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Pentagon management turns “Development Fund for Iraq” into misnomer August 5, 2010

Posted by Matthew Leatherman in Uncategorized.
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Eight former officials of the Defense Department or Coalition Provisional Authority currently are in federal prison for bribery, fraud, and money laundering in association with $96.6 million in Development Funds for Iraq that went missing in 2005.  Last week the Special Inspector General for Iraq Reconstruction reported that the Pentagon cannot account for another $7.73 billion of these development funds, bringing the total to $8.7 billion.

Fully 96% of this total fund ($9.1B) was lost somewhere in Pentagon accounting.  And this wasn’t even the Pentagon’s money – the Development Fund for Iraq held export revenues from Iraq’s oil and gas fields, along with surpluses from the U.N.’s Oil-for-Food program, and was operated by the Pentagon under management delegated by the interim Iraqi government.

The Defense Department confesses that it is “one of a very few cabinet level agencies without a ‘clean’ financial audit opinion.” Abstract as that sounds, it is a critical obstacle to our success overseas.

There was no mysterious purpose for the Development Fund for Iraq – it was meant to fund development in Iraq.  There is no way to know if anything of the sort happened with this money, but it is clear that a number of other things did.  The U.S. Army Corps of Engineers (USACE) was delegated between $2.1 – $2.3 billion, for instance, and it kept the money.  According to last week’s report, USACE treated it as “advance payments for reconstruction work they were planning.”

This flies in the face of development practice – subsidizing USACE does nothing to build local capacity; locals have no authority over USACE decisions; and money was hemorrhaged on costly American salaries instead of maximized on the local economy.  Added on top, we broke the newborn government of Iraq’s trust.  It was their money, after all, and the best that we can tell them is that it disappeared through inefficiency, outright loss, and – occasionally – crime.



SIGIR’s Special General Advocates for New Civil-Military Office November 5, 2009

Posted by Trice Kabundi in Analysis.
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091029-F-9933W-147Ginger Cruz, Deputy Inspector General at SIGIR, considers identifying where and when fraud and waste occur in Iraq contracts to be the “easy part” of SIGIR’s job. The hard part, in her view, is creating the right recommendations and solutions for many of the issues.  Addressing this issue, Special Inspector Stuart Bowen has proposed the establishment of a new office that would essentially staff, coordinate and mange all civilian functions in war zones.   The new agency, referred to as an “international FEMA”, would seek to remedy the myriad of issues caused by shaky coordination between US civilian and military agencies.

Special Inspector General Bowen’s recommendation carries significant weight.  The Office of the Special Inspector General for Iraq Reconstruction (SIGIR) has seen first hand the successes and failures associated with reconstruction and rehabilitation activities in Iraq.  SIGIR was created in 2004 to provide effective oversight of Iraqi relief and reconstruction programs, which to date have totaled more than $52 billion in US taxpayer dollars.  SIRGIR has repeatedly reported on the complex interagency issues that have taken place in Iraq when numerous US federal agencies are involved in large reconstruction and stabilization efforts (which are complicated by security concerns) and no clear lines of authority are drawn.  As US political focus re-shifts back to Afghanistan, the hard lessons learned in Iraq become even more salient.

Special Inspector General Bowen recommended the creation of the Office for Contingency Operations (USOCO), a civil-military organization inside the federal government.  The USOCO would be the singular civilian point-of-contact with the US military during complex oversees operations (e.g., Iraq and Afghanistan), synthesizing all civil-military operations and allowing one single agency to be held accountable for operations and initiatives undertaken in such theaters, as well as ensuring that all entities involved work together cohesively.  Moreover, USOCO would report to both the DOD and State, which Special Inspector General Bowen believes to be the best solution for the interagency coordination dilemma, stating that “As the US reconstruction effort in Iraq demonstrated, when everyone is in charge, no one is in charge.”

As the US withdrawals from Iraq and SIGIR’s time comes to a close, it appears that the agency’s final mission is to advocate for an office that would address the issues of interagency coordination, bureaucratic politics, and turf wars, exactly the sort of thing that SIGIR reported on but had no control in fixing.