Wednesday, July 18, 2012

All the lost billions

Last night, Jason Ditz ( noted, "Following up on last week’s audit release, Special Inspector General for Iraqi Reconstruction (SIGIR) Stuart Bowen has given a somewhat better estimate of exactly how much money was wasted in Iraq reconstruction, saying that of $51 billion spent some $6-$8 billion is wasted." Dropping back to last Friday's snapshot:

Today the US Government Accountability Office released [PDF format warning] "IRAQ: U.S. Assistance to Iraq's Minority Groups in Response to Congressional Directives."  According to the report, through November 2011, the US taxpayer has footed the bill for $40 million which was supposed to go towards assisting Iraq's minority population.  [The report breaks down the $40 million as follows: "According to the agencies, USAID provided $14.8 million for the 2008 directive, USAID and State provided $10.4 million for the 2008 supplemental directive; and State provided $16.5 million for the 2010 directive."]  Since Iraq's population is estimated by the CIA to be 31 million, the US government could have skipped the minority issue and given a million dollars to every Iraqi.  So the GAO just completed a 12 month audit (June 2011 to July 2012) to see if USAID was living up to the outlines of Congress' 2008 directive?

Are they?

No one knows.  USAID didn't pass the audit.  The report notes:

Our analysis of USAID documents found that USAID could not demonstrate that it met the provisions of the 2008 directive because of three weaknesses. First, although USAID reported that it provided $14.8 million in assistance to minority groups through existing programs to meet the 2008 directive, its documents could link only $3.82 million (26 percent) of that amount to the Ninewa plain region. The documents linked $1.67 million (11 percent) of the assistance to areas outside of the Ninewa plain region. USAID documents did not provide sufficient detail to determine the location of the remaining $9.35 million (63 percent).
Second, USAID documents generally did not show whether the projects included minority groups among the beneficiaries of the assistance and whether $8 million was provided specifically for internally displaced families. According to USAID officials, the agency generally did not track its beneficiaries by religious affiliation. For $14.7 million of the $14.8 million in assistance, USAID documents did not provide sufficient detail for us to determine that Iraqi minority groups were among the beneficiaries of all of the projects. Only 1 of the 155 projects ($66,707 out of $14.8 million) provided sufficient detail in its documents for us to determine that the assistance was directed to internally displaced families; however, the location of that project was outside of the Ninewa plain region. While USAID documents listed $2 million in funding for a microfinance institution, USAID officials were unable to provide detail on whether all of these loans were disbursed in the Ninewa plain region. 
Third, USAID officials and documents did not demonstrate that the agency used unobligated prior year ESF funds to initiate projects in response to the 2008 directive. USAID could document that the agency used unobligated prior year funds for two of the six programs after the date of the 2008 directive. However, according to USAID officials, the agency did not use unobligated prior year funds for the remaining four programs.

When you can't produce documentation to back up your claims, you have failed the audit.

Which is bad news for Iraq's minorities and for US taxpayers. Robert Burns (AP) notes this cost issue from the report, "A contractor was allowed to charge $80 for a pipe fitting that a competitor was selling for $1.41." There was no oversight.  There will be no oversight.  The State Dept will go before the Congress and make statements about their Afghanistan mission that will be similar to the statements they made about the Iraq mission and, unless Congress gets serious about accountability, you will see the exact same waste and fraud.

The State Dept is supposed to provide ongoing oversight of their own personnel. They didn't do that very well and what they found, when they did find something, usually a great deal of time had passed between the crime or violation. Laura Litvan (Bloomberg News) reports, "The agency said work by its investigators and those of other agencies have resulted in 71 convictions and almost $177 million in fines and forfeitures. Kickbacks were the leading type of criminal activity, accounting for 71 percent of indictments, according to the report."

The editorial board of the Columbus Ledger-Enquirer points out, "An old and ugly reality is that there's easy money to be made in war, and still more easy money to be made in its aftermath. U.S. contracting officers, often understaffed, underfunded and overworked, just haven't been able to stay on top of the chaotic (and often dangerous) aftermath of a notoriously ill-planned American involvement. For example, the inspector general's report noted that there was only one U.S. contracting officer to oversee a more than $2.5 billion DynCorp contract for police training.  In other words, to better oversee spending we would have to spend more for overseers."  Spend more and be able to have them.   Ditz notes "lack of manpower" appears in the report.

It's a little more than the report implies and it was addressed last month (see the June 29th snapshot) in a hearing of the House Oversight and Government Reform's Subcommittee on National  Security, Homeland Defense and Foreign Operations.  US House Rep Jason Chaffetz is the Chair but in the excerpt below, US House Rep Blake Farenthold was filling in as acting Chair due to the fact that Chaffetz had to step out of the hearing for another hearing.  He's speaking with USAID's Deputy Inspector General Michael Carroll.

Acting Chair Blake Farenthold: Alright, Mr. Carroll, I would also like to follow up a question I had on the last panel about the use of Iraqi nationals in overseeing some of our investigations of it -- does that? I mean, what's your opinion that? Does that strike you as a good idea, a bad idea or something we're stuck with because there's no alternative? It seems like Americans would be a little more concerned about how their tax dollars were spent than the Iraqi nationals who are the receipients of those tax dollars. That's kind of a fox guarding the hen house, it looks like. 

Michael Carroll: [Laughing] Well I-I personally I think it's a - like-like Ms. Rudman said it's an additive sort of step. We would do the same thing. For example, in some of the places where it's absolutely prohibited because of security what we will do is contract with a local CPA firm -- primarily out of Egypt -- and do a very comprehensive agreed upon procedures document that they will go out and they will take pictures, they will ask questions, they will do what we would do if we could get there. So I think that it what Mara is talking about as well. I don't see it as a problem. In fact, I see it as an adjunct to and it's not a replacement for USAID contracting representatives and technical representatives actually getting out and ensuring that the work is actually being done. That's not what these people are doing. What these people are doing is just going out, doing some monitoring and observing. But it does not replace what the responsibilities are for the Americans.

It's not that they didn't have people to inspect, it's that they were unable to send Americans who were supposed to be overseeing the various projects to the sites to do inspections.  (And Carroll's referring to USAID's Mara Rudman when he references "Mara" above.)  When you're unable to provide the inspection you are mandated to conduct, that's your first problem and your first sign that, at the very least, waste is going to take hold.  USAID witnesses outside the IG office were very clear that they were fine with these second-hand reports.  They shouldn't have been.  They talked about how these people -- sometimes Iraqis, sometimes Egyptians, etc. -- were paid for their work.  It wasn't a manpower issue.  It was an inspection issue and it was USAID's inability to provide that on site inspection, that oversight, that they were supposed to.  (Violence is the reason USAID was unable to do their own inspections through the present day.  Yes, violence.  Supposedly on the down swing to hear Antony Blinken yammer away.  But the violence kept USAID from doing on site inspections.)

I'm not seeing that issue addressed in the coverage.  It is in the report but you probably needed to have heard Stuart Bowen's testimony to Congress last month to pick up on it when reading the report.  At that hearing, I saw no one from NBC or the Center for Public Integrity and I'll assume that's why their report last night is a mangled version of the report that the SIGIR issued last week  -- repeating obvious points and failing to build on anything.  Neil Gordon (Project On Government Oversight) brings in this point, "For what it’s worth, the Commission on Wartime Contracting in Iraq and Afghanistan last year estimated the fraud and waste in those two countries combined is between $31 billion and $60 billion."

The following community sites -- plus Black Agenda Report -- updated last night and this morning:

Today we'll cover some veterans issues including a hearing this morning.  Senator Patty Murray is the Chair of the Senate Veterans Affairs Committe and her office noted yesterday:

Tuesday, July 17, 2012 (202) 224-2834

HOMELESS VETERANS: Senator Murray Announces Funding for Homeless Prevention Across Washington State
Six state non-profit community agencies will receive homeless prevention grants under VA program
(Washington, D.C.) – Today, U.S. Senator Patty Murray, Chairman of the Senate Veterans’ Affairs Committee and the Senate Housing Appropriations Subcommittee, announced that six state non-profit community agencies will receive homeless prevention grants in order to provide homelessness prevention and rapid re-housing assistance to veterans in Washington state. The grants are part of the Department of Veterans Affairs’ Supportive Services for Veteran Families (SSVF) Program. The SSVF program aims to improve the housing stability of very low income veteran families by providing funding to private, non-profit organizations and consumer cooperatives who in turn provide supportive services to veteran families living in or transitioning to permanent housing. Chairman Murray supported the expansion of this critical program by including it in Public Law 112-37, the Veterans Health Care Facilities Capital Improvement Act of 2011.
“This funding is a huge help for veterans and their families who are struggling to stay in their homes or to get into permanent housing,” said Senator Murray. “With new servicemembers returning home every day and the economy sputtering, we must step up our efforts to provide all veterans with stable housing and the dignity that comes with it. We owe it to our veterans to provide them with the resources and support they need to keep a roof over their heads.”
According to the VA, the SSVF Program Grantees provide eligible veteran families with outreach, case management, time-limited payments to landlords and utility companies, and assistance in obtaining VA and other benefits, which may include:
§ Health care services
§ Daily living services
§ Personal financial planning services
§ Transportation services
§ Fiduciary and payee services
§ Legal services
§ Child care services
§ Housing counseling services
Learn more about VA’s SSVF Program HERE.
The following is a list of Washington state SSVF grantees:
Organization Name
Amount Awarded
Organization Address
Area Served
Blue Mountain Action Council
342 Catherine, Walla Walla, WA 99362
Blue Mountain Action Council plans to serve approximately 325 participant households in seven counties in state of Washington, four counties in Oregon, and four counties in Idaho; including 3 tribal communities.
Young Women's Christian Association of Seattle-King County Snohomish County
1118 Fifth Avenue, Seattle, WA 98101
YWCA of Seattle plans to serve approximately 120 participant households in Puget Sound in Washington State and King County.
Catholic Community Services of western Washington
100 23rd Avenue S, Seattle, WA 98144
Catholic Community Services of Western Washington plans to serve approximately 400 participant households in Pierce, Thurston, Snohomish, and King Counties.
Catholic Charities of Yakima
2139 Van Giesen Street, Richland, WA 99354
Catholic Charities of Yakima plans to serve approximately 20 participant households in Benton and Franklin Counties.
Community Psychiatric Clinic
11000 Lake City Way NE, Suite 200, Seattle, WA 98125
Community Psychiatric Clinic plans to serve approximately 120 participant households in King County.
Opportunity Council
1111 Cornwall Avenue, Bellingham, WA 98225
Opportunity Council plans to serve approximately 275 participant households in the Counties of Clallam, Jefferson, Island, Skagit and Whatcom.

Kathryn Robertson
Specialty Media Coordinator
Office of U.S. Senator Patty Murray
448 Russell Senate Office Building
Washington D.C. 20510

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