The U.S. occupation authority in Iraq had a chaotic, "Wild West" approach to contracting which opened up the system to abuse and waste, a former employee from the authority said on Monday.
Ex-Coalition Provisional Authority official Franklin Willis cited examples of this "chaos" at a hearing of the Senate Democratic Policy Committee and said he believed most abuse and waste could have been avoided.
Willis showed a picture of himself and other U.S. officials holding up plastic-wrapped 'bricks' of $100 bills worth $2 million to pay security contractor Custer Battles, which the Defense Department has since suspended due to billing issues.
"The Custer Battles case, which while anecdotal, reflects a general pattern of waste and inefficiencies which could have been avoided," said Willis of contracting abuses in Iraq.
"In sum, inexperienced officials, fear of decision-making, lack of communications, minimal security, no banks and lots of money to spread around. This chaos I have referred to as a 'Wild West'," Willis, who was a senior aviation official for the CPA, told the hearing.
Democrats have called for a full congressional hearing on what they say is a pattern of contracting abuses in Iraq, from overcharging by lead contractor Halliburton to poor planning and mismanagement.
Audits last month by the Special Inspector General for Iraq Reconstruction were particularly scathing over the CPA's handling of more than $20 billion of Iraq's own money and said lack of oversight opened up these funds to corruption.
MELTING FUNDS
North Dakota Sen. Byron Dorgan said passing money stuffed into plastic bags to contractors made it all the more difficult to track funds.
"Your description of passing money around sounds like passing an ice cube around. By the time the person gets the ice cube at the end of the line, it's much smaller," he said.
"There is a lot here that should be the subject of aggressive oversight hearings," he said.
Defense department spokesman Lt. Col Joe Yoswa said the CPA operated under extremely difficult conditions from its inception until its job was over in June 2004.
"Throughout, the CPA strived for sound management, transparency and oversight," he told Reuters.
The United States Congress set aside $18.4 billion for rebuilding Iraq, of which about 15 percent has been spent.
A lawyer representing two "whistle-blowers" in the Custer Battles case, Alan Grayson, said his clients wanted to provide testimony at the hearing but had been too afraid to attend because of death threats, and because they feared retaliation from the Bush administration.
"In our case the Bush administration has not lifted a finger to recover tens of millions of dollars that our whistle-blowers allege was stolen from the government." REUTERS
