Lawmakers appalled by scale of contract fraud in Iraq

Members of the House Armed Services Committee said Thursday they were saddened and appalled at the number of military officers and civilian officials implicated in as much as $6 billion in contract fraud in Iraq and by the mismanagement that left 190,000 weapons intended for Iraqi security forces unaccounted for.

Armed Services Chairman Ike Skelton, D-Mo., opened a hearing on incidents of bribery and fraud that occurred in a major contracting office in Kuwait by saying they "were so severe that I fear they represent a culture of corruption," a term repeated by others.

But a panel of senior defense acquisition and investigative officials attributed the rampant errors and abuse in contracting -- which have resulted in 10 convictions, 78 criminal indictments and audits into $88 billion in questionable contracts -- on lack of controls, poor leadership and an undermanned and untrained work force operating in a combat zone.

While it is important to have audits and investigations to find "the few bad actors," it is more important "that we put the proper controls in place," Thomas Gimble, the principal deputy Defense Department inspector general, told the committee. "There is no short-term solution. This is going to take a lot of work."

"We did not properly train our officers and enlisted personnel to operate in the environment they are in," said Shay Assad, director of defense procurement and acquisition policy and strategic sourcing. There also were no joint doctrines and policies to guide the people sent to handle the rapidly growing contracts for supplies and services, he said.

"It will come down to the fact that we didn't have the right leadership," said Peter Velz, the Defense secretary's foreign affairs specialist for Iraq.

And Lt. Gen. Ross Thompson, military deputy to the Army acquisition and logistics executive, said the acquisition work force was too small and "never caught up" with the crush of service contracts, that now cost more a year than the procurement of major weapon systems.

Efforts are under way to correct all those problems, the officials said.

But those explanations failed to satisfy Armed Services ranking member Duncan Hunter, R-Calif., and Rep. John Kline, R-Minn., both combat veterans.

"Dishonesty is not a reflection of manning levels," Hunter said.

Hunter said the committee had inserted language in the fiscal 2006 defense authorization requiring the Army to create three "contingency contract brigades" able to deploy rapidly to handle situations like the build up in Iraq.

Told that those brigades were just being formed two years later, Hunter said, "That's half the time it took us to win World War II."

"You may be moving in the right direction, but you're moving slowly," he said.

Kline observed that this was not the first time the U.S. military has been to war. "When are we going to have these controls in place?"

The Defense officials sought to deflect some of the committee's ire, noting that the Government Accountability Office, which reported last month it could not account for 30 percent of weapons the United States distributed to Iraqi forces, did not say weapons were actually missing.

The weapons went into Iraq by different means, some went directly to Iraqi troops and others to the warehouses, Velz said. "There just weren't enough people to document them" and no one can be sure if the weapons were ever transferred, he said.

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