Iraq Watchdog Office Faces 2007 Closure

An explosive report released Monday on U.S. weapons losses in Iraq could be part of the reason Stuart Bowen's days as the special inspector general for Iraq reconstruction are numbered.

The special IG office, which since 2004 has kept watch over how U.S. taxpayers' funds are being spent rebuilding Iraq, is scheduled to close at the end of fiscal year 2007, next Sept. 30. Its expiration has prompted concerns that new and continuing investigations into waste, fraud and abuse by Iraqis and American contractors will recede into the shadows of the federal bureaucracy.

"It seems to me, there is a general sense in Congress that this office has done a good job and should be able to continue," said Leslie Phillips, spokeswoman for Sen. Joseph Lieberman, D-Conn., ranking member of the Senate Homeland Security and Governmental Affairs Committee.

"That is exactly the wrong time to close that office," said Sen. Byron Dorgan, D-N.D., chairman of the Senate Democratic Policy Committee. "The proof is in the experience here and the Defense Department has not done the oversight and the Congress has not done the oversight so keeping the inspector general's office is critical for our taxpayers. ... I just think the taxpayers are getting fleeced and we need to have more, not fewer resources" toward oversight.

Dorgan said if Democrats win control of the Senate in next week's election, "We will make a major effort to keep that inspector general."

The latest release from Bowen's office is just the kind of inspections that supporters fear will be lost. Monday's report found that the U.S. military failed to track hundreds of thousands of weapons intended for Iraqi security forces or account for spare parts, operating manuals or maintenance personnel for most of the weapons given to the Iraqis.

The report did not speculate on where the weapons may have ended up, but said that the American military did not record serial numbers on the 370,000 weapons purchased with U.S. taxpayer funds, and therefore they can't be readily traced now.

The weapons range from semi-automatic pistols and assault rifles to heavy machine guns and rocket-propelled grenade launchers. The United States plans to provide equipment for more than 325,000 trained Iraqi security force personnel by December. As of August, 277,600 Iraqis had been issued weapons.

The findings were contained in an audit requested by Senate Armed Services Committee Chairman Sen. John Warner, R-Va. It includes a response from the Pentagon command charged with training and equipping Iraqi forces, which maintains no provision exists for registering foreign-owned weapons by the relevant Defense Department program. The audit also offers a recommendation for the U.S. military to establish accurate weapons inventories.

"House Republican leaders, who have conducted no meaningful oversight of the conduct of the Iraq war, must explain how the revelation that our troops are in even more danger from untracked weapons squares with their appalling assessment of Secretary Rumsfeld as 'the best thing to happen to the Pentagon in 25 years,'" House Minority Leader Rep. Nancy Pelosi, D-Calif., said in a written statement Monday.

She was citing a comment a day earlier by House Majority Leader Rep. John Boehner, R-Ohio, who praised the defense secretary.

"With 100 American troops killed thus far in October, and thousands more caught in the middle of escalating sectarian violence, that is unacceptable. Our troops deserve far better," she said.

But supporters of shuttering the special IG's office say the agency created by Congress all along was intended to close 10 months after 80 percent of the approximately $20 billion in combined U.S. Iraq Relief and Reconstruction Funds had been spent. According to the special inspector general's office, the 74 percent mark was reached over the summer and all funds had been obligated. This despite efforts by Senate Democrats to redirect more funding into the IRRF for Bowen to oversee.

"That purpose [of the special IG] is coming to a close," said John Scofield, spokesman for the House Appropriations Committee. "We support the oversight of the funds, but at some point, once you start these things you have to put an end to them."

Scofield said once the special Iraq reconstruction fund dries up, so goes the special IG. He said leaving the agency open runs the risk of creating a permanent and unnecessary federal office. The special IG's office employs about 110 people in Arlington, Va., and 55 people in Baghdad.

Still, senators on both sides of the aisle say because of illuminating reports from Bowen's office, they want to extend the special IG's office expiration beyond the date set forth in the defense authorization bill signed by President Bush on Oct. 17.

"I met ... with Mr. Bowen and told him that I strongly support the continuation of his office as long as American tax dollars are being spent on Iraq reconstruction," said Sen. Susan Collins, R-Maine, chairwoman of the Senate Homeland Security and Governmental Affairs Committee. Collins said she planned to propose legislation to extend the position past the expiration date.

Though a year may sound like a long way off, IG advocates say 100 audits and investigations are still pending, and contracts worth billions of dollars in reconstruction projects are still incomplete.

"The concern is that it's being closed, that there is a date for closing it, without making sure the investigations are finished," said Jennifer Porter Gore, spokeswoman for the Project on Government Oversight. "There is a lot of money being spent in there that needs to be watched vigorously."

Scofield said after the deadline, any ongoing oversight of contracts in Iraq, as well as open cases in Bowen's office, would be handled by the inspector generals' offices at the Department of Defense and the State Department, the two agencies in charge of Iraq reconstruction.

He added that House Republicans are "exploring all options" to get any extensions repealed. "Ultimately," he said, "we will have the ability to revisit this."

Bowen's Full Plate

Lieberman and others have suggested that the administration is wary of Bowen's work. Declaring that "waste, mismanagement and fraud have occurred on a massive scale" in Iraq, Lieberman told the Senate Homeland Security and Governmental Affairs Committee in August: "Unfortunately, oversight has been lacking elsewhere, and the IG has found few allies in this administration … the administration has been attempting to phase out the office of the special inspector general for some time."

In a letter written Monday to Rumsfeld and Secretary of State Condoleezza Rice, Lieberman and Collins further charged that the work of the special inspector general has been impeded by defense contractor Kellogg, Brown & Root, a subsidiary of Halliburton, who has been accused of wrongly marking proprietary data in order to get around federal disclosure rules.

Bowen's office is not commenting on the pending closure of his office and he won't speculate on how other agencies feel about his work. However, spokeswoman Kristine Belisle said the staff "are happy to do what Congress directs us to do and it is up to Congress to make that decision how oversight will progress."

Lieberman's allegation could stem from the criticism Bowen has freely dispensed since 2004. His investigations have uncovered overcharges by major contractors such as Halliburton and Bechtel, missing funds through corruption in the Iraqi ministries and bad accounting throughout the U.S. federal bureaucracy leading the rebuilding effort.

In total, Bowen's office has initiated 256 investigations, completed 65 project inspections and presented 73 congressional reports. According to his office, 92 preliminary and criminal cases remain open. In his quarterly report to Congress in July, Bowen said 25 of those cases are currently awaiting prosecution by the Department of Justice.

The IG reports have given credit where credit is due. For instance, Bowen noted that oil production began exceeding pre-war levels this summer.

But he has painted a less-than-flattering picture of U.S. reconstruction efforts in Iraq. In his quarterly report released Monday, Bowen said security continues to deteriorate and hinder progress in rebuilding and the transition of U.S-led programs to Iraqi control. Corruption is also a problem within the Iraqi government and inspectors continue to grapple with substandard, often fraudulent work by U.S. contractors, Bowen said.

For example, the U.S.-based Bechtel Corp. was dropped this summer from a contract to build a children's hospital in Basra after it was found to be more than a year behind schedule. The contractor announced the estimated construction costs would be greater than 200 percent higher than initial projections and would take another year to finish.

Also in September, Bowen's office reported that a $75 million contract held by the U.S.-based Parsons Corp. to rebuild the Baghdad Police College resulted in construction so shoddy that the building was actually posing a health risk to Iraqi police recruits. In some cases, urine and feces were coming through the ceilings from restrooms above, according to the report.

Bowen's office also found that the U.S. Army Corps of Engineers used accounting tricks to make it look like it had spent more than $360 million before the reconstruction funds were set to expire at the end of the fiscal year Sept. 30. While completing over 2,670 construction projects out of a planned 3,683 since 2003, the corps "parked" the money aside to use it later, Bowen charged, and he called into question the amount of reconstruction money that has actually been spent.

Oversight to Continue

Officials at the U.S. Agency for International Development and Department of Defense, the primary spenders of the reconstruction money, deny any resentment toward the special IG for his criticisms, and representatives insist they will continue oversight of the contracts and revenues after Bowen's office is closed.

"We have welcomed and supported the work of the Special Inspector General for Iraq, with whom we work closely," said USAID spokesman David Snider.

He said the agency is providing everything from logistical and administrative support to the new Iraqi government to education, health and economic resources. USAID has spent nearly the entire $5 billion it was allocated for reconstruction and has more money appropriated for it in the 2007 budget.

USAID is confident it will maintain the critical oversight necessary with its own auditors in Iraq, Snider said. "USAID remains committed to ensuring that the resources provided by Congress are managed effectively and transparently."

Similar comments have come from the Pentagon.

"When [the special IG's] charter expires, the DoD does have in place an entity to provide oversight," said Lt. Col. Brian Maka, Pentagon spokesman. "If the concern is that oversight will be lost, that's an unnecessary concern."

Gore, the Project on Government Oversight spokeswoman, said she is skeptical.

"If they could have handled that workload from the beginning, they would have," said Gore. "That doesn't square. Will they be given extra staff and money to handle the extra caseload? These are the questions that need to be answered."

Belisle said a "transition period" built into the current expiration date will allow the IG to work with USAID and the Pentagon to ensure that any open investigations and audits are carried over as smoothly as possible.

"None of the work will come to an end," she said. "The oversight will definitely continue."