Thousands of weapons missing, report says

Still more evidence today of poor management of U.S. tax dollars designed to help rebuild Iraq. And for the first time, the possibility that this may be endangering our own troops. The U.S. has not properly tracked half a million weapons bought for Iraqi security forces, and a new report reveals that 14,000 weapons are now considered missing.

That's right, according to government watchdogs, more than 13,000 Glock semi-automatic pistols, 751 assault weapons and almost 100 machine guns cannot be accounted for in Iraq, raising the possibility that they may have fallen into the hands of insurgents.

"They're using our weapons in a way that we are not planning for and that means that it's going to endanger the lives of our soldiers and the people of Iraq," says Rick Barton, an international security expert with the Center for Strategic and International Studies.

Hundreds of thousands of weapons couldnt be tracked because the military failed to properly record serial numbers.

Equally bleak: Another report finding that less than half the budget for some reconstruction projects actually went to rebuild the country.

Where did most of it go? Some for security, but even more to house, feed and pay contractors while they did nothing for months. Some were in Iraq as long as nine months before significant work on projects began.

"This was a waste of money because the contractors were ordered to go to Iraq to work, but they weren't working," says Stewart Bowen, Iraq Reconstruction Special Inspector General.

Who's to blame? Investigators mostly blame the government's poor planning. But they also single out a Halliburton subsidiary — KBR.

In this 2004 letter obtained by NBC News, a U.S. official criticizes KBR for "accruing exhorbitant indirect costs at a rapid rate" and for failing to provide adequate cost information.

Government watchdogs now say Halliburton actually tried to hide data from auditors. "I believe that KBR was attempting to impede the scope of  our oversight," Bowen says.

Halliburton denies doing anything improper and says it has restricted access to such data for years. But a U.S. official was sufficiently angry, that at one point, he threatened to cancel Halliburton's contract if it didn't provide information to justify costs.