Panel: Widespread waste and fraud in war spending
The co-chairs of the Congressionally chartered Commission on Wartime Contracting in Iraq and Afghanistan, former Connecticut Rep. Christopher Shays, right, and Michael Thibault, take part in a news conference on Capitol Hill in Washington, Wednesday, August 31, 2011, to present their final report that summarizes more than two and a half years' work on waste and fraud in contracting.
AP Photo/Manuel Balce Ceneta
WASHINGTON (AP) — The U.S. has lost billions of dollars to waste and fraud in Iraq and Afghanistan and stands to repeat that in future wars without big changes in how the government awards and manages contracts for battlefield support, independent investigators said Wednesday.
The Wartime Contracting Commission urged Congress to quickly put in place dozens of its recommendations to overhaul the contracting process. The commission even suggested that joint House-Senate debt reduction committee take a close look at the proposals.
"What you're asking for is more of the same," said Dov Zakheim, a commission member and a former Pentagon comptroller. "More waste. More fraud. More abuse."
The commission, created by Congress in 2008, estimated that at least $31 billion and as much as $60 billion in U.S. money has been lost in Iraq and Afghanistan over the past decade due to lax oversight of contractors, poor planning and corruption.
Yet new legislation incorporating the reforms remains a challenge for lawmakers deeply divided on the best way to reduce the deficit.
"If these recommendations are not implemented, there ought to be a Hall of Shame," said Michael Thibault, co-chairman of the commission. "There's an opportunity at hand."
The commission's 15 recommendations include creating an inspector general to monitor contracting, appointing a senior government official to improve planning and coordination, and reducing the use of private security contractors.
Sen. Claire McCaskill, D-Mo., who co-sponsored legislation to establish the commission, said she plans to prepare legislation based upon the commission's recommendations.
The commission's report said contracting waste in Afghanistan and Iraq could grow as U.S. support for reconstruction projects and programs wanes. That would leave the countries to bear the long-term costs of sustaining the schools, medical clinics, barracks, roads and power plants already built with American money.
Overall, the commission said spending on contracts and grants to support U.S. operations is expected to exceed $206 billion by the end of the 2011 budget year. Based on its investigation, the commission said contracting waste in Afghanistan ranged from 10 percent to 20 percent of the $206 billion total. Fraud during the same period ran between 5 percent and 9 percent of the total, the report said.
Styled after the Truman Committee, which examined World War II spending six decades ago, the commission had broad authority to examine military support contracts, reconstruction projects and private security companies.
But the law creating the commission set this September as the end of its work, even as contractors continue their heavy support of U.S. operations in the war zones.
Security, transportation, food preparation and delivery, and much more are now handled by the private sector. At the same time, the officials responsible for monitoring contractor performance have been overwhelmed by increasing reliance on private companies.
"We are far more reliant on contractors than we ever were," said commission member Charles Tiefer, a professor of government contracting at the University of Baltimore Law School. "We always bought munitions from them. But we didn't used to buy much in the way of services from them."
The commission cited numerous examples of waste, including a $360 million U.S.-financed agricultural development program in Afghanistan. The effort began as a $60 million project in 2009 to distribute vouchers for wheat seed and fertilizer in drought-stricken areas of northern Afghanistan. The program expanded into the south and east. Soon the U.S. was spending a $1 million a day on the program, creating an environment ripe for waste and abuse, the commission said.
"Paying villagers for what they used to do voluntarily destroyed local initiatives and diverted project goods into Pakistan for resale," the commission said.
The Afghan insurgency's second largest funding source after the illegal drug trade is the diversion of money from U.S.-backed construction projects and transportation contracts, according to the commission. But the report does not say how much money has been funneled to the insurgency. The money typically is lost when insurgents and warlords threaten Afghan subcontractors with violence unless they pay for protection, according to the report.
The Associated Press reported this month that U.S. military authorities in Kabul believe $360 million has ended up in the hands of the Taliban, criminals and power brokers with ties to both.
The military said only a small percentage of the $360 million has been garnered by the Taliban and insurgent groups. Most of the money was lost to profiteering, bribery and extortion by criminals and power brokers.