Losing track of billions of dollars is an invitation to corruption and abuse. But the U.S. Department of Defense seems to have done just that with Iraqi reconstruction funds set aside for the benefit of the people of Iraq. Last week, the Office of the Special Inspector General for Iraq Reconstruction (SIGIR), an independent government agency, issued a devastating audit of DOD's handling of $8.7 of the $9.1 billion targeted for reconstruction, humanitarian and other needs of the Iraqi people, describing a total "breakdown in controls" that "left the funds vulnerable to inappropriate uses and undetected loss."
Given the SIGIR's finding, how is the American or Iraqi public to know how much of the $8.7 billion was spent on building schools, highways, water mains or electric substations, as intended -- and desperately needed -- or whether some or all of it ended up in the pockets of corrupt contractors or government officials? There is plenty of reason to wonder, given that SIGIR's previous criminal investigations into the use of Iraqi reconstruction funds resulted in eight convictions of U.S. officials for bribery, fraud and money laundering. While the SIGIR report makes prospective recommendations, it fails to insist on accountability and sanctions as warranted.
The breakdown in controls over Iraq reconstruction funds also raises serious concerns about how the U.S. Government is tracking billions for Afghanistan reconstruction and relief. With that country's reputation for pervasive corruption, it is absolutely essential that the U.S. Government (starting with DOD) ensure that there are effective controls for reconstruction efforts there as well. It is also essential that the Afghan government commits to adequate controls and transparency with respect to the recently announced find of $1 trillion in untapped mineral deposits in Afghanistan. Without such controls and transparency, there will be no way to know whether American and Afghan resources will truly benefit Afghan society.
The SIGIR's report raises even more fundamental questions about the ability of the United States to promote accountability in other countries. What kind of a model does the United States present to the world if DoD cannot implement standard accounting procedures? How can we promote accountability in other countries when we can't account for $8.7 billion?