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9/26/2004

Reconstruction Funds Not Going to Iraq

The LA Times reports (archive here):

Barton and his organization estimate that less than 30% of the [Iraqi Reconstruction] money spent reaches Iraqis. Another 30% appears to be going to security, about 10% to U.S. government overhead, 6% to contractor profits, and 12% on insurance and foreign workers' salaries. The rest, perhaps 15%, may be lost to corruption and mismanagement, they estimate.

Several government analysts, who spoke on condition of anonymity because of the political sensitivity of the issue, acknowledged that the total amount lost to special costs was probably about 50% and that the administration planned to undertake a study to determine the extent of the extra costs. One government analyst said the costs of security and lost property could be estimated with some precision, "and that gets you close to around 50%."
Why is the situation so bad? Because the administration opted to work with "major contractors such as Bechtel and Halliburton," rather than on "locally staffed rebuilding projects, training police and other officials, and working to get government agencies and democratic institutions up and running." And it's going to get worse: insurance costs, security costs, and contractual indemnities will exacerbate the situation in the near future.

In the contentious $87 billion appropriation that passed almost a year ago, George Bush refused to separate money for reconstruction from money for the troops. He threatened to veto any bill that wasn't exactly what he wanted. The lack of oversight in his scheme has contributed to the "predicament" we are in today. John Kerry wanted more oversight and more accountability.

 

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