Report: federal contractors owe billions in unpaid taxes

Posted by Joshua Holland at 6:55 AM on April 30, 2007.

Truthout:

... a recent GAO inquiry reveals that about 113,800 contractors working for a variety of federal agencies, including the Pentagon and the General Services Administration, have built up $7.7 billion in unpaid taxes. This matches untidily with a March GAO report saying that more than 21,000 doctors, health professionals or medical suppliers, collecting billions in federal Medicare dollars, simultaneously owed more than $1 billion in federal income taxes.

The U.S. project to rebuild Iraq remains far short of its targets, leaving the country plagued by power outages, inadequate oil production and shortages of clean water and health care, according to a report to be issued today by a U.S. government oversight agency.

The 232-page quarterly review by the Special Inspector General for Iraq Reconstruction presents a sobering picture of the challenges of reconstruction in a war zone.

The inspector general's report lays out how even successful endeavors -- for example, the completion of more than 800 school projects and training for thousands of teachers -- haven't realized their potential because of security risks. During a four-year-old insurgency and sectarian fighting, less than a third of Iraq's 3.5 million students attend class, according to the report, which cited Iraqi Education Ministry statistics.

The report found that almost all of the nearly $20 billion in reconstruction funds appropriated by Congress in 2003 has been allocated. More than half of the projects to be undertaken with that money have been completed, and many more are underway. In the medical field, for example, only 15 of 141 primary health-care centers have been completed -- and only eight of those are open to the public -- but 126 projects are slated to be finished by the end of the year.

As in past reports, the inspector general's office found some of the most significant reconstruction shortfalls were in electricity production. "Electricity has the longest way to go," special inspector general Stuart W. Bowen Jr. said in an interview Friday.

Before the U.S.-led invasion, Iraq's power system produced 4,500 megawatts a day with an aging infrastructure in which 85 percent of power plants were at least 20 years old, the report said. Reconstruction officials initially hoped to increase daily output to 6,750 megawatts by the summer of 2004, a target later lowered to 6,000 megawatts. But in the most recent quarter, Iraq generated only 3,832 megawatts a day.

The shortage was particularly acute in Baghdad. Before the war, the city received an average of 16 to 24 hours of power a day. Last spring, Baghdad averaged eight hours of electricity a day. This year, during the last week of March, the city received only 6.5 hours a day. The rest of the country, however, received an average of 14 hours of power a day.

Slightly more than three-quarters of the $4.2 billion in reconstruction funds allocated by Congress for electricity have been spent, and 402 of 537 electricity projects have been completed.

Tagged as: iraq, reconstruction, contracting

Joshua Holland is an editor and senior writer at AlterNet.