Video: Fleecing of America: Parsons in Iraq

By Lisa Myers Senior investigative correspondent
NBC News
updated 1/31/2007 6:56:37 PM ET 2007-01-31T23:56:37

New revelations have emerged about how tens of millions of taxpayer dollars have been wasted in Iraq. A new report by government watchdogs singles out a big American contractor — Parsons — for shoddy work. Investigators charge that Parsons managed to turn a flagship project to help train Iraqi police into a hall of horrors using taxpayer money.

The Baghdad Police Academy was supposed to be a showcase to train Iraqi police — key to the U.S. strategy.

Instead, Wednesday's report says the American construction company turned it into a disaster from the start: incomplete and substandard designs, shoddy construction and no real quality control.

"This is the worst project that my inspectors have visited," says Stuart Bowen, inspector general for Iraq.

Bowen says the Iraqis recently refused to take over the complex, calling the work disgusting.

Here's what Parsons delivered for taxpayers' $62 million:

  • Shoddily built brick walls.
  • Cracking concrete.
  • Exposed reinforced steel bars.
  • Buildings without enough power or with faulty electrical box wiring.
  • Plumbing so bad that when cadets used it, human waste rained through light fixtures and ceilings.

The report places some blame on the Army Corps of Engineers, which was supposed to oversee the project.

"They actually awarded Parsons merit increases despite widespread evidence of deficient work," says Rep. Susan Collins, R-Maine.

Parsons' contract was terminated last spring. However, the company insists problems at the academy occurred after it was turned over to the U.S. government. Parsons also says it's done good work on 1,000 projects in Iraq under hazardous conditions.

Bowen disputes this, saying he's found serious deficiencies at almost every Parsons project inspected.

"Most of the other contractors have met standards," Bowen says. "Parsons has not."

The new report also reveals that another company was paid $44 million for a training camp that was never used and an Olympic swimming pool that the U.S. didn't authorize.

Still, its not all bad news. Bowen says 75 percent of projects inspected in Iraq were built properly. So, while millions have been wasted, in at least some cases, taxpayers got their money's worth.

Statement from Parsons Chairman and CEO Jim McNulty:
“As a company with a long history of delivering superior program management and quality projects, Parsons regrets that problems with the Baghdad Police College occurred after the facility was turned over to the U.S. Government. The project assessment issued by the Special Inspector General for Iraq Reconstruction (SIGIR) restates many of the findings it first released in September.  The report fails to note that Parsons, in conjunction with the US Army Corps of Engineers, when notified about the problems moved quickly to alert the Iraqi subcontractor, which performed the repairs at no additional cost to the U.S. or Iraqi governments.

This is the first we've heard about design issues on this project. We continue to review the full SIGIR report, which was completed without our input and response. Parsons obtained a copy of the report from members of the media who received it ahead of its public release.

The Baghdad Police College is one of more than a thousand projects completed by Parsons across Iraq, and we’ve put forth our best efforts amid extremely difficult circumstances. The unprecedented security challenges continue to impact the work we do in Iraq. In particular, the Police College was targeted by the insurgents because it was a powerful symbol of Iraqi progress towards security and the rule of law, resulting in at least one major suicide bombing at the College during the period of this report.

We are pleased to learn that cadet barracks and classrooms continue to be operational while repairs are taking place and that the Baghdad Police College has graduated six classes on time, totaling about 3,800 cadets, since occupying the facility in May 2006.

At the height of our construction efforts at more than 500 locations across Iraq, we employed more than 25,000 Iraqis who worked on a wide range of projects — from building border forts to delivering clean drinking water. Extremely difficult security conditions factored significantly into problems that occurred, and we worked to fix the problems as soon as we learned about them.’’

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