Reconstruction Funds Spent Unequally

U.S. officials have spent nearly all of the $20-billion Development Fund for Iraq, which is financed by selling Iraqi oil, but have spent only $366 million from the $18.4-billion aid package Congress approved last year, government reports show.

Figures for the Development Fund expenditures came from a report last week by Congress’ General Accounting Office. Joseph Christoff, who directs the GAO’s international affairs section, said all but $900 million of the fund had been committed as of late June.

“They clearly spent [development fund money] at a much faster pace than the appropriated dollars,” Christoff said.

White House budget office spokesman Chad Kolton said the figure on spending from the U.S. aid package is misleading because for many long-term contracts, checks are written only after substantial work is completed. When money owed for specific contracts is included, the outlay rises to $5.3 billion, according to a quarterly report released Friday by the budget office.

The funds are meant for projects such as training Iraqi police; starting small businesses; and rebuilding the country’s electric, water, health and oil production facilities.

As of May, more than half the money from the Development Fund for Iraq had gone to operate ministries. The rest went to relief and reconstruction projects.

Until the return of sovereignty, the U.S.-led coalition authority had the ultimate say over how the money was used. Decisions were made in meetings with Iraqi officials appointed by the authority and the U.S.-picked Iraqi Governing Council.

U.S. authorities have told international monitors that some of the contracts were awarded without competitive bidding to Halliburton, the company formerly led by Vice President Dick Cheney.

Some critics have suggested that American authorities tapped the Iraqi money to avoid the stricter controls Congress demanded on the spending of U.S. tax dollars.

“Perhaps they prefer to have the flexibility to give away contracts to whichever companies they want on whatever terms they want,” said Svetlana Tsalik, director of the George Soros-funded Revenue Watch.