Ask Paul Bremer

From Holden:

During Mr. Bremer’s current book tour has anyone seriously asked him where all of our money went?

More than 18 months after the Pentagon disbanded the Coalition Provisional Authority that ran Iraq, neither the Justice Department nor a special inspector general has moved to recover large sums suspected of disappearing through fraud and price gouging in reconstruction.

Earlier audits by the Special Inspector General for Iraq Reconstruction — a post Congress created in late 2004 — found that oversight of contractors by the Authority was so lax that widespread abuse was likely. An audit in April 2005, for example, found “significant deficiencies in contract administration,” which meant that “there was no assurance that fraud, waste, and abuse did not occur in the management and administration of contracts” the U.S. awarded with Iraqi oil money administered by the United Nations.


The Coalition Provisional Authority, which existed from shortly after the fall of Saddam Hussein in April 2003 until June 2004, was allocated more than $38 billion in U.S. and Iraqi funds. It spent $19.7 billion of U.N.-administered Iraqi oil money.

Authority officials rapidly doled out the money, including $12 billion from the U.N. fund paid in cash, as they scrambled to restore vital services and impose order in Iraq.


Some officials who were associated with the contracting, in the Pentagon and in Iraq, have defended contractors’ practices in the country, citing the chaos of wartime. They say contractors were doing their best to perform quickly amid trying circumstances. Paul Bremer, who ran the Authority, wrote in response to one critical audit that it unfairly assumed that “Western-style budgeting and accounting standards” should apply “in the midst of war.”

Still, some in Congress have advocated tough action against contractors, noting that the government’s main legal means to recover money is the False Claims Act, passed during the Civil War to recoup gains from contractors who had gouged the Union Army for essential supplies.

Under that act, the Justice Department’s civil division has the authority to sue contractors that defraud the government, and to seek treble damages. But Justice hasn’t initiated any such suits involving Iraq-related work, a spokesman said. The civil division also hasn’t joined any suits filed by private-sector whistle-blowers who claim they know of fraud or abuse, although lawyers familiar with such suits estimate that at least two dozen are pending.


It isn’t clear how many contracts the Authority issued, in part because the inspector general’s office says it hasn’t located many of the contracts. But among those awarded large ones were Fluor Corp., Parsons Corp. and Washington International Group. One question facing the government is whether to seek recovery of funds paid to the largest contractor, Halliburton Co.’s KBR unit, which was awarded multibillion-dollar no-bid contracts beginning shortly before the U.S. invaded Iraq to rebuild oil fields and provide logistical support to the U.S. military.

A series of 2004 audits by the Defense Contract Audit Agency, the Pentagon’s contract-auditing arm, found expenses of $1.48 billion unsupported by adequate documentation on KBR’s two largest contracts, which were valued at a total of $9.5 billion.