Failures cited in Iraq rebuilding

WASHINGTON -- A crucial program to train 20,400 Iraqis to guard key oil and electricity infrastructure sites ended in failure last year, with only about half that number actually trained and millions of dollars worth of automatic weapons, armored cars, night-vision goggles, and other equipment unaccounted for, auditors reported to Congress yesterday.

US officials who ran the training effort, Task Force Shield, kept so little documentation on how they spent the $147 million in Iraqi and American funds allocated to finance it that the program is now being investigated for fraud, the auditors said.

The program was one of a number studied by the Special Inspector General for Iraq Reconstruction, a congressionally appointed watchdog assessing the reconstruction efforts, which reports to Congress quarterly.

The inspector general also highlighted failures in the effort to build and refurbish hospitals and health centers across rural Iraq. Because of poor government oversight and the underperformance of a private contractor and its subcontractors, a $186 million project to construct 150 primary health care centers had managed to complete just six of the centers at the time the audit was prepared, according to the report to Congress and a newly released audit on that project.

Longtime critics of the nearly $32 billion effort to reconstruct Iraq's oil pipelines, electric power plants, sewage treatment facilities, hospitals, and schools say the latest quarterly report provides more evidence that poor planning and inadequate oversight caused the rebuilding effort to stumble.

''We're not building what needs to be built to meet the basic needs of Iraqis, and our nation's credibility is being further eroded," said Representative Henry Waxman, a California Democrat. ''The administration appears incapable of protecting either the interests of American taxpayers or the Iraqi people."

But Inspector General Stuart Bowen Jr. painted the failures in a more positive light, saying that oversight had greatly improved since the two projects were conceived soon after the US-led invasion of Iraq in March 2003.

''Perhaps they are emblematic of problems of an earlier era," he said in a telephone interview yesterday. ''The management of reconstruction in Iraq is much better today than it was in 2003 and 2004."

Bowen's report also highlighted some successes. It noted that electricity generation had returned to prewar levels in most parts of the country, with the exception of Baghdad. Another major success in the health sector was the immunization of nearly all Iraqi children for measles, mumps, rubella, and polio.

Even so, with the US government planning to transfer nearly all infrastructure projects to Iraqis by the end of 2006, the report and the detailed audits that accompanied it paint a disturbing picture of continuing problems.

In at least two cases, the inspector general's office said US government agencies refused to release documents needed to conduct the audits.

One of those cases related to the training program for oil and electricity sites. The project, which auditors called ''mission critical," was meant to train an Iraqi force that could combat the relentless insurgent attacks on Iraq's oil pipelines -- from which the Iraqi government derives 94 percent of its revenue -- and on its electricity lines, which are also crucial for the oil industry to run.

The report noted that the Iraqi oil industry lost 78 percent of its potential export earnings in northern Iraq in the second half of 2005, largely because of attacks on the infrastructure, underscoring the importance of an effective protective force.

The audit said the US Army Corps of Engineers refused to give the inspector general's investigators access to its electronic files, which investigators believed contained additional information on the project. To draw their conclusions, the inspectors relied on documents they found at other offices, and interviewed the few officials who had worked on the project that remained in Iraq.

While Task Force Shield was meant to train and equip a new force of 14,400 guards to protect thousands of miles of oil pipeline, the only documentary evidence they found indicating the number of guards trained was a roster with 11,413 names. A simultaneous program to train 6,000 security forces to guard key Iraq's electrical lines and power plants fared even worse. Investigators could find evidence of only 334 completing the course at a special academy built to train them before the electricity protection project was canceled.

Auditors said they could not account for $21.2 million in military equipment. Of 9,792 automatic rifles that had been delivered to the project in August of 2004, only 3,015 were accounted for in subsequent inventories.

Task Force Shield was disbanded in April 2005 when funding became more difficult, the audit said.

The report also highlighted key failures in the health sector. Iraq, which once had one of the finest health care systems in the region, needed assistance to rebuild its hospitals and clinics. They had suffered from years of sanctions and neglect under Saddam Hussein's rule, as well as significant looting after the 2003 invasion.

The major push to bring health care to the rural areas was to come from Parsons, a contracting giant based in Pasadena, Calif., which won a contract in March of 2004 to build 150 clinics across the country.

Poor oversight and unrealistic expectations marked the project from the start, according to the government auditors.

Parsons initially asked for two years to build the 150 centers, but the US government said they should be built in one year. Parsons also asked to build region by region, to concentrate its expertise in one area at a time, but the US government said all clinics should be started at the same time.

By the time the inspectors audited the contract in March 2006, only six of the 150 had been completed, the report said. Auditors said visits to five health centers that were partially complete revealed shoddy workmanship and that some of the buildings were dangerous to enter.

When the US officials realized how slowly the health centers were being built and how much they were costing, the contract was revised to mandate that Parsons finish just 20 of the centers, including the six that had already been finished, the report said.

Erin Kuhlman, a spokesman for Parsons, said the company agreed to reduce the number of clinics after it became clear that funding was running out.

''We're extremely proud of our dedicated employees who have performed very well under very difficult and dangerous circumstances," she said.

She said Parson has completed the 20 centers, but that one had been destroyed by insurgents. An additional 35 centers were between 75 percent and 99 percent complete, she said.

Bowen, the inspector general, said that the US government was committed to finding the funding to complete the health centers.

The report also expressed support for the Bush administration's request for about $3 billion in new funding to train Iraqis to take over US-funded infrastructure projects.