US-led Iraq agency blamed for wasting millions

Speaking to a Senate panel, former CPA official Franklin Willis said the processes for handling contractors were as chaotic as the Wild West.

Almost two years after the war, 80 percent of the $18bn set aside by the US Congress for rebuilding Iraq remains unspent.

A Pentagon spokesman said the CPA had worked under very difficult conditions.

Democratic senators called the hearing into the management of the reconstruction funds, saying the Republicans who run Congress have declined to investigate fraud in Iraq.

What they heard did not please them.

Willis told the US Senate Democratic Policy Committee there was widespread abuse and waste of money at the authority.

He showed pictures of himself and other US officials holding up plastic-wrapped bundles of $100 notes, worth $2m. They were used to pay a security contractor.

Willis said a combination of inexperienced officials, fear of decision-making, lack of communications, minimal security, no banks and lots of money to spend led to a Wild West type of chaos.

These allegations of incompetence come just weeks after an audit of the CPA's handling of more than $20bn of Iraq's own money found that a lack of oversight had left the funds open to corruption.

A Pentagon spokesman said the CPA had striven for sound management and transparency under extremely difficult conditions.

AFP adds: The Bush administration was accused Monday of allowing the US rebuilding of Iraq to become as chaotic as the Wild West, of protecting a US contractor accused of fraud and of censorship.

Senator Harry Reid, head of the opposition Democrats in the US Senate, was visibly angry over accounts of incompetence and corruption from former staff of the US-led Coalition Provisional Authority (CPA) in Iraq.

"This is a scandal," said a visibly angry Reid. "We are close to 24 months into this conflict with Iraq, and the administration (of US President George W. Bush) still can't seem to get it right," he said.

Reid spoke during hearings in Congress into the management of the CPA's multi-billion dollar reconstruction program.

In the hearings, civilians compared CPA operations to the Wild West, saying bags full of cash were tossed freely about, at times as footballs.

Franklin Willis, who supervised aviation for the CPA in late 2003, accused the organisation of "poor execution" and called it "naive."

He said that millions of dollars in 100-dollar bills stored in the basement of the CPA offices were casually distributed to favored contractors with little accounting discipline.

Another witness accused the government of hampering an investigation into alleged fraud US-based by Custer Battles, which had contracts worth as much as 100 million dollars in Iraq for airport security and other jobs.

Custer Battles was accused of repainting old airport equipment and billing the CPA for new equipment, among other schemes.

"We estimate that the government's total losses are tens of millions of dollars," said lawyer Alan Grayson, who represents former employees of the company.