Where did the billions for Iraqi "reconstruction" go?
There's more and more original reporting in the blogosphere. Here's a fine example from the The Agonist. Sean Paul looks at what happened to the money for a health clinics contract. He starts with a WaPo story, which is pretty accurate, except that it gets the contractor, the money, and the number of clinics wrong:
[WaPo reporter] Witte writes that "a contract aimed at building 142 new health centers across Iraq instead produced 20 before the program ran out of money." He's right about a contract for 142 new health centers, but that's all he's right about. It wasn't Halliburton and they didn't even complete 20 centers.
"Halliburton wasn't the contractor," said James Mitchell, spokesman for the Special Inspector General for Iraq Reconstruction, this morning when I called him.
"It was a company called Parsons," he added, "in Pasadena and only 8 of the centers were completed."
O-h-h-h-k-a-a-a-y. So, where did the money go?
Mitchell was a generous fount of knowledge on the subject. He pointed out that the original Parsons contract was for $243 million. I asked if all of the money had been given to Parsons. He wasn't sure, but pointed me to this document to find out. On page i of the executive summary it indicates that $186,000,000 of the original $243,000,000 was spent by Parsons "with little progress made."
I had asked Mr. Mitchell earlier, from the Inspector General's office, "where did all the money go then, if they only managed to complete 8 healthcare centers?"
"Was it because of security concerns? Did the Blackwater-types eat the money up?" I asked.
Mitchell said much of it was "administrative overhead." I'm not sure how Mitchell or the IG's office defines "administrative overhead." And I doubt Parsons would tell me if I asked.
"Let's back up and talk about security," I asked Mitchell. "What proportion does security make up in the Iraq reconstruction budget as a whole?" He said that, overall, after a series of quarterly and annual audits, his office estimates that 22% of the money spent on Iraqi reconstruction went to provide for the security of sites, personnel, supplies and movement of supplies and people. Twenty-two percent?
That's almost $4,000,000,000.
Now, math isn't my forte, but my trusty solar-powered Texas Instruments calculator can do the simple stuff like percentages rather well. If twenty-two percent of the original $186 million Parsons was contracted went towards security that means they paid $41 million for it. That leaves $145 million to build 142 health centers, of course that's less the 'administrative overhead'. The average amount of administrative costs for construction companies (see Yahoo! Finance) is about 10%, so Parsons would have been in the right taking $14.5 million for 'administrative expenses.' But let's be generous and make it 20 percent or $29 million, after all it is a war-zone, right? That leaves $116 million to build 8 health centers, or $14.5 million a center. The centers Parsons built, I bet, are the cream of Iraq's medical infrastructure, no doubt!
Well, not exactly.
Sean-Paul's got pictures. And they're not pretty.
So where did the money go? Not into the clinics for the Iraqi people, that's for sure.