Bipartisan Support to Keep Iraq Watchdog Agency

The Senate voted Tuesday in favor of keeping open a federal agency that monitored taxpayer-funded reconstruction efforts in Iraq - a month after the Republican majority in both houses of Congress quietly passed legislation signed into law by President Bush to close down the agency next year.

The Special Inspector General for Iraq Reconstruction (SIGIR) issued a scathing report in October accusing Halliburton, the oil services corporation once headed by Vice President Dick Cheney, of once again trying to defraud the federal government related to its work in Iraq. Shortly after the report was released, Stuart Bowen, the inspector general, said he would be out of a job come October 2007, having been told by White House officials that the watchdog agency he headed would be shuttered.

But in a rare show of bipartisan support - led by the new Democratic majority in the Senate - an amendment attached to a military spending bill was drafted ensuring the Inspector General's office would remain open. The overall spending bill is expected to pass the House later this week.

"The important work of this watchdog must continue, as long as American funds are being used for Iraqi reconstruction," said Susan Collins, the Republican senator from Maine who co-sponsored the plan with Democratic senator Russ Feingold of Wisconsin.

Since its inception in January 2004, SIGIR has singled out corporations like Halliburton for systematically defrauding US taxpayers for services it conducts in Iraq, such as delivering fuel and preparing meals for the military. In late October, Bowen's office issued a report claiming Halliburton had routinely refused to provide the government with financial documents related to its reconstruction efforts in the region, asserting that the information was proprietary when in fact it wasn't.

Bowen said, during a recent appearance on C-Span shortly after he found out his office would be permanently closed, that his agency currently has 92 open investigations, five of which were turned over to the Department of Justice, of alleged taxpayer fraud in Iraq that could total billions of dollars. A majority of the corporations under scrutiny are US-based companies. Bowen said of the 72 reports his office has prepared, four people have been convicted of fraud, a figure that seems paltry when measured against numerous reports of corporate profiteering.

Bowen, a Republican who assisted President Bush's campaign committee during the contentious Florida recount in 2000 and worked with Bush in 1994 when he was governor of Texas, has fallen out of favor with many Republicans on Capitol Hill over the past year. His explosive reports have identified US corporations as having committed fraud and deceptive business practices and have embarrassed the White House.

One such report was released just two weeks before the midterm elections. It claimed that Halliburton had billed the US Army $52 million for overhead costs during the first 10 months of 2004 for a major oil construction project that did not begin until November 2004. Bowen criticized the government, saying officials turned a blind eye to the egregious error and took only "limited action to reduce administrative and overhead costs during the periods of project inactivity." Moreover, Bowen's report blamed US officials for poor planning on reconstruction projects.

In a separate report issued by the Inspector General's office, also in October, Halliburton was accused of wasting $75 million in taxpayer funds on a failed pipeline project, ignoring advice from a consultant that further studies needed to be undertaken before work on the project began. Hunter's office also recently discovered that the US military has failed to properly track hundreds of thousands of weapons it shipped to Iraqi security forces.

The reports had a negative effect on the overall view of how the public perceived the Iraq War. But Congressman Duncan Hunter, the outgoing chairman of the Armed Services Committee, sealed the fate of the watchdog agency when he stripped a provision from the final version of a major defense bill that aimed to keep SIGIR operating.

Hunter, the Republican from California, wanted to turn over control of monitoring spending in Iraq to the Pentagon and the State Department, and he slipped language into an appropriation bill saying as much. It passed. Democrats said scuttling the office was an attempt to bury the bad news that reflects poorly on their Republican colleagues.

"This is par for the course for this Congress, which goes to great lengths to avoid any accountability," Democratic senator Charles Schumer said one week before the midterm elections.

Incoming House Majority Leader Nancy Pelosi agreed, saying "Republican leaders in Congress are turning a blind eye to the realities on the ground by insisting that the office be closed rather than pushing for desperately needed change in Iraq."

Hunter's legislative maneuver will likely unravel come the end of the week.

Jason Leopold is a former Los Angeles bureau chief for Dow Jones Newswire. He has written over 2,000 stories on the California energy crisis and received the Dow Jones Journalist of the Year Award in 2001 for his coverage on the issue as well as a Project Censored award in 2004. Leopold also reported extensively on Enron's downfall and was the first journalist to land an interview with former Enron president Jeffrey Skilling following Enron's bankruptcy filing in December 2001. Leopold has appeared on CNBC and National Public Radio as an expert on energy policy and has also been the keynote speaker at more than two dozen energy industry conferences around the country.

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