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Iraq rebuilding is an $8 billion bust

More than $8 billion in taxpayer funds earmarked to help rebuild Iraq were wasted through a combination of mismanagement, ineptitude and corruption, according t

More than $8 billion in taxpayer funds earmarked to help rebuild Iraq were wasted through a combination of mismanagement, ineptitude and corruption, according to a new report released this week by Special Inspector General for Iraq Reconstruction.

Another $1 billion is believed to have been lost to fraud.

The Washington Post's Rajiv Chadrasekaran said its a "mind-boggling, sobering" report on The Daily Rundown Thursday.

"The real question is: what did we get for this? You could argue that in some cases, yes, it bought short-term security. But the broader effort to try to create a stable, sustainable economy for the facilitate political compromise, that really didn't happen," said Rajiv Chadrasekaran, reporter with The Washington Post, said on The Daily Rundown Thursday.

A broad overview found numerous examples of projects that were poorly planned at the start and poorly executed in the end. Ultimately, the report found that the U.S. and Iraq received zero return on about 15% of the $60.5 billion spent on reconstructing Iraq.

That's not to say there were no positive effects. According to the report, Iraq's electricity supply doubled between 2004 and 2012 (although it still lags behind demand), oil exports have risen 45% since 2009, and the size of Iraq's security force has more than tripled to 933,000 by the start of 2012.

But the overriding sense among U.S. and Iraqi officials is one of missed opportunity.

"There exists limited tangible evidence of any positive effects from the rebuilding program," wrote the report's authors, summarizing an interview with Iraqi Minister of Finance Rafi al-Eissawi. "It was a mistake to launch a huge number of programs across numerous geographic and infrastructure sectors rather than devote resources to a finite number of worthy and well-focused projects."

One notable example of misspent funds is the wastewater treatment plant in Fallujah, started just before U.S. anti-insurgent operations destroyed entire sections of the city. The price tag rose from $35 million to $108 million in 2011 when it began providing limited service. By the time the entire city is hooked up, the price tag will near $200 million. U.S. efforts to rebuild a bridge and pipelines destroyed by American bombs ultimately cost more than $100 million.

Another $40 million was spent on a partially built prison abandoned by the U.S. years ago.

The report also found that as much as 15% of the financial data linked to Iraqi projects is missing. An effort to train and equip an Iraqi special operations unit was labeled a success, but no one kept track of how much was spent on it.

Why did so much of the effort fall short? Former Iraqi Prime Minister Ayad Allawi, for one, blamed unclear priorities, poor oversight, a lack of security and an unstable political environment. On the U.S. side, it was often unclear who was in charge. According to the report, in 2007, some 41 agencies were involved at some stage of the decision-making process. The State Department was initially put in charge of reconstruction, even though the majority of the funding came from the Department of Defense.

It should be noted that because of the hundreds of investigations and audits that uncovered the data used in the report, nearly $2 billion was saved and dozens of people were convicted of fraud, money laundering, and other criminal activities. But the report is clear in its verdict on the Iraqi rebuilding effort.

"Not enough was accomplished for the size of the funds expended," says the Special Inspector General, Stuart Bowen. In other words, not nearly enough bang for the buck.

iraq reconstruction organization
iraq reconstruction organization