By NBC News Producer
NBC News
updated 11/6/2006 3:32:34 PM ET 2006-11-06T20:32:34

WASHINGTON — While surging violence grabs headlines, Iraq reconstruction continues to fall far short of U.S. and Iraqi goals, further undermining stability in the nascent democracy.

And in a “shoot the messenger” coup de grâce, the latest casualty in the war may be the office of the Special Inspector General for Iraq Reconstruction (SIGIR) whose investigations have exposed waste, fraud, and mismanagement of billions of dollars spent by U.S. taxpayers in rebuilding Iraq. 

In a stealth blow during a closed-door conference on a major defense bill, the Republican side of the House Armed Services Committee inserted a provision to shutdown the Special Inspector General (IG) office led by Stuart Bowen Jr.

Tracking tax payer dollars
Bowen’s office opened in Januar 2004 with the task of tracking the $18 billion in U.S. taxpayer dollars initially allocated for Iraqi reconstruction. The Special IG office was supposed to be temporary, but then again so was the war.

The U.S. government’s plan was to execute reconstruction rapidly in Iraq — but many of the efforts have been stymied by the worsening security in the country.

“This was a waste of money because the contractors were ordered to go to Iraq to work, but they weren’t working,” explained Bowen (whose office will disappear in October 2007 unless critics of the termination prevail in having the office continue). Due to the deteriorating security situation, many contractors were forced to remain idle, but taxpayer dollars still had to pay for their food and housing while they waited to begin work in Iraq. “About $62 million was spent on overhead for contractors that only accomplished $26 million in construction work.”

By the end of September 2006, according to the latest SIGIR report, 100 percent of the $18.44 billion Iraq Relief and Reconstruction Fund (IRRF) has been “obligated” (or allocated) — and major U.S. spending is rapidly winding down. In three and a half years, over nine Congressional bills, U.S. taxpayers have paid $38.4 billion for Iraq reconstruction.

A bipartisan group led by Republican Sen. Susan Collins of Maine, the chairman of the Senate Homeland Security and Governmental Affairs Committee, is seeking to keep the Special IG office in business.

“I strongly support the continuation of [Bowen’s] office as long as American tax dollars are being spent on Iraq reconstruction,” said Collins. “I am working with Senators Russ Feingold, John Warner and Joseph Lieberman and will propose legislation to extend the term of the SIGIR past the October 1, 2007, expiration date."

Money’s worth?  
Have American taxpayers gotten their money's worth? Specific contractor abuses, such as overcharging and shoddy construction, have been well-publicized.

Many press accounts of the latest SIGIR report released Oct. 30 made particular note of the fact that the U.S. government lost track of weapons purchased with reconstruction funds for the Iraqi security forces. “There were a mixture of pistols and assault rifles,” said Bowen. “Primarily, 13,000 of them were semiautomatic nine millimeter pistols.”  Where the missing weapons are is unknown.

But, in addition to the exposure of missing weapons, the SIGIR quarterly report and accompanying audit reports present one of the best assessments of U.S. progress in Iraqi reconstruction in specific sectors that is worth taking a closer look at.


  • More than three and a half years after the U.S. invasion Iraq oil production is 12 percent below prewar levels (p. 36). Iraq currently pumps 2.3 million barrels a day, and exports 1.6 million of that.
  • Iraq did not meet any of its total critical refined product targets in the latest quarter (p.  40), and continues to suffer from severe shortages in all fuels. (p.39)
  • Because of smuggling and corruption, a thriving black market exists for fuel with Iraqis paying $4 per gallon, almost eight times the official price (p.44).


  • Electric production is up only six percent above prewar levels (p. 24) despite major U.S. funding and 88 percent of U.S. projects completed.
  • Attacks on electric lines in Baghdad on Oct. 20, 2006 reduced power in Baghdad to two hours a day for a week (p.4 ). Baghdad had less than five hours of electricity a day at the end of September (p. 26).
  • The SIGIR report states: "repairing power lines is nearly impossible because of sniper attacks and death threats to repair crews." (p. 4)

Water & Sanitation

  • U.S. projects have provided an estimated 4.6 million people with access to water, and 5.1 million people with access to sanitation, but a major challenge is to ensure that U.S. efforts are sustainable (p. 45).
  • An example of sub-par Iraqi contractors can be seen in sanitation problems at the U.S.-funded Mosul Police Headquarters (p. 170-171). See site photo14 for a tree trunk that was painted white to mimic a concrete pillar rather than removed as the contract required.


  • Agriculture supports 20 percent of the Iraqi workforce, but despite some rehabilitation USAID estimates Iraq's grain yields last summer were less than half the yields of neighboring countries (p. 52).

Schools Repair

  • Only 48 percent of the Iraqi schools needing repair in 2003 have actually been repaired, but 100 percent of the U.S.-funding for education projects has been spent (p. 60).

Security & Justice

  • More than 88 percent of the U.S.-IRRF funds for military and police forces have been spent to train and equip 312,900 Iraqi security forces (p.68). However, "sectarian divisions permeate the leadership ranks of the Iraqi Security Forces," (p.73), and "critical infrastructure remains a high-value target for insurgent attack." (p.75).
  • “It’s going to cost $3.5 billion dollars to support the Iraqi army in the field next year,” Bowen told NBC News, “We were unable to determine in the course of our audit, and we tried, whether the Iraqi government has made provisions for this.”


  • While two-thirds of the U.S. money allocated for health care projects has been spent, just over one-third (36 percent) of these projects have been completed, "progress has been impeded by security and management problems"(p.77).


  • In transportation, 88 percent of railway stations have been repaired, but "only a small number of trains continue to run nationwide because of security concerns." (p. 83)
  • U.S. projects have rehabilitated five Iraqi airports, and traffic is increasing but "the rise is attributed to a recent increase in military" flights (p. 87).
  • Currently, only military and charter flights are permitted in Iraqi airspace.

Top Contractors

  • SIGIR reports the top contractor for the 3rd quarter was Bechtel, awarded $1.26 billion, with five others above $500 million each: Fluor-Amec, LLC, Parson Global Services, Inc, Parsons Iraq Joint Venture, Kellogg Brown & Root Services, Inc., and Washington Group International (p. 92).


  • Iraq's ability to attract international funds is impeded by a perception of government-wide corruption. The SIGIR report states, "Iraq ranks lower than Egypt, Syria, Iran, and other countries in the region that struggle with corruption" (p. 99).

International Donations vs. U.S. donations

  • Non-U.S. donors have pledged $15 billion to Iraq reconstruction, less than 40 percent of the amount U.S. taxpayers have contributed (p. 105). It is not clear how much non-U.S. donors have actually contributed to meet their pledges, versus the $38 billion U.S. taxpayers have committed. But it is clear that Iraq reconstruction will increasingly rely on non-U.S. donors who are more skeptical of dealing with the Iraq government than with the Coalition's more transparent accounting.

The Big Picture

  • SIGIR reports that: "security throughout Iraq remains a challenge to the management and oversight of many projects" (p. 122). For example, because of security concerns, inspectors could not visit the $2.23 million Al Karkh Courthouse in northwestern Baghdad, instead they had to rely on satellite imagery to view the courthouse complex from outer space (p. 160).

The reconstruction of Iraq is underway at enormous cost with an as yet uncertain future. The rebuilding of the country during a time of continued warfare has been fraught with danger and delays, cost overruns and corruption. And now that the Special Inspector General position is in peril, it will be even harder to determine whether the costs of trying to build the cornerstones for success in Iraq have been worth the price.

Carl Sears is an NBC News producer based out of Washington, D.C.


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