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Analysis: Tracking U.S. Dollars to Iraq

Council on Foreign Relations

November 8, 2006
Prepared by: Lionel Beehner

The cost of combat operations in Iraq has soared above $300 billion (PDF), even as hundreds of millions of dollars still go unaccounted for. This is partly due to poor postwar planning and the handing out of uncompetitive bids to private contractors. But it is also due to the opaque budgetary process by which U.S. military and reconstruction operations in Iraq (and Afghanistan) are funded. Instead of being included in the regular annual defense budget, many of these costs are included in supplemental requests, which receive little scrutiny from Congress, as this new Backgrounder explains.

Recent attempts at congressional oversight have actually become “a painful example of how little oversight there actually is,” writes Winslow Wheeler of the Center for Defense Information. Steven M. Kosiak of the Center for Strategic and Budgetary Assessments agrees. “We are long past the point (PDF) where special supplemental appropriations, which are intended to cover the cost of unanticipated emergencies, should be used as the primary means of funding these operations,” he writes. Some experts expect with Democrats in control of at least one house of Congress, there will be increased oversight over military spending, and perhaps a shift away from relying on supplemental requests to finance combat operations in Iraq.

Meanwhile, multiple audits conducted by U.S. and other agencies point to waste and malfeasance involving funds slated for reconstruction. The most recent, conducted by a UN oversight agency, found that the Halliburton subsidiary KBR had charged the Iraqi government $25,000 per truck per month for 1,800 fuel trucks that, it turns out, sat largely unused (PDF) along the Iraqi border. The Special Inspector General for Iraq Reconstruction (SIGIR), in its quarterly audits since January 2004, has uncovered widespread corruption, incompetence, and red tape.

Read the rest of this article on the cfr.org website.

Copyright 2006 by the Council on Foreign Relations. This material is republished on GlobalSecurity.org with specific permission from the cfr.org. Reprint and republication queries for this article should be directed to cfr.org.