Iraq reconstruction oversight office to expand, then disband

Oversight by an office dedicated to Iraq reconstruction projects will be enhanced during 2007, but will wrap up at the end of the fiscal year with authority transferred to the inspectors general of three different agencies, under provisions of a bill signed into law last week.

The final version of the fiscal 2007 Defense authorization bill -- agreed upon just before Congress left for recess and signed by President Bush last Tuesday (H.R. 5122) -- expands the Special Inspector General for Iraq Reconstruction's oversight duties through the use of a broader definition of reconstruction funds.

Previously, SIGIR has overseen only funds appropriated into the Iraq Relief and Reconstruction Fund. Under the new language, any funds for Iraq reconstruction will be construed as being included in the IRRF. Most notably, the change will expand SIGIR's oversight to include activities under the Economic Support Fund, which backs many foreign aid programs, and the Iraq Security Forces Fund for the training and support of the Iraqi military and police.

But two senators who have been active in promoting SIGIR criticized a provision that will terminate the office on Oct. 1, 2007, and redistribute its oversight duties among the State and Defense departments and the U.S. Agency for International Development.

"As we continue to spend billions of U.S. taxpayer dollars for Iraq reconstruction efforts, the SIGIR provides critical oversight of funding for Iraq reconstruction projects," said Sen. Russ Feingold, D-Wis. "This termination plan means that billions of dollars will go without proper oversight and auditing."

Sen. Susan Collins, R-Maine, said Monday she would introduce legislation to extend SIGIR's term. That office, she said, "has proven to be a much-needed watchdog auditing reconstruction contracts in Iraq and spotlighting numerous cases of waste, fraud and abuse."

To date, SIGIR has issued 73 audit reports and 65 project assessments, and has seized more than $17 million in assets, according to data compiled by Feingold's office and confirmed by a SIGIR spokesman. The office's work has led to the arrests of five people and the convictions of four.

SIGIR's reports have contained descriptions of new buildings falling apart and projects never built. A report on a police training academy documented raw sewage seeping through concrete walls due to faulty plumbing, and an investigation led to the arrest of a contractor who pleaded guilty in March to bribing Defense officials with cash, gifts and visits to prostitutes in exchange for contracts and special treatment.

Because the SIGIR language was finalized in conference committee negotiations to resolve differences between the House and Senate versions of the authorization bill, it was unclear who introduced the termination provisions. Previously, the office had been scheduled to disband 10 months after 80 percent of Iraq reconstruction funds had been expended. SIGIR spokesman Jim Mitchell said a rough estimate might have placed that point about two years from now -- one year beyond the newly mandated expiration -- though it would have been dictated by the pace of future spending.

In establishing a sunset time for the oversight group, the Defense authorization language calls for SIGIR and the inspectors general for State, Defense and USAID to jointly develop a transition plan for oversight responsibilities and submit that plan to Congress by April 1. It should ensure minimal disruption to the government's ability to oversee assistance to Iraq, and include a process and timeline to transfer open audits and investigations, according to the bill.

But a caveat in the authorization language could provide an opening for advocates seeking to extend SIGIR's mandate.

The bill says the transition plan "should consider various contingency scenarios which may impact the transition time line."

"The conferees recognize that a significant change in the assumptions underlying this provision, such as a major new commitment of U.S. funds for Iraq reconstruction, would require changes to the transition plan and time line," the conference report accompanying the measure states.

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