State and Foreign Operations Subcommittee Evaluates Diplomacy, Devlopment, and Oversight in Iraq

WASHINGTON – Congresswoman Nita Lowey, Chair of the Appropriations Subcommittee on State, Foreign Operations, and Related Programs, today delivered the following introductory remarks at a hearing entitled “Assessing an Effective Diplomatic and Development Program in Iraq: An Examination of the Diplomatic Surge.”

Lowey opening statement
Good afternoon. The Subcommittee on State, Foreign Operations, and Related Programs will come to order for today's hearing on our diplomatic and development programs in Iraq. I welcome our distinguished witnesses, Mr. Joseph Christoff, the Director of the International and Trade Division of the Government Accountability Office (GAO), and for a second time this year, Mr. Stuart Bowen, Jr. the Special Inspector General for Iraq Reconstruction (SIGIR).

We look forward to a frank discussion on the findings in the SIGIR report released today as well as other recent SIGIR and GAO reports on oversight, accountability and effectiveness of our relief and reconstruction programs in Iraq.

Since 2003, over $45 billion has been appropriated for relief and reconstruction assistance in Iraq, of which 74% has been obligated and 60% expended. Just last week, the President requested an additional $3.4 billion for the Department of State and USAID's efforts. The war has already cost the American taxpayer $450 billion, nine times more than the Administration initially calculated. And the costs in loss of life and respect in the world are far greater. Yet, I fear that our national security is more at risk now than before the Iraq war began.

It is our responsibility to thoroughly assess whether our current diplomatic and development efforts have a positive, sustainable impact – in other words, the measured results the Secretary's own transformational diplomacy strategy requires – and if not, take the necessary steps to change course, before any additional funds are appropriated.

I hope you can provide this subcommittee with your assessment of the investment of $45 billion we have appropriated thus far. For example:

• How many infrastructure projects have been completed, and are they being maintained by the Iraqi government?
• What kind of capacity development is occurring in the Iraqi government ministries, and which ministries are functioning?
• How many Iraqi police have we trained, and how many continue to show up for work?
• What is the status of the justice sector? How many lawyers and judges are there and how many courts are functioning at an acceptable standard?
• How many hospitals and schools have been built? Do they have trained doctors, nurses, and teachers? Are these institutions being maintained by the provincial or central governments and are they equitably serving all sects?

Increasing our footprint and scaling up our assistance programs will contribute to political progress, reconciliation and ultimately self-governance in Iraq only if these programs are well-managed and efficient and with a strong, viable partner in the Iraqi government.

Sadly, these key ingredients seem to be missing. Several early reports found widespread waste, fraud and abuse of U.S. resources invested in major infrastructure programs. Unfortunately, it seems that U.S. government agencies charged with overseeing these contracts have not made the necessary reforms to ensure that taxpayer dollars are used properly, efficiently and effectively. For example, the SIGIR's June 2007 audit of KBR's life-support contract with the U.S. Embassy in Iraq found significant shortfalls, and the September 4th report by the Department’s own inspectors identified serious deficiencies in the new Embassy’s fire suppression system. The July 2007 Quarterly Report found that Bechtel's $1.2 billion infrastructure project managed by USAID, had significant problems. Now today's report identifies serious shortcomings in the financial controls and program management of DynCorp’s $1.2 billion police-training contract, managed by the Department of State. In fact, it is my understanding that the audit couldn’t even be completed because of poor recordkeeping?

While your various reports have noted that steps have been taken to address each of these instances, they are symptoms of a systemic problem that can only be remedied with procedures and policies to ensure accountability in all our contracts and programs. I am eager to hear whether you believe the Department of State and USAID have made the necessary reforms to ensure that further abuse and mismanagement do not occur. All evidence points to the contrary.

It should be noted that waste, fraud, and abuse are not limited to USG contracting. Previous reports, as well as the October 2007 report of the Government Accountability Office, highlight rampant corruption in Iraqi Ministries. Difficult challenges facing the Iraq's Joint Anti-Corruption Council and the Commission for Public Integrity, whose Chair said earlier this year, "violence, intimidation, and personal attacks were a main obstacle to the Commission's work," also have been reported by both the SIGIR and GAO. Is there any evidence that the State Department is taking the necessary steps to address corruption at every level of government and to hold the Government of Iraq accountable for their actions? I am concerned that our reconstruction efforts cannot be sustainable if we do not have a viable partner in Iraqi government officials or institutions.

Mr. Bowen, as you have noted, the Provincial Reconstruction Teams (PRTS) are an essential element of the Administration's diplomatic surge strategy. The goals of this program, as outlined by the President, are to strengthen Iraqi capacity and self-sufficiency, support the USG's counterinsurgency strategy, foster economic development, and build provincial capacity. I look forward to hearing whether you believe we are meeting these objectives particularly because based on recent developments, I am concerned they are no longer sustainable – that the costs outweigh the benefits.

The President has requested an additional $907.1 million for these 25 PRTs, to "capitalize on the enhanced security environment in Iraq." Yet, over half of the requested funding is for security. We face incredible management and oversight deficiencies for private security contractors, such as Blackwater, as identified in the Secretary of State's Panel on Personal Protective Services in Iraq report. And now, Secretary Rice has ordered all diplomatic positions in Iraq be filled before any other openings in Washington or overseas so that diplomats can transition into PRT roles currently filled by military personnel, the first forced diplomatic deployment since the Vietnam war.

It seems clear to many of us that spending half of our PRT funding on security is in no way “capitaliz(ing) on enhanced security,” and as embedded military personnel and military protection forces are drawn down, PRTS will lose a significant layer of security. How can PRTs be effective in such a security environment, and is there evidence that planning is underway to address this problem or any analyses of the cost implications of the loss of this security presence? What effect will the issues arising from the management, or lack of management, of private security contractors in Iraq have on the State Department's capabilities to provide security to PRT personnel as Coalition forces withdraw?

Another objective of the PRT program is to support the USG's counterinsurgency program. Yet, your recent audit states that coordinating reconstruction programs with counterinsurgency operations was one of the most significant continuing challenges to the PRT program. Can you please tell us why the USG is unable to coordinate effectively in this way?

Your report also noted that PRT officials have mixed opinions of the effectiveness of the program, of the strength and commitment of provincial governments, and of the sustainability of their efforts. We hope you can provide insight into whether government corruption has impacted the PRTS work and whether the Iraqi government and local provincial councils are committed partners in this program.

Additionally, the SIGIR’s quarterly report, as well as reports from the Army Corp of Engineers, states that the Mosul Dam is “likely to fail” and could release a tsunami like wave flooding two of Iraq’s largest cities. The U.S. government has executed 21 contracts, valued at $27 million, with the overall goal of helping to repair and restore Mosul Dam. However, you have found that these contracts failed to further the original project objectives of providing Mosul Dam and the Ministry of Water Resources with additional personnel, critical spare and replacement parts, and enhanced grouting abilities. Failure of this dam would be catastrophic for Baghdad, Mosul and indeed our own reconstruction efforts. I hope you can further enlighten the committee on the problems associated with this dam. Is this simply another example of poor contract oversight? Or is this yet another instance where we have failed to recognize the shortcomings of the Iraqi government and their lack of commitment and ability to operate and sustain large infrastructure projects?

Any additional funding for diplomatic and development programs in Iraq must be carefully considered and have clear, attainable objectives. Our assessment of the current diplomatic and development strategy in Iraq is critical to our Committee’s review of the supplemental request and to the appropriate oversight of funds of this magnitude.

The Administration should not expect Congress to appropriate additional funds for Iraq until we can be assured that taxpayer funds will change the course of action in Iraq, advance American interests, and be accounted for fully and accurately.

As we only have a limited amount of time this afternoon, I hope you can summarize your testimony for us, and we will, of course, put your full statement in the record. I would also like to remind the members of the committee that I will be recognizing members as they arrived, switching between majority and minority when possible, and adhering to the 5-minute rule for questions.

Now, let me turn to Mr. Wolf for any opening statement that he may wish to make.



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