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Panel finds widespread waste in wartime spending

Wednesday, August 31, 2011 | 8:15 a.m. CDT; updated 2:15 p.m. CDT, Wednesday, August 31, 2011

WASHINGTON — The U.S. has lost billions of dollars to waste and fraud in Iraq and Afghanistan and stands to repeat that in future wars without big changes in how the government awards and manages contracts for battlefield support and reconstruction projects, independent investigators said Wednesday.

The Wartime Contracting Commission urged Congress and the Obama administration to quickly put in place its recommendations to overhaul the contracting process and increase accountability. The commission even suggested that the joint House-Senate debt reduction committee take a close look at the proposals.

"What you're asking for is more of the same," said Dov Zakheim, a commission member and the Pentagon comptroller during President George W. Bush's first term. "More waste. More fraud. More abuse."

The bipartisan commission, created by Congress in 2008, estimated that between $31 billion and $60 billion has been lost in Iraq and Afghanistan over the past decade due to lax oversight of contractors, poor planning, inadequate competition and corruption.

"I personally believe that the number is much, much closer to $60 billion," Zakheim said.

Yet new legislation incorporating the changes remains a challenge for lawmakers deeply divided on the best way to reduce the deficit.

"If these recommendations are not implemented, there ought to be a Hall of Shame," said Michael Thibault, co-chairman of the commission. "There's an opportunity at hand."

The commission's 15 recommendations include creating an inspector general to monitor war zone contracting and operations, appointing a senior government official to improve planning and coordination among federal agencies, reducing the use of private security companies, and carefully monitoring contractor performance.

Massachusetts Rep. John Tierney, the top Democrat on the House Oversight and Government Reform national security subcommittee, said Wednesday that the commission's findings are "alarming." Tierney said he plans to introduce legislation next week to create the inspector general's post.

Sen. Claire McCaskill, D-Mo., chairwoman of the Senate's contracting oversight subcommittee, said she plans to prepare legislation based upon the commission's recommendations.

The commission's report said contracting waste in Afghanistan and Iraq could grow as U.S. support for reconstruction projects and programs wanes. That would leave the countries to bear the long-term costs of sustaining the schools, medical clinics, barracks, roads and power plants already built with American money.

Overall, the commission said spending on contracts and grants to support U.S. operations is expected to exceed $206 billion by the end of the 2011 budget year. Based on its investigation, the commission said contracting waste in Afghanistan ranged from 10 percent to 20 percent of the $206 billion total. Fraud during the same period ran between 5 percent and 9 percent of the total, the report said. Fraud includes bribery, kickbacks, bid rigging and defective products, according to the commission.

"It is disgusting to think that nearly a third of the billions and billions we spent on contracting was wasted or used for fraud," McCaskill said.

Styled after the Truman Committee, which examined World War II spending six decades ago, the commission had broad authority to examine military support contracts, reconstruction projects and private security companies. But the law creating the commission set this September as the end of its work, even as contractors continue their heavy support of U.S. operations in the war zones.

Security, transportation, food preparation and delivery, and much more are now handled by the private sector. At the same time, the officials responsible for monitoring contractor performance have been overwhelmed by increasing reliance on private companies.

"We are far more reliant on contractors than we ever were," said commission member Charles Tiefer, a professor of government contracting at the University of Baltimore Law School. "We always bought munitions from them. But we didn't used to buy much in the way of services from them."

The commission cited numerous examples of waste, including a $360 million U.S.-financed agricultural development program in Afghanistan. The effort began as a $60 million project in 2009 to distribute vouchers for wheat seed and fertilizer in drought-stricken areas of northern Afghanistan. The program expanded into the south and east. Soon the U.S. was spending a $1 million a day on the program, creating an environment ripe for waste and abuse, the commission said.

"Paying villagers for what they used to do voluntarily destroyed local initiatives and diverted project goods into Pakistan for resale," the commission said.

The Afghan insurgency's second-largest funding source after the illegal drug trade is the diversion of money from U.S.-backed construction projects and transportation contracts, according to the commission. But the report does not say how much money has been funneled to the insurgency. The money typically is lost when insurgents and warlords threaten Afghan subcontractors with violence unless they pay for protection, according to the report.

The Associated Press reported this month that U.S. military authorities in Kabul believe $360 million has ended up in the hands of the Taliban, criminals and power brokers with ties to both.

The military said only a small percentage of the $360 million has been garnered by the Taliban and insurgent groups. Most of the money was lost to profiteering, bribery and extortion by criminals and power brokers.


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Comments

Gary Straub August 31, 2011 | 9:53 a.m.

The war in Iraq and now Afghanistan, has been nothing less than a feeding trough for corporate pigs, with the CEO of Haliburton laying down the path by awarding many no bid contracts to his "former" company. Under the guise of protecting the ostriches of the far right, they have managed to rip us and our soldiers off from day one. The blackhearted right wing that complains about one penny being spent to help a down and out citizen has been looking on like the three monkeys as the public coffers have been pillaged with impunity. All the while our country has suffered more natural disasters, and a recession that the "privatize everything" crowd are fighting funding for at every step of the way.
Taking from their play book I have a new mantra; If you are not with all Americans than you are against us.

(Report Comment)
Michael Williams August 31, 2011 | 10:25 a.m.

Gary: Nice start on a manifesto.

What's in store for Chapter 2?

(Report Comment)
Gary Straub August 31, 2011 | 11:13 a.m.

Michael, Hard to say, what with God telling us to get our fiscal house in order.

(Report Comment)
Greg Allen August 31, 2011 | 1:38 p.m.

Waste in wartime spending?

Duh.

Money is power. Those with it make the rules. Military industrialists have been reaping it healthily for the last ten years, and they have the power to override even the elected desires of The People to get out of the wars. Do you think they'd give it up without a fight?

(Report Comment)
mike mentor August 31, 2011 | 4:33 p.m.

Waste in wartime spending? Duh?

More like... Waste in government spending on anything for anything. Duh !!!

Now that leaves us with some choices. Do we get rid of the government altogether so there is no more waste and defend ourselves from rogue nations that would do us harm and take what we have with our shotguns?

or

Do we get rid of all but the absolutely necessary operations of the federal government. Maybe we should go back to the beginning and examine why we formed a federal government in the first place. Oh yeah. I remember. One of the first things the continental congress did was form a continental army. They did this before we declared independence. Before we ratified the constitution. Then came the three branches of government, the bill of rights, etc.

I am thinking that this whole army thing is probably too important to get rid of.

Maybe those of us "blackhearts" actually have come to realize this because we actually think our sovereignty is more important than say, building pretty windmills for the brother of a democratic senator and democratic sec of state, or to send someone a check on the first of the month so they don't have to work a job that they feel is beneath them, or paying some professor to study gay sex in South American bars. The list goes on and on...

So, maybe, just maybe, we "blackhearts" realize that there has been, and will always be, waste in government spending, military included, and the blind ones are the ones who are advocating an increase in size and functions of said federal government!

(Report Comment)
Paul Allaire August 31, 2011 | 4:51 p.m.

You're just jealous because they didn't send anybody to study sex in the bar where you hang out.

(Report Comment)
mike mentor August 31, 2011 | 5:39 p.m.

@Paul
D'oh!

(Report Comment)
frank christian August 31, 2011 | 7:46 p.m.

Cost of both Iraq and Afghanistan comes to 1.25T$ since 2001. Our Indebtedness has increased 4.6T$ since Pelosi and Obama took control of our Government.

Gary Straub - If the "corporate pigs, with the CEO of Haliburton fed from the trough before, please identify the whereabouts of these later funds or admit that they have been spent, given away, or stolen (not necessarily in that order).

(Report Comment)
Tim Trayle August 31, 2011 | 8:56 p.m.

Actually, more responsible studies of the economic costs of the Iraq and Afghanistan wars put the figure at somewhere between $3.2 and $4 trillion dollars in moderate estimates. Conservative estimates within the same study range at about $2.9 trillion. That's because the kinds of rudimentary surveys that FC gleans from only estimate what's been spent so far. When we look at factors such as projected add'l spending, interest on war appropriations, costs deeply tied to the "war on terror" such as support for foreign states that we never would have extended but *for* the "war on terror," *and* finally, the costs of caring for wounded vets in a truly honorable way (costs which will extend to 2050), then we have to consider higher figures. Right?
.
(Yes, I can provide a link to the study I have in mind. Just say the word.)
.
NB: Just thinking more about this: high as they go, these studies do *not* count the negative economic impact the wars have had upon returning soldiers, many of whom have had to reintegrate themselves into civilian life after multiple deployments, in a less-than-healthy economic climate. I would imagine that there is a profound economic wastage in all of that.
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In any case, this is just basic, sober cost-extrapolation, and should not be taken as some kind of "Blame America First" ideology (don't do it, FC), nor as rantings from some whacky "leftist" perspective (ditto). Good conservatives like realistic cost assessments, right?
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Truly, we should remember that gov't (whether headed by Democrats or Republicans) want to *under-represent* the true economic costs of these wars, since both parties--and the state itself--are deeply implicated in them. Both of our major parties have a vested interest in drawing a very narrow circle around what count as legitimate cost-factors, and what do not.
.
PS: I wonder if anyone feels there are add'l *social* costs related to the wars, such as the erosion of civil liberties or privacy? This is an area where conservatives and liberals ought to be able to find areas of agreement. Anyhow...clearly, a bald figure like $1.25 trillion is more-than-optimistic. Cloud cuckoo-land.
,
But heck, if folks can use a figure like that to score some cheap political points, then why worry about more complex (and as I see it, more realistic) types of assessment?

(Report Comment)
frank christian August 31, 2011 | 9:49 p.m.

You really are a trial. The figure is total and running amount of the dollars so far spent. You know it.

If you want to show us the adverse conditions pending, look into the costs of the result of the Obama owned 9% unemployed since he took office. The new records set in those categories are beyond anything the American people can imagine. These records are creating a sub-culture of unemployed that will never find a job. We - some of us, learn tonight that another 4200 regulations on our labor force are being installed now. Needed by whom? Unions of course. This President is going to advise us to accept another trillion or so of government deficit spending to bring gdp growth to 4% which until spent might reduce the unempl.rate that he and the progressive liberal gov'ts of our European neighbors have previously been content with. This liberal crap won't fly. Quit trying to sell it!

(Report Comment)
Corey Parks August 31, 2011 | 9:53 p.m.

Like I posted on Facebook. They did not need to over pay a few people on a panel to tell the country that there is widespread waste in spending. Go ahead and ask any one of us Soldiers that spend more then a week there. If 60 billion is all they are reporting then you might as well double it.

Nothing is more frustrating then being in the military and being a businessman and seeing such waste and stupidity from the way things are conducted at the top to the way they deal with supplied. I know that this is nothing compared to the waste that politicians create daily but it still makes your head want to explode.

(Report Comment)
Tony Robertson August 31, 2011 | 10:26 p.m.

There is no doubt that all wars have had wasteful spending, from broken-down horses, moth-ridden uniforms, and rotten meat in the Revolution, to the blatant profiteering of that evil Dick Cheney's old company. Probably the most wasteful spending in war is losing one.

I have to quibble a bit with the scare quotes around "war on terror", above. But I also quibble with the phrase "war on terror", too. It has been a war on Islamist extremism. And that's decidedly not "Islamist extremism". Because 19 "terrorists" actually hijacked "planes" and flew them into the "World Trade Center" and "Pentagon". Many "innocent" people were "killed".

See how ridiculous that is?

(Report Comment)
Tim Trayle September 1, 2011 | 6:32 a.m.

"You really are a trial...If you want to show us the adverse conditions pending, look into the costs of the result of the Obama owned 9% unemployed since he took office. The new records set in those categories are beyond anything the American people can imagine. These records are creating a sub-culture of unemployed that will never find a job. We - some of us, learn tonight that another 4200 regulations on our labor force are being installed now. Needed by whom? Unions of course. This President is going to advise us to accept another trillion or so of government deficit spending to bring gdp growth to 4% which until spent might reduce the unempl.rate that he and the progressive liberal gov'ts of our European neighbors have previously been content with. This liberal crap won't fly. Quit trying to sell it!"
-----------

Notice this one folks. Typical overheated rhetoric, that somehow manages union-bashing, Europe-bashing, liberal-bashing, and fearful descriptions of non-working "sub-cultures," in one ranting response. Note that my own post merely advised that the true costs of the wars are likely significantly higher than this poster had proclaimed, before he used those claims to try and hijack the thread towards more Obama-bashing. Funny.

(Report Comment)
frank christian September 1, 2011 | 7:37 a.m.

I saw when I re-read my post that I had left open the opportunity for you to pounce on my portrayal and disregard the importance of the information I proffered while dismissing it as "bashing". I should have taken your tone, I was only trying to advise of the true costs of liberalism (portrayed by Obama and Democrat party)in our country and the damage it continues to foist upon us all. "Pew Center researchers also analyzed recent employment data to create a demographic portrait of the long-term unemployed.2 According to the Bureau of Labor Statistics (BLS), the median duration of unemployment stood at 25.5 weeks in June 2010, meaning half of the unemployed—the largest proportion since World War II—have been looking for work for six months or more. The previous high, in May 1983, was 12.3 weeks, less than half the level today." Please read:
http://www.theatlantic.com/magazine/arch... Thank you for your attention.

(Report Comment)
John Schultz September 1, 2011 | 10:01 a.m.

Mike, I agree that the US needs an army, but I don't think the founding fathers you referenced would have been too happy with our incursions into Iraq and Libya, even accounting for the past incursion into Tripoli that occurred under Jefferson's (I believe) tenure.

(Report Comment)

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