Democrats probe alleged
mismanagement in Iraq
CNN
From Paul Courson
Monday, February 14, 2005
Posted: 7:58 PM EST (0058 GMT)
WASHINGTON (CNN) -- Democrats held a hearing Monday to probe
concerns raised by whistleblowers, saying Republican leaders
refuse to act on calls to investigate alleged U.S. mismanagement
of resources in Iraq.
"I think there was a massive waste of taxpayer money," said
Sen. Byron Dorgan of North Dakota, who said the Senate Democratic
Policy Committee is trying to establish accountability in the
wake of "stories about money being delivered in paper bags --
cash -- millions of dollars of cash being delivered in bags."
Dorgan said his panel "would not hold oversight hearings if,
in fact, the committees of jurisdiction would be holding the
oversight hearings themselves," referring to the Senate
Government Affairs Committee.
A Defense Department spokesman said the Coalition Provisional
Authority -- the U.S.-led administration that ran Iraq until June
2004 -- spent money in a process monitored by the United Nations,
and did not do any contracting involving U.S. funds.
Regarding Iraqi funds, which included a mix of oil revenue and
money recovered from Saddam Hussein's regime, the Pentagon
official said such money was handed over to various post-Saddam
Iraqi ministries, who in turn were responsible for spending it
properly.
The military official said his expertise was limited to the
CPA's affairs, and he would not comment on Monday's criticism of
the overall spending process.
Dorgan, along with Senate Minority Leader Harry Reid of
Nevada, compared the handling of money in Iraq to that of passing
around an ice cube that melts a bit in each hand until there's
not much left.
Dorgan and Reid both made reference to a January inspector
general's report, which found that nearly $9 billion of money
spent on Iraqi reconstruction is unaccounted for because of
inefficiencies and bad management. (Full story)
Former Iraq civil administrator Paul Bremer and the Defense
Department, which was in charge of the reconstruction effort,
disputed those findings. The audit dealt with Iraqi money and did
not examine the use of U.S. funds appropriated for
reconstruction.
"It's not too late to have adequate controls on that which is
spent on the reconstruction and on the contracting in Iraq,"
Dorgan said, adding that "very little" of about $19 billion in
reconstruction funds approved by Congress in October 2003 has
been spent.
The men displayed a large photograph of a stack of money that
a witness said totaled $2 million, bundled in plastic-wrapped
packages of $100,000 apiece. The testimony cited a primitive
banking system in Iraq that requires hand-carried delivery of
large payrolls.
Some of the testimony Monday was secondhand knowledge that
included allegations of discrepancies between the amounts
contractors billed the government and the actual cash spent.
Alan Grayson, an attorney who represents people hoping to get
a share of reward money as they file under the U.S. False Claims
Act, testified that a former FBI agent was recruited by an
American subcontractor in Iraq, but walked out when he was asked
to inflate charges for time and materials.
Grayson said the man "refused twice and said, 'You all are
going to prison.'
"The second time he was held at gunpoint in Baghdad, stripped
of his weapons and security identification and then was released,
defenseless, on the streets of Baghdad," Grayson said. "I'm
talking about Americans holding guns on Americans."
There was also some firsthand criticism from a man the United
States hired to establish the "Iraqi Media Network" in the weeks
that followed the end of Saddam Hussein's regime.
Don North, a veteran U.S. radio and television correspondent,
told the panel his project hoped to inherit Saddam's
well-equipped studios, only to find that "they had been bombed"
by U.S. forces and then looted by locals as security broke
down.
Once his group had cobbled together some basic television
newsgathering and production gear, he was told the point of the
mission had changed.
Instead of looking for news and information of interest to the
Iraqis, "we were running a public diplomacy operation" covering
briefings and photo opportunities of the Coalition Provisional
Authority, then headed by Bremer.
North left after only four months, and he told lawmakers that
independent media outlets that followed his efforts in Iraq did
not enjoy U.S. support.
"Our know-how to establish free and open media should have
been a priority in Iraq," he said. "As one of the foundations of
a budding democracy. These ideals were seriously derailed in
Iraq."
Dorgan said he had invited Republican senators, top Pentagon
officials and Bremer to the hearing, but none appeared.
"This is a scandal," Reid said. "This is only the tip of the
iceberg. ... We're talking about billions of dollars."
Reid, who left the hearing early, said the questionable
practices are "wrong and in some cases possibly criminal."
"It also contributes to the poor security position we find
ourselves in today," he said.
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