Auditors say billions wasted in Iraq

? About $10 billion has been squandered by the U.S. government on Iraq reconstruction aid because of contractor overcharges and unsupported expenses, and federal investigators warned Thursday that significantly more taxpayer money is at risk.

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.

More than $1 in $6 charged by U.S. contractors were questionable or unsupported, nearly triple the amount of waste the Government Accountability Office estimated last fall.

“There is no accountability,” said David M. Walker, who leads 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.”

Also testifying Thursday were Stuart Bowen, the special inspector general for Iraq reconstruction, and William H. Reed, director of the Defense Contract Audit Agency.

The appearance before the House Oversight and Government Reform Committee came as Congress prepares for a showdown with President Bush next month over his budget request of nearly $100 billion for the wars in Iraq and Afghanistan.

So far, the Bush administration has spent more than $350 billion on the Iraq war and reconstruction effort.

The Army, which handles most of the Iraq contracting, said Thursday it had not reviewed the latest contract figures.

“The U.S. Army, along with the Departments of Defense and State, continue to help thousands of Iraqis daily with reconstruction projects to provide them with better lives,” said spokeswoman Mary Ann Hodges. “We look forward to examining its findings and applying some of its recommendations in the future.”

Senate Democrats said recently cited cases of waste were “outrageous rip-offs of the American taxpayer” and introduced legislation Thursday to stiffen punishment for war profiteers and cut down on cronyism in contracting.

According to their testimony, the investigators:

¢ Found overpricing and waste in Iraq contracts amounting to $4.9 billion since the Defense Contract Audit Agency began its work in 2003. Some of that money has been recovered.

¢ Pointed to growing Iraqi sectarian violence as a significant factor behind bloated U.S. contracting bills. Iraqi officials, they said, must begin to take primary responsibility for reconstruction efforts.

¢ Urged the Pentagon to reconsider its growing reliance on outside contractors in wars and reconstruction efforts.