[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
                OVERSIGHT: HARD LESSONS LEARNED IN IRAQ
                       AND BENCHMARKS FOR FUTURE
                         RECONSTRUCTION EFFORTS

=======================================================================



                                HEARING

                               BEFORE THE

SUBCOMMITTEE ON INTERNATIONAL ORGANIZATIONS, HUMAN RIGHTS AND OVERSIGHT

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 24, 2010

                               __________

                           Serial No. 111-82

                               __________

        Printed for the use of the Committee on Foreign Affairs


 Available via the World Wide Web: http://www.foreignaffairs.house.gov/

                                 ______



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                      COMMITTEE ON FOREIGN AFFAIRS

                 HOWARD L. BERMAN, California, Chairman
GARY L. ACKERMAN, New York           ILEANA ROS-LEHTINEN, Florida
ENI F.H. FALEOMAVAEGA, American      CHRISTOPHER H. SMITH, New Jersey
    Samoa                            DAN BURTON, Indiana
DONALD M. PAYNE, New Jersey          ELTON GALLEGLY, California
BRAD SHERMAN, California             DANA ROHRABACHER, California
ELIOT L. ENGEL, New York             DONALD A. MANZULLO, Illinois
BILL DELAHUNT, Massachusetts         EDWARD R. ROYCE, California
GREGORY W. MEEKS, New York           RON PAUL, Texas
DIANE E. WATSON, California          JEFF FLAKE, Arizona
RUSS CARNAHAN, Missouri              MIKE PENCE, Indiana
ALBIO SIRES, New Jersey              JOE WILSON, South Carolina
GERALD E. CONNOLLY, Virginia         JOHN BOOZMAN, Arkansas
MICHAEL E. McMAHON, New York         J. GRESHAM BARRETT, South Carolina
JOHN S. TANNER, Tennessee            CONNIE MACK, Florida
GENE GREEN, Texas                    JEFF FORTENBERRY, Nebraska
LYNN WOOLSEY, California             MICHAEL T. McCAUL, Texas
SHEILA JACKSON LEE, Texas            TED POE, Texas
BARBARA LEE, California              BOB INGLIS, South Carolina
SHELLEY BERKLEY, Nevada              GUS BILIRAKIS, Florida
JOSEPH CROWLEY, New York
MIKE ROSS, Arkansas
BRAD MILLER, North Carolina
DAVID SCOTT, Georgia
JIM COSTA, California
KEITH ELLISON, Minnesota
GABRIELLE GIFFORDS, Arizona
RON KLEIN, Florida
VACANT
                   Richard J. Kessler, Staff Director
                Yleem Poblete, Republican Staff Director
                                 ------                                

              Subcommittee on International Organizations,
                       Human Rights and Oversight

                   RUSS CARNAHAN, Missouri, Chairman
BILL DELAHUNT, Massachusetts         DANA ROHRABACHER, California
KEITH ELLISON, Minnesota             RON PAUL, Texas
DONALD M. PAYNE, New Jersey          TED POE, Texas
              Jerry Haldeman, Subcommittee Staff Director
          Paul Berkowitz, Republican Professional Staff Member
                    Mariana Maguire, Staff Associate


                            C O N T E N T S

                              ----------                              
                                                                   Page

                                WITNESS

Mr. Stuart W. Bowen, Jr., Special Inspector General for Iraq 
  Reconstruction, Office of the Special Inspector General for 
  Iraq Reconstruction............................................     7

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Russ Carnahan, a Representative in Congress from 
  the Commonwealth of Massachusetts, and Chairman, Subcommittee 
  on International Organizations, Human Rights and Oversight: 
  Prepared statement.............................................     3
Mr. Stuart W. Bowen, Jr., Special Inspector General for Iraq 
  Reconstruction, Office of the Special Inspector General for 
  Iraq Reconstruction............................................    10

                                APPENDIX

Hearing notice...................................................    34
Hearing minutes..................................................    35


   OVERSIGHT: HARD LESSONS LEARNED IN IRAQ AND BENCHMARKS FOR FUTURE 
                         RECONSTRUCTION EFFORTS

                              ----------                              


                      WEDNESDAY, FEBRUARY 24, 2010

              House of Representatives,    
   Subcommittee on International Organizations,    
                            Human Rights and Oversight,    
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:35 a.m. in 
room 2172, Rayburn House Office Building, Hon. Russ Carnahan 
(chairman of the subcommittee) presiding.
    Mr. Carnahan. The International Organizations Subcommittee 
will come to order. I want to thank Stuart Bowen, the Special 
Inspector General for Iraq Reconstruction, for testifying here 
today. He has undertaken an enormous task, and I really want to 
thank him for his service.
    With over $50 billion in U.S. taxpayer funds spent for Iraq 
reconstruction--the largest reconstruction ever since the 
Marshall Plan--through Fiscal Year 2010, there are a number of 
lessons to be learned. I believe if we fail to learn these 
lessons we are doomed to repeat many of these mistakes. Some 
money was spent properly, but far too much has been wasted, 
misspent or wholly mismanaged. There have been numerous 
examples of poor accountability and inadequate procurement 
processes, just to name a few of the problems.
    With reconstruction efforts in Afghanistan, Haiti and 
others sure to take place, we need to ensure we take the 
lessons learned in Iraq and turn the corner. While there is 
certainly no one size fits all, we need to make sure there is a 
process in place that meets not only our goals of 
reconstruction, oversight and accountability, but also one that 
ensures we are meeting our development and diplomacy goals as 
well.
    Mr. Bowen has put forward a proposal that seeks to answer 
the question of who should be accountable for planning, 
managing and executing stabilization and reconstruction 
operations that are part of an overseas contingency operation. 
The question is being asked because there was not a coordinated 
U.S. Government approach to reconstruction operations, which 
has resulted in, among other things, mismanagement of U.S. 
taxpayer funds.
    I am very interested in hearing you testify about your 
proposal today. I am especially interested in hearing how your 
proposed U.S. Office for Contingency Operations would increase 
effectiveness and accountability while dramatically decreasing 
instances of waste, fraud and abuse. I am also interested in 
hearing how this proposal would enhance our diplomacy and 
development goals.
    When Secretary Clinton announced the inaugural QDDR this 
past July, she indicated that it would provide a 
``comprehensive assessment for organizational reform and 
improvements to our policy, strategy and planning processes'' 
with respect to diplomacy and development; our ``smart power,'' 
specifically. Diplomacy and development are essential to any 
reconstruction operations, so I am interested to also hear how 
these goals can be met with your proposal.
    Again, Mr. Bowen, I want to thank you for your work on 
these issues and for your willingness to testify. I would now 
like to invite the ranking member, Mr. Rohrabacher from 
California, to give his opening remarks.
    [The prepared statement of Mr. Carnahan 
follows:]Carnahan statement deg.


    Mr. Rohrabacher. Thank you very much, Mr. Chairman. My 
first duty this morning is to welcome you to the subcommittee 
and congratulate you on ascending to this spot. I hope you will 
enjoy your time here as much as I enjoyed with your 
predecessor, Mr. Delahunt, and we were able to utilize this 
position both ranking member and chairman to look into issues 
that were really important and we enjoyed broad areas of 
disagreement, but we also found a lot of areas of agreement, 
and I hope that we have that same type of very positive 
relationship that will serve our country and will make sure 
that we are not just wasting our time; we are getting something 
done. That is what Stuart Bowen is all about: Getting something 
done.
    Mr. Carnahan. Would the gentleman yield?
    Mr. Rohrabacher. I certainly will.
    Mr. Carnahan. I just want to thank you for those remarks. 
You know, our colleague, Mr. Delahunt, has not left us. He is 
still a member of the committee and I know he looks forward to 
continuing here, but you and I have talked privately and I also 
very much look forward to a really strong and positive working 
relationship with you and all the members of the committee. 
Thank you.
    Mr. Rohrabacher. Thank you. As I was saying, Mr. Bowen and 
I have known each other many years, and he has been here as a 
person who is really dedicated his life to trying to make sure 
that we accomplish our goals in some very trying circumstances 
and trying to do it with the American taxpayer in mind and it 
has been--he has met the ultimate challenges and he has got 
some ultimate insights as to maybe the way we can do these 
things in the future in a better, more efficient manner. I 
have, of course, long been frustrated by our reconstruction 
efforts in Iraq, there is a lot of goodwill that has been there 
but we have wasted some of that goodwill; before that we have 
wasted a lot of money too.
    We need to figure out ways of how we can do this more 
effectively in the future, when we meet future challenges. I 
will--let me note--when I say that we have wasted some money, 
certainly things could have been done better. Let me just add 
to that I am very proud that the people of the United States 
have helped free the people of Iraq from a brutal tyrant, 
Saddam Hussein, who murdered their people by the hundreds of 
thousands and created a reign of terror among his people. We 
should never forget when we are analyzing what is going on here 
that that monster, that Hitler of the Middle East has been 
eliminated and the world will be better for it and certainly 
the people of Iraq; not only will be, but are better for it 
today.
    So let us not forget when we criticize and we try to figure 
out better ways of doing things that while the critical eye is 
there we also are recognizing the good things that have been 
accomplished even though at a high cost. Between defense 
spending and reconstruction spending we see that Iraq has cost 
us almost $1 trillion, and that is an enormous amount of money 
to be spent on the part of the United States especially 
considering that we are borrowing a significant amount of money 
each year in order to pay for that type of operation
    Mr. Chairman, you were not here when this vote happened, 
but there was a proposal by my Democratic colleagues early on 
in the Iraqi operation that the Iraqi Government should be 
expected to pay for the expenses of our operations to free them 
from Saddam Hussein from future oil revenues.
    I don't know what was wrong with the last administration. I 
don't know why George Bush decided that oh, that is a terrible 
idea, but the fact is that I was one of only three Republicans 
that voted in favor of that Democratic proposal, and I would 
suggest that right now that we reaffirm to people that America 
will not spend one more penny in Iraq until it is agreed to 
that the American people are going to be reimbursed.
    We can't afford to do this anymore. I mean, yes, we can be 
proud that we eliminated Saddam Hussein, but we cannot afford 
to go around the world and spend this kind of money when our 
own people are in terrible need right now, so I would hope that 
is one thing we could be thinking about in this committee of 
moving forward that type of proposal, as well as the specific 
structural changes that Mr. Bowen has in mind.
    I would like to remind everybody about that particular 
issue that I just mentioned because if that would have passed 
at that time it would have saved America a lot of money and 
American people at a time when we needed it the most, but it 
didn't pass because people were afraid to be saying well, this 
war is about oil. It is blood for oil. You heard that, blood 
for oil.
    Well, who has won the oil contracts now that the war 
against Saddam Hussein is over and the situation is stabilized 
in Iraq? Who is winning those oil contracts? Not the United 
States, but the Chinese. So here we are. We have borrowed money 
from the Chinese in order to repay them with interest of course 
in order to free Iraq so that they can give contracts to the 
Chinese.
    This certainly isn't representing the best interests of the 
people of the United States, and we need to make sure that we 
dedicate ourselves, that we are not going to get into this mess 
again and that we are going to have some structural changes, as 
Mr. Bowen is suggesting to us today, but also some solid, 
fundamental policy standards that we will have to meet before 
we commit ourselves to these type of operations.
    Let us note that even as it has stabilized, even as we have 
spent so much money and blood in Iraq, some of the fundamentals 
have still not been dealt with there. For example, if you trace 
this back all the way to the beginning of when our trouble 
started with Iraq it was an Iraq conflict with Kuwait that 
started this whole dynamic that led to all of this expenditure 
of blood and money.
    Well, Iraq is still dealing and has not brought up and not 
compensated Kuwait for the damages that it inflicted on Kuwait. 
I mean, it still has U.N. sanctions that it still has to deal 
with. Iraq still owes Kuwait billions of dollars of 
compensation.
    Now, let me just note that the Ambassador from Kuwait has 
notified me that Kuwait is willing to reach out to Iraq and any 
amount of money that is repaid of those billions of dollars for 
the damages for the destruction that the Iraqis did on Kuwait, 
they are willing to invest that directly back into Iraq. That 
is a wonderful compromise, and yet Iraq has not been willing to 
step forward and deal with that specific fundamental issue.
    We also haven't seen, for example, there hasn't been an 
Ambassador sent by Iraq to Kuwait. Again, a fundamental issue. 
It needs to be resolved. Is there going to be peace between 
Kuwait and Iraq or is there not? Get that done. We need to make 
sure that gets done or otherwise everything we have spent, all 
the lives that have been lost, are for nothing.
    Let us note there was a border dispute between Kuwait and 
Iraq. These are things that can be resolved politically. These 
are doable, and we should, as we are looking at reforms and the 
way we handle ourselves, we should look to make sure what are 
the fundamental things that need to happen so we can close this 
book on the Iraqi involvement of American troops and so much 
massive presence there.
    Let me just note that includes the fact that Iraq must pass 
a carbon law and must get their own back together so that they 
can become a prosperous and free and secure country. We can't 
do that for them forever. So they haven't even got themselves 
organized to the point where that issue is solved as to where 
the profits will be channeled and the revenue from oil 
resources in their country.
    So let us remember that we can't do everything for Iraq. 
Let us try to push them in the right direction, but we can set 
standards for ourselves in future operations, which is what 
this hearing is about. Let us make sure the Iraqis know that 
these opportunities they have to solve these problems 
themselves were paid for dearly with American treasure and 
American blood.
    Again, I rarely hear a thank you from our Iraqis that come 
to visit us, and I think that we, the American people, deserve 
that. And today I thank you for hosting this hearing, and let 
us see if we can get some valuable insights out of it.
    Mr. Carnahan. Thank you. And I would now like to introduce 
our witness for today's hearing, Mr. Stuart W. Bowen, Jr. Mr. 
Bowen is currently the Special Inspector General for Iraq 
Reconstruction, a position he has held since October 2004, 
where he is responsible for ensuring effective oversight of $52 
billion appropriated for the reconstruction of Iraq.
    Just prior to assuming this position, in January 2004, Mr. 
Bowen was appointed as the Inspector General for the Coalition 
Provisional Authority. Previously, Mr. Bowen was a partner at 
Patton Boggs, LLP, and has held various positions in the George 
W. Bush administration as Deputy Assistant to the President, 
Deputy Staff Secretary and Special Assistant to the President, 
and Associate Counsel.
    He also served on the Bush-Cheney transition team and prior 
to that held several positions as counsel to then-Governor Bush 
in Texas, where he was also an Assistant Attorney General from 
1992 to 1994. Additionally, Mr. Bowen spent 4 years as an 
intelligence officer in the U.S. Air Force, achieving the rank 
of Captain. He holds a B.A. from the University of the South 
and a J.D. from St. Mary's Law School.
    Welcome, and thank you for joining the subcommittee today 
for this important hearing. We now turn to Mr. Bowen for his 
opening remarks.

   STATEMENT OF MR. STUART W. BOWEN, JR., SPECIAL INSPECTOR 
    GENERAL FOR IRAQ RECONSTRUCTION, OFFICE OF THE SPECIAL 
           INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

    Mr. Bowen. Thank you, Chairman Carnahan, Ranking Member 
Rohrabacher, for the opportunity to appear before you this 
morning on this important topic. I am especially honored, Mr. 
Chairman, to appear at your first hearing of your chairmanship.
    I think that the issue that you have taken on is highly 
relevant to ongoing stabilization and reconstruction operations 
in Iraq and Afghanistan and very applicable to an issue that 
must be resolved; that is, how the United States should 
approach managing, executing, planning for stabilization and 
reconstruction operations. There is no clear answer for that 
and that, sadly, is one of the hardest lessons from Iraq.
    A year ago my office put out Hard Lessons, a comprehensive 
review of all that has happened in the reconstruction program 
over the last 7 years. We had some tough stories to tell, but I 
think perhaps the toughest is that we simply did not have a 
structure in place adequate to the mission that we took on in 
2003.
    As you rightly pointed out in your opening statement, Mr. 
Chairman, this program was undertaken at great cost and, 
because of that lack of organization, great waste; as we 
pointed out before, upwards of $4 billion in waste, wasted 
taxpayer dollars, the consequences of failing to properly 
prepare.
    The issue that we have addressed this week, this hard 
lesson in our latest lessons learned report, Applying Iraq's 
Hard Lessons to the Reform of Stabilization and Reconstruction 
Operations, is the need for a new office to bring together the 
disparate elements that are scattered across the government now 
among several departments to plan and execute stabilization and 
reconstruction operations.
    As we say in the opening of this report, the question of 
who is in charge is not clearly answered. The United States has 
taken steps to address this matter over the last 10 years, and 
we spell that out in Part 1 of the report, but those steps have 
not yielded a coherent response. Those steps produced a series 
of ad hoc organizations in Iraq, most of which no longer exist, 
so the accountability issue is lost.
    Those responsible for that waste were parts of 
organizations that have ceased to be. A more permanent solution 
is necessary, we firmly believe, to ensure that there is 
accountability, for results and that there is clarity on the 
responsibility for planning and execution.
    We have also pointed out in this report that there are 10 
things that the United States could do now to improve 
stabilization and reconstruction operations. They best be 
undertaken by a new office, the U.S. Office of Contingency 
Operations, but those 10 straightforward, targeted reforms are 
still relevant today--reflective of the fact that our lessons 
have not been sufficiently learned to date from Iraq.
    For example, there is not coherently implemented policy for 
stabilization and reconstruction operations (SORs) by the NSC 
yet, and we recommend that the NSC develop a more concrete and 
implemented process for overseeing these important missions--
missions that are not development, not diplomacy, not defense, 
but elements of all three; thus they are unique and 
fundamentally interagency with respect to protecting U.S. 
interests abroad.
    There is a system in place that was adopted 3 years ago, 
the Interagency Management System. It is fairly complex. It has 
a Country Reconstruction Stabilization group that oversees 
these operations. It has an interagency planning cell that is 
supposed to help resolve conflicts and it proposes active 
response teams. The problem is it is not implemented. Three 
years down the road and it is a dead letter right now.
    Other reforms include developing sensible budgets in 
advance, understanding what the obligations of the taxpayers 
are going to be in future scenarios, developing contingency 
contracting regulations of the kind that we repeatedly argued 
for, developing more effective oversight, permanent oversight 
that ensures that from the start of a stabilization and 
reconstruction operation that there is an IG presence, 
developing IT systems that ensure that we can track the 
projects we are doing.
    We only know 70 percent of what we have built in Iraq 
because there was no system developed until our audits 
identified that problem and one was developed. We still haven't 
been able to capture all the data. That is an enormous 
weakness. How can you make good decisions with a 70 percent 
picture?
    These are existing problems, well documented by our work 
and all supportive of our core recommendation: The need to 
bring together the disparate elements that now have parts of 
the mission of stabilization and reconstruction operations into 
one office, the U.S. Office for Contingency Operations (USOCO).
    USOCO would capture what I think is perhaps the most 
revolutionary development at the Department of Defense in 
years, the Stabilization and Operations Branch, a huge capacity 
that has been developed in Iraq and applied in Afghanistan, but 
not well coordinated by any means, by any analysis.
    The lack of coordination is obvious to those that are 
involved in this. I hear it on the ground at the embassy when I 
visit with U.S. Forces-Iraq individuals. I hear again and again 
the challenges in coordination at the operational level, and it 
is because of a lack of an integrated system.
    At the Department of State, as you know, over $100 million 
has been appropriated and invested in developing the 
Coordinator for Reconstruction and Stabilization, a 5-year old 
organization that is now shaping a Civilian Response Corps. 
They have about 89 on board now, split between U.S. Agency for 
International Development and SCRS, about 16 on the ground in 
Afghanistan, three in Haiti, so it is not terribly robust, but, 
more importantly, it is not well integrated with the Department 
of Defense for operations that are fundamentally civil military 
operations.
    U.S. Agency for International Development, Office of 
Transition Initiatives and also part of the Civilian Response 
Corps, but again another agency with part of a mission, but 
with no purview, with no authority, with no capacity to carry 
out this essential process, this essential kind of operation to 
protect our interests abroad.
    What is the consequence, besides waste, of failing to have 
a coordinated planning system? The consequence is the lack of 
unity of command. The hundreds of people I interviewed for Hard 
Lessons and those that we discussed for this latest report and 
frankly virtually every trip--I am going on my 26th trip to 
Iraq in the near future, and I hear on every visit recognition 
that there is a lack of unity of command.
    Lack of unity of command yields a lack of unity of effort 
exemplified, interestingly, most recently by two audits, one by 
my office, one jointly by the DoD and State IGs, addressing the 
same issue, police training. Two and a half billion, the 
largest contract in State Department history, in Iraq, and a 
contract in excess of $1 billion in Afghanistan, reaching the 
same conclusion: There was a lack of capacity to oversee and 
properly protect taxpayer interests with regard to the training 
of police in Iraq and Afghanistan.
    How important is that issue? General McChrystal says it is 
number one, so the urgency of this reform is evident I think at 
the ground level in these latest reports. Indeed, the State-DoD 
IG report said the Chief of Mission in Afghanistan thought the 
lack of unity of command was what was responsible for the 
failure of this contract.
    USOCO is a new idea. Some have criticized it as perhaps a 
layering of bureaucracy or unnecessary. To the contrary. It is 
a reorganization. The government, when it is confronted with 
systemic problems, has responded in recent years to meaningful 
reform that has improved the United States approach to critical 
problems. The Department of Homeland Security is one example. 
The Director of National Intelligence is another example.
    Those are new offices, but they really are ways that have 
brought together unity of effort, unity of command, to critical 
issues of national security interest. This is another perfect 
example that needs such reform, and those with experience on 
the ground in Iraq and on this issue recognize it.
    General Scowcroft, perhaps the godfather of contingency 
operations, recognizes this issue as well as anyone on the 
planet and believes this is the right answer. Ambassador Ryan 
Crocker 2 years in Iraq lived with this issue, worked with me 
daily on helping set the course right, sees this as the right 
solution. Spike Stevens, on the ground at the beginning as 
Director for the U.S. Agency for International Development, 
sees this as a plausible approach.
    So this is the product of 6 years of careful study, an 
issue that we identified 3 years ago that we vetted heavily on 
the ground, through the departments, through experts and thus 
firmly believe that some reform is necessary. We think this is 
the right reform. Though not a panacea, it is a positive step 
forward.
    Thank you, Mr. Chairman, Ranking Member Rohrabacher, for 
this opportunity, and I look forward to your questions.
    [The prepared statement of Mr. Bowen 
follows:]Stuart Bowen deg.










    Mr. Carnahan. Thank you, Mr. Bowen. Again, I think your 
remarks here this morning really reflect those hundreds of 
interviews and years of work and expertise, experience, 
listening, and learning on the ground from people that are 
trying to achieve our goals in Iraq and seeing how we can move 
forward in a better way. So I really appreciate you being here 
today, and this is very timely as we look at other operations 
going forward.
    These reports that have been prepared I think are very 
instructive and your ideas are very instructive. I guess I want 
to start with a question about the estimated $4-plus billion 
that you have indicated has been wasted in Iraq.
    Can you break that down in terms of where you think that 
has come from and also simply how can we prevent that going 
forward because in an era where we have limited resources? We 
need to be sure the dollars that we are putting forth here are 
getting where they need to be. Obviously some of that is 
overlap, lack of coordination at best and at worst 
mismanagement, fraud and beyond. So give us an idea of where 
that is coming from.
    Mr. Bowen. Yes. I can give sort of the macro picture of why 
it happened and specific examples. In 2003, specifically March 
2003, the vision for Iraq reconstruction was about $2 billion. 
It is now 25 times that. How did we get there? A significant 
change in policy for which there was no structure undergirding 
it to implement.
    That policy change occurred in the summer of 2003 that 
produced the Iraq Relief and Reconstruction Fund, $18.4 
billion, and then following upon that the Commander's Emergency 
Response Program, $3.5 billion spent, the Iraq Security Forces 
Fund, another $18.5 billion. These numbers boggle the mind, 
eventually--how much we ultimately put into an effort that was 
anticipated to be very short and very modest.
    The fact that there was no structure in place to carry out 
these missions meant that ad hoc structures were all created 
and ad hocracy evolved in Iraq and a series of acronyms that 
people have forgotten: PCO, CPA, ERMO, ITAO, MNSTC-I. All of 
these are temporary agencies that have gone away, but they 
spent billions and they spent billions on the fly figuring out 
how to do it, addressing problems that were there without 
sufficient contingency contracting capacity, without quality 
assurance.
    And that gets to our audits. Three hundred inspections and 
audits yield some important lessons of the causes of this 
waste. We sort of exposed, frankly, the massive drop in the 
U.S. Government contract capacity. For whatever reason in the 
1990s, perhaps as part of the Cold War dividend and the 
outsourcing movement, the contracting corps at DoD was 
dramatically cut. The consequences of that were severely 
realized in Iraq because there weren't enough warranted 
officers there to oversee.
    Second, the lack of capacity to ensure quality assurance. 
Quality assurance means the government makes sure contracts do 
what they are supposed to do. We didn't have enough people 
going out and visiting projects. A lot of times my inspectors 
would arrive at a project and we were the first Americans that 
the contractors had seen in a long time. That obviously is a 
grave weakness.
    It results in things like Kahn Bani Saad Prison, $40 
million spent for a monument to failure in the desert an hour 
north of Baghdad. It will never house an Iraqi prisoner I don't 
think because not much was accomplished. Money was poured into 
failure after failure because of poor oversight, just one 
example of projects that simply did not get completed.
    The other significant waste areas included asset transfer, 
projects that didn't get finished but we declared concluded and 
just unilaterally handed over to the Iraqis. It happened 
hundreds and hundreds and hundreds of times where they refused 
to accept it and so the Corps of Engineers would just sign a 
unilateral transfer, hand it to them and that is it. It is a 
project again not accomplishing anything.
    These various elements, the macro weaknesses, the failure 
to have a system in place of the kind I have discussed in my 
opening statement, the fact that an ad hocracy of now 
nonexistent agencies spent billions, 50 times more than 
expected, and the fact that the oversight on the ground and the 
aptitude, the expertise, was not present to ensure that 
projects got done and that money was properly spent yielded 
this waste.
    We are here today with really that hardest lesson before us 
on the table essentially saying never again, and never again 
means preventing it from happening, which means improving how 
the United States tackles planning and executing these kinds of 
operations.
    Mr. Carnahan. It is not only a hard lesson, but a 
colossally expensive lesson.
    Mr. Bowen. Yes.
    Mr. Carnahan. The problem with throwing so much money at a 
problem and to so many entities that are now gone----
    Mr. Bowen. Yes.
    Mr. Carnahan [continuing]. Seems to me very difficult, and 
we may never figure out where some of that money went.
    Mr. Bowen. That is exactly right.
    Mr. Carnahan. I guess my next question has to do with 
really quantitative and qualitative metrics that can be used in 
determining today progress in Iraq.
    I mean, obviously there is the look back in terms of what 
went wrong with some of the money and lack of systems and 
coordination. But going forward, what are some of the 
measurements that we can use in terms of number of civilians 
trained, police trained, election reforms, economic development 
statistics? Where are we in terms of that snapshot to measure 
progress?
    Mr. Bowen. Great question, and we are going to provide 
snapshots of that to you over the next year. I have established 
an Evaluations Branch, an element of oversight that is critical 
to answering exactly the question you are raising.
    What are the results? Ultimately that is the core question 
of any stabilization and reconstruction operation. What did you 
achieve? What difference did you make? And that, I assure you, 
we will provide you over the next 12-18 months. We are going to 
produce our first report later this spring that assesses the 
various evaluative reports that have already been accomplished.
    So what do we know now? I think that is the first question, 
and then we are going to get into some evaluative studies of 
infrastructure projects. What were the outcomes, the results of 
all that money spent on hard infrastructure? You know, I have 
told you the bad news, but what potential good news is there 
from it?
    We know from our quarterly reports that electricity is and 
has been now for 1\1/2\ years above pre-war levels, so there is 
outcome evidence of progress there, but I need to tell you how 
did our investment achieve that? That is the question you are 
asking.
    And then the next report after that will be looking at 
ministry capacity development, an important matter that has 
been focused on heavily the last 3 years under the State 
Department's aegis, and it is certainly a laudable goal. What 
results have we achieved? That is what we will be getting to. I 
think it is time now to make these evaluations and to provide 
the Congress with concrete evidence of what was accomplished.
    Mr. Carnahan. Thank you. I am now going to turn it over to 
the ranking member, Mr. Rohrabacher.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman, and 
thank you again, Mr. Bowen, for your long and very dedicated 
service to our country.
    Mr. Bowen. Thank you.
    Mr. Rohrabacher. The things we are talking about are of 
great significance to so many people. I mean, we have to 
realize that thousands of lives have been lost, American lives 
have been lost, and there are people who will never have a 
father in their lives because their father is dead in Iraq now 
and wives who will never have a husband for the rest of their 
lives.
    I grew up in a military family and I know about those 
sacrifices, so it is our job to make sure that at the very 
least we try to be as effective as we can if we are going to be 
involved in these kind of operations, and I would suggest the 
very first reform that needs to take place is for us to be 
aware that we are making these decisions and how significant it 
is to the thousands of our fellow citizens that we will not go 
into situations.
    I don't think there are many of us who supported the call 
that we were called upon by President Bush to support this 
invasion of Iraq. I don't think there are many of us who would 
in retrospect have gone along with that had we known the price 
that was being paid for what we have gotten out of it and what 
the world has gotten out of this.
    Let me just note that World War II, if I remember--what was 
that book? Catch-22. When you look at World War II and you take 
a look at what really happened if you look down at that level, 
there was an enormous amount of corruption. An enormous amount 
of corruption.
    And in Vietnam--I just have to say I spent a little time in 
Vietnam in 1967 when I was 19, and while I was not a soldier I 
was out with the Montagnards and various places in Vietnam, but 
I was totally dismayed after I left knowing that the level of 
corruption that I thought indicated to me that we would never 
be able to win and all the lives and all the gore that was 
going on was going to be for nothing, and that is how it turned 
out, of course.
    So here we are now again, and Vietnam had a horrible impact 
on our country economically, as well as every other way. Let us 
hope that what is happening now in Iraq and Afghanistan do not 
leave America in that same retreatist mindset that plagued us 
after Vietnam. That did not do well for our country and I think 
brought on some of the problems we face today.
    But World War II and Vietnam were noble causes, even though 
the corruption level in both of those were things that led us 
to perhaps not succeed as we should have succeeded, or in the 
case of World War II we lost 300,000 people there and it was a 
very costly war and perhaps we could have had some idea of how 
to prevent it from the beginning by standing up to Hitler. Who 
knows.
    Let us get back to some of the basic points you are making. 
I like that ad hocracy. That was an excellent way to put it 
because what you are saying is we just weren't prepared for how 
to handle this part of the conflict. In order to be successful, 
that part had to be handled and it wasn't.
    Is it true that billions of dollars were handed out from 
the Central Bank of Iraq? Once we captured Iraq that there were 
billions of dollars there that American military personnel then 
utilized right off the bat to make sure that things didn't 
totally collapse and it was just basically handed out? That 
wasn't our money. That was Saddam Hussein's stash.
    Mr. Bowen. You are right. Those were called seized funds, 
and that is how the Commander's Emergency Response Program 
begin, speaking of ad hoc developments.
    You put your finger exactly on one of the most significant 
things that, ironically, has turned into a new 
institutionalized program within DoD that has accomplished 
thousands and thousands of projects funded at $3.5 billion now 
in Iraq by the Congress.
    Mr. Rohrabacher. This is fascinating. This might even be a 
little bit higher than micro loans you might say directly to 
the people there.
    Mr. Bowen. Well, and you put your finger on another 
important point that the program expanded beyond its regulatory 
limits and has had to be reined in by the Congress and that it 
was supposed to be for small projects, $50,000 to $500,000 at 
the top.
    Mr. Rohrabacher. Right.
    Mr. Bowen. And now in order for a $1 million project to go 
forward the Secretary of Defense has to sign off.
    Mr. Rohrabacher. The Office of Contingency Operations that 
you are suggesting. Would this help in problems like that?
    Mr. Bowen. Yes, because it would provide clarity where 
there is only ambiguity now. It would provide coherence where 
there is only diffusion now. It would provide organization 
where we have disorganization.
    Mr. Rohrabacher. Okay. Let me challenge this for you here. 
So you are making that as a suggestion. You have told us, for 
example, that you have a Civilian Response Corps, which is in 
place.
    Mr. Bowen. Yes.
    Mr. Rohrabacher. What is the budget again for that?
    Mr. Bowen. They have received about $130 million----
    Mr. Rohrabacher. Okay.
    Mr. Bowen [continuing]. To date with more coming.
    Mr. Rohrabacher. Okay. Civilian Response Corps, $130 
million, yet we only have 16 people in Afghanistan and three in 
Haiti.
    Mr. Bowen. Yes.
    Mr. Rohrabacher. And $130 million doesn't sound like a very 
effective use of money. If our highest priorities are Haiti and 
Afghanistan, would what you are suggesting, would that make 
this operation more efficient?
    Mr. Bowen. Yes. USOCO would coordinate or integrate this 
operation with everything else that is going on in government. 
Indeed, the Civilian Response Corps you are referring to itself 
is bifurcated between the U.S. Agency for International 
Development and the Department of State so that the program 
itself is suffering from a lack of integration.
    Mr. Rohrabacher. And the $2.5 billion in police training 
that we are talking about. Now, are you telling us today that 
that $2.5 billion expenditure for police training in Iraq has 
been a failure?
    Mr. Bowen. No. We are carrying out an audit of the 
executing of the contract. Our review was of the management of 
the contract; in other words, contract oversight.
    Were invoices getting reviewed? No, they weren't. Does that 
create a huge weakness and vulnerability to fraud and waste? 
Yes. And those are the findings of our audit and also the audit 
of Afghanistan.
    This is another example of the lack of unity of command. It 
was DoD money going through a state contract then back to DoD 
to execute. That sort of division of duties would be solved by 
USOCO.
    Mr. Rohrabacher. When I was 19 years old I was trying to 
find out the dynamics of how we were going to win the war in 
Vietnam politically at that level, and I was taken by some 
people about a hundred miles north of Saigon, some doctors, 
American doctors who were trying to win the hearts and souls of 
the people there--that was our idea, hearts and minds--by 
setting up clinics and helping them.
    When we went to these clinics it was a horrible mess. It is 
unbelievable the stench and the fact that everything had been 
looted frankly. It had been looted, and these doctors were 
just--here they were dealing with young Americans, people from 
my area who I remember this surfer who was shot and it was 
really horrible.
    They were crying. They were just crying to me. What are we 
going to do? This is a $1 million investment here and look at 
it. It is nothing. The problem was, of course, we were sending 
aid into that area via the Vietnamese, who were our allies, and 
they were stealing everything.
    Now, where do we do this? This board that you are talking 
about. Is it going to be responsible? Are you suggesting as you 
are overviewing what we have done in Iraq and in the past, 
should we be channeling it directly in to local people or 
should we have direct control over every expenditure?
    If we have direct control over every expenditure, do we 
then not leave ourselves in a situation that we are assuming 
work that we would like the people on the ground to be doing 
for themselves?
    Mr. Bowen. Well, it shouldn't be exclusively either 
approach. It is conditions-based, and that is essential for 
effective oversight.
    You have to have controls in place that ensure that there 
is sufficient oversight of the money that is going forward, but 
again it is conditions-based. If you know that those with whom 
you are dealing are rife with corruption then that is a signal 
for more controls.
    Mr. Rohrabacher. Okay. Let me give you specifically in Iraq 
a case I know about. They wanted to build schools for the kids 
of Iraq. They needed school desks. There was a company that 
happens to be in my district--I know about this; that is one of 
the reasons I know about this specifically--that builds school 
desks and wanted to send these desks over, okay? They want to 
do that now for Haiti. Their school desks are superior. They 
will last forever. No matter what happens, they last for 20 
years.
    They couldn't get the contract, Mr. Chairman, to provide 
the school desks because they wanted to make sure that the 
local people had the contract to build the school desks, but 
all the school desks that were being built there in Iraq--I saw 
examples of it--fell apart after a few weeks. It looked good 
for about a week and then they all fell apart, so a wasted 
expenditure.
    What do we do? Are we going to give the money to some 
company here to build the school desks and send it there or 
does our aid program focus on building enterprise in the 
country?
    Mr. Bowen. Well, I think both aspects have to figure in to 
a stabilization and reconstruction operation. It should be 
neither one nor the other exclusively.
    I think that certainly there have been and we have 
documented many, many failures by Iraqi contractors. At the 
same time they have improved, partly because we have gradually 
empowered them. The Joint Contracting Command Iraq implemented 
about 3\1/2\ years ago, something called Iraqi First, and that 
is where I think this is coming from. In other words, 
preference to Iraqi contractors on continuing projects.
    That was difficult at first for reasons you are alluding 
to, but I think that the contractors have improved over time, 
so building capacity through contracting has certainly been 
part of our mission.
    Mr. Rohrabacher. Just one last thought, and that is if we 
are to succeed we must have Americans who take this job very 
seriously, as we need to take our job of oversight seriously. 
You, sir, have taken your job seriously.
    There is not just an easy answer to any of the questions 
that I asked, but the real answer is making sure that we have 
people with good hearts who are diligent and responsible trying 
to make sure these programs succeed with the best judgment they 
can put forth. So thank you very much, and thank you, Mr. 
Chairman, for holding this hearing.
    Mr. Carnahan. Next I am going to recognize Judge Poe from 
Texas.
    Mr. Poe. Thank you, Mr. Chairman. I appreciate you being 
here. Setting up a new agency, Office for Contingency 
Operations. How much is that going to cost? How much is it 
going to cost to set up this agency?
    Mr. Bowen. That would be determined by the scope of it, but 
it would take the existing money that is out there now, and 
there is significant money for stabilization and reconstruction 
operations that is spread at S/CRS costing $140 million, at DoD 
hundreds of millions being spent on stabilization operations 
there, as well as money at AID and other agencies.
    And so as a practical matter, while there is an incremental 
cost, this would be a cost saver over time because right now, 
as I pointed out, these responsibilities are not clearly 
allocated. They are diffused among the agencies, and there is 
not a clear point of accountability, which is about saving 
money, or clear point of responsibility, which is about 
effective execution, in the current system.
    Instead it is stovepiped, to use the term of art, within 
the agencies and that leads to waste. Frankly, the waste that 
occurred in Iraq, billions of dollars in waste, was symptomatic 
of not having an established structure. Indeed, the leadership 
that I interviewed for Hard Lessons, our report on what 
happened in Iraq, reiterated this point over and over again. 
They were shocked that there wasn't a structure.
    Mr. Poe. Excuse me. Excuse me, Mr. Bowen.
    Mr. Bowen. Sure.
    Mr. Poe. Do you see this agency being permanent?
    Mr. Bowen. Yes.
    Mr. Poe. Eventually in our lifetime we will leave Iraq 
probably.
    Mr. Bowen. Yes.
    Mr. Poe. But do you see this agency staying around for 
other type situations like this?
    Mr. Bowen. Yes. Yes, sir, because this is not about Iraq 
only, and certainly I think its effect would be well beyond 
Iraq. It could help Afghanistan, but it is about preparing for 
stabilization and reconstruction operations in the future.
    This is a relatively new kind of operation. In the last 30 
years we have had about 15. The two largest are Afghanistan and 
Iraq, but we had several in the 1990s. Indeed, President 
Clinton issued Presidential Directive 56 to try and get some 
control of the kind we are talking about today around these 
kinds of operations.
    It didn't succeed, and as a result over the last 8 years in 
Iraq and Afghanistan through Presidential directives and other 
directives we have had to create more temporary agencies to try 
and tackle the problem. That resulted in waste.
    Those temporary agencies are gone. There is no 
accountability. Creating an entity that plans for these before 
they begin, that takes a look at the 10 reforms we talk about 
in the report like ensuring there is a policy. As a matter of 
fact, the Interagency Management System, the policy that is in 
place 3 years now, is a dead letter. It has never been 
implemented, and that is just another element of weak 
integration. We have to go beyond coordination to integration, 
beyond temporary execution to permanent accountability to avoid 
waste.
    Mr. Poe. You say that $4 billion approximately, 10 
percent--I believe that is 10 percent--of our funding of Iraq 
has been unaccounted for, wasted. Do we know where that $8 
billion went?
    Mr. Bowen. The $4 billion?
    Mr. Poe. Excuse me. I am sorry.
    Mr. Bowen. Yes.
    Mr. Poe. The 10 percent.
    Mr. Bowen. Yes.
    Mr. Poe. The $4 billion that you mentioned. I am sorry.
    Mr. Bowen. We do. We have done 300 audits and inspections, 
and we have looked at the causes of it. There are macro causes 
and there are micro examples. As I alluded to earlier, the 
reality is this was a situation in 2003 that expected to spend 
$2 billion.
    March 10 the decision was made for a very narrow program. 
The first Iraq Relief Reconstruction Fund was about $2 billion, 
a very limited infrastructure program. It is now $52 billion, 
and that is because in May and June of that year it went to 
$18.5 billion additional, as well as----
    Mr. Poe. Excuse me, Mr. Bowen. My time is limited. Cut to 
the chase.
    Mr. Bowen. Yes.
    Mr. Poe. Did the bad guys get any of this money? Did al-
Qaeda get some of this money? Is it possible? Do we know?
    Mr. Bowen. It is possible. It is possible. Indeed, we did 
an audit in 2006, to cut to the chase on this point about lack 
of accountability over weapons. As a matter of fact, it was the 
first review. I think you remember that one. It was 14,000 
missing Glocks.
    But more importantly, that audit pointed out that the 
Multi-National Security Transition Command wasn't doing serial 
number tracking of weapons it was distributing. It began after 
that audit came out, but what happened before? We found part of 
the issue, but the troubling points you are making is evident 
and supported by that.
    Mr. Poe. All right. Thank you very much. Well timed.
    Mr. Bowen. Thank you.
    Mr. Poe. Thank you, Mr. Chairman.
    Mr. Bowen. Thank you, Judge Poe.
    Mr. Carnahan. Thank you, Judge. Mr. Bowen, I wanted to get 
back and ask a few other questions here and in particular talk 
about your reference to Secretary Gates and that he observed 
earlier ``contracting in Iraq was done willy-nilly.''
    Mr. Bowen. Yes.
    Mr. Carnahan. What can be done to institutionalize these 
contracting procedures in this ad hocracy that just seems to 
have no standards whatsoever? Later, I want to get to the whole 
matter of the police contracts that you have talked about, but 
talk to me about the sort of overall system going forward.
    Mr. Bowen. It is a critical area for needed reform right 
now. Some steps have been taken by the Department of Defense, 
significant steps, since the issuance of the Gansler Commission 
report which identified huge weaknesses in Army contracting 
capacity.
    But still we don't have a coherent system of agreed upon 
approaches, contracting approaches, principles, regulations for 
stabilization and reconstruction operations. We first 
identified this 4 years ago in our contracting lessons learned 
report that there needs to be some coherence and simplification 
of the approach to contracting. We reiterated it in Hard 
Lessons a year ago, and we reiterated it again in Applying Hard 
Lessons this week. What it means is achieving efficiencies in 
how the United States goes about contracting.
    Right now there are several versions of the Federal 
Acquisition Regulation, the regulation covering contracting in 
Iraq and Afghanistan operatives on the ground, and they each 
have their own permutations and they make complex in a conflict 
situation what must be simple, so as to ensure that policies 
that happen at a much faster pace are effectively executed.
    As a matter of fact, at the Wartime Contracting Commission 
hearing on Monday it was mentioned that a contract protest 
under existing regulations was potentially impeding critical 
military progress for 6 to 9 months. That is exactly the kind 
of legal reform that should be addressed by meaningful 
contracting improvements that are there to be executed, in my 
opinion, for stabilization and reconstruction operations.
    Mr. Carnahan. I want to move on to talk about the issue of 
the police training. When I traveled to Iraq back in early 
2005. I had a tour of a police training facility and there was 
much fanfare about this as one of the highest priorities for 
success in the country and substantial funding had been 
provided to it, and there were glowing numbers about how 
quickly they were going to get the numbers of police trained up 
to where they needed to be. You know, even today, as you 
mentioned, General McChrystal is saying that one of the number 
one priorities is to get our police trained.
    You know, between 2005 and now we haven't seen anywhere 
near the progress that we need to have seen, and I guess with 
the planned withdrawal of United States troops from Iraq by 
December 31, 2011, what challenges do you foresee? I guess my 
first question, what challenges in terms of the transition and 
responsibility from the military to State, and do you believe 
State will be able to successfully take over that training 
program in October 2011?
    Mr. Bowen. First of all, a great question, because I think 
it is the critical issue to ensure improved security in Iraq 
going forward. We are going to go down to 50,000 troops in 4 
months, so that is going to obviously mean that the Iraqis have 
to shoulder the complete security burden moving forward.
    We have trained hundreds of thousand of police and equipped 
them over the last 5 years, and we are doing an audit now to 
provide you the particulars of how the military executed the 
police training contract. That will be out later this year.
    But the transition issue I think that is paramount is the 
fact that the contract and the management of the contract that 
we criticized in this most recent audit, the DynCorp contract, 
is up for bid right now in Iraq. No surprise, DynCorp is one of 
the bidders for that, and I think it is a contract that has to 
be managed by the State Department.
    The core of our criticism was the lack of in-country 
oversight, the failure to review invoices, the questions raised 
about the vulnerability to fraud and waste regarding billions 
of taxpayer dollars. Those weaknesses have not been remedied 
yet.
    Now, Deputy Secretary Lew, when I met with him on this a 
month ago, assured me that he is going to take a personal 
interest and ensure that there is adequate oversight, but that 
promise needs to be fulfilled and thus here is the issue, the 
number one issue: Ensuring contract management of this 
continuingly very expensive oversight package for Iraq.
    Mr. Carnahan. So the question of this transition. How do 
you see that happening?
    Mr. Bowen. Well, I have visited with the State Department 
individual in charge of management. It is going to be radical 
reform I think of the approach simply because of the limited 
assets the State Department has vis-a-vis the Department of 
Defense and so it is going to move, as he described it, up to 
30,000 feet from 5,000 feet.
    It is going to be about macro improvements to ministry 
capacity, and there will be a reduction in staffing. There will 
not be the individual police training at the level that is 
going on now.
    Mr. Carnahan. And to the specific contract, you indicated 
we have put $2.5 billion into police training? That is correct?
    Mr. Bowen. Yes, sir.
    Mr. Carnahan. And that this is the largest single 
contract----
    Mr. Bowen. Yes.
    Mr. Carnahan [continuing]. In all of the Iraq 
reconstruction?
    Mr. Bowen. In the State Department.
    Mr. Carnahan. In State.
    Mr. Bowen. The State Department has ever managed.
    Mr. Carnahan. In State Department history?
    Mr. Bowen. Yes.
    Mr. Carnahan. And how many U.S. Government officials were 
overseeing this contract?
    Mr. Bowen. In-country officer representatives? Three. This 
is the tough story here, Chairman Carnahan. We looked at this 4 
years ago, and the problem we identified 4 years ago was lack 
of contract management raised in our first audit issued in the 
first month of 2007.
    Then we got into the whole contract and found that it was 
inauditable and so we issued a review in October saying the 
State Department asked for 3-5 years to get their records in 
order because it was a mess. Then we went in in 2008 to see if 
there were remedial measures, and there were, but then we go in 
last summer and find the same problem: Three people in-country 
overseeing a contract that is spending hundreds of millions of 
taxpayer dollars.
    And more disturbing, the lack of clarity about who was 
supposed to do what. The in-country contracting officer 
representatives my officers interviewed said well, invoice 
accountability is being done back in Washington. We went back 
to Washington and asked them. They said it is being done in 
Iraq. A huge vulnerability.
    Mr. Carnahan. And with regard to the contractor, DynCorp, 
describe how that contract was initially awarded.
    Mr. Bowen. It was an existing contract that was held by the 
State Department that was used--I don't have the specific facts 
of the bidding process, but it was in existence in 2004 and 
used to apply to this program at the level of $2.5 billion.
    Again, as I said, it was DoD money that went into it so I 
think DoD was looking for a vehicle that it could use to spend 
this money and it did so. I think there are some questions 
about that process, but it certainly shows how bifurcated or 
disjointed both the source of the money, the contract 
management of the money and then the execution of the contract, 
all different places. It shows I think just the lack of clarity 
in stabilization and reconstruction contracting.
    Mr. Carnahan. And in your reviews, to what extent can you 
account for how that money has been spent?
    Mr. Bowen. As I said, we are looking at the execution of it 
now. My auditors in Iraq are today reviewing that matter and 
the outcomes, which are an important question for you, we will 
answer later this year.
    Mr. Carnahan. And you expect that report out when?
    Mr. Bowen. By July. No later than July.
    Mr. Carnahan. I am going to yield to Judge Poe.
    Mr. Poe. Thank you, Mr. Chairman. I have just one question. 
Which of our Government agencies in your opinion was the most 
irresponsible about money? DoD? State Department? USAID?
    Mr. Bowen. I think that the State Department did not carry 
out its contract oversight responsibilities sufficiently 
enough, and this particular contract we are discussing is the 
most egregious example of that. The disturbing point is it 
hasn't remediated that weakness sufficiently today.
    Mr. Poe. Thank you. Thank you, Mr. Chairman.
    Mr. Carnahan. Thank you, Judge Poe. Yes. I don't know 
anything about police training, but if I had a $2.5 billion 
contract, I think I could figure out a way to train police. I 
mean, that is outrageous.
    Mr. Bowen. Yes, sir.
    Mr. Carnahan. I guess continuing on with some of my 
questions about the oversight role, can you address the quality 
of oversight and effectiveness of Inspector Generals connected 
with international organizations such as U.N. or NATO? That is 
my first question, and then the other is, what oversight role 
has the Iraqi Government itself has played in these reviews?
    Mr. Bowen. I can't address to what extent the U.N. or 
international organizations are doing oversight, but I haven't 
seen any evidence in Iraq of any such oversight. I have engaged 
very regularly since the beginning of my work in-country in 
February 2004 with the oversight entities in Iraq. That 
includes the Inspector Generals--that we created, by the way.
    The Coalition Provisional Authority issued an order and 
established that system, and also the Commission on Integrity, 
formerly the Commission on Public Integrity, that we created in 
Iraq, somewhat parallel to the FBI and finally there is the 
existing Board of Supreme Audit, which has been in Iraq for 
many, many decades.
    I think the Board of Supreme Audit is the most reliable of 
those three and has issued some important audits, and we have 
in fact done some work with them in carrying out oversight of 
certain projects. Dr. Abdul Basit, its head, I meet with every 
trip. I will see him soon, in the next couple of weeks. I have 
confidence that he is a man of integrity and that he has done 
his best in a situation that he acknowledges to me is rife with 
corruption.
    Indeed, that is not really a point very much in dispute any 
more when I meet with Iraqi officials. The Minister of Finance, 
Bayan Jabr, who I met with two trips ago or last trip, said it 
is outrageous corruption. It is everywhere present, and he 
doesn't know what to do about it except privatize was his 
suggestion.
    Others have said--Ali Baban, the Minister of Planning 
says--it is worse than ever. The Chief Justice of their Supreme 
Court says it is an out of control problem. Obviously those 
statements indicate to me that the progress or success of the 
oversight entities in Iraq, in the Iraqi Government, is very 
limited.
    Mr. Carnahan. Next. This is an unusual way to ask a 
question, but I tweeted the news about today's hearing 
yesterday and asked anyone interested to send some questions. 
We got several, but I picked out one that I thought was 
particularly good from a Michael Grady.
    His question was, ``Is there any accounting for private 
contractors' effectiveness in nation building in Iraq? Are we 
getting our money's worth?'' Mr. Bowen, how would you answer 
this question for Michael?
    Mr. Bowen. That is a great question and a huge question 
because a study a couple years ago found that there were over 
180,000 private contractors in Iraq carrying out virtually 
every conceivable kind of task in-country and so it is 
difficult I think to make, A, a judgment about the success of 
any particular area or, B, to get our arms around the scope of 
expense and the return, so to speak, on that investment.
    What is clear is that the Iraqi and Afghanistan 
stabilization and reconstruction operations have used private 
contractors in an unprecedented fashion and the cost has been 
at historic highs. Have we managed them well? I think the 
answer is generally no.
    Why? Because there wasn't adequate preparation, planning, 
structure, oversight in place before these operations began to 
ensure that there were clear regulatory limits and oversight of 
an army of contractors bigger than our Army in-country, and 
that is something that USOCO would squarely address.
    Mr. Carnahan. And really, I guess it was a function of our 
lack of civil capacity that we basically had to go buy it and 
threw a lot of money at it----
    Mr. Bowen. Yes.
    Mr. Carnahan [continuing]. And did not have the structure 
in place to create it or to properly oversee it and have 
accountability.
    Mr. Bowen. That is correct. That is correct, and the 
security problem aggravated every aspect of that. I think an 
example is you say it is presence. They have a relatively small 
footprint of government employees, about 35, and then they have 
thousands of contractors that are carrying out their programs.
    Mr. Carnahan. And of those 100,000 contractors in Iraq, can 
you describe--are those mostly U.S. contractors? Local 
contractors? Describe sort of the variety of things that they 
are doing.
    Mr. Bowen. I think they are predominantly non-U.S. 
contractors as far as nationality goes, and they are carrying 
out everything from supporting food, fuel, and billeting to the 
troops in the field under the LOGCAP contract, to helping build 
local capacity in provincial governments, to building schools 
and health clinics.
    Mr. Carnahan. One of the things that you have very, I 
think, eloquently described is this problem with the silos of 
effort out there, and your proposal for the U.S. Office of 
Contingency Operations I think is a great way to begin this 
conversation, how to really break down those walls, but also to 
prevent overlap: Waste that is created by people being stuck in 
those silos and not coordinating that effort so we can get a 
better bang for our buck here.
    Mr. Bowen. Yes.
    Mr. Carnahan. And I guess I really wanted to get you to 
talk about how you see those elements from Defense, State, and 
USAID coming together in a more functional way; in a practical 
way on the ground for delivering what we are trying to achieve.
    Mr. Bowen. The functional execution is the key. Right now 
the responsibilities are diffused with limited coordination, 
frankly, and that is what I am told. Even today in Iraq when I 
talk to embassy personnel, USF-I personnel, there is good 
coordination at the senior, very senior levels, but in 
executing programs it is much more limited.
    That is not a new problem, and it is not a problem of lack 
of resources and it is not a problem of lack of leadership. It 
is a problem of institutional structure or inadequate structure 
in place.
    And so what USOCO would do would be before you even begin a 
stabilization and reconstruction outreach--this isn't an issue 
that should be taken on in-country. This ought to be worked out 
ahead of time--the staffing, the contracting, the funding, the 
oversight, the information systems.
    These are matters that touch all of these agencies, but 
they ought not to be independently managed when it is a single 
mission and therefore this proposal would integrate. I think 
the word is integration versus coordination. We need to move 
beyond coordination to integration to execution, of planning 
and execution of stabilization and reconstruction operations.
    Mr. Carnahan. I guess beyond your proposal I would like you 
to talk about other alternative ideas that get to this issue. 
Talk to me about some of those alternative ideas that are out 
there and why you think your proposal is the best way to 
address these issues.
    Mr. Bowen. Well, we proposed some alternatives, the 
targeted reforms in our report; in other words, ensuring that 
the NSC executes and implements a set of stabilization and 
reconstruction operation policies and procedures. It doesn't 
appear that the Interagency Management System is the one since 
it is not being used, so reconvene and redevelop and implement.
    There would be ways to develop and independent Inspector 
General oversight that could be standing and ensure that there 
is, from the start of an SRO, oversight. I think one of the 
challenges in Iraq is my office was developed 8 months, 9 
months after the operation began and we didn't get on the 
ground until 3 months before the CPA went out of business, so a 
lot of financial water under the bridge, waste under the bridge 
by that point. It ought to be there from the start.
    Mr. Carnahan. Actually, if you could yield, that gets to 
another point I had that your operation, being there pretty 
much from the beginning, has saved millions of dollars by 
identifying these issues. Many people have been held 
accountable for mismanagement and fraud, but by contrast no IG 
was created for Afghanistan until early 2008. How do we be sure 
that those kinds of things are again part of the structure of 
ongoing operations?
    Mr. Bowen. Well, USOCO would do that. I mean, creating 
USOCO would. Obviously because it impinges upon this existing 
turf it draws natural resistance. Absent creating an integrated 
office that plans, resources and executes and is held 
accountable--I think that is the other thing. The job here, 
after an SRO you would have the USOCO Director sitting here and 
you would be holding him or her accountable for the outcomes.
    Who do you call now? Is State in charge? No. Is AID in 
charge? No. Is DoD in charge? No. I mean, you have to fill this 
table up and try and discern what is missing between the 
various gaps and do gap filling.
    Mr. Carnahan. They are all in charge, and nobody is in 
charge.
    Mr. Bowen. If everyone is in charge, no one is in charge. 
You are exactly right. And so that is the core issue.
    We talk about it in our report, Applying Hard Lessons, the 
lead agency dilemma. We quote an NSC official saying exactly 
that. When you have a lead agency you only have one agency 
because it imbues upon the process its own culture, structure 
and biases.
    USOCO would be free from those particular institutional 
biases while drawing significantly upon the capacities of those 
respective agencies. NSC gives the policy. DoD has capacity. 
State, AID and the other agencies have expertise. What is 
filling the middle? Nothing right now. It is still diffused in 
the stovepipes. USOCO would fill that vacant space.
    Mr. Carnahan. I guess I want to wrap up with maybe a 
historical perspective that I wanted to ask you about because 
you have identified--you actually have a table in your February 
report that lists the U.S. assistance for stability and 
reconstruction operations from Iraq, Germany, Afghanistan, 
Japan, Bosnia, Kosovo, Dominican Republic, Panama, Haiti, 
Lebanon, Somalia, Grenada, Cambodia.
    Are there common themes in all these operations that you 
have identified to help you make the conclusions that you have?
    Mr. Bowen. I think the most common theme from these 
operations is we haven't applied our lessons from them to the 
next operation. Each one is sui generis. Each one evolves on 
its own without a sufficient structure in place because there 
is no structure in place to carry it out. They begin. They are 
carried out. They are over. They are forgotten. Their lessons 
aren't applied.
    There were lessons I believe from Bosnia and Kosovo, 
certainly those who have lived them. General Nash, who worked 
with us on our lessons learned report, said hey, I did the 
lessons learned report and you are repeating a lot of what I 
have found in Bosnia.
    That is one of the reasons we pursued this entire lessons 
learned initiative to help apply lessons learned. A lesson 
learned that is not applied is a lesson lost, and that 
certainly is the commonality of the previous stabilization and 
reconstruction operations.
    Mr. Carnahan. It seems to be lessons learned reports that 
we are not learning from.
    Mr. Bowen. Not sufficiently. That is clear.
    Mr. Carnahan. I am going to yield to my colleague, Mr. 
Delahunt from Massachusetts. I am so glad that he could join 
us, particularly for this first hearing that I have had with 
the subcommittee.
    Mr. Delahunt. Well, thank you, Mr. Chairman. You were an 
outstanding vice chairman, and you will I am sure more than 
adequately fill the shoes of the individual who preceded you in 
that capacity.
    And I want to say this. I think this is such an appropriate 
topic for the first hearing under your leadership because what 
is being discussed here really is the core responsibility of 
the Congress, which is to oversee the effectiveness of the 
Executive Branch, and to take that information that we glean 
and put forth recommendations and proposals that make sense, 
that enhance the security of the country, that avoid waste and 
at some point in time are acknowledged for their value and for 
their worth.
    There has been in my judgment far too long where that role 
has been abdicated by Congress, and I want to say this: Mr. 
Rohrabacher, who continues to serve as ranking member, during 
my tenure in the chair was a terrific ally, and I know he will 
do well working with you to make oversight a truly bipartisan 
effort.
    We hear a lot about partisanship and bipartisanship and the 
lack thereof, but this committee--and I know at times it was 
difficult--really took a hard look at what went wrong in Iraq 
and what has gone wrong, but Dana Rohrabacher was there despite 
the fact that during much of that time or really during all 
that time it was a Republican administration.
    I really want to acknowledge the great work of Stuart 
Bowen, who I understand is also a member of the Republican 
Party, but nobody in government could ask for anyone to better 
handle this particularly sensitive role in such a nonpartisan 
fashion. He just simply called them as he saw them. It was 
tough. I mean, what a colossal waste.
    I can remember reading the reports in the newspapers. Nine 
billion dollars was somehow lost. Nine billion. We forget about 
that now. Nine billions that was lost by the CPA, Coalition 
Provisional Authority, was in fact I think some five times as 
much as Saddam Hussein stole from the Oil-for-Food Program that 
was administered by the United Nations.
    In any event, I want to say to Mr. Bowen and to his 
outstanding team that these lessons that were so painfully 
learned in Iraq as far as future contingency planning are so 
important. You know, I am very impressed with your proposal to 
create a new Office for Contingency Operations. I hear the 
criticism that this is another layer of bureaucracy.
    I don't believe it is, but if this question hasn't been 
addressed, Stu, I would like you to take it because I am 
absolutely confident that if this function that this office has 
created, that the savings--simply the cost--to the American 
taxpayer are going to be phenomenal. Put aside the fact that 
the United States will be fully prepared for crises that 
continue to plague the globe. Mr. Bowen?
    Mr. Bowen. Thank you, Mr. Delahunt. A question very 
applicable to whether to create USOCO is, is it a new agency 
that simply adds to what exists or is it a meaningful reform 
that improves the efficiencies of how we approach stabilization 
and reconstruction operations? The answer is it is the latter.
    The United States has shown a remarkable willingness, a 
proper disposition to address challenges in the National 
Security arena within the structure of government, challenges 
of weak integration by implementing reforms. Creating the 
Department of Homeland Security is one example. Creating the 
Director of National Intelligence is another, both in reaction 
to the challenges experienced over the last decade regarding 
these important issues.
    This is another one. This is a unique one, though. This 
isn't defense. This isn't development. This isn't diplomacy, 
which is why it shouldn't be assigned to DoD or State or AID 
exclusively, but it needs to find one place because if you 
assign it to all of them, as we were talking about, no one is 
in charge.
    So there has to be a place where we can bring all of these 
elements together that will ensure that we don't repeat the ad 
hocracy, that we don't improve with temporary agencies whose 
acronyms we have forgotten, that we don't answer into 
significant stabilization and reconstruction operations and 
have to figure out what the contracting regs are. What is the 
IT system? Who should staff it? What is the oversight? All 
matters that were picked up on the fly in Iraq and Afghanistan.
    The lesson learned, the hardest lesson from Iraq and 
certainly I think Afghanistan--Richard Holbrooke said in 
December $39 billion; we are starting from scratch because it 
was uncoordinated--is that no structure was in place to carry 
this out. There were no plans in place to execute it. There 
were no systems ready to deploy that could ensure that taxpayer 
dollar are protected. Billions were lost as a result.
    Three hundred audits and inspections later don't paint a 
pretty picture. Some successes, sure, developed over time as we 
learned our lesson, but why do we have to learn the hard way 
when we can learn now the hardest lesson from Iraq and I think 
Afghanistan, and that is the need to concentrate, integrate 
planning, preparation, resources, capacity in one place where 
you have that accountability.
    You know who to call. You don't have to call five or six 
agencies and say well, what was your role in this breakdown. 
You have one person to call and to find out, A, whether you are 
prepared--I guess that is the most important question--for the 
next one, but then, B, explain the outcomes.
    So it is not only not a layering of bureaucracy. It is an 
efficiency that perfectly fits within how the United States 
Government has responded to crises in national security areas, 
reforming government to strengthen our capacity to protect our 
interests. That is very squarely what this is, but it also has 
a huge fiscal component. It will save money.
    Mr. Delahunt. Thank you, Mr. Bowen. Mr. Chairman, I have to 
excuse myself. The Russians are coming. They have arrived. 
Since I now chair the Subcommittee on Europe I have to meet 
with our colleagues from the Russian Duma, but thank you again 
for your service.
    Mr. Bowen. Thank you, Mr. Delahunt.
    Mr. Delahunt. Thank you, Mr. Chairman.
    Mr. Carnahan. Thank you, Mr. Delahunt, and again 
congratulations on your new chairmanship of the Europe 
Subcommittee and for your continued service on this 
subcommittee.
    You know, I was pleased that Mr. Delahunt mentioned this 
committee working together in a bipartisan way and the spirit 
in which Mr. Rohrabacher has been engaged here and really look 
forward to that continuing. These issues are ones that should 
bring people together in a very focused way.
    You know, I often think about the history of our favorite 
son, Harry Truman, when he chaired that famous Truman 
Commission during his time in the Senate. He described it as 
one of the most bipartisan and patriotic committees in the 
Congress at that time.
    It was a democratically controlled Congress and a 
Democratic administration, but they were going after waste, 
fraud and abuse in a way that respected the taxpayers' dollars, 
but also was focused on the mission supporting the troops, and 
results, and holding those contractors that were gaming the 
system accountable.
    So there are some great parallels in history here, but we 
do have to learn. We just can't keep doing reports about how we 
should learn. We actually need to learn. So this is very 
helpful, and I think there are opportunities to have less 
waste, more savings, better results and for people in this 
Congress to really work together.
    I don't know if you have invented the term of ad hocracy, 
but if you did I think it is a great invention and it is a 
great way to describe this problem. But you have also laid out 
some ways to really move forward better, stronger, and smarter, 
for us to get where we need to go in these stability and 
reconstruction operations.
    So thank you for your service. We look forward to 
continuing to work with you, and I think you have provided some 
very valuable tools for policymakers to take up going forward, 
so thank you.
    Mr. Bowen. Thank you, Mr. Chairman.
    Mr. Carnahan. All right.
    [Whereupon, at 11:07 a.m., the subcommittee was adjourned.]
                                     

                                     

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