Corruption

Between 2005 and 2009, more than $567 million was spent on one contract in Iraq to build up the logistical capabilities of the Iraq security forces, with almost no oversight whatsoever. When an audit was finally done on the invoices, it found that 14 percent of the money examined in sampling -- that's more than $4.2 million -- was completely unaccounted for.

The audit was conducted by the office of the Special Inspector General for Iraq Reconstruction (SIGIR), which found in one example that the contractor, a company called AECOM, charged $196.50 for a package of 10 washers that should have cost $1.22, a markup of 16,000 percent. "There just weren't enough people to look at this contract, which was a half a billion dollars," Deputy Inspector General Ginger Cruz told The Cable.

The contract is one of the hundreds of investigations done in recent years by SIGIR. But as the U.S. military withdraws from Iraq, SIGIR is losing its funding and its staff, begging the question of how the U.S. government will be able to discover such abuses going forward. Special Inspector General Stuart Bowen has been meeting with various government officals and groups to try to create a permanent organization to oversee reconstruction  projects in warzones, an idea that hasn't gotten any official traction so far but could be included in any of a number of government reform efforts now ongoing.

Since its inception in 2004, SIGIR claims to have produced $82 million of direct savings, $49 million of seizures and restitution payments, $224 million of funds put to better use, 31 criminal indictments, and 25 convictions. Right now, SIGIR has 96 ongoing investigations. But SIGIR's budget is being cut in half over the next two years and the organization will cut its staff correspondingly. The office could close completely as soon as 2012.

"The ramp-down has begun," said Bowen told The Cable. "A year from now, we will be in a serious windup mode and in two years from now there will be 30 people left," meaning basically no investigations will be able to move forward.

SIGIR has almost gone out of business five times since 2004. First it was created as the Inspector General for what was then the Coalition Provisional Authority. Congress has extended its mandates, albeit temporarily, several times since then. But with the clock running down on the U.S. military presence in Iraq, SIGIR's nine lives are just about up.

There is $6 billion left to spend of the $52 billion appropriated by the U.S. Congress for reconstruction in Iraq. The law stipulates that when the money runs out, so too will SIGIR's mandate.

Bowen is currently searching for a way to keep SIGIR's institutional knowledge and expertise in the government and to keep his staff employed. He has been shopping around town his idea for a new U.S. government agency that would manage all reconstruction efforts in areas where the military is deployed. He calls it the U.S. Office for Contingency Operations, which would exist in perpetuity and stand independent of either the State or Defense Departments, as SIGIR does now.

"It assumes that over time, contingencies will occur," said Bowen, "It's sort of like FEMA. FEMA is set up to address disasters, but disasters aren't continuous. The history of the last 50 years, with 15 contingencies or so, indicates that the next 50 years will probably have more contingency operations."

Bowen met with Deputy Secretary of State James Steinberg on Thursday and plans to meet with Policy Planning chief Anne Marie Slaughter's office soon. The hope is that his proposal will find its way into the Quadrennial Diplomacy and Defense Review (QDDR) ongoing inside State now.

"The idea is contribute to the ongoing efforts to reform how the United States approaches this critical issue," Bowen said.

If that's too ambitious, Bowen has a scaled-back idea that he hasn't yet proposed, creating a Special Inspector General for Overseas Contingency Operations. This would be a version of his other proposal, but focused on oversight and investigations, rather than actually managing contracts.

"It makes sense to have a body that can look at both pots of money without resistance. That ‘s the genius of this organization, there's no door we can't get through."

SIGIR's top officials point to $100 billion spent by the U.S. on reconstruction in Iraq, Afghanistan, and Pakistan. When Lebanon and Georgia are added, more than $16 billion will be spent in fiscal 2010. Afghanistan alone will see at least $1 billion in reconstruction money coming next year, and very few of the 68,000 troops there are trained as program managers, much less contract oversight specialists.

The Pentagon office for Acquisitions, Technology and Logistics, run by Ashton Carter, is working to rapidly increase the contracting staff in Afghanistan now, "but are they going to be able to ramp up fast enough so that when you start moving all this money really fast in Afghanistan, that it is properly managed?" asked Cruz. "You run the risk of it being wasted or stolen."

The two battling sides in the Honduran crisis have come to an agreement that would allow ousted President Manuel Zelaya to return to office, after a parliamentary vote and with the prior approval of the Supreme Court.

Also included in the deal are terms for a power sharing government, an agreement to respect the results of November 29 elections, and the establishment of a trust commission to weigh in on how the crisis started in the first place.

A U.S. delegation has been in Tagucigalpa since Wednesday, led by Assistant Secretary for Western Hemisphere Affairs Tom Shannon, principal Deputy Assistant Secretary Craig Kelly, and National Security Council Senior Director for Western Hemisphere Affairs Dan Restrepo.

Zelaya was deposed June 28 by force and replaced with a de facto regime led by Roberto Micheletti. Zelaya snuck back into Honduras last month and has been hiding out in the Brazilian embassy in Tagucigalpa ever since.

Here are Secretary of State Hillary Clinton's congratulatory remarks, delivered while traveling in Pakistan:

I'm very pleased to announce that we've had a breakthrough in negotiations in Honduras.

I want to congratulate the people of Honduras as well as President Zelaya and Mr. Micheletti for reaching an historic agreement. I also congratulate Costa Rican President Oscar Arias for the important role he has played in fashioning the San Jose process and the OAS for its role in facilitating the successful round of talks.

As you know, I sent Assistant Secretary Tom Shannon and his deputy Craig Kelly and the White House NSC representative for the Western Hemisphere Dan Ristreppo to Honduras yesterday after speaking with both President Zelaya and Mr. Micheletti last Friday to urge them finally, once and for all to reach an agreement.

I cannot think of another example of a country in Latin America that having suffered a rupture of its democratic and constitutional order overcame such a crisis through negotiation and dialogue.

This is a big step forward for the Inter-American system and its commitment to democracy as embodied in the Inter-American Democratic Charter. I'm very proud that I was part of the process, that the United States was instrumental in the process. But I'm mostly proud of the people of Honduras who have worked very hard to have this matter resolved peacefully.

We're looking forward to the elections that will be held on November 29, and working with the people and government of Honduras to realize the full return of democracy and a better future for the Honduran people.

Lawmakers are actively but secretively trying to get to the bottom of the CIA's relationship with Ahmed Wali Karzai, the brother of Afghan President Hamid Karzai, in light of the stunning New York Times article which cited unnamed sources stating he has been on the CIA's payroll for years while simultaneously facilitating massive drug trade in his region.

CIA Director Leon Panetta met with several Senators on both sides of the aisle Thursday behind closed doors and Senate Foreign Relations Committee chairman John Kerry, D-MA, has submitted a formal request for information detailing the Agency's relationship with Karzai the brother.

Following his meeting with Panetta, Senate Armed Services Chairman Carl Levin, D-MI, said that he would not disclose what Panetta told him but that on the question of Ahmed Wali Karzai's relationship with the CIA, he had gotten some clarity.

"I think we know [about his relationship with the CIA] but I can't share that with you," Levin said, adding mysteriously, "I don't know that Karzai's brother is on the CIA payroll."

On the issue of whether or not the President's brother is facilitating the drug trade near Kandahar, lawmakers who are in the loop seem more confident and willing to publicly express their concerns.

"According to credible people, the President's brother is involved in various illicit activities," said Armed Services ranking Republican John McCain, R-AZ, "We can't have that."

McCain reiterated his call that Ahmed Wali Karzai should leave the country immediately.

Kerry was the only senior lawmaker to issue a statement expressing his frustration about not being aware of the relationship.

In an interview with The Cable, Kerry said although the CIA relationship with Karzai might not necessarily be nefarious, Congress had a right to know the details.

"If the CIA has a deal, I want to know what the realities are," he said, "I want to examine the relationships and know what the terms are and understand what's the impacts of that might or might not be."

"It may not be something you want to deal with publicly, but we have to be absolutely certain that nothing we are trying to do is being compromised," said Kerry.

The leaders of the Senate Intelligence Committee have been notably mum on the subject, presumably working behind the scenes.

Chairwoman Dianne Feinstein, D-CA, refused to comment and a spokesperson for ranking Republican Kit Bond, R-MO, said that Bond would only say the news shouldn't result in any delay in President Obama's decision on how to move forward in Afghanistan.

Senator Jay Rockefeller, D-WV, the immediate past chairman of the Intelligence Committee, said that he was not aware of the CIA's relationship with Karzai during his tenure but should have been.

"You know what the problem is? We on the committee own no intelligence," he said, "We only get what they choose to give us. That's why we are always fighting."