- WASHINGTON (Reuters) - U.S.
investigators found multiple examples of fraud and abuse in millions of
dollars worth of contracts to rebuild Iraq that used U.S. taxpayer and
Iraqi funds, according to an audit released on Friday.
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- The report to Congress by the inspector general's office
of the Coalition Provisional Authority, the U.S. occupying force dissolved
in June, said it had been involved in 69 criminal investigations, of which
42 had been closed or referred elsewhere. A further 27 are still open.
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- In one case, an unnamed senior adviser for the CPA bypassed
the bidding process for a $7.2 million security contract. The deal was
revoked, a $2.3 million advance taken back from the contractor and the
CPA adviser removed.
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- CPA Inspector General Stuart Bowen said his findings
were not unexpected given that the CPA and contractors were working in
a volatile, dangerous environment.
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- "These results are not surprising: the CPA faced
a variety of daunting challenges, including extremely hazardous working
conditions," the former White House lawyer said in a letter accompanying
the report.
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- In another case, the Iraqi Ministry of Interior appointed
a Defense Department civilian as a coach for an Iraqi amateur sports team.
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- The civilian received a $40,000 cash advance but gave
the funds to his military assistant who went gambling and lost some of
it. The money frittered away was then written off as a legitimate loss.
That case is still pending.
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- "TIME CARD FRAUD"
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- The CPA-IG's office also found weaknesses in the monitoring
process for oil pipeline repair and found employees were not doing work
in the field specified by the contract, the report said.
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- In yet another instance of abuse, a Defense Department
official in the CPA's contracting office committed "time card fraud"
and charged for work he had not done. He also had an unauthorized weapon.
The employee was removed from his position and sent back to the United
States, the report said.
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- Another probe is focusing on the "illegal exchange
of worthless Iraqi dinars" by a foreign national that has led to the
recovery of $29,000. The investigation was continuing and the report said
further funds were likely to be recovered.
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- The report said the CPA comptroller's policies and rules
had not done enough to monitor and control more than $600 million in Iraqi
funds held as cash.
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- Bowen's office is also looking into the "timeline"
of how the $18.4 billion in U.S. funds for Iraq is being spent. There has
been criticism, particularly by Iraqis, the money was being spent too slowly.
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- The report says just 2.1 percent of the $18.4 billion
Iraq Relief and Reconstruction Fund has been spent so far.
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- With the CPA handing over authority to a new Iraqi authority
last month, the CPA-IG's office ceases to exist from the end of December.
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- Another CPA-IG report is set to be delivered to Congress
in October, and the inspector general's office will also be continuing
audits including whether companies are providing enough insurance for staff
and foreign workers are being humanely treated.
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