Déjà vu

In an interview with Reuters on Tuesday, Stuart Bowen, the US Special Inspector General for Iraq Reconstruction, noted that there was evidence of corruption in US-funded deals. As of April 1, 35 potential criminal cases had been referred to other agencies while 34 more remain open.

"The big ones are yet to unfold ... We are talking tens of millions of dollars and not just thousands," he said....

He wouldn't provide any more details, but the day before, the Guardian (UK) quoted the Wall Street Journal as saying

US efforts to rebuild Iraq are being hampered by management failures and security problems....

[A] comprehensive US audit ... will also highlight incidences of apparent corruption, fraud and embezzlement.

Based on an AP report for May 4, I'm not sure "incidences" is an adequate term:

U.S. civilian authorities in Iraq cannot properly account for nearly $100 million that was supposed to have been spent on reconstruction projects in south-central Iraq, government investigators said Wednesday.

There are indications of fraud in the use of the $96.6 million, according to a report by the Special Inspector General for Iraq Reconstruction. A separate investigation of possible wrongdoing continues.

More than $7 million of the total is unaccounted for, the report said. An additional $89.4 million in payments do not have the required supporting documents.

The report accused civilian contract managers of "simply washing accounts" to try to make the books balance.

This is, of course, nothing new and so far the reconstruction fraud is small potatoes for Iraq: At the end of January, Bowen reported that some $8.8 billion spent by the Coalition Provisional Authority during its reign in Iraq could not be accounted for. The report delicately referred to the problems as "inefficiencies and bad management," while effectively admitting that it sure looked like a whole lot more:

"CPA staff identified at one ministry that although 8,206 guards were on the payroll, only 602 guards could be validated," the audit report states. "Consequently, there was no assurance funds were not provided for ghost employees."

Which smacks of something a bit more serious than sloppy bookkeeping. "No assurance," indeed.

It was things like that and subsequent revelations that prompted Frank Willis, a former senior advisor to the CPA, to charge last month that the US's laxity was turning Iraq into a "free fraud zone." He compared it to the "wild west" and said the "corruption" could potentially involve billions of dollars, especially since less than a quarter of the nearly $19 billion set aside for reconstruction has been spent.

The BBC reported that a UN report that came out in January also criticized the US as being a "poor role model" in "keeping corruption at bay."

Classic British understatement, I'd say.