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Iraq reconstruction hampered by fraud

Nov. 1, 2004 at 7:47 AM

WASHINGTON, Nov. 1 (UPI) -- Lawlessness and corruption are hampering reconstruction efforts in Iraq, U.S. Inspector General Stuart Bowen said.

In his latest quarterly report, Bowen said allegations have surfaced of large-scale embezzlement, robberies perpetrated by Iraqi police and even payoffs to U.S. military personnel who aided in theft, the Washington Post reports.

The inspector general has managed or coordinated 113 criminal investigations, and opened cases on 272 reports of fraud, waste or other problems reported on the agency's hotline.

In one case, an Iraqi government official was suspected of embezzling $500,000 of funds allocated to help local governance, and possibly funneling some of that to insurgents. The investigation found the official had actually spent only $70,000 on legitimate projects. He returned the other $430,000.

Bowen also said reconstruction aid promised by international lenders and other countries has only trickled into Iraq. Of the $13.5 billion pledged at a donors conference last year in Madrid, contributions and firm commitments total $2.7 billion, the report said.

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