Board free of oversight as it spends $4 billion in Iraqi money

By Jackie Spinner and Ariana Eunjung Cha
The Washington Post

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WASHINGTON — Iraqis spooked by rumors of a fuel shortage were hoarding the precious commodity, inadvertently causing exactly what they feared. Officials in charge of oil for the U.S.-led occupation government in Baghdad were worried that there would be riots if they didn't do something, fast. And so, on Nov. 29, they went to Saddam Hussein's former presidential palace and sought help.

By nightfall, they had received an emergency allotment of $425 million to import fuel from neighboring countries.

The spending was approved by the 11-member Program Review Board. The board, comprising mostly Americans, Britons and Australians, was appointed by L. Paul Bremer, the top administrator of the Coalition Provisional Authority (CPA). It uses Iraqi money that includes oil revenue and seized assets from the Saddam era to pay for projects not anticipated by the country's budget. So far, the board has approved more than $4 billion in such spending.

And while spending of the $18.6 billion Congress approved this fall for Iraqi reconstruction will be overseen by an office run by a retired U.S. admiral, and the $13 billion pledged from other countries will be monitored by an Iraqi-run oversight board, there seems to be little oversight or accountability for the money spent by the Program Review Board.

Despite detailed regulations and pronouncements about "transparency," it has little of the openness, debate and paper trails that define such groups in democratic nations.

Though the interim government has extensive information on its Web site, it doesn't include, for example, when contracts have been awarded. Citing security concerns, it also doesn't say what companies won them.

During its twice-weekly meetings, the board has approved more than 500 projects, including $120 million for printing and distributing currency, $36 million for renovating police stations, $15 million for a national micro-credit program and $4 million for creating a radio system for the railroad network.

It also has signed off on scores of smaller projects, including $3,500 to start a Baghdad theater festival, $50,000 to pay two zookeepers and $79,245 to re-establish the Baghdad stock exchange.

Meetings of the review board aren't public, and there are no transcripts. Abbreviated minutes of meetings since August have been posted on the Internet, but they do not include information on more than 200 projects approved from May to mid-August.

There's no description of the discussions leading to a decision. There's no explanation, for example, of why the board decided to spend $35,000 to remove the four sculptures of Saddam's head at the presidential-palace headquarters of the interim government or why it approved $194,370 for the Resalla High School but nothing for the Tigris Primary School next door, or why it felt a $1.4 million allocation to support women's centers would be beneficial to the Iraqi people.

Some contracts, mostly small ones, aren't publicized.

The names of winning contractors are kept secret. And the limited amount of information available — how much money was allocated and for what general purpose — is available only in English, though the CPA says it is translating the minutes into Arabic.

For some "micro-purchases," contracts may be awarded without competition. For contracts from $5,000.01 to $25,000, bids can be taken orally.

An international monitoring board, set up when the United Nations transferred money from the oil-for-food program to the occupation authority, is supposed to audit the Program Review Board's work, but it is still being organized. In addition, Defense Secretary Donald Rumsfeld has yet to appoint an inspector general for the Coalition Provisional Authority, as Congress mandated.

"Our allies clearly expect there to be transparency in the process," said Christopher Yukins, a contracting expert and associate professor of government contract law at George Washington University Law School.

The occupation authority's legal standing has led to some confusion. For example, the U.S. General Accounting Office, which reviews federal contract disputes, said that because the CPA isn't a federal agency, it wasn't sure it had the authority to review a protest lodged by a company that lost a bid for a reconstruction contract.

Frederick Barton, a former official of the U.S. Agency for International Development (USAID) and the United Nations, said it was essential for the occupation authority to start spending money as quickly as possible.

"That money did not have the usual slow-me-down quality of U.S. government money," he said. "A lot of things got done. Obviously, there's always an opportunity to question how that money got out. But if you spend time doing all your normal procedures, you'll get people killed."

A Pentagon spokesman said the coalition can track the money: "We've got accountability for it," said Maj. Joseph Yoswa. "It's not like we're letting it disappear."

CPA officials declined numerous requests for an on-the-record interview with someone who could talk about the process. In written answers to questions, the CPA said it "goes a long way beyond its legal requirements and is far more conscientious than many democratic governments in ensuring real transparency in its contracting and spending decisions."

The statement noted that in October, the board issued 52 contracts for a total of $57.4 million to Iraqi companies, 41 contracts for a total of $66.4 million to U.S. firms, and $86.2 million worth of contracts to companies in 19 other countries.

The Program Review Board is chaired by Rodney Bent, a deputy from the Office of Management and Budget, but its membership has changed over time. As the skeleton of an Iraqi government has been formed, the board has begun to hand off more of the responsibility for specific projects to the ministries. But the board still handles the overall allocations.

Bremer has veto power over the allocations. On Nov. 15, for example, the board approved the use of $5.8 million to buy equipment and uniforms and to pay salaries for the Iraqi Civil Defense Corps, but Bremer knocked it down to $1.7 million. More often than not, however, Bremer approves the board's decisions.

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