Mismanagement at Pentagon hurting Iraq’s reconstruction

Seven years after the U.S.-led inva- sion freed Iraq from the shackles of Saddam Hussein’s dictatorship, Iraqis are still waiting for the better life that had been promised with the advent of democracy. To be sure, the social and political strictures imposed by the murderous dictator, Saddam, have been removed, but their daily lives remain a challenge.

Electricity service is spotty — for those fortunate enough to have power. Outages are a daily occurrence and generation capacity is falling far short of demand. Fuel shortages are common and unemployment remains high.

These difficulties exist despite the fact that Congress allocated $53 billion for the rebuilding of the country and the Pentagon received $9.1 billion from the Development Fund for Iraq for humanitarian needs and reconstruction. Thus the question: With all that money, why is life still so tough for so many Iraqis? Indeed, there is growing disenchantment with the whole idea of democracy, especially in Baghdad and other population centers.

The answer to the question was revealed this week in an audit of the Pentagon conducted by the Special Inspector General for Reconstruction.

“The breakdown in controls left the funds vulnerable to inappropriate uses and undetected losses,” the audit said of the Pentagon’s handling of the $9.1 billion. Over 95 percent of the amount could not be accounted for by the auditors.

The Development Fund for Iraq was established shortly after the Coalition Provisional Authority took over governance of Iraq after the military invasion by the U.S. and its allies in the war on global terrorism.

According to the wire service Reuters, the DFI is charged with harnessing money from export sales of oil, petroleum products and natural gas, as well as frozen Iraqi assets and surplus funds from the U.N. oil for food program. The U.N. approved the creation of the fund, understanding that the money was to be used to benefit the people of Iraq.

However, lax oversight and weak controls at the Defense Department have resulted in most of the money not being available for the reconstruction of Iraq.

“Our selective review in DoD’s financial and management controls left it unable to properly account for $8.7-billion of the $9.1-billion in DFI funds it received for the reconstruction activities in Iraq,” the special inspector general’s report said.


The Obama administration must deal with this situation aggressively. Heads must roll at the Pentagon. This isn’t just about mismanagement. The effect of the inappropriate uses and undetected spending is a disgruntled population in Iraq that no longer views the United States as a shining example of honesty and virtue.

Indeed, reports of wholesale misuse of American and Iraqi funds since the 2003 invasion have been constant and, in some instances, confirmed. There have been arrests of Americans and charges of favoritism in the awarding of contracts.

For instance, auditors working for the special inspector general discovered that $57.8 million was sent in “pallet upon pallet of hundred-dollar bills” to the U.S. comptroller for south-central Iraq, Robert J Stein Jr., who had himself photographed standing with the mound of money.

Stein is among the American officials working in Iraq who was convicted of fraud and money-laundering.

Don't Miss a Story

Sign up for our newsletter to receive daily news directly in your inbox.