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."
John Hudson reports on national security and foreign policy from the Pentagon to Foggy Bottom, the White House to Embassy Row, for The Cable.