(formerly IRIN News) Journalism from the heart of crises

Insecurity and corruption hinder reconstruction, audit says

[Iraq] Destroyed telecommunications building Baghdad.
Mike White

Insecurity, corruption among Iraqi officials and weak US contract management have led to tens of millions of dollars in Iraq reconstruction aid going missing, a new audit report said on Wednesday.

The quarterly audit prepared by the office of the Special Inspector General for Iraq Reconstruction (SIGIR), Stuart Bowen Jr, is the latest to paint a grim picture of the deteriorated security situation, waste, fraud and frustration in the Iraqi reconstruction effort.

"The security situation in Iraq continues to deteriorate, hindering progress in all reconstruction sectors and threatening the overall reconstruction effort," said an extract from the 579-page report.

Corruption, in particular, has been singled out by specialists as one of the factors that have contributed to the worsening security situation.

“There are concerns that corruption among Iraqi officials has diverted much of these funds to fuel internal conflicts between Iraqi rivals or insurgent attacks against US and Iraqi forces. It’s like what's going on with smuggling oil," Rigal Hama Jalil, a Baghdad-based economist, said.

"There should be a real surveillance on how these funds are used and also there should be real surveillance on how the reconstruction projects are being implemented. Wrongdoers should be punished," Jalil added.

''The security situation in Iraq continues to deteriorate, hindering progress in all reconstruction sectors and threatening the overall reconstruction effort.''


With US $21 billion allocated to it, the Iraq Relief and Reconstruction Fund (IRRF) is the largest US foreign aid project since the Marshall Plan was launched to rebuild Europe after World War II. Some 80 percent of the money has already been paid out, the report said.

Shifting priorities

Since 2003, US officials shifted their priorities several times on how to use the reconstruction aid. They have spent more on implementing security programmes, supporting elections and developing an Iraqi government, than on reconstruction, according to the report.

"We got nothing out of elections. Our lives just got more miserable as none of those we elected is serving us," said Ahmed Jabouri, a 39-year-old taxi driver.

"We need security and good services. We want to be treated like human beings who have access to good health care, potable water and electricity all day," Jabouri added.

At present, Iraqis get about three hours of electricity a day, in contrast to a pre-war level of about 20 hours a day. This has forced many citizens, as well as large private and governmental factories, to rely on their own generators for power.

In many cases, the residents of the capital, Baghdad, suffer acute fuel shortages because lack of electricity has forced refineries to stop functioning.

According to the audit report, money that was originally earmarked for electricity, water, oil projects and transportation and communications has been diverted to fund health care, elections and democracy programmes as well as the training of Iraqi security forces. The largest single expense, the report said without mentioning a figure, was on security.

''We got nothing out of elections. Our lives just got more miserable as none of those we elected is serving us.''

The audit report said that 34 percent of the IRRF’s funds were spent on security and justice, 23 percent on trying to generate and distribute electricity, 12 percent on water, 12 percent on economic and societal development, 9 percent on oil and gas, 4 percent on transportation and communications and 4 percent on health care.

But despite the high figure allocated for security, Iraq’s capital Baghdad and some other provinces are still witnessing high levels of violence which claim the lives of tens of civilians on a daily basis.

Insurgents are relentlessly attacking the country's public servants and infrastructure in a bid to make the Iraq ungovernable.

The SIGIR is a temporary US federal agency serving as a watchdog for fraud, waste, and abuse of funds intended for Iraq’s reconstruction programmes. It was created by the US Congress to provide oversight of the IRRF. This is done by independent audits, field inspections and criminal investigations into potential fraud, waste and abuse of funds.

Tough measures are needed

"The Iraqi government must be more aware of the danger of corruption and lack of security. It has to adopt meaningful plans on the ground to ensure security in the country and then put reconstruction efforts on track," Hamid Ali al-Azawi, a Baghdad-based political analyst, said.

"Corruption and insecurity are like moths eating the body of the government. The quicker the government annihilates these insects, the sooner prosperity and security will prevail," al-Azawi added.

The report cited an incident in which $43.8 million was paid by the US State Department to DynCorp International to build a residential camp for trainee police in one of former president Saddam Hussein’s palaces in Baghdad.

About $4.2 million of this money was spent improperly on 20 trailers for important visitors and an Olympic-sized swimming pool - all ordered by the Iraqi Ministry of Interior but never authorised by the US.

''Corruption and insecurity are like moths eating the body of the government. The quicker the government annihilates these insects, the sooner prosperity and security will prevail.''

The report added that the auditors had "significant concern" about the way ahead, partly because of the Iraqi government's bad track record on budgeting for such projects.

The report also warned that soaring unemployment was contributing to the insurgency and, therefore, was hampering reconstruction efforts.

However, the report concluded that the Iraqi government's most significant challenge “continues to be strengthening rule-of-law institutions - the judiciary, prisons and the police. The United States has spent billions of dollars in this area, with limited success to date."

Iraqi government officials have declined to comment on the report, saying that they have yet to read it.

For ordinary Iraqis, reports and new initiatives come and go while the conditions they live in continue to deteriorate.

"We prefer Saddam's days. There was not as much corruption then as we see now," said Fawaz Ahmed Ajil, a 44-year-old Baghdad owner of a supermarket. "We are subjected to death every single moment and have no basic services like potable water and sewage networks.”

sm/ar/ed

Read more:
Smuggled oil hampering reconstruction
Corruption and poor security stem flow of investment
Slow reconstruction blamed on corruption
International Compact targets corruption
Large-scale oil smuggling operations lead to reconstruction delays

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