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New Report Details Reconstruction Failures in Iraq

April 30, 2007 at 6:25 PM EDT

JEFFREY BROWN: Building a new Iraq was supposed to go hand in hand with the U.S.-led war to depose Saddam Hussein, but the effort has been beset with problems, including questionable planning, poor construction, corruption, and an absence of security, impacting billions of dollars in investment.

The special inspector general for Iraq reconstruction has issued his 13th and latest report on the program. It focused on several showcase projects that went awry under Iraqi management. The inspector general, Stuart Bowen, joins us now.

Welcome back to the program.

STUART BOWEN, U.S. Special Inspector General: Thank you. Good to be with you.

JEFFREY BROWN: Let’s start with these eight projects. These were projects that had been considered a success, turned over to Iraqi management, and yet you found problems in seven of them. What kind of problems?

STUART BOWEN: The issue is sustainment, whether the Iraqis, once they receive U.S. projects, are able to continue to operate them and maintain them effectively.

I feel part of my job, in assessing and accounting honestly for the U.S. taxpayers’ investment in Iraq, is to go look at projects that the Iraqis have taken charge of, and thus I initiated this regime. And we found this quarter, in the eight sites we visited, that seven had problems.

Now, they were generally operating, but they had problems onsite, like at the Irbil maternity hospital, the incinerator that had been installed to address medical waste was not being used. The water treatment facility was not being used. The oxygen provision system was also not being used. These were expensive and important upgrades to the hospital that the Iraqis simply chose not to incorporate.

JEFFREY BROWN: And why is it happening? Who is responsible for the problems that you saw?

STUART BOWEN: Well, once a project is handed over to the Iraqis’ management, then it is their job to ensure the continuing operations and maintenance. But the sustainment issue is one that the U.S. management has been addressing over the last 18 months and investing hundreds of millions of dollars in it, that is ensuring that there’s proper training, sufficient staff, sufficient follow-on contracts to maintain these projects.

It’s a combination of responsibility in certain instances wherein inadequate investment has been made in sustainment and inadequate oversight is being exerted by the Iraqis.

The issue of sustainment

JEFFREY BROWN: When you say sustainment, you mean whether the U.S. is doing enough to hand it over at the right time and make sure that the investment will be kept up?

STUART BOWEN: That's right. This was a shortfall early on in the reconstruction planning process; that is, the need to invest in and plan for sustainment was not a significant component of the early stages.

It was recognized two years ago, and investment has been forthcoming. If there's a "lessons learned" from all of this, it's that, in future contingency operations, sustainment must be addressed early on.

JEFFREY BROWN: But here's a line from the report. "If these projects are typical of the quality and effectiveness of operations and maintenance performance, the value of the U.S. investment in Iraq reconstruction will be at risk."

STUART BOWEN: That's right.

JEFFREY BROWN: That's a fairly damning statement.

STUART BOWEN: Well, that's right. I mean, this is the first look, as I said, the first data we have about how the Iraqis are managing and sustaining projects. We will continue to carry out this program in the course of this year and continue to report on projects that they have under the control, but the first look is a problematic one.

JEFFREY BROWN: Some of the people -- we've talked to some experts and people who have been watching this. And one of the things that they raised with us was whether too many projects were turned over too soon to the Iraqis, who were not prepared. Do you agree?

STUART BOWEN: Well, I think, early on, that was the case. There was not enough emphasis on sustainment. And there wasn't emphasis on getting projects started and getting projects moving along, as the IRFFI program matured. But what I think is the core issue here is the lack of focus in the planning stages on the need to develop a good system for transfer.

JEFFREY BROWN: Planning stages, meaning -- how far back are you going?

STUART BOWEN: During the Coalition Provisional Authority and thereafter.

Including the Iraqis in investment

JEFFREY BROWN: Another critique that we heard -- and I think this goes back to the planning stages -- that the Iraqis themselves were not included in thinking through these projects. Therefore, they didn't have an investment, a personal investment in these projects, so that, when they were handed over, they didn't quite see them as their own.

STUART BOWEN: We've conducted a "lessons learned" program as part of our mandate and have looked at that issue and, indeed, have had reported to us on numerous occasions that the Iraqis were not adequately consulted. There was some consultation, but they should have played a major role in deciding on what and what kind of projects needed to be done.

JEFFREY BROWN: All right. So as part of this, as you're looking back in lessons learned, but what needs to be done right now?

STUART BOWEN: What needs to be done right now is to convey to the Iraqis these findings, to address the warranty issues that we've uncovered as a result of these inspections, and to continue to advance the sustainment program that is ongoing, so that the projects that we provide are operated and maintained and ultimately enhance the Iraqis' infrastructure.

The solution in Iraq is an economic and a political one, not a military one. And the economic component must include a successful series of projects that are provided to the Iraqis.

A mixed story

JEFFREY BROWN: Do you feel that you have the support, the ear of the State Department, the Defense Department? When you issue a report like this, who's listening?

STUART BOWEN: Secretary Rice is. I meet with her each quarter and review what we've found. And she's been very responsive and supportive to my organization and the Department of Defense, similarly so. In fact, Secretary England has been very supportive of our work.

But on the ground in Iraq, working with the embassy and with the Corps of Engineers, is where the difference is made, and the difference has been made by the oversight we've accomplished.

JEFFREY BROWN: But you have issued many reports. You've been on our program a number of times, to come back and tell us about them. Do you see improvements? I mean, the bald question here is, do you feel that millions or billions of dollars, of American taxpayer dollars, have been misspent and are continuing to be misspent?

STUART BOWEN: As I've said, the story of Iraq reconstruction is a mixed one: $21 billion has been invested, and much has been accomplished, but much more could have been accomplished had the environment been more stable.

The security situation impedes everything, impedes reconstruction. It impedes oversight. Indeed, this quarter has been a challenge for my auditors and inspectors to get out of the Green Zone to review these projects, because of the difficult security situation.

JEFFREY BROWN: In the past, you have cited corruption as a problem. To what extent is it still a problem?

STUART BOWEN: It continues to seriously disrupt progress within the government of Iraq. Judge Radhi, who's the commissioner of public integrity, and with whom I meet each trip, and I'll see him next week when I'm over there, reported to me this quarter that he estimates that corruption costs the Iraqi government about $5 billion annually.

The Board of Supreme Audit, the oldest oversight entity in Iraq, reports that corruption afflicts virtually every ministry. The Iraqis are going to have to address this; it's going to have to be a gradual, perhaps even generational solution. But it does impede progress on many fronts.

Enabling the Iraqi government

JEFFREY BROWN: And in your trips to Iraq, do you see signs that the Iraqis are better able to take on these projects or to manage them once they're handed over?

STUART BOWEN: Well, there has been a significant evolution in the program over the last two years, and that is moving from contracting with U.S. contractors to contracting with Iraqi firms. That has the salutary effect of building capacity within the Iraqi contracting environment, and there have been significant challenges, as our reports have demonstrated. But I think there have been some improvements, as well.

JEFFREY BROWN: But I'm asking because, of course, this is all at the same time where there's a debate about the military involvement of the U.S. over there. Do you see on the reconstruction side that there will be -- that the U.S. is in here for a long haul?

STUART BOWEN: No, the message of this quarterly report is that the phase wherein the United States bears the preponderance financial burden for the recovery of Iraq has passed.

The Iraq Relief and Reconstruction Fund is virtually spent. It's entirely under contract. The program has now evolved into a more traditional foreign aid effort, with targeted support to provincial reconstruction teams, the Commander's Emergency Response Program. And, thus, the United States will make a difference by enabling the Iraqi government to carry out and complete a reconstruction plan.

JEFFREY BROWN: All right, Stuart Bowen, thank you very much.

STUART BOWEN: Thank you, Jeff.