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$57B Reviewed: $10B in “Questionable” or “Unsupported” Costs

The top three auditors of Iraq reconstruction reviewed $57 billion in contracts, one-seventh of the total U.S. expenditures, and found $10 billion in "fuzzy spending."

"$4.9 billion in 'questioned' or overly expensive charges, and $5.1 billion in "unsupported" or undocumented expenses," writes Dan Duray in the San Francisco Chronicle.

More than $10 billion of the money paid to military contractors for Iraq reconstruction and troop support was either excessive or unsupported by documents, including $2.7 billion for contracts held by Halliburton or one of its subsidiaries, Congress was told Thursday.

The three top auditors overseeing work in Iraq told a House committee their review of $57 billion in Iraq contracts found that Defense and State department officials condoned or allowed repeated work delays, bloated expenses and payments for shoddy work or work never done.

With only $57 billion reviewed, Chairman of the House Oversight and Government Reform Committee, Rep. Henry Waxman (D-Los Angeles, Calif.), warned that the total overcharges and fraud could be staggering.

"American taxpayers have already spent over $350 billion for the war in Iraq," said Rep. Henry Waxman, D-Los Angeles, chairman of the committee. "There's $300 billion still to audit. The total amount of waste, fraud and abuse could be astronomical." 

As the article notes, the audit highlights Halliburton's role in scamming the government out of billions, mostly on contracts that aim to "feed and support American troops." This would include things like $45 for a six-pack of Coca-Cola soft drinks.

The auditors reported that a Halliburton subsidiary, KBR, overcharged the Pentagon by $212 million for meals served to U.S. troops in Iraq, $100 million for troop housing sites that already had been shut down, and $42 million in subcontractor costs that were duplicated.

Halliburton/KBR is not alone. Parsons, the company that built a fraction of the medical clinics they were contracted to construct, was another major offender.

Another major contractor, Parsons Corp. of Pasadena, holds more than $2.2 billion in contracts for reconstruction of public buildings and oil infrastructure in Iraq. Of that, the Defense Department audit report found, more than $90 million was either questionable or lacked proper documentation.

Republicans defended defense contractors and the massive waste perpetrated in Iraq.

The witnesses urged the Pentagon to reconsider its growing reliance on contractors in wars and reconstruction efforts. Layers of subcontractors, poor documentation and lack of strong contract management are rampant and promote waste.

The Pentagon did have some support among Republican committee members. "Taking risks, which sometimes leads to waste, is much better than having a perfect paper trail and a bad outcome," said Rep. Darrell Issa, R-Vista (San Diego County). [emphasis added]

Rep. Darrell Issa's (R-Vista, Calif.) suggestion that the reconstruction of Iraq had a "good outcome" is tragically laughable.

The Army Sustainment Command awarded the first piece of the LOGCAP contract, that was originally given to Halliburton, to Virginia-based Serco, passing on a bid from KBR. Three more contracts will be awarded later this year.

Speaking of which, the former U.S. envoy to Iraq says the new reconstruction plan for Iraq will not work.

A diplomat for 22 years, she quit her job last month as leader of a Provincial Reconstruction Team — groups made up of about 50 civilian and military experts that try to help Iraqi communities build their own government while strengthening moderates.

"In spite of the magnificent and often heroic work being done out there by a lot of truly wonderful people, the PRTs themselves aren't succeeding. The obstacles are too great," Munshi said this week in Washington, where she was pressing her view at the State Department and to Congress.

"Once again we are proceeding to lay people's lives on a line drawn with faulty information. Once again the fantasies of the 'policy-makers' drive decisions without much link to the realities on the ground," said Munshi, who retired from the foreign service in 2002 .

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