Iraqi Oil Theft Drives Up Reconstruction Costs

The Nation
Iraqi Oil Theft Drives Up Reconstruction Costs
Katrina vanden Heuvel

According to James Jeffrey of the State Department's Bureau of Near Eastern Affairs, at $21.9 billion the Iraqi reconstruction program is "the largest since the Marshall Plan."

If only it included the PLAN part.

Assessing the Bush Administration's "2005 National Strategy for Victory in Iraq," a newly released Government Accountability Office report criticizes the Bush administration's failure to identify "which U.S. agencies are responsible for implementation" as well as "current and future costs…."

Last Tuesday, U.S. Comptroller General David Walker told a House Government Reform subcommittee of "massive corruption" and "theft" in the Iraqi oil industry – including the stealing of 10 percent of refined fuels, and 30 percent of imported fuels. Walker noted the "tremendous incentive" for theft given that subsidized gas sells for 44 cents per gallon in Iraq, compared to 90 cents per gallon elsewhere in the region. And with oil production down from prewar levels, the invasion-justification-assumption that these revenues would largely pay for reconstruction has proven wildly off target.

Joseph Christoff, GAO's director of international affairs and trade, also spoke of wasted payments to a "bloated bureaucracy" and "ghost employees."

The GAO report concludes with the staggering assertion that neither the Defense Department nor Congress "can reliably determine the costs of war, nor do they have the details on how appropriated funds are being spent or historical data useful in considering future funding needs."

The Congressional Budget Office added to the grim picture revealed last week by estimating that – even in the case of a rapid withdrawal – "an additional $166 billion would be needed… on top of $290 billion already allocated."

But the American people have been misled on the costs of this war at every stage, so why what possible reason do we have to believe that these are real numbers? Nobel prize winning economist Joseph Stiglitz places the costs at $1 trillion to $2 trillion, depending on how long this madness continues.

And this is the reckless, uncharted course that the administration and its GOP accomplices (and Joe Lieberman) continue to ask our nation to follow? To use Mr. Bush's own words, unwittingly captured by a microphone at the G-8 Summit, "That seems odd."