it will have to include a lengthy section on the contracting fiascos that wasted billions of taxpayer dollars in the name of rebuilding the country. It isn’t only money that was lost. Washington’s disgraceful failure to deliver on its promises to restore electricity, water and oil distribution, and to rebuild education and health facilities, turned millions of once sympathetic Iraqis against the American presence.
Their discovery that the world’s richest, most technologically advanced country could not restore basic services to minimal prewar levels left an impression of American weakness and, worse, of indifference to the well-being of ordinary Iraqis. That further poisoned a situation already soured by White House intelligence breakdowns, military misjudgments and political blunders.
The latest contracting revelations came in a report issued Tuesday by the office of the Special Inspector General for Iraq Reconstruction. The office reviewed records covering $1.3 billion out of the $18.4 billion that Congress voted for Iraq reconstruction two years ago. Reported overhead costs ran from a low of 11 percent for several contracts awarded to Lucent to a high of 55 percent for, you guessed it, the Halliburton subsidiary, KBR Inc.
On similar projects in the United States, overhead is typically just a few percent. Given the difficult security environment in Iraq, overhead was expected to run closer to 10 percent. But in many of the contracts examined, it ran much, much higher, in some cases consuming over half the allocated funds. And the report may have actually underestimated total overhead because the government agencies that were supposed to be supervising these reconstruction projects sometimes failed to systematically track overhead expenses.
The main explanation for these excessive overhead rates turned out to be not special security costs but simply the costly down time that resulted from sending workers and equipment to Iraq months before there was any actual work for them to do. That is yet another example of the shoddy contract writing, lax oversight and absent supervision that has consistently characterized Washington’s approach to Iraq reconstruction from the start.
Bush administration incompetence, not corporate greed, is the chief culprit. Still, these charges are one more example of how the favored American companies lucky enough to be awarded reconstruction contracts made large sums of money while the Iraqis failed to get most of the promised benefits.
As Americans now look for explanations of how things went so horribly wrong in Iraq, they should not overlook the shameful breakdowns in reconstruction contracting. They need to insist that Congress impose tough new rules on the Pentagon to ensure more competitive bidding, tighter contract writing and more rigorous supervision. That is the best way to ensure that such a costly and damaging failure never happens again.
