Thank you, Chairman Collins, for scheduling today’s hearing to examine contracting and procurement issues in Iraq. Our committee is responsible for government oversight, and nothing facing our nation is in greater need of review than the cost of Iraq’s reconstruction.

I want to welcome you, Mr. Bowen, and thank you for the important service you are providing to our nation as the Special Inspector General for Iraq Reconstruction. I commend you and your staff for the diligent work you are doing in difficult and often dangerous circumstances. Your reports remind us that just as war and crises motivate citizens to heed the call of government service – others see it as an opportunity to enrich themselves unjustly at the government’s expense. In these trying times, auditors and investigators are often the best protection the government has against these unprincipled individuals.

Approximately $40 billion has been appropriated for the security, relief, and rehabilitation of Iraq. Given this tremendous sum it is critical that there is oversight on how taxpayer dollars and Iraqi funds have and will be spent.

A first reason for the high cost of reconstruction in Iraq is the Administration’s failure to plan for the post-war period. This has led to large-scale waste, fraud, and abuse. During the debate on whether the U.S. should go to war, I said that the President lacked a strategy for winning the peace. I fear that the problems and the abuses with contracts and procurements today bear out my concern.

A second reason for the high cost of reconstruction in Iraq is the Administration’s lack of truthfulness with the American people.

• Congress and the American people were told that Iraq’s oil wealth would provide adequate funding for rebuilding the country’s infrastructure. This was not true.
• Congress and the American people were told that the American taxpayer would be not be funding the reconstruction of Iraq. This was not true.
• Congress and the American people were told that the Iraqi people would stand and put their own house in order. This has not happened yet.

A third reason for the high cost of reconstruction in Iraq is the Administration’s failure to oversee how money is being spent. Just last week Iraqi Prime Minister Maliki confirmed to Congress that much of the budget Congress allocated for Iraq’s reconstruction ended up paying for security firms and foreign companies, whose operating costs were vast. As a result, the Prime Minister has asked for even more aid.

In addition to the high costs, mismanagement and misuse of American and Iraqi funds are commonplace. In fact, a report issued by Mr. Bowen last January shows investigators and auditors cannot account for over $9 billion in Iraqi funds. Contractors are also providing incomplete and inadequate services or are overcharging for their services. For example, as was widely reported in February 2006, the Defense Contract Audit Agency found over $200 million in overcharges by Halliburton for its contract to import fuel and repair oil fields.

I am appalled that large, highly recognizable American companies are abusing government contracts. Is the culture of corruption in our country so endemic that publicly-known companies feel complacent during a time of war to defraud the government without any concern?

We are now over three years into this conflict, and the Administration has spent over $300 billion of American taxpayer money in fighting a prolonged war and rebuilding Iraq. The taxpayers demand and deserve accountability. Make no mistake – what we undertake today determines the future. Given the stakes, there remains no room for error.

Madam Chairman, the government’s past failures in Iraq cannot be undone. But the lessons learned from yesterday should ensure that fraud and inadequate oversight do not reoccur tomorrow. Thank you again for holding today’s hearing. You are providing a service to all Americans.

Mr. Bowen, I look forward to your testimony.