Pentagon Audit Finds $15 Billion in Iraq Funds Unaccounted For

Middle East Online. Posted May 27, 2008.

The Pentagon cannot account for nearly 15 billion dollars in payments for goods and services in Iraq, according to an internal audit which members of Congress blasted Friday as a "shocking" accountability failure.

Of 8.2 billion dollars in U.S. taxpayer-funded defense contracts reviewed by the Defense Department's inspector general, the Pentagon could not properly account for more than 7.7 billion dollars.

The lack of accountability of the funds, intended for purchases of weapons, vehicles, construction equipment and security services, amounted to a 95 percent failure rate in basic accounting standards, according to the report.

"We estimated that the army made 1.4 billion dollars in commercial payments that lacked the minimum documentation for a valid payment, such as properly prepared receiving reports, invoices, and certified vouchers," Deputy Inspector General Mary Ugone told a Congressional committee Thursday.

"We also estimated that the army made an additional 6.3 billion dollars of commercial payments that met the 27 criteria for payments but did not comply with other statutory and regulatory requirements."

The Pentagon also was found to have given away another 1.8 billion in Iraqi assets "with absolutely no accountability," said Congressman Henry Waxman, chairman of the House Committee on Oversight and Government Reform.

"Investigators examined 53 payment vouchers and couldn't find even one that adequately explained where the money went."

Another five billion dollars spent on supporting the Iraqi security forces could not be properly traced, according to a November 2007 inspector general report.

"Taken together, the inspector general found that the Defense Department did not properly account for almost 15 billion dollars," Waxman said.

The disclosures sparked outrage among legislators and concern that U.S. taxpayers are deeply vulnerable to massive waste and fraud in the Pentagon's contracting system.

"The report has new shocking details of billions of dollars of American taxpayer money unaccounted for and likely wasted, which should be a wake-up call to Congress and the (President George W.) Bush administration that the status quo is unacceptable," Democratic senator and presidential candidate Hillary Clinton said in a statement.

"American taxpayers are picking up the tab for Iraqi ministries, coalition governments, U.S. and foreign contractors, Iraqi security forces, and Blackwater and other U.S. security companies," Waxman said.

"In one remarkable instance, a 320-million-dollar payment in cash was handed over with little more than a signature in exchange."

The Pentagon to date has been appropriated 492 billion dollars to support Operation Iraqi Freedom, according to Ugone.

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