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< Back to Iraqi Dinar in the News February 6th, 2007

Bremer: Oversight improving on billions in Iraq aid

Updated 2/6/2007 12:14 PM ET
WASHINGTON — Iraq's government has a "primitive" financial system that leaves it susceptible to fraud and abuse, but oversight of funds is improving, a key figure in use of U.S. funds in the region told Congress this morning.

Paul Bremer, the former head of the Coalition Provisional Authority, is testifying this morning before the House Oversight and Government Reform Committee about the billions of dollars his agency spent in Iraq. It is his first appearance on Capitol Hill since he left office more than two years ago.

Bremer said prewar spending planning was inadequate and took responsibility for spending mistakes by the Coalition Provisional Authority (CPA). But he defended his decision to funnel cash through Iraqi ministries, saying there was no other way to quickly get funds to Iraqis.

"It was not a perfect solution, but there are no perfect solutions in Iraq," he said.

Stuart Bowen, the U.S. special inspector general for Iraq reconstruction, told the panel the CPA did little or nothing to ensure the Iraqi ministries were spending the money properly.

"More should have been done to find out what the Iraqi ministries were doing with the $8.8 billion," Bowen saidl. The $8.8 billion were Iraqi government funds the United Nations sent to the CPA as the de facto government of Iraq.

The hearing is part of the examination of the Bush administration's conduct in Iraq that Democrats promised after regaining control of Congress.

The committee's chairman, Rep. Henry Waxman, D-Calif., is a longtime critic of the administration's handling of the Iraq war and reconstruction contracts. As head of the committee, Waxman has the power to force officials to testify and hand over documents, as well as to decide what the panel will investigate.

The panel also will hold hearings this week on allegations of price gouging by contractors and mismanagement by the Department of Homeland Security.

The stakes are high. Rep. John Murtha of Pennsylvania and other Democrats have criticized the reconstruction effort in Iraq as wasteful, suggesting that the money would be better spent to rebuild New Orleans or improve military readiness at home.

Republicans warned Democrats today about potential grandstanding. "Self-righteous finger wagging and political scapegoating won't make Iraq any more secure," said the panel's top Republican, Rep. Tom Davis of Virginia.

The president's 2008 budget proposal presented to Congress on Tuesday requests $3.4 billion in reconstruction funds, but Democratic leaders have said they would closely scrutinize the administration's spending requests for Iraq.

The committee cannot directly punish wrongdoing but can refer possible criminal conduct to prosecutors, publicize the faults and propose legislation to fix the problems.

The panel's hearing today will scrutinize spending and oversight by the Coalition Provisional Authority (CPA), which ruled Iraq from May 2003 to June 2004.

Audits by the United Nations and the U.S. Special Inspector General for Iraq Reconstruction found the provisional authority under Bremer couldn't properly account for the billions of dollars it spent. Bremer has responded that he and other CPA officials did the best they could in dangerous and chaotic post-invasion Iraq.

The inspector general, Stuart Bowen, also is scheduled to testify. Two years ago, his office found that the provisional authority never released spending guidelines and relied on a questionable Iraqi bureaucracy in spending the $8.8 billion allocated under U.N. auspices. As a result, the report said, there was no assurance that the money was spent on legitimate projects.

Last week, Bowen reported to Congress that corruption and mismanagement continue to plague Iraqi ministries, and the sectarian violence there threatens to undo the rebuilding efforts.

That report also highlighted audits finding waste and mismanagement of hundreds of millions of dollars of U.S. government money, including a Baghdad police academy with serious construction defects and a State Department police training program that paid more than $48 million for a training camp that was never used but included an Olympic-size swimming pool.