Iraq reconstruction funds may run out before projects finished

A top U.S. official overseeing Iraq reconstruction said Tuesday the $18.4 billion for rebuilding the war-ravaged country will run out before major projects are finished.

Stuart Bowen Jr., special inspector general for Iraq reconstruction, told the Senate Armed Services Readiness Subcommittee that most of the money appropriated in November 2003 has been obligated.

"What remains is less than $3 billion, which we estimate will not permit completion of all projects that were envisioned when the requirement for $18.4 billion was being determined in late 2003," Bowen said.

The big projects that will go unfinished, he noted, were sewage, irrigation, dams and other water development, and electricity generation. Of the 136 water projects first envisioned, only 49, or 36 percent, will be completed. And only 300 of the 425 electrical projects will be completed.

The goal of 3,400 additional megawatts of electricity will also be missed, with only 2,200 megawatts delivered.

The shortfalls are a result, in part, of insurgent attacks on facilities and reprogramming of funds to pay for additional security.

Still, Bowen tried to put a good face on the situation. "To be clear, this is not an alarm bell, but merely an observation of a current reality," Bowen said.

Readiness Subcommittee Chairman Sen. John Ensign, R-Nev., called the meeting to get an update on construction contracts in Iraq, a situation that has come under criticism in government reports for waste and even fraud.

Under questioning from Readiness Subcommittee ranking member Sen. Daniel Akaka, D-Hawaii, Bowen acknowledged there were "significant problems" in the contracting process early on but they have "substantially improved and are getting better."

Although Bowen, a lawyer and longtime Texas ally of President Bush, said "more resources must be allocated" for the reconstruction effort, he did not spell out whether those funds must come from taxpayer dollars.

Sen. Carl Levin, D-Mich., told Bowen other factors besides security are causing missed construction targets, noting Bowen's own auditing reports of mismanagement or waste.

Claude Bolton, assistant secretary of the Army for acquisition, logistics and technology, and Maj. Gen. Ronald Johnson, deputy commanding general of the Army Corps of Engineers, and Bowen expressed outrage at the scandal involving former U.S. occupation official Robert J. Stein, Jr.

Stein pleaded guilty last week to five felony counts involving theft of $2 million and kickbacks of more than $1 million. Others, including five U.S. Army reserve officers, have been implicated in the scheme.

"I was appalled," Bolton said.

Bowen suggested there may be other cases down the road, adding that there are "57 other investigations ongoing."