Here in the Boston area, the so-called Big Dig has had more than its share of mismanagement, incompetence and outright fraud. The total price for the project, which is mostly done, is about $14 billion; an amount that has been rightly called an outrage and a scandal. How much of that is due to fraud and waste?
In Iraq the overhead for graft and corruption alone is estimated at $10 billion. Money that’s been skimmed right off the top by contractors, including Dick Cheney’s cronies at Halliburton. We need more outrage.
Audit finds $10 billion in fuzzy spending
Inspectors reviewed one-sixth of $350 billion U.S. has spent on Iraq
Dan Duray, Hearst Newspapers
Friday, February 16, 2007(02-16) 04:00 PST Washington — 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.
William Reed, director of the Pentagon’s Defense Contract Audit Agency, told the House Oversight and Government Reform Committee that his agency discovered the problems — $4.9 billion in “questioned” or overly expensive charges, and $5.1 billion in “unsupported” or undocumented expenses — after auditing $57 billion in Pentagon contracts.Reed acknowledged that war-torn Iraq lacked ideal circumstances for solid accounting practices.
“We do try to be flexible and recognize that there are circumstances where the records might not be in perfect condition, on the back of envelopes and things like that,” he said. “We try to be flexible in that regard, but we’re not flexible in regard to having to have the evidence to support the costs.”
“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.”
“There is no accountability,” said David Walker, head of the Government Accountability Office, 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.”
The new audit report put the spotlight again on Halliburton, the Houston conglomerate formerly headed by Vice President Dick Cheney, which has landed large Pentagon contracts without competition.
Most of Halliburton’s $2.7 billion in questionable charges came from programs to feed and support U.S. troops.
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.
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.
“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,” Waxman said.
In their testimony, the investigators said they had found overpricing and waste in Iraq contracts amounting to $4.9 billion since the Defense Contract Audit Agency began its work in 2003. An additional $5.1 billion in expenses were charged without proper documentation.
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).
But Rep. Tom Davis, R-Va., the top Republican on the panel, pointed to continuing, 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,” he said.
The Associated Press contributed to this story.