US wasted billions in Iraq with few results: inspector

WASHINGTON (AFP) - After invading Iraq ten years ago, the United States spent US$60 billion (S$74.9 billion) on a vast reconstruction effort that left behind few successes and a litany of failures, an auditor's report said on Wednesday.

The ambitious plan to transform the country after the fall of Saddam Hussein has been marked by half-finished projects and crushed expectations, according to the final report of the Special Inspector General for Iraq Reconstruction, Stuart Bowen.

The aid effort was plagued by in-fighting among US agencies and an improvised "adhocracy" approach, with no one clearly in charge of a massive investment that was supposed to put Iraq on a stable footing, said the report to Congress.

"Management and funding gaps caused hundreds of projects to fall short of promised results, leaving a legacy of bitter dissatisfaction among many Iraqis," it said. Some of the reconstruction money was stolen, with a number of US military officers and contractors now imprisoned for fraud, while other funds remain unaccounted for to this day, it said.

Of US$2.8 billion in Iraqi oil revenues handled by the US Defence Department, officials could not produce documents accounting for the use of about US$1.7 billion, including US$1.3 billion in fuel purchases, it said.

The lengthy report highlighted some of the worst examples of mismanagement and graft and included interviews with senior Iraqi and US officials who mostly regretted the outcome of the reconstruction programme.

"The level of fraud, waste, and abuse in Iraq was appalling," Senator Susan Collins, a Republican from Maine, was quoted as saying.

She was "especially angry when she learned that some reconstruction money found its way into the hands of insurgent groups," the report said.

The review, however, concluded that a program to train and arm Iraqi security forces stood out as a success.

Both Iraqi and US officials agreed that the Americans tended to ignore the advice of Iraqis or never bothered to consult them before launching costly projects, with sometimes disastrous results.

The list of failures included a new police academy with raw sewage leaking through ceilings, a subcontractor charging US$900 for a control switch valued at seven dollars and a project to build large prison in Diyala province that was eventually abandoned, despite an investment of US$40 million.

Hoping to restore a vital oil and gas pipeline at the al-Fatah bridge, which had been blown up during the US invasion, American officials tried to build a pipeline under the Tigris river at a cost US$75 million.

A geological study had predicted that drilling in the sandy soil under the river would doom the attempt and the warning proved correct. After the project failed, the pipeline and bridge were fixed, but at an additional cost of US$29 million.

Iraqi officials recounted a bewildering array of US bureaucrats and contractors who rushed through poorly planned projects while arguing among themselves.

"Not only was there no coordination between the Department of State, the Pentagon and the CPA (coalition provisional authority), they were fighting each other," Fuad Hussein, chief of staff to the Kurdish regional government's president, Massoud Barzani, told the inspector general.

"The policy was to control the Ministries of Oil, Interior, and Defense completely, but if you know nothing about the culture you're trying to control, the result is chaos," he said.

The US commander credited with rescuing the war effort and containing sectarian violence, David Petraeus, offered the report's authors a more optimistic view.

The reconstruction programme brought "colossal benefits to Iraq," said Petraeus, while acknowledging mistakes made immediately after the invasion, including disbanding the Iraqi army.

"Over time, we got the electricity infrastructure running and the oil industry working again, and, thanks to these efforts, the country began generating significant oil revenues," Mr Petraeus was quoted as saying. The four-star general went on to lead the CIA before resigning last year over an extra-marital affair.

A senior diplomat, Deputy Secretary of State William Burns, told the auditors that in any future aid effort, the United States should move with more caution and not expect to "do it all and do it our way."