U.S. govt. wastes billions in Iraq


About $10 billion has been squandered by the U.S. government on Iraq reconstruction aid because of contractor overcharges and unsupported expenses, and federal investigators warned Thursday that significantly more taxpayer money is at risk.

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.

More than one in six dollars charged by U.S. contractors were questionable or unsupported, nearly triple the amount of waste the Government Accountability Office estimated last fall.

“There is no accountability,” said David M. Walker, who heads the auditing arm of Congress. “Organizations charged with overseeing contracts are not held accountable. Contractors are not held accountable. The individuals responsible are not held accountable.”

“People should be rewarded when they do a good job. But when things don’t go right, there have to be consequences,” he said.

Also testifying Thursday were Stuart Bowen, the special inspector general for Iraq reconstruction, and William H. Reed, director of the Defense Contract Audit Agency.

The appearance before the House Oversight and Government Reform Committee came as Congress prepares for a showdown with President Bush next month over his budget request of nearly $100 billion for the wars in Iraq and Afghanistan.

So far, the Bush administration has spent more than $350 billion on the Iraq war and reconstruction effort.

The Army, which handles most of the Iraq contracting, said Thursday it had not reviewed the latest contract figures.

“The U.S. Army, along with the Departments of Defense and State, continue to help thousands of Iraqis daily with reconstruction projects to provide them with better lives,” said spokeswoman Mary Ann Hodges. “We look forward to examining its findings and applying some of its recommendations in the future.”

Senate Democrats said recently cited cases of waste were “outrageous rip-offs of the American taxpayer” and introduced legislation Thursday to stiffen punishment for war profiteers and cut down on cronyism in contracting.

According to their testimony, the investigators:

  • Found overpricing and waste in Iraq contracts amounting to $4.9 billion since the Defense Contract Audit Agency began its work in 2003. Some of that money has been recovered. An additional $5.1 billion in expenses were charged without proper documentation.
  • Pointed to growing Iraqi sectarian violence as a significant factor behind bloated U.S. contracting bills. Iraqi officials, they said, must begin to take primary responsibility for reconstruction efforts. That is an uncertain goal, given the widespread corruption in Iraq and the local government’s inability to fund projects.
  • Urged the Pentagon to reconsider its growing reliance on outside contractors in wars and reconstruction efforts. Layers of subcontractors, poor documentation and lack of strong contract management are rampant and promote waste even after the GAO first warned of problems 15 years ago.

Walker complained that GAO investigators have difficulty getting basic detail about reconstruction contracts such as expenses and subcontractors involved because many Pentagon divisions fail to consistently track or fully report them.

“It’s absolutely essential if Congress wants to make an informed decision on authorizations and appropriations that we get this information,” he said. “We’re talking about billions of dollars and thousands of American lives at stake.”

Rep. Henry Waxman, D-Calif., the committee chairman, has pledged scores of investigations of fraud, waste and abuse — with subpoenas if necessary — on the administration’s watch.

Of the $10 billion in overpriced contracts or undocumented costs, more than $2.7 billion were charged by Halliburton Co., the oil-field services company once headed by Vice President Dick Cheney.

Noting that auditors still have $300 billion of Iraq spending to review, Waxman said the total amount of waste, fraud and abuse “could be astronomical.”

“It’s no wonder that taxpayers all across our country are fed up and demanding that we bring real oversight to the ‘anything goes’ world of Iraq reconstruction,” he said.

Rep. Tom Davis, R-Va., the top Republican on the panel, pointed to ongoing, “systemic” problems in Iraq contracting. “This much is clear: Poor security, an arcane, ill-suited management structure, and frequent management changes have produced a succession of troubled acquisitions,” Davis said.


On the Net:

House Oversight and Government Reform Committee

House committee memorandum analyzing Iraq contracting costs

Copyright © 2007 The Associated Press


  1. JimZ

    Since Bu$h supposedly has bought a “compound” in Paraguay, I think we know what his plans are for his post-presidential years. He’d better get as far away from the U.S. as possible, as a tar & feather job will be waiting for him.

    The rest of us get to writhe in filth left by his wake.

  2. Kent Shaw

    PS – Whats going to happen when the real estate taxes on that nice, comfortable, affordable $200,000 house rise to $200,000 a year? And even for the wealthy, what happens when those seven 2 million dollar houses tax bill comes to 2 million dollars a year each? Its going to get interesting. Keep your powder dry.


  3. Kent Shaw


    Our esteemed “leaders” will either allow to happen or scheme to cause a period of rampant inflation. This may come about simply by U.S. debt holders deciding to dump dollars and refuse to loan any more money to the U.S. The multi-trillion debt will be paid off “easily” with worthless inflated dollars and bread will be $25 a loaf, gasoline $100 a gallon, a new pair of jeans $1000, etc. Sort of like post WW1 Germany where it took a wheelbarrow full of marks to purchase a loaf of bread. It is coming, mark my word. Best now to horde food, silver, guns, ammunition, and anything else of true value that you can use for barter. Its coming.


  4. Carl Nemo

    Carl Nemo post

    Correction…along with my apologies!

    If you convert this 8.7 trillion to seconds you come up with 275686 years. If we had the ability to start paying off this debt at the rate of $31,557,600 per second it would take almost that amount of time to pay it off, but remember the lenders are using compound interest so the debt is basically unpayable because the interest for 2007 alone is $156,639,532,706.88; i.e., that’s almost a 157 billion dollars in interest.


    $31,557,600 “per second” should read “per year”. I suffered a “brain fart”. 😉


    I should have kept in simple. 8.7 trillion is 8700 billion, so if we could reduce the principal by one billion per year it would take 8700 years. We can’t do so because of the $157 billion per annum interest charge and growing all the time. No matter how you cut it, it’s “impossible” debt, no different than a family that’s gone “hog wild” spendingwise and needs to file bankruptcy. As a note the dollar in your in wallet is worth a little under 10 cents compared to a 1947 dollar. I’ll provide an inflation calculator as a sobering tool concerning the effects of inflation on your money. http://www.westegg.com/inflation/

  5. Carl Nemo

    Get Real makes reference to the Bushistas wanting another 100 billion for Iraq in 2007? Based on Hope’s article concerning 10 billion wasted at this point, Bushco should really be saying they need another 100 billion for Halliburton, KBR, Bechtel, Blackwater and a host of other camp-following war-profiteers to pilfer during this next fiscal year. Our troops get “chump change” while these monsters clean up. This money goes out of the country only to boomerang back into the pockets of Bushco’s constituents. The majority if not all the contracts go to the aforementioned companies along with select Israeli companies; but few contracts, if any, ever go to Middle Eastern contractors in Iraq or otherwise. Folks this is a scam; i.e, a free-booter’s paradise and our 435 House reps along with 100 Senators are facilitating this shakedown. I urge all citizen/patriots to contact their duly elected reps regardless of party affiliation and demand de-funding, de-escalation, and withdrawal from this debacle, predicated on “cooked” intelligence. As Americans, we can no longer afford partisanship. We are letting evil fools destroy this once great nation. How much is enough…?!


  6. Carl Nemo

    We are actually finished as a nation, but the sword hasn’t dropped across our necks yet. The public debt is 8.7 trillion dollars of which 2.5 trillion has been run-up by so-called Republican fiscal conservatives during the past 6years…?!If you convert this 8.7 trillion to seconds you come up with 275686 years. If we had the ability to start paying off this debt at the rate of $31,557,600 per second it would take almost that amount of time to pay it off, but remember the lenders are using compound interest so the debt is basically unpayable because the interest for 2007 alone is $156,639,532,706.88; i.e., that’s almost a 157 billion dollars in interest. The Chinese are holding a substantial portion of this debt at this point in time along with the Japanese. The Chinese are doing quite well sitting on a one trillion dollar surplus courtesy of WalMart et. al. They are building their military at a rapid rate and the rate of construction and growth within their nation’s infrastructure is phenomenal. They consume most of the worlds cement production at this point in time. 40 new cities are popping up each “month”. The Chinese although not having a record of attacking nations afar since the days of Genghis Khan who was not Chinese, but a Mongol who later unified China this may not be the case in the future. A lot of Americans are familiar with the title Sun Tzu, The Art of War. But most people have never heard of the Thirty-Six Ancient Strategies of China. The Art of War was heavily influenced by the Confucian notion of honor, Thirty-Six Strategies, makes no pretense of being anything but ruthless.

    In its pages are some of the most cunning strategies used by ancient Chinese warriors, such as “killing with a borrowed knife” … “befriending the far and attacking the near” … and “catching a fish in troubled waters.”And over the years, these strategies have been cited and used by not just generals, but also Chinese businessman.

    We as a nation are bleeding white on the sands of Iraq and are generally over-extended financially in all areas of endeavor. Hope Yen’s editorial discusses the waste which I believe at 10 billion is only the tip of the iceberg. The Bushistas could care less. Their mission in the next two years is to continue ripping off the U.S. taxpayer through the issuance of debt-money, and to continue to weaken our nation to the point that our destruction will simply be a function of the Chinese re-patriating their loaned money…! Not a shot will have to be fired as the U.S. capital markets roll-over and die like a slug in the noon-day sun! We’ll be reduced to beggars having to pay usurious interest rates just to take care of the very basics as a nation. We will become pariahs as far as lenders are concerned when they finally realize the “full faith and credit” of the United States doesn’t mean diddly squat. The clock is ticking and the Chinese will have simply destroyed us with their creative use of borrowed money, never having to fire a shot…!



  7. Ray

    Yes David, I made that suggestion also.

    Just think of the impact and statement that would make, if the majority just took the day off and called the white house complaining about the crap. I guarantee that would get someones attention. Of course emergency services would have to continue. Flooding them with phone calls and emails would melt things down for a while.

  8. Kent Shaw

    Hijack a Chinese/Walmart freighter and dump all the goods it carries into the Los Angeles harbor.


    And for those of you at the NSA/CIA/DHS/ABCDEFGHI… JUST KIDDING!!