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WASHINGTON - Major US companies with multi-million dollar contracts for Iraq reconstruction are being forced to devote 12 .5 percent of their expenses for security du to spiraling violence in the region, investigators said Wednesday, Jan. 31.
Meanwhile, tens of millions of U.S. dollars have been wasted elsewhere in Iraq reconstruction aid, some of it on an Olympic sized swimming pool ordered by Iraqi officials for a police academy that has yet to be used.
The quarterly audit b Stuart Bowen Jr, the special inspector general for Iraq reconstruction, is the latest to paint a grim picture of waste and fraud in an Iraq war and reconstruction effort that has cost U.S. taxpayers more than $300 billion and left the region near civil wr .
According to the report, nine of the largest U.S. contractors in Iraq re-ported paying significant amounts of money for personal security for their workers, protection against violence at construction sites and else-where.
Contractor security costs ranged from %7.6 to 16.7 percent, or an average of %12.5, the report said.
"The security situation in Iraq continues to deteriorate, hindering progress in all reconstruction sectors and threatening the overall reconstruction effort," according to the 579 page report .
Calling Iraq's sectarian violence the greatest challenge, Bowen said in a telephone interview with The A.P. that billions in U.S. aid spent on strengthening security has had limited effect. He said reconstruc-tion now will fall largely on Iraqis to manage and they are nowhere ready for the task.
Former Rep. Lee Hamilton, co-chairman of the Iraq Study Group, said Wednesday that the report shows the uphill battle for the United States and the international community in their efforts to bring stability in Iraq.
"There are very, very few things that hurt our effort more in trying to succeed in Iraq than that kind of performance, because it turns all people off" Hamilton during testimony before the Senate Judiciary Committee.
The audit comes as President Bush is pressing Congress to approve $1.2 billion in new reconstruction aid as part of his broader plan to stabilize Iraq by sending 21,500 more US troops to Baghdad and Anbar province.
Democrats in Congress have been skeptical. Sen. Jim Webb, D- Va. has suggested the U.S. is spending too much on Iraq reconstruction at the expense of Hurricane Katrina rebuilding in New Orleans, while California Representitve Henry Waxman plans in-depth hearings next week into charges of Iraq waste and fraud.
According to the report, the State Department paid $43.8 million to contractor DynCorp International for the residential camp for police training personnel outside of Baghdad's Adnan Palace grounds that has stood empty for months. About $4.2 million of the money was improperly spent on 20 V.I.P. trailers and an Olympic size pool, all ordered by the Iraqi Ministry of Interior but never authorized by the U.S.
U.S. officials spent another $36.4 million for weapons such as armored vehicles, body armor and communications equipment that can't be accounted for. DynCorp also may have prematurely billed $18 million in other potentially unjustified costs, the report said.
Responding, the State Department said in the report that it was working to improve controls. Already, it has developed a review process that re-jected a $1.1 million DynCorp bill earlier this month on a separate con-tract because the billed rate was incorrect.
A spokesman for DynCorp, Greg Lagana, did not immediately return a phone message seeking comment.
Bowen, whose office was nearly eliminated last month by administration-friendly Republicans in Congress, called spending waste in Iraq a continuing problem. Corruption is high among Iraqi officials, while U.S. contract management remains some-what weak.
With the United States' $21 billion rebuilding effort largely finished, it will be up to the international community and the Iraqis to pitch in to sustain reconstruction, Bowen said in the interview. "That will be a long term and very expensive process," he said.
According to the inspector general:
Shoddy construction was wide-spread at the $73 million Baghdad Police College, including plumbing problems that posed health risks to Iraqi recruits.
_Bowen's office opened 27 new criminal probes in the last quarter, bringing the total number of active cases to 78. Twenty-three are await-ing prosecutorial action by the Justice Department, most of them centering on charges of bribery and kickbacks.
Still, "fraud has not been a significant component of the U.S. experience in Iraq," Bowen said.
As of the end of 2006, contracts had been let for all of the $21 billion that Congress put into the Iraq Relief and Reconstruction Fund it created in 2003. Some 80 percent of the money has been paid out, the report said.
Since 2003, use of the reconstruction aid changed several times as U.S. officials shifted priorities to spend more on security problems or pro-grams critical to supporting elections or developing the new government.
For example, money was cut from what had been originally planned for electricity, water, oil projects and transportation and communication so it could be used to help pay for such things as health care, elections, democracy programs and training Iraqi security forces.
Overall, the largest single expense was security. The total was spent in the following way:
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 said. It said the Iraqi gov-ernment had "billions of budgeted dollars remained unspent at the end of 2006."
Unemployment remains high, con-tributing to the insurgency because it sours the population and leaves idle young men to their own devices, according to the report.
The government's "most significant challenge continues to be strengthening rule of law institutions the judiciary, prisons and the police," the report said. "The United States has spent billions of dollars in this area, with limited success to date."