America in Iraq: Lessons for Afghanistan (Part I)

Since 2003, a sea of U.S. taxpayers' dollars has washed over Iraq. Not since the Marshall Plan has the United States undertaken so massive an effort to rebuild a nation. Never before has the U.S. expended so much on a foreign national reconstruction program.

And yet, it was and is a catastrophe in sheer economic and financial terms — a combination of gross mismanagement, waste, fraud and corruption.

To get to the bottom of it all, the Office of the Special Inspector General for Iraq Reconstruction (SIGIR) conducted hundreds of audits, inspections, as well as hundreds of criminal investigations.

It found that the overuse of "cost-plus" contracts, high contractor overhead expenses, excessive contractor award fees, as well as unacceptable program and project delays all contributed to the disaster.

As the U.S. expended billions, Iraq's public service — which under Saddam Hussain had already become highly corrupt — now became still more corrupt. The abuse of public office for personal gain — at all governmental levels from the highest cabinet ministries to the smallest provincial town halls — became rampant.

Even the head of the nation's anti-corruption commission fled to the United States after multiple death threats against him and the assassination of numerous colleagues.

In 2008, Iraq had a score of 1.3 out of 10.0 on the Transparency International Corruption Perception's Index, which placed it just a notch above Myanmar and Somalia as the most corrupt nation of the 160 covered by the survey.

Importantly, Afghanistan registers just a notch above Iraq on the Index. This indicator of rampant corruption in the country where President Obama has announced deployment of 17,000 more U.S. soldiers begs the question: Will the reconstruction mistakes made in Iraq be avoided by the U.S. and its allies in Afghanistan?

For more than a decade, a host of bilateral and multilateral official donors have been engaged on reconstruction efforts in Afghanistan, from seeking to train judges and build respect for the rule of law, to constructing highways and other infrastructure. Corruption has grown, while the fruit of the investment is modest at best.

President Obama has ordered a series of strategic reviews to determine his Afghanistan policies and he aims to have some answers by the time of the next NATO summit in mid-April. Some of his experts are looking at economic reconstruction issues, mindful that stability in this country cannot be won by military means alone.

A guide to all the traps that need to be avoided has recently been published by Stuart W. Bowen Jr., Special Inspector General for Iraq Reconstruction. In his new book "Hard Lessons — The Iraq Reconstruction Experience" he offers insights into how the combined forces of the titans of government and U.S. industry could squander enormous sums. A tale unfolds of systemic mismanagement, waste, fraud and corruption.

The rot started even before the United States went to war in Iraq with a complacent and sanguine confidence on the part of the then U.S. Administration that the scale of reconstruction would be modest and the cost would be paid for by Iraqi oil revenues.

"We're dealing with a country that can really finance its own reconstruction and relatively soon," were the words famously used by then U.S. Deputy Secretary of Defense Wolfowitz. When Iraq's withering post-invasion reality superseded these expectations, there was no well-defined "Plan B" as a fallback — and no existing government structures or resources to support a quick response.

Bowen noted, "In the absence of effective management by government officials, contractors in Iraq were often left in dangerous circumstances to carry out insufficiently defined contracts written by inexperienced contracting officers who lacked situational awareness."

He continued: "In this chaotic environment, it was, at times, difficult to differentiate between reliable contractors who would carry out good work and those whose ad hoc operations and lack of experience pointed to failure."

And the Inspector General added, "A succession of contracting and program management offices suffered under varying sets of complex contracting regulations, divergent chains of authority, changing program requirements and shifting reconstruction priorities.

A shortage of qualified contracting officers, continuous staff turnover, and poor program management practices, particularly regarding quality assurance programs, weakened oversight of reconstruction projects. Finally, contracting officers did not have adequate information systems to track contract activity."

Experiences by national chapters of Transparency International suggest that effective economic development is especially difficult where public respect for judiciary is absent. Countries where judges and public prosecutors are under the thumbs of ruling elites in government and business turn a blind eye to corruption — and the public at large is acutely aware of this. Such conditions, which prevail in dozens of countries, encourage illicit activity.

What is remarkable is that even in some of the most authoritarian and corrupt states there are individuals with the courage to make a stand for justice and the independent and honest administration of the law.

One such person is Judge Radhi Hamza al-Radhi, who was appointed in June 2004 by then U.S. Ambassador Bremer to head Iraq's anti-corruption commission. The Commission filed 541 cases in its first 18 months, including 42 that involved government ministers. The Judge told a U.S. Congressional hearing in 2008 that the cost of corruption across all ministries in Iraq was an estimated $18 billion.

But the work of the Commission was constantly threatened by forces that had a vested interest in continuing corruption. Between 2004 and 2007, 31 of the Commission's employees were assassinated and 12 family members were murdered. Judge Radhi lived under constant threat and ultimately had to flee, seeking political asylum in the U.S. in August 2007.

As Bowen wrote in Hard Lessons, "Since April 2003, hundreds of thousands of U.S. civilian and military personnel have participated in the Iraq reconstruction effort. The vast majority of them served honorably, but some did not.”

“(In the immediate post-invasion period) when there was little oversight of the reconstruction effort and no fraud-fighting presence in Iraq, an unscrupulous few too advantage of the chaotic circumstances to enrich themselves.”

“Not until the Special Inspector General of Iraq started to deploy in Baghdad in March 2004 did the United States have meaningful numbers of auditors and investigators permanently based in Iraq to pursue allegations of fraud, waste and abuse."

While some U.S. funds were spent explicitly on assisting the Iraqi government to fight corruption, the amounts were modest. In fact, there was no coordinated leadership on rule-of-law initiatives and a paucity of personnel engaged in this. It was not until 2005 that a rule-of-law coordinated was even appointed.

Overall, there have been at least 35 convictions of Americans resulting from criminal misconduct committed during the Iraq reconstruction program. Current investigations include a number of former very senior U.S. military officers.

Meanwhile, however, there have been barely any meaningful punishments doled out to officials, past and present, in the Iraqi government who are suspected of involvement in grand corruption.