Corruption is "a virtual pandemic in Iraq," threatening rebuilding efforts, international aid and citizen confidence needed for a fledgling democracy, a government report said Tuesday.

One Iraqi official has estimated that corruption costs the country $4 billion annually. A recent survey indicated a third of Iraqis polled had paid a bribe to get products or services in the past 12 months and that they had a "core mistrust" of the army and police.

The details are cited in the quarterly report by the Special Inspector General for Iraq Reconstruction.

"Unless reforms are put in place, corruption may jeopardize the political stability of the new government," said an audit included in the report.

"Successfully addressing corruption in Iraq is indubitably a multigenerational process, but the severity of the current problem begs for a better-resources effort," Inspector General Stuart W. Bowen Jr. said in the report, recommending greater spending on anti-corruption programs.

His office was created by Congress and reports administratively to the departments of State and Defense as well as Congress.