McCaskill: Fraud and waste in Iraq and Afghan wars are stunning

Shortly after arriving in Washington in 2007, Sen. Claire McCaskill of Missouri knew the government’s practice of hiring private contractors could be a source of wasted tax dollars and even fraud.

A trip to Iraq confirmed it.

“Contracting was out of control,” she said Wednesday after releasing a new oversight report in Kansas City. “It was the wild, wild West. There was no competition. There was money being wasted. There were pallets of money disappearing. There were things being built that weren’t even functioning.”

The report — from the Commission on Wartime Contracting in Iraq and Afghanistan — affirmed those fears and more.

The bipartisan panel, which McCaskill helped and was styled after Harry Truman’s World War II oversight committee, concluded that as much as $3 of every $10 that U.S. taxpayers spent on wartime contracting over the last decade went up in smoke due to waste and fraud.

That’s an estimated $31 billion to $60 billion lost due to lax oversight of contractors and poor planning. However, McCaskill, a former Missouri state auditor, said she suspected the total was far higher.

Altogether the federal government spent more than $200 billion on private contractors who provide everything from security to transportation to food preparation. The practice is destined to continue in a small-government era when lawmakers are reluctant to hire more permanent workers, the Democratic senator said.

“The problem was the military was not ready, equipped or able to do these contracts in a way that the taxpayers could ever approve of,” McCaskill said.

Military leaders “basically said, ‘We want what we want, and we don’t care what it costs, and we don’t care how sloppy we are in the process,’ ” she said. “And that’s what caused billions and billions and billions of dollars to go down the drain.”

One example cited in the report was an effort in 2009 to distribute vouchers for wheat seed and fertilizer in drought-stricken areas of northern Afghanistan. Under pressure to increase spending, USAID, the government agency providing economic and humanitarian assistance, boosted spending to $1 million a day in each of a dozen districts, creating an environment “in which waste was rampant,” the report noted.

The document also cited the soaring cost of building the $82 million Afghan Defense University, that country’s equivalent of West Point. Defense officials now concede that Afghanistan may not be able to afford the $40 million a year needed to operate and maintain the university.

Other examples cited in the report included one Afghanistan road project involving the New Jersey-based Louis Berger Group and Black & Veatch, Kansas City’s largest engineering firm. According to the report, the project more than doubled from its $86 million estimate due to unexpectedly high security costs.

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