Panel tallies massive waste and fraud in wartime U.S. contracts

Geez, who would’ve thought?


Editor’s note: The 240-page final report of the Commission on Wartime Contracting is online at http://www.wartimecontracting.gov/.

Washington (CNN) — A nonpartisan panel reporting to Congress says the United States is wasting $12 million a day among contracts issued in support of American efforts in Iraq and Afghanistan.

The Commission on Wartime Contracting spent the past three years documenting whether American funding went where it was supposed to. The findings show misdirected money has totaled between $31 billion and $60 billion, and that both the government and the contractors are to blame for fraud and waste.

Commissioner Katherine Schinasi told reporters at a news conference Wednesday that the numbers don’t seem to have an impact on people concerned about spending.

To make it easier to grasp the magnitude of the problem, Schinasi said, “we’ve broken it down to $12 million a day.”

“We are wasting $12 million a day,” she said, “maybe that will make a difference.”

The study looked at contracts from 2001 through the projected end of fiscal year 2011.

Without contract reform and better oversight, future prospects look just as ominous, the panel members warned, as the U.S. considers a role rebuilding Libya in a post-Gadhafi time frame.

Dov Zakheim, a former comptroller at the Defense Department, said he believes the misdirected money is closer to $60 billion, not the low end of the range the panel itself has estimated.

“We also have to think about projects that we start, but are not sure can be finished or sustained,” he said. “What is the point of spending hundreds of millions on projects that will then fall into disuse?” he asked, saying the choice then becomes writing off the investment, or “spending taxpayer money for God knows how long, in order to keep the projects going.”

The panel issued 15 recommendations for contract reform, including hiring more auditors and analysts to make sure the government gets what was paid for.

The report was delivered to congressional staffers early Wednesday; lawmakers are on summer break.

A paper statement was left with reporters from Rep. John Tierney of Massachusetts, who said the panel’s findings “are alarming.” Tierney, the ranking Democrat on a House subcommittee that reviews foreign operations, said he will introduce a bill next week “to create a permanent inspector general for contingency operations.”

Such a move is among the recommendations of the commission.

Tierney’s statement continued: “The kind of waste we have witnessed in Iraq and Afghanistan cannot be repeated.”

The commission was a provision of the 2008 Defense Department budget, mandating an investigation into the reliance on contractors for security, logistics, and reconstruction in Iraq and Afghanistan. In the three-year probe, the panel held 25 formal hearings, and published two interim reports and five special reports to Congress.

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