Inspectors general probe fraud, profiteering in Iraq

The special inspector general for Iraq reconstruction told a Senate panel Tuesday that corruption is widespread in the Iraq government and among U.S. contractors.

"First, corruption in Iraq has been -- and is -- a problem of great enormity within Iraq's government," Stuart Bowen told the Senate Judiciary Committee. The Commissioner of Public Integrity, the Iraqi equivalent of the FBI, has reported to Bowen that it is investigating 2,000 cases involving Iraqi officials and $8 billion in missing funds.

Bowen's office has 79 ongoing investigations and has referred 28 cases to the Justice Department for prosecution. Judiciary Chairman Patrick Leahy, D-Vt., questioned the Justice Department's pace of bringing prosecutions. "I'm worried that these are taking a long time," Leahy said.

At the hearing into waste, fraud and corruption, Deputy Assistant Attorney General Barry Sabin refused to specify how many cases will be prosecuted. He would say only that there would be action within the next three months.

Sabin said prosecuting war profiteering has been a priority despite Leahy's assertion that only a handful of cases have been brought.

Thomas Gimble, acting inspector general of the Defense Department, said his agency has initiated 83 investigations into Iraq contract fraud and war profiteering, and into the misappropriation of funds set aside for the fight against terrorism.

Bowen endorsed legislation introduced by Judiciary ranking member Arlen Specter, R-Pa., to make war profiteering a federal crime covering not just the United States but overseas as well. While Sabin refused to give the Justice Department's specific views on the legislation, he raised several questions about whether it would interfere with other broader laws.

On penalties for war profiteering, Specter said the best antidote to white collar crime is a prison sentence rather than fines; Leahy and Bowen agreed.