US auditor urges anti-corruption drive in Iraq

US auditor urges anti-corruption drive in Iraq
November 1st, 2005  
Team Infidel

Topic: US auditor urges anti-corruption drive in Iraq

US auditor urges anti-corruption drive in Iraq
By Andrea Shalal-Esa
WASHINGTON, Oct 30 (Reuters) - Corruption continues to cost Iraq
billions of dollars each year, and Washington and Baghdad should be doing
far more to stop it, the top U.S. auditor for Iraq's reconstruction said in
a report released on Sunday.
Stuart Bowen, special inspector general for Iraq reconstruction,
said U.S. efforts to help Iraq build strong anti-corruption institutions
were urgently needed and called for an American-Iraqi summit to battle a
legacy of corruption.
"Creating an effective anti-corruption structure within Iraq's
government is essential to the long-term success of Iraq's fledgling
democracy," Bowen wrote in his seventh quarterly report to Congress.
It was released days after the United Nations concluded that 2,200
companies including DaimlerChrysler, Siemens and Volvo made illicit payments
totaling $1.8 billion to Saddam Hussein's government under the U.N.
oil-for-food program.
Bowen's office, which has 20 auditors and 10 investigators in Iraq
plus staffers in the United States, has made significant progress on cases
charging fraud, bribery and kickbacks involving U.S. citizens -- government
officials and contractors -- in Iraq, he said.
The report said investigators had gathered "an enormous amount of
evidence" in these investigations but gave no details on any possible
Bowen said his office, created by Congress in November 2003 to
oversee the Iraq Reconstruction and Relief Fund, recently transferred $2
million to the Justice Department to fund prosecution efforts, and four
prosecutors were now working full-time on Iraq reconstruction cases.
He said it was crucial for the United States to strengthen Iraq's
new domestic anti-corruption agencies, noting that Iraq lost more than $2
billion each year in stolen gasoline and diesel fuel supplies.
The report said Iraq's Bureau of Supreme Audit charged that up to
$1.27 billion from some 90 contracts was lost from June 2004 to February
2005 because deals were given to "favored suppliers" and cash was given to
third-party firms to work out contracts.
On Oct. 10, Iraqi authorities issued warrants for the arrest of five
former ministers and 22 former ministry of defense officials on criminal
corruption charges, it said.
Overall, the report said the United States had made steady progress
in its $30 billion drive to rebuild Iraq, billed as the biggest U.S. foreign
aid operation since the post-World War Two reconstruction of Europe.
Of the 2,784 projects started, 1,887 were completed and 897 were
ongoing, it said.
But it noted that oil production remained low, insurgent attacks on
Iraqi pipelines continued to disrupt oil exports, fuel shortages were still
common, and the electricity supply remained limited for Iraq's citizens.
In July a report by Congress' investigative arm, the Government
Accountability Office, said that as of May 2005, power generation in Iraq
was at a lower level than before the U.S. invasion of Iraq in March 2003.
Iraq's oil output, which U.S. officials initially said would help
pay for rebuilding projects, had also dropped in the past two years, said
the GAO's report on Iraq reconstruction.
Bowen's report warned that high security costs and the growing price
tag to keep Iraq's existing infrastructure running could force the United
States to drop plans for many rebuilding projects.