Inquiry suspends rebuilding city

Corruption probe targets the mayor

FALLUJAH, Iraq - US-funded reconstruction in a former Sunni insurgent stronghold has been suspended because of a corruption investigation, including allegations that the mayor and police chief were involved in a multimillion-dollar oil smuggling ring.

The problems in Hit, a dusty, ramshackle western town along the Euphrates River, provide a glimpse of the challenges in rebuilding a country where years of war and misrule have destroyed the social fabric.

Reconstruction is a key part of the US military strategy against both Sunni and Shi'ite extremists, but many projects have long been dogged by mismanagement and allegations of corruption.

The US government suspended its efforts in Hit this month after the police chief, Colonel Salah Rasheed al-Gaoud, was fired for his alleged role in the scheme, US and Iraqi officials familiar with the investigation said.

Officials also confirmed that the mayor, Hikmat Jubair al-Gaoud, was under investigation. Marine Lieutenant Colonel Chris Hughes, a spokesman for US forces in Anbar Province, said the mayor's current whereabouts were unknown and that it was unclear whether he fled the country.

But a man identifying himself as the mayor said by phone that he was still in Hit and "still in my job as the mayor."

"There is a committee that it is investigating the case of stealing oil and its work has not finished yet," he said.

Among the reconstruction projects that have been suspended are repairs to the town's dilapidated infrastructure, including street repairs, sewerage upgrade, and school construction.

US military officials said reconstruction projects in Hit will remain on hold during the probe, which Iraqis said was being conducted by the Ministry of Interior.

"Since the mayor and the chief of police are under investigation for corruption, we have stopped all reconstruction efforts in Hit until the investigation is resolved," said Mike Isho, the Arabic public affairs officer for Multi-National Forces-West.

"Since there is nobody to lead the city, it doesn't make a whole lot of sense to continue these projects," Isho said. Caught in the middle are the 120,000 residents of Hit, located in Anbar Province 85 miles west of Baghdad.

Although the United States has been trying to pursue reconstruction projects in Iraq since the early months of the war, the effort has taken on greater urgency since General David Petraeus assumed command in late 2006.

Once US and Iraqi troops subdue militants in a town or district, the next step is to begin programs to improve the quality of life to undermine support for the militants among the civilian population.

Last month, however, Democratic Senators Byron Dorgan of North Dakota and Sheldon Whitehouse of Rhode Island asked the Treasury Department to investigate whether Iraqi officials have embezzled or misspent billions of US tax dollars intended for the country's reconstruction.