9 ways the US wasted taxpayer money in Iraq

A new report gives an unvarnished look at what went wrong in efforts to rebuild the broken country.

By Kim Peterson Mar 6, 2013 4:00PM
A landscaper works on the grounds of a children's hospital on Aug. 12, 2010 in Basra, Iraq. The hospital is one site among hundreds of projects funded by U.S. taxpayers that remain abandoned or incomplete. (Nabil al-Jurani/AP Photo)How does $8 billion in taxpayer dollars simply disappear? Look no further than the report out Wednesday by Stuart Bowen, the special inspector general for Iraq reconstruction.

The report details all the U.S. spending on rebuilding Iraq, including the billions lost to corruption, mismanagement, theft and fraud. Bowen told Wired that $8 billion of that money was wasted outright -- and that's a conservative estimate.

Overall, more than $60 billion in taxpayer dollars went to rebuild Iraq -- a far cry from the $2.4 billion fund Congress initially set up for Iraq reconstruction shortly after the March 2003 invasion.

Even now, there is little evidence that the money did any real good in the country or helped its citizens. "With all the money the U.S. has spent, you can go into any city in Iraq and you cannot find one building or project" built by the U.S. government, Acting Minister of Interior Adnan al-Asadi said in the report. "You can fly a helicopter around Baghdad or other cities, but you cannot point a finger at a single project that was built and completed by the United States."

The 171-page report is truly remarkable, and is a grenade lobbed into the deficit discussion now under way in Congress.

From the report, here are nine ways taxpayer money was wasted in Iraq.

1. Huge overbillings. One Dubai company, Anham, won a $300 million contract to run two warehouse and distribution facilities. Auditors found hugely inflated charges, including $3,000 for a circuit breaker valued at $94, $80 for a PVC plumbing elbow valued at $1.41, and $900 for a control switch valued at $7.05.

2. Unfinished projects. The U.S. government spent nearly $40 million to fix a prison in the Diyala province. The first contractor, Parsons Delaware, fell behind schedule by 990 days. The three subsequent contractors couldn't finish the job. In 2007, the U.S. pulled out of the project, and the prison is still dormant and will probably never be used.

3. Bribes and money laundering. Why was a convicted felon overseeing hundreds of millions of dollars in reconstruction funds? Robert Stein used a "rigged bidding process," according to the report, to award 20 contracts valued at more than $8.6 million. The man who won the contracts, Philip Bloom, spent the money on fancy cars, computers, jewelry and airline tickets. He laundered more than $2 million in cash stolen from a vault, the report said. Stein received nine years in prison and Bloom received 46 months in prison. Six others either went to prison or were placed under house arrest.

4. Excessive spending. One school administrator requested $10,000 for a small school refurbishment project. But U.S. authorities insisted on providing $70,000, which the report called "a needless waste." A health clinic cost $345 million, more than 40% over budget. A children's hospital (pictured) went 200% over budget, fell four years behind schedule and is still incomplete.

5. Poor coordination with Iraqi officials. The U.S. spent more than $1 billion to develop a police department program that officials said was unnecessary. After wasting about $200 million on the project, the U.S. downsized the program by 90%.

6. Not enough Iraqi approval. The U.S. didn't get enough buy-in from Iraqis for major projects. So the U.S. would plow money into a project, but no one on the Iraqi side would step up to accept the project or maintain it when complete. A $32 million project to build a financial management information system failed, for example, because no one in Iraq was interested in learning how to use it.

7. Incorrect accounting. In several cases, the costs for individual projects didn't match in different government databases. Sometimes, the costs on record were just the estimated costs, not the actual costs. In other cases, the money spent on a contract was multiplied dramatically due to erroneous reporting.

8. Missing data. Some of the money spent was not accounted for in agency databases. It's unclear if this was due to data-entry problems or something more sinister, such as fraud, the report said.

9. Inadequate contractors. The U.S. spent millions of dollars on contracts to fix the Mosul Dam on the Tigris River. But $19 million in equipment and materials went unused. And the project was poorly designed, inadequately executed and had no dedicated supervisor.

There were some positive stories in the report. The most successful of all the large infrastructure projects may have been the $185 million Ifraz water treatment plant, which served 600,000 people in Erbil. The plant was later expanded by Kurdish water authorities.

But overall, the report provides ample evidence that the U.S. went about reconstruction in the wrong way. "You think if you throw money at a problem, you can fix it," Kurdish government official Qubad Talabani, son of Iraqi president Jalal Talabani, was quoted as saying in the report. "It was just not strategic thinking."

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Mar 6, 2013 5:58PM
Cheney. Bush friends where given contacts and then protected.  Halibuton moved offices out of USA.. ?while brave military died
Mar 6, 2013 4:22PM

Kimis going to turn people against war with these facts.Who would listen to the far

right if they didn`t have war to try to unite the little people.At one point the

congress had 1100 offspring and only 1 was in active duty.Americans should

be outraged that congress keeps funding wars that the Congress has

no skin in.

Mar 6, 2013 5:18PM
wait, there MUST be an $800 toilet seat in there somewhere. WHY aren't the people running or paying these "companies" going to prison?
Mar 7, 2013 1:21PM
and this is still going on!!Our government has enough money to waste on forgein countries while we go forther in debt and people in our own country need the money.
Mar 6, 2013 4:25PM

DLH2448: Don`t try to rewrite history.Your buddy Bush started these wars,yet you

didn`t see his daughters serving in the military.Why let him off the hook?

Mar 6, 2013 5:44PM
This is not really surprising. There was a report back in the post-war days that there was $1 Billion per day going from the US to Iraq during and/or following the war.  They were asking some top ranking government auditor about, "what is happening to this money" and his response was he didn't have a clue.  If he were to dig for information on that, he wouldn't find a thing.  I think point #8 'Missing Data' is the big one there.  Some day the full truth will come out about this, and like usual, you have to wait a really long time for the 'real truth' to come out on stuff like this.  We've been waiting about 10 years already.
Mar 6, 2013 7:16PM

We'll probably see the same thing happen in Afghanistan.  Somehow, the information never seems to get to the US public/tax payer until 10 years after the fact.

Mar 7, 2013 12:10PM
Death, torture, waste and fraud - a nice legacy for the Iraqi war and the Bush regime.
Mar 7, 2013 2:40PM
Left out how the big American contractors, (Brown & Root a subsidiary of Halliburton, and others) replaced the American contract workers with cheap inexperienced workers from India and the Philippines. Paid the foreign workers around 550 $ a month but continued to charge the D.O.D the same rates they had charged for the American contract labors around 5,000 - 10,000 $ a month. Remember when American soldiers were getting electrocuted in the showers by shoddy contract work, that's how that happened. Look it up.  
Mar 6, 2013 6:26PM
Mar 6, 2013 10:38PM

What saddens me most about the thought of this money being wasted?...is the millions of hungry people in the UNITED STATES. Ain't it amazing how we are working to stop global hunger, yet can't fix national hunger in our own country? We squabble in Congress over money yet we piss it away on a country we just leveled? ... that cost us billions to level? ...and is now going to cost us billions to re- rebuild? ...


Anyone interested in a little anarchy? I think it's time we overthrow our government and install our own dictator. Since we seem so bent on doing this for the rest of the world, we ought to do it here. Why not? The only thing wrong with a dictator is that the name is associated with negativity. But, you wouldn't have any problem with Congressional members arguing over nothing and blaming each other for everything under the sun.

Mar 6, 2013 5:27PM
The US government is broken.  Obama is certainly not the answer in terms of a cure.  He has no experience or skills in business, economics, agriculture, energy...nothing whatsoever.  What is needed is to vote out everyone in the senate and the legislature and vote in new people who will agree in advance to have repealed all of the spicific unique, exclusive benefits for those in congress and their employees.  If the new ones fail to keep their respective promises, vote them out and try again.. 
Once our financial and economic house is in order the congress and president will be encouraged to appointment dedicated, talented people to positions that manage foreign afairs, defense, agriculture, energy, etc.  Somehow the senators and legislators have to be convinced that they will not be allowed to buy votes and personal support with the valuable management positions.  Goals must be set and people must be held accountable for results. 

Mar 8, 2013 2:18AM

There was a big scandel about Haliburton fraud amounting in the millions on fuel sales. How is that not in the list?


Halliburton, once run by Vice-President Dick Cheney, is under renewed pressure over its work for the Pentagon in Iraq.

An audit report investigating $108m-worth of questionable fuel delivery costs in Iraq was released on Monday by Congressional Democrats critical of Halliburton's work in Iraq

Mar 6, 2013 7:20PM
USAID   the Agency for these operations is staffed by incompetents who lay off much of the work to contractors .AID likes fantasy projects ,about which they know little ,do not closely monitor work ,if at all, for fear of finding problems and corruption..Irag and Afghanistan are just recent examples of gross waste Medeical clinics built in Afghanistan were never staffed ,buidings abandoned ,looted destroyed.a farm subsidy to grow wheat instead of poppies failed as AID at the same time was giving away wheat destroting the market price .Farmers took  the money  to  grow more opium poppies.having done consulting work for USAID it was astonishing to see that the staff had little interest in the country inwhich they wer working ,did not have langauge skills ,cultural knowledge ,or any significant contact with the indigenous population ,living in a cocoon of PXs and American compounds.from SE Asia through the Mid East ,Eastern Europe ,Africa and Russia .I recommmended  in the 1980.s that the agency be downsized to a small new hired professionals .200-500 worldwide ,sharply forcused on a few specific projects of US interest Non starter !! Too big a honey pot .A travesty as we have 47 million people on food stamps in the US and the Congress continues to squander taxpayers scarce resources .Isreal gets 3.6 billion dollars this year and has a GNP growht rate almost 2X that of the US ,Egypt  $1.6 billion and now Kerry has just given them an additional  $190 million .When do Americans get mad enough to end this folly ?
Mar 8, 2013 5:11PM
How about the 4,488 American deaths in Iraq since March, 2003?  Almost ten yrs. ago to the day.  The search for WMDs which never existed. 
Mar 8, 2013 2:54AM
If Bush took a dump in the road the RWNJ's would blame Obama. They wouldn't admit Bush made a mistake if you had pictures. Millions lose their jobs, millions in foreclosure and banks near collapse Bush's last 6 months and it's Obama's fault. Just the fear a black man might be president was enough to destroy the country. Clearly it had nothing to do with the man sitting in the big chair for 8 years. 
Mar 6, 2013 11:54PM
Though this is what happens when our military-industrial block, cynically backed by the politicians, believes it can create a tailored world in its own image and liking by financial means alone. First send in the bombers and then the contractors.

The Iraq debacle was a preannounced disaster that only the ghastly neocon mind believed was an auspicious strategic and business opportunity. Aside from the tragic human aspect, the cultural dichotomy between the US and the Middle East state meant that any ideologically motivated war for oil was not going to be fortuitous.

What annoys me is that the disaster is only being quantified in terms of a monetary scandal, when it’s really a humanitarian one about an entire people brutalized by the neoliberal and neocolonial agenda.
Mar 11, 2013 7:30AM
This made a whole bunch of people millionaires all at the expense of american taxpayers! The sad thing is a lot of seniors in this country are going hungry because they do not get enough money from social security to buy both food an other expenses and help pay for their prescriptions. Those that did not work enough for various reasons like taking off to care for their kids or maybe they could not afford to work and pay a sitter, ect. but the us government can send billions to a country that hates our guts and wans no part of us.
Mar 11, 2013 12:27PM
I think the presidents are getting a bad rap when it is the congress that is responsible for most of the funding problems. Trouble is no one is watching the cookie jar to instill responsibility. The most irritating thing is that the "wasted" Iraq money is close to the amount the government wants to cut this year. What a farce. Same old stuff year after year. 
Mar 11, 2013 8:47AM
They left out a major waste of money. The war is being fought by "Contractors" like Black Water. They are paid over $30,000.00 per month yet the military barely receives that per year. And that is from all presidents.
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