WASHINGTON -- As American military commanders struggle with deteriorating security in Iraq, there are growing indications that the $21 billion U.S. reconstruction effort is at risk, including a new report that casts doubt on Iraq's ability to maintain the reconstruction projects that have been completed.
The government of Iraq has been unable to boost the production of oil or electricity despite U.S. aid and many critical U.S.-funded projects remain unfinished, according to the latest quarterly report by Stuart W. Bowen, the U.S. special inspector general for Iraqi reconstruction. Some of the work done under U.S. supervision has been so shoddy that it will saddle the Iraqi government with additional maintenance headaches, he said.
The dismal outlook for Iraq, including high unemployment, continuing corruption and the inability of the Iraqi government to work effectively, requires "a new phase of investment" to secure the reconstruction done so far, said Bowen's report, which is being released today.
Since 2003, Congress has appropriated $21 billion for the Iraqi Relief and Reconstruction Fund, which has been spent or obligated in contracts. An additional $11 billion has been appropriated for reconstruction and other post-invasion initiatives, such as training Iraq's security forces.
Congress set up Bowen's office in 2004 to audit the spending programs.
In an interview, Bowen said international aid donors are $10 billion short of what they have promised, and more international aid for Iraq is needed "urgently."
Iraq's two biggest problems are official corruption and the lack of security, "and the two are linked," he said, citing an Iraqi government report that $1 billion stolen from an oil refinery in northern Iraq ended up in the hands of the insurgency.
"It's a devastating problem," he said.
His worries were reflected yesterday by Adm. William J. Fallon, nominated by President Bush to be the new U.S. military commander in the Middle East. At his confirmation hearing before the Senate Armed Services Committee, Fallon reiterated that the Iraq war cannot be won "militarily" but requires urgent economic and political action as well.
"The situation in Iraq is serious and clearly in need of new and different actions," Fallon said. "What we have been doing has not been working. ... We have got to be doing, it seems to me, something different."
Bush, in laying out his new Iraq war plan Jan. 10, said there would be renewed U.S. efforts to stimulate Iraqi economic and political action. The State Department has named an economic coordinator for Iraq. But few details about new Iraq spending have emerged from the White House, and there is deep skepticism in Congress about further investments.
The billions of dollars already spent in Iraq have "produced little of lasting value," Rep. Henry A. Waxman, Democrat of California, charged in a recent letter to his colleagues. "Too often, the administration has failed to learn from its mistakes in Iraq, wasting billions in taxpayer dollars. ... We should not make the same mistake ourselves."
Waxman, chairman of the House Government Reform Committee, has scheduled an inquiry into the U.S. reconstruction effort, summoning L. Paul Bremer III, former head of the Coalition Provisional Authority in Iraq, to a hearing next week.
"Be prepared to discuss ... more than $8.8 billion in cash" that was disbursed under Bremer's authority in Baghdad "without adequate financial controls or accountability," Waxman warned Bremer, citing an audit report by Bowen's office in 2005.
Bowen's new report is the latest in a series of grim assessments, by him and other investigators, indicating that the conditions that underlie and exacerbate Iraq's bloody sectarian fighting persist after nearly four years of U.S. reconstruction efforts, and that Iraq's government has been unable to make much progress against a mountain of economic difficulties.
Many Iraqi ministries lack the capability to effectively budget, draw up and award contracts and get work done, leaving the government sitting on about $6 billion in unspent reconstruction funds, according to a report this month by the U.S. Government Accountability Office. Iraq's oil ministry, which has crippling problems in its oil pipelines and dilapidated refineries and export facilities, has been able to spend only $4 million of the $3.6 billion it has budgeted for repairs, the GAO reported.
In another example of intertwined security and political problems, Baghdad gets an average of only 6.5 hours of electric power a day, Bowen's report said, in part because transmission lines are sabotaged but also because of political squabbles about which power plants in regions outside of Baghdad should share electricity with the capital.
There have also been problems with American management of reconstruction and aid programs.