Quarterly Report and

Semiannual Report to the United States Congress

[ January 30, 2011]

(Public Laws 108-106 and 95-452, as amended)

223-818 SIGIR Cover.indd 1 1/24/2011 8:08:12 AM SIGIR Mission Statement

Regarding U.S. relief and reconstruction plans, programs, and operations in Iraq, the Special Inspector General for Iraq Reconstruction provides independent and objective: · oversight and review through comprehensive audits, inspections, and investigations · advice and recommendations on policies to promote economy, efficiency, and effectiveness · prevention, detection, and deterrence of fraud, waste, and abuse · information and analysis to the Congress, the Secretary of State, the Secretary of Defense, and the American people

______

The jurisdiction of the Office extends to amounts appropriated or otherwise made available for any fiscal year to the Iraq Relief and Reconstruction Fund, the Iraq Security Forces Fund, the Commander’s Emergency Response Program; or for assistance for the reconstruction of Iraq under the Economic Support Fund, the International Narcotics Control and Law Enforcement account, or any other provision of law.

(Section 3001 of Public Law 108-106, as amended)

Workers at the al-Rumaila Operations Organization (ROO)—a consortium of Iraq’s South Oil Company, British Petroleum, and the Chinese National Petroleum Corp.—reportedly drilled 41 new oil wells in Basrah’s al-Rumaila field in 2010. Iraq’s southern oil fields contain more than half of the country’s proved reserves, and international oil companies are also ramping up operations at West Qurna, Majnoon, and al-Zubair. (ROO photo)

223-818 SIGIR Cover.indd 2 1/24/2011 8:08:13 AM Special Inspector General for Iraq Reconstruction

Quarterly Report and

Semiannual Report to the United States Congress

[January 30, 2011]

(Public Laws 108-106 and 95-452, as amended)

Jan11.indb 1 1/23/2011 9:25:08 PM Jan11.indb 2 1/23/2011 9:25:33 PM MESSAGE FROM THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

As I mark my seventh anniversary as Special Inspector General for Iraq Reconstruction, I am pleased to present this 28th Quarterly Report to the United States Congress and the Secretaries of State and Defense.

The next eleven months will see a series of transitions in Iraq that will profoundly affect the nature ofthe continuing U.S. mission, culminating in the scheduled withdrawal of all U.S. troops by December 31, 2011. Notable transitions include: • the closure of the last Provincial Reconstruction Teams and the transition of their reconstruction missions to consulates in Erbil and Basrah and temporary offices in Mosul and Kirkuk • the transition of the police training mission from the military to the Department of State • the opening of a new Office of Security Cooperation-Iraq to manage most aspects of the continuing U.S. military assistance program

The various changes occurring in Iraq in 2011 will unfold under the aegis of the new coalition government in Baghdad. Prime Minister Nuri al-Maliki finally secured a second four-year term this quarter, but did so only byallowingmyriadrivalstoobtainnumerouspositionsinthenewCouncilofMinisters.

This quarter was good for Iraq economically. The Iraqi government’s aggressive efforts to attract foreign capital investment continued to bear fruit. Moreover, several international oil companies, working to develop south- ern Iraq’s lucrative oil fields, reported better-than-expected progress, including production increases at the super-giant al-Rumaila field. Much of Iraq’s oil and gas resources are located in Basrah province, Iraq’s eco- nomic engine and gateway to the world. Cognizant of Basrah’s importance to the future of Iraq, SIGIR officials traveled there in January to assess the state of the U.S. reconstruction effort. Our “Focus on Basrah” section de- tails SIGIR’s findings and describes conditions in what is probably Iraq’s most strategically important province.

In another development, the United Nations Security Council passed three resolutions in December, lifting a series of anachronistic trade sanctions imposed when Iraq was governed by Saddam. One effect of this UN action is that the Government of Iraq (GOI) is free, if it so wishes, to pursue a peaceful nuclear energy program. It must alsobevigilantinprotectingitsassetsfromcreditors,nowthatprotectionsoftheUNwillbelifted.

This quarter, SIGIR published five audits, including a review of the U.S. military’s $370 million effort topay former insurgents to provide security services through the Sons of Iraq (SOI) program. The military financed the costly SOI initiative using funds from the Commander’s Emergency Response Program (CERP). To date, almost $3.7 billion in CERP funds have been committed to projects in Iraq, with the SOI program being the single largest outlay. The Insert to this Quarterly Report contains a comprehensive look at how CERP funds have been expended in Iraq. SIGIR’s collective oversight reporting on the CERP is particularly informative, given the continued large-scale use of CERP funds in Afghanistan.

400ArmyNavyDrive•ArlingtonVirginia22202

0.0_TitleandLetter_Jan11.indd 3 1/24/2011 10:45:47 AM Other notable SIGIR accomplishments this quarter include: • completing investigative work that helped result in criminal and civil penalties of $69 million levied against the Louis Berger Group for inflating invoices relating to work it performed for USAID and the Department of Defense • issuing a finding that a $26 million U.S.-funded educational academy for Iraqi officials had not been formally supported by the GOI and that no provisions had been made for the academy’s operation and sustainment • determining that a discrepancy exists between the total CERP allocations that U.S. Forces-Iraq reports it received and the amount of CERP funds that the Army Budget Office reports it provided to them

In early February, I will travel to Iraq for the 29th time, meeting with senior officials from the U.S. Embassy andtheGOItodiscusshowtheU.S.drawdownwillaffecttheongoingreconstructioneffort.Iwillalso confer with members of the new Iraqi government about its plans to maintain U.S.-funded projects and ameliorate the continuing pernicious influence of corruption.

Although the last troops may withdraw from Iraq in December 2011, the Department of State will still maintain a significant reconstruction presence there for years to come, requiring sustained oversight and engagement to watch over what remains of the $58 billion U.S. reconstruction program.

Stuart W.Bowen, Jr. Special Inspector General for Iraq Reconstruction

0.0_TitleandLetter_Jan11.indd 4 1/24/2011 7:58:30 AM SIGIR SUMMARYTABLE OF PERFORMANCE OF CONTENTS

SIGIR Summary of Performance As of January 30, 2011 Audits

Reports Issued 182 Recommendations Issued 444 Dollars Saved and Recovered ($ Millions) $610.61 Dollars Put to Better Use ($ Millions) $586.62 Challenged Payments ($ Millions) $112.63

Evaluations

Reports Issued 1 Recommendations Issued 4 Studies Ongoing/Planned 3

Inspections

Project Assessments Issued 170 Limited On-site Assessments Issued 96 Aerial Assessments 871

Investigations

Investigations Initiated 524 Investigations Closed or Referred 420 Open Investigations 104 Arrests 31 Indictments 54 Convictions 44 Monetary Results ($ Millions) $140.9

Hotline Contacts, as of December 31, 2010

E-mail 398 Fax 18 Mail 29 Referrals 26 SIGIR Website 169 Telephone 79 Walk-in 112 Total Hotline Contacts 831

Other Products

Congressional Testimony 31 LessonsLearnedReportsIssued 5 Quarterly Reports 28

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Section 1 Section 5 SIGIR Observations 1 SIGIR Oversight 103 Iraq Reconstruction 2011: SIGIR Audits 104 Evolving toward Regular Order 2 Collaborative Forensic Audits/ Funding Update 3 Investigations Initiative 117 U.S. Reconstruction Management 4 SIGIR Investigations 118 Government Formation 6 SIGIR Evaluations 129 Security 10 SIGIR Hotline 130 Energy 13 SIGIR Website 131 Economy 14 Legislative Update 132 SIGIR Oversight 16 Human Toll 18 Section 6 Other Agency Oversight 135 Section 2 Introduction 136 Funding for Iraq Reconstruction 19 Other Agency Audits 137 Funding Overview 20 Other Agency Investigations 140 U.S. Funding 21 Iraqi Funding 34 Special Feature International Support 36 Focus on Basrah 45

Section 3 Endnotes 141 U.S. Presence and Sources and Notes for the Insert 152 Reconstruction Management 37 Acronyms and Definitions 153 TheU.S.Presencein2011 38 Contracting 44 Section 4 Developments in Iraq 55 Governance 56 Security 65 Rule of Law 75 Economy 81 Public Services 94

*The complete version of this SIGIR Quarterly Report is available on the SIGIR website: www.SIGIR.mil. It is the official version of the Report, containing all appendices and corrections.

Jan11.indb 7 1/23/2011 9:25:35 PM TABLE OF CONTENTS

Appendices

The appendices for this Quarterly Report are not included in the print version of the publication. They are published on the SIGIR website at www.sigir.mil.

Appendix A cross-references the pages of this Report with SIGIR’s statutory reporting requirements under Section 3001 of P.L. 108-106, as amended, and the Inspector General Act of 1978, as amended.

Appendix B cross-references budget terms associated with the Iraq Relief and Reconstruction Fund (IRRF), Iraq Security Forces Fund (ISFF), Economic Support Fund (ESF), Commander’s Emergency Response Program (CERP), and international support for Iraq reconstruction.

Appendix C reports on the international contributions to the Iraq reconstruction effort.

Appendix D contains a list of SIGIR’s completed inspections of Iraq reconstruction activities.

Appendix E contains a comprehensive list of suspensions and debarments related to Iraq reconstruction contracts or Army support contracts in Iraq and Kuwait.

Appendix F provides summaries of completed and ongoing audits and reviews of Iraq reconstruction programs and activities, released by other U.S. government agencies.

Appendix G contains a list of completed audits, reports, and testimonies on Iraq reconstruction activities released by SIGIR and other U.S. government audit agencies.

Jan11.indb 8 1/23/2011 9:25:35 PM SIGIR OBSERVATIONS

Iraq Reconstruction 2011: 2 Evolving toward Regular Order

Funding Update 3

U.S. Reconstruction Management 4

Government Formation 6

Security 10

Energy 13

Economy 14

section SIGIR Oversight 16 Human Toll 18 1

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State of Law (SoL) Coalition controls the power- IRAQ RECONSTRUCTION ful Ministries of Interior and Defense and five 2011: EVOLVING other cabinet posts. Former Prime Minister Ayad Allawi’s al-Iraqiya bloc has the chairman- TOWARD REGULAR shipofthenewNationalCouncilforHigher Policies (NCHP)—whose duties have yet to be ORDER defined—and 10 cabinet-level offices. The other two major blocs—the Shia Iraqi National Alli- Thenewyeardawnedwiththeformationofthe ance and the Kurdistani Alliance—hold 12 and new Iraqi government and is expected to close 7 cabinet seats, respectively. withthewithdrawalofvirtuallyallmilitaryforces, A major challenge for the new government ending the United States’ almost nine-year military will be managing its relationship with the anti- engagement in Iraq. Although the remaining mis- American cleric Muqtada al-Sadr, who returned sions of the U.S. Forces-Iraq (USF-I) under Opera- from Iran this quarter and controls 39 seats in tion New Dawn will conclude in December 2011, the Council of Representatives (CoR). This sig- significant U.S. support for the overall reconstruc- nificantpoliticalpowerplaceshiminaposition tioneffortwillcontinueasthenewGovernment to demand policy concessions from Prime Min- ofIraq(GOI)seekstobuildonrecentgainsin ister al-Maliki. In January, al-Sadr banned his governance, economy, and security. ministers from meeting with any U.S. officials.2 The next 11 months will bring numerous transi- • Security. In late 2010, the GOI began to dis- tions and transformations within the U.S. rebuilding mantle some of the more than 870 checkpoints program, whose total price tag in American tax dollars dottingBaghdad,inpartbecausethenumberof now stands at $58 billion. Notable changes include: reported violent incidents reached post-invasion • By the end of January, the Department of De- lows. Despite this statistical good news, insur- fense(DoD)TaskForceforBusinessandStability gentscontinuedtowageacampaignofintimida- Operations (TFBSO) will conclude its current tion and assassination against certain GOI mili- operations in Iraq.1 tary and civilian personnel this quarter, killing or • By early fall, the last Provincial Reconstruction attempting to kill several dozen officials. Police Teams(PRTs)willshutdown,transferringremain- officials were particularly singled out. ingmissionstotwopermanentconsulatesand With the end of the U.S. combat mission in two temporary Embassy Branch Offices (EBOs). IraqlastAugustandthescheduleddepartureof • By October, the Department of State (DoS) will allU.S.troopslaterthisyear,oneofthemainre- takeoverDoD’spolice-trainingmission,anda sponsibilitiesofIraq’ssecurityforceswillbesup- newOfficeofSecurityCooperation-Iraq(OSC-I), pressing such violence. This quarter, several U.S. under the U.S. Chief of Mission authority, will observers noted real or potential gaps in Iraqi assume control of most aspects of the ongoing Security Forces (ISF) capabilities that could affect U.S. military assistance program. its ability to lock in hard-won security gains.3 • Essential Services. Accordingtoarecently These key developments occurred this quarter: released DoS report, the lack of sufficient basic • Government Formation. After nearly nine services will be the most likely cause of future months of political negotiations, Prime Minister instability in Iraq. DoS’s new “Stability Devel- Nuri al-Maliki secured sufficient parliamentary opment Roadmap” analyzed public opinion supportinlateNovembertoclaimasecond data and determined that the lack of perceived term. Under the power-sharing deal, al-Maliki’s improvements in Iraq’s water, sewage, and

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electricitysystemscouldleadtopopularunrest— pursue,ifitsochooses,apeacefulnuclearpower more so than political or sectarian disagree- program.Currently,theGOIispreparingtohost ments.Toamelioratepartofthisproblem,the theupcomingArabLeagueSummit,scheduledto Ministry of Electricity (MOE) will soon release take place this March in Baghdad—the first such the Iraq Electricity Masterplan for improving the gatheringheldinIraqinmorethantwodecades. nationalgrid.Itanticipatesthat,ifplannedgener- atorscomeintoserviceonscheduleoverthenext fewyears,Iraqshouldmeetnationalelectricity demand by 2014. But this hope is conditioned FUNDING UPDATE on implementing costly improvements to Iraq’s electrical transmission and distribution network MajorU.S.ReconstructionFunds as well as operational enhancements between Since 2003, the United States has appropriated or the MOE and the Ministry of Oil. In December, otherwise made available $58.00 billion for recon- theprimeministernamedformerMinisterof structioneffortsinIraq,primarilythroughfive Oil Hussein al-Shahristani as Deputy Prime major funds: the Iraq Security Forces Fund (ISFF), Minister for Energy Affairs—a new position that the Economic Support Fund (ESF), the Iraq Relief placeshiminchargeofcoordinatingtheGOI’s andReconstructionFund(IRRF),theInternational energy policy, historically hampered by a lack of Narcotics Control and Law Enforcement (INCLE) cooperation between the operative ministries. account, and the Commander’s Emergency Re- • Economic Development. Iraq’s southern oil sponse Program (CERP).6 Figure 1.1 summarizes fields continued to be the focus of international the current status of unexpended obligations of the investors’ attention this quarter, with the al- five major funds. For more on U.S. reconstruction RumailafieldinBasrahexceedingtargetsfor funding, see Section 2 of this Quarterly Report. crude production and several international oil companies increasing the size and scope of their Figure 1.1 presenceintheoil-richdesertsaroundBasrah. Unexpended Obligations: Major U.S. Funds GOI officials reported that they plan to explore $ Billions Total: $2.27 fornewoilfindsinthewesterndesertslocated 4 in the predominantly Sunni Anbar province. ESF $0.46 Severalobstaclesstandinthewayoftheeffective ISFF exploitation and monetization of extant resources, $1.18 20% including poorly maintained infrastructure, 52% pervasive public corruption, and a set of hydro- carbonlawsstillgreatlyinneedofreform. 15% IRRF • Reintegration into the Global Community. In $0.35 7% early October, the International Monetary Fund 5% (IMF) made an additional $741 million available INCLE CERP $0.16 fordisbursementtotheGOIaspartofitsStand- $0.11 By Arrangement with Iraq.5 Two months later, Note: Data not audited. Numbers affected by rounding. theUnitedNationsSecurityCouncil(UNSC) Sources: P.L. 108-7; P.L. 108-11; P.L. 108-106; P.L. 108-287; P.L. 109-13; P.L. passedthreeresolutions,liftingaseriesofsanc- 109-102; P.L. 109-148; P.L. 109-34; P.L. 109-289; P.L. 110-28; P.L. 110-92; P.L. 110-116; P.L. 110-137; P.L. 110-149; P.L. 110-161; P.L. 110-252; P.L. 111-32; P.L. tionsthathadbeenimposedonIraqwhenit 111-117; P.L. 111-118; P.L. 111-212; P.L. 111-322; P.L. 111-242, Sec. 101(8); USAID, response to SIGIR data call, 1/10/2011; USACE, response to SIGIR data call, was governed by Ba’athists. One consequence of 1/4/2011; NEA-I, responses to SIGIR data calls, 12/20/2010, 12/21/2010, 1/7/2011, and 1/10/2011; INL, response to SIGIR data call, 1/10/2011; OSD, response to theseresolutionsisthatIraqisonceagainableto SIGIR data call, 1/13/2011; ABO, response to SIGIR data call, 12/6/2010.

JANUARY 30, 2011 I REPORT TO CONGRESS I 3

Jan11.indb 3 1/23/2011 9:25:35 PM SIGIR OBSERVATIONS

Status of the CERP • $5.94billionfortheMinistryofOil,a162% The CERP began as a relatively low-cost means for increase from 2010 local military commanders to implement small • $3.69billionfortheprovincialgovernments,a reconstruction projects that could address urgent 69%increasefrom2010 and humanitarian needs. Over the years, it grew • $3.64billionfortheKurdistanRegionalGovern- into a $3.99 billion program that has been used for ment,a2%increasefrom2010 awidevarietyofprojects—frompayingformer • $3.20billionfortheMinistryofElectricity,a insurgents to provide security services through the 38% increase from 2010 Sons of Iraq (SOI) regime to financing large-scale business development and infrastructure projects. In the security sector, the draft budget provides As of January 2011, USF-I was still working to pro- fundstohireabout110,000newpoliceofficers. vide comprehensive updates on its use of the CERP Italsosetsaside$195millionforsalariesandex- to fund projects. Consequently, SIGIR is unable to pensesrelatingtotheSonsofIraqprogram,a448% provideacomplete“project-by-project”or“category- increase from 2010 levels.15 by-category” accounting of all CERP obligations and Article39ofthedraftbudgetallowstheCoM expenditures. For an in-depth analysis of the chal- accessto$5billionfromtheCentralBankofIraq’s lenges with CERP reporting data, see Section 2; and currency reserves.16 U.S. officials have privately forananalysisoftheCERPprogramsince2003, voiced their concerns about this provision, specu- see the Insert to this Quarterly Report.7 lating that, if this proposal were to become law, it could potentially weaken international confidence Iraq’s 2011 Draft Budget inthesolvencyoftheIraqistate.17 The CoR will On December 1, 2010, the Council of Ministers decide the fate of Article 39 when it finalizes Iraq’s (CoM) approved a draft budget of $79.47 billion for 2011 budget. 2011.Thedraftbudgetrepresentsa10%increase from the GOI’s 2010 base budget of $72.36 billion.8 The 2011 budget is based on two assumptions about oil:9 U.S. RECONSTRUCTION • Price. It assumes an average price per barrel of oilof$73.00,a17%increasefromthe$62.50 MANAGEMENT priceassumedforthe2010budget.10 As of De- cember 31, 2010, Kirkuk crude oil was selling for The Department of State (DoS) continued the $90.84 per barrel.11 ongoing process of normalizing Embassy opera- • Export levels. It estimates that Iraq’s oil ex- tionsthisquarter,proceedingwithplanstoclose portswillaverage2.25millionbarrelsperday all PRTs by September 2011. The reconstruction (MBPD).Thisassumptionincludes150,000 responsibilities of the PRTs will transition to the BPDinexportsfromtheKurdistanRegion.The ConsulatesGeneralinErbilandBasrahandthe GOI’s2010budgetassumedanaverageexport temporary EBOs in Mosul and Kirkuk. levelof2.15MBPD.12 Theactuallevelin2010was 1.90 MBPD.13 DoS Defines Reconstruction Narrowly, Resulting in a Data Gap The draft budget provides for capital expendi- Thisquarter,DoSinformedSIGIRthattheonly tures totaling $24.75 billion, a 22% increase over U.S. government civilian employees supporting the 2010 budget. Notable planned capital expendi- reconstructioneffortsinIraqasofDecember31, tures for 2011 include:14 2010, were the 10 members of its Iraq Strategic

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Partnership Office. It estimated contractor support Mission authority. Current plans call for the of- forreconstructionactivitiesat1.1%ofthetotal fice to have 157 full-time personnel, 118 of whom number of contractors supporting Embassy activi- willbeprovidedbytheU.S.military.19 Of note, ties,foracombinedtotalof58U.S.,third-country, the Defense Security Cooperation Agency, which and Iraqi contractors—including private security manages similar offices in 117 countries, has 723 contractors (PSCs) and non-PSCs. DoS arrived at Security Cooperation Officers stationed overseas— these figure by applying a restrictive definition of an average of 6.2 officers per post.20 “reconstruction,” excluding programs managed by the PRTs, the U.S. Agency for International INL Police Training Mission Development (USAID), and the DoS Bureaus of Reduced in Scope International Narcotics and Law Enforcement Af- INL will begin implementing the PDP in mid- fairs (INL), Democracy, Human Rights, and Labor 2011, and will take over responsibility for training (DRL), and Population, Refugees, and Migration Iraqi police officers from USF-I in October. This (PRM)—all of which spend U.S. taxpayer dollars quarter, INL reported that it reduced the number subject to SIGIR oversight. of advisors it will allot to the program because of Applying U.S. Embassy-Baghdad’s narrowed funding concerns.21 Although it will be unable to definitionof“reconstruction”wouldmeanthat reach the number of MOI officials called for in the virtually all of the 910 U.S. government civilian original plan, INL noted that, “this revision does employees now working at U.S. Embassy-Baghdad notimpacttheoverallmissionorgoals.”22 The areperformingtasksunrelatedtosupportingthe revised PDP does not focus on complex investiga- reconstruction effort.18 The Embassy declined to tivetraining,butinsteadondevelopingtheMOI’s answer SIGIR’s request for information on the leadership and management capacities, prompt- status and funding of several aspects of its recon- ingsomeMOIofficialstoexpressconcernsthat struction responsibilities, including: urgently needed criminal investigative training • the status of life-support contracts that will be has not been sufficiently prioritized.23 used to provide support to PRTs, EBOs, Consul- ates, and other Embassy elements that imple- Task Force for Business and Stability ment reconstruction activities Operations Ending Iraq Mission • thestatusofEmbassyvehicleandequipment Since 2006, DoD’s TFBSO has operated in Iraq, fo- requests to support the Police Development cusingonrehabilitatingtheeconomyandcreating Program(PDP),EBOs,andConsulates(asthey jobs for the unemployed. This quarter, the Office of relate to the enduring PRT mission and other the Secretary of Defense reported that TFBSO plans reconstruction activities) to end its operations there on January 31, 2011.24 • anticipated staffing for vehicle and equipment On September 29, the Deputy Secretary of maintenance for those activities related to Defense notified the Congress of waivers he issued reconstruction to use the CERP to fund three TFBSO contracts in excessof$2millioneach.Twoofthecontractswere among the ten largest CERP contracts on record OfficeofSecurityCooperation-Iraq for Iraq:25 On October 1, 2011, the new OSC-I will assume • $9.8 million for facilitating business devel- primary responsibility for assisting the ISF from opment opportunities in non-fuel natural USF-I. OSC-I will manage sales of U.S. military resources equipment to the GOI, operating as an office • $9.1milliontoassisttheMinistryofIndustry within U.S. Embassy-Baghdad under Chief of and Minerals in restructuring its operations

JANUARY 30, 2011 I REPORT TO CONGRESS I 5

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These projects had originally been financed by holdintheCoR;andinNovember,heprovided U.S. Army Operation and Maintenance funds; but, sufficient assurances to al-Iraqiya and the Kurdis- after determining that this was unlawful, DoD tani Alliance to secure their assent to his leading a charged these contacts to the CERP, marking what broad-based coalition government encompassing was apparently the first time that TFBSO has received allofIraq’smajorpoliticalblocs.Thedealbecame CERPfundingtosupportitsoperationsinIraq.26 officialonNovember25,2010,whenPresidentJalal Talabaniofficiallyaskedal-Malikitoformthenew government, ending a 264-day political impasse. Figure1.2displaysselectedsignificanteventsinthe GOVERNMENT process of government formation between March FORMATION 2010 and January 2011.27 More Seats at the Table Prime Minister al-Maliki The new GOI contains 42 ministerial posts, slightly Secures a Second Term more than the size of the former government.28 AlthoughPrimeMinisterNurial-Maliki’sSoL Newly created positions include an additional Vice CoalitionwontwofewerseatsintheMarch2010 President, a Deputy Prime Minister for Energy Affairs, elections than former Prime Minister Ayad Al- theNCHP,andseveralcabinetposts.Mostofthese lawi’s al-Iraqiya bloc, al-Maliki outmaneuvered newoffices,however,areessentiallyministerswithout hispredecessorintheninemonthsofnegotiations portfolio.Definingthesepositions’responsibilitiesand that followed. In October, he won the support of clarifyingtherelationshipsamongthemwillbeone Muqtada al-Sadr and the 39 seats his followers of the GOI’s major challenges in the coming months.29

Figure 1.2 Significant Developments in Negotiations Concerning Government Formation, 3/1/2010−1/15/2011 March April May June July August

IHEC rejects final appeals Ally of PM al-Maliki visits Grand of election results Ayatollah al-Sistani in Najaf Ayad Allawi meets with Grand Ayatollah Chief Justice Medhat Iraqi Foreign Minister calls lack Ali al-Sistani in Najaf al-Mahmoud certifies of government“embarrassing” election results Council of Prime Minister meets with Head of ISCI, Representatives al-Iraqiya representative Two al-Iraqiya parliamentary al-Hakim, meets elections Rafi al-Eissawi candidates assassinated with Ahmed Chalabi

IHEC announces IHEC begins recount of 2.5 million Prime Minister meets Former PM Allawi PM al-Maliki meets election results votes cast in Baghdad province with Ayad Allawi meets Muqtada with Assistant al-Sadr in Syria Secretary of State IHEC concludes Baghdad recount New CoR holds Feltman confirming initial results first session Prime Minister again meets with Ayad Allawi · Second meeting of Winning parliamentary candidate from Minister of Electricity CoR indefinitely al-Iraqiya list assassinated in Mosul announces resignation postponed · PM al-Maliki meets with Chairman of the Joint Chiefs ADM Mullen

Source: SIGIR analysis of GOI and U.S. government documents and open-source information in Arabic and English.

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To secure a working majority in the 325-person least12spotsinthecabinet,includingtheminis- parliament, SoL, which won 89 seats, offered prom- triesofOil,Justice,andTransportation.TheINA inent cabinet posts to its former rivals. Under the holdsabout29%ofthecabinetpostsand22%of November agreement, each bloc submitted three thetotalCoR(70seats).31 candidates for the ministries it sought, and Prime • Kurdistani Alliance (KA). The Kurds hold 7 Minister al-Maliki selected from those nominees. cabinetposts,includingtheministriesofFor- The broad power-sharing agreement resulted in the eignAffairsandHealth.TheKAcontrolsabout following apportionment of power:30 17%ofthecabinetand13%oftheCoR(43seats). • State of Law. SoLcontrols7seatsinthenew cabinet, including the ministries of Defense and The remaining positions are filled by represen- Interior, both of which are currently filled by the tatives from minor parties. As of January 18, the primeministerinanactingcapacity.SoLholds government is still being formed, and all reported about17%ofthecabinetseatsand27%ofthe positions are subject to change. CoR (89 seats). Only one female minister has been appointed • Al-Iraqiya. Al-Iraqiya secured 10 cabinet-level to the new cabinet; she will serve as an at-large positions, including the ministries of Finance, Minister of State. In the previous government, five Electricity, Agriculture, and Industry and women held cabinet seats (as of November 2010), Minerals.Al-Iraqiyacontrolsabout24%ofthe leading notable ministries such as Environment cabinet and 28% of the parliament (91 seats). and Human Rights.32 Reports in mid-January • IraqiNationalAlliance(INA).This grouping indicated that additional female members may be of Shia parties, including the Sadrist Trend and named in the coming weeks. Figure 1.3 shows the Islamic Supreme Council of Iraq (ISCI), has at current makeup of the GOI.

September October November December January

· Group of Iraqi NGOs announce suit demanding return of CoR members’salaries · Shia al-Fadhila party announces support for PM al-Maliki Al-Iraqiya and SoL attempt to Provisional power-sharing agree on language for National Kurdistani Alliance reportedly sends 19 accord agreed to by PM Council for Higher Policies law conditions to both al-Iraqiya and SoL al-Maliki and former PM Allawi CoR votes to lift ban on eligibility of New U.S. Ambassador James Al-Iraqiya completes its draft certain Sunni politicians to participate Jeffrey presents his credentials Chief Judge Medhat law for the National Council in government; however, many Shia to President Talabani orders CoR to meet for Higher Policies lawmakers boycott vote

Six-month anniversary Large sit-in in central Baghdad President PM al-Maliki Muqtada al-Sadr, whose of CoR elections protests lack of government Talabani announces new followers control 39 asks PM government, leaving seats in the CoR, returns VP Biden arrives in Erbil to CoR convenes; al-Iraqiya’s Osama al-Maliki to 11 posts unfilled; from Iran meet Kurdish officials, al-Nujaifi elected Speaker; President form a new CoR endorses including President Barzani Talabani elected to second term; government Al-Iraqiya announces that al-Iraqiya walks out within 30 Council of Ministers postpones National Council for Higher Muqtada al-Sadr supports second term for PM days indefinitely the national census Policies will not be formed until al-Maliki; predominantly Shia National CoR meets again; that had been scheduled for at least late January 2011 Alliance endorses al-Maliki for PM al-Iraqiya ends walkout December 5, 2010

JANUARY 30, 2011 I REPORT TO CONGRESS I 7

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Figure 1.3

8 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

1.0_Observations_Jan11.indd 8 1/24/2011 10:40:42 AM SIGIR OBSERVATIONS

Council of Representatives National Council for Higher Policies

Speaker: NCHP Chairman: Osama al-Nujaifi Ayad Allawi Party: Al-Hadba Party: Iraqi National Accord

1st Deputy: 1st Deputy: Qusay al-Suhail TBD Party: TBD Party: Sadrist Trend

2nd Deputy: 2nd Deputy: Arif Tayfor Party: TBD Party: KDP TBD

3rd Deputy: TBD Party: TBD

Minister of Finance: Minister of Electricity: Minister of Justice: Minister of Planning: Rafi al-Eissawi Ziad Tariq (acting) Hassan al-Shimari Nasar al-Rubaie (acting) Party: National Future Gathering Party: National Movement for Party: al-Fadhila Party: Sadrist Trend Development and Reform

Minister of Transportation: Minister of Housing and Construction: Minister of Health: Minister of Education : Hadi al-Amiri Mohamad al-Daraji Majid Amin Mohamad Tamim Party: ISCI Party: Sadrist Trend Party: PUK Party: Iraqi National Dialogue Front

Minister of Labor: Minister of Dispacement and Migration: Minister of the Environment: Minister of Culture: Nasar al-Rubaie Dindar Najman Sargon Sliwah Saadoun al-Dulaimi Party: Sadrist Trend Party: Islamic Coalition Party: Assryian Democratic Movement Party: Constitution Party, associated with the INA

Ministry of Municipalities Minister of State and Government Minister of State of Provincial Affairs: Minister of State of and Public Works: Spokesman: Norhan Mudher National Reconciliation: Dindar Najman (acting) Ali Dabbagh Party: Iraqi Turkoman Front, associated Ali al-Adeib (acting) Party: Sadrist Trend Party: Associated with Dawa with al-Iraqiya Party: Dawa

Minister of State of CoR Affairs: Minister of State at Large: Minister of State at Large: Minister of State at Large: Safa al-Safi Abdul-Mahdi Mutairi Yassin Mohamad Ahmed Bushra Saleh (F) Party: Independent Party: Associated with the Sadrist Trend Party: ISCI, associated with the INA Party: Independent, associated with al-Fadhila

Minister of State at Large: Minister of State at Large: Diyah al-Asadi Salah al-Jabouri Party: Sadrist Trend Party: Iraqi National Dialogue Front

F= Female

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National Council for Higher Policies while ensuring protection of Iraqi funds from Thefeaturethatmostdistinguishesthecurrent international creditors government from its predecessor is the newly creat- • creating a safe environment effectively edNCHP.Thisbody,formedinanefforttoplacate • conductinganationalcensus,whichthisquarter al-Iraqiya’s leader Ayad Allawi, has no parallel in was once again postponed indefinitely theformergovernment,norisitmentionedinthe • implementing the constitutionally mandated Iraqi Constitution. Allawi will serve as the NCHP process to determine the final status of Kirkuk Chairmanalongwiththreedeputies,oneeach and its environs fromSoL,theINA,andtheKA.Theremainder • improving the capacity of GOI workers and of the NCHP’s membership has not been decided, strengthening the fight against corruption at all althoughrepresentativesfromeachmajorpolitical levels of government bloc will be included. While the NCHP is expected to have a voice on security, economic, energy, and governance matters, the precise scope of its powers has not been defined.33 SECURITY As of mid-January, the CoR is considering a draft law delineating the NCHP’s authorities. As IraqReports2010CasualtyFigures providedforinthisbill,theNCHPwouldhave AccordingtotheGOI,morethan3,600civilians 20 members, including the president, the vice andISFpersonnelwerekilledinviolentincidents presidents, the prime minister, the deputy prime during 2010.35 For the third consecutive month, ministers, the speaker of the CoR and his depu- however, December set a 2010 record for the fewest ties, the leaders of all major political blocs, and the numberofpersonskilledinattacks,down151 chairmanoftheHigherJudicialCouncil(HJC). from the previous month’s 2010 record low of AccordingtothebillbeforetheCoR,theNCHP 171.36 Figure 1.4 notes some of the major security couldbindtheprimeministertoactaccordingto incidents in Iraq between October 20, 2010, and itswishes,butonlyif80%oftheCouncilsup- January 20, 2011. portsadecision.IftheNCHPoperateswith20 members, this would allow any grouping of 5 to GOI Officials Targeted for Assassination blocktheissuanceofabindingdecision,making On December 29, 2010, three suicide bombers it difficult for the NCHP to impose its will on the stormed a police headquarters facility in the prime minister.34 restivenortherncityofMosul,killingthelocal police commander, Lieutenant Colonel Shamel Near-term Priorities Ahmedal-Jabouri.Alittlemorethantwoweeks for the New Government later, a suicide bomber almost suceeded in killing In the coming months, the new government will the governor of Anbar province. MOI officials confront a series of pressing legislative challenges. informed SIGIR that nearly 240 ISF and intel- Foremostamongthemare: ligencepersonnelandabout120civiliangov- • appointing permanent Defense and Interior ernment employees have been assassinated in ministers and strengthening the ISF recent months.37 As Table 1.1 shows, more than • definingtheNCHP’spowersandclarifyingits three dozen mid- to senior-level GOI civilian relationship to the GOI’s constitutional offices and military officials were the apparent targets andpassingafinalbudgetfor2011 of assassination attempts this quarter, continu- • executingasmoothtransitionforoilrevenue ingadisturbingtrendSIGIRfirstreportedonin from United Nations (UN) to GOI control, January 2010.38

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Figure 1.4 Major Security Incidents, 10/20/2010−1/20/2011

1/18/2011 12/29/2010 Suicide bomber strikes Dahuk Multiple suicide bombers police recruitment attacked Mosul police HQ; center in Tikrit; at least police commander killed 50 reported killed and Ninewa more than 100 injured Erbil 10/26/2010 Kirkuk jewelry store robbed; 12/12/2010 10 killed Anbar provincial government Tameem Sulaymaniyah 10/29/2010 compound bombed; Cafe in Balad Ruz bombed; at least 10 killed 26 killed Salah Al-Din 11/2/2010 12 bombs detonated AftermathoftheOctoberattackonaSyriacCatholicchurchin Diyala in mostly Shia areas of Baghdad. (Ankawa photo) Baghdad; more than 60 killed ChristiancommunityinIraqalsofellpreyto Baghdad 11/10/2010 Anbar Multiple attacks several other violent attacks, as summarized in on Christian Wassit Kerbala homes; 3 killed Table 1.2. Babylon and more than 20 injured The UN estimates that several thousand Chris- Missan Qadissiya tiansfledNinewaandBaghdadprovincesinthe 10/31/2010 Syriac Catholic wake of the church massacre, seeking refuge in the church in 12/27/2010 Najaf Thi-Qar 41 Multiple suicide Baghdad Kurdistan Region and other areas of northern Iraq. bombings in Ramadi attacked; more than strike assembled Basrah relatives of those Muthanna 50 killed killed on 12/12/2010; Prime Minister: All U.S. Troops Will Be at least 19 killed and OutofIraqbytheEndoftheYear more than 40 injured 1/20/2011 Multiple car bombings This quarter, in one of his first public statements 12/4/2010 11/8/2010 strike Shia pilgrims in Multiple bombings; Car bombs target Iranian Kerbala; at least 50 killed since securing a second term in office, Prime approximately 14 killed pilgrims in Kerbala and Najaf; and more than 150 injured 10 killed Ministeral-Malikideclaredthathedoesnotintend to alter or extend the U.S.-Iraq Security Agreement Note: All casualty figures are based on best available information. (SA).HestatedthatheexpectstheUnitedStatesto Source: SIGIR analysis of GOI and U.S. government documents and open-source information in Arabic and English. adhere to existing deadlines, which require all U.S. military forces to leave Iraq by December 31, 2010. Judicial Security Remains a Problem As of early January 2011, USF-I had more than Unknown assailants attacked two Iraqi judges 49,000 troops stationed in Iraq.42 in January, killing one. Since 2003, more than The current SA—which governs the bilateral 40 judges have been killed in Iraq. The HJC at- securityrelationshipbetweenthetwocoun- temptedtosecurefundinginthe2011budgetfor tries—expires at the end of the year. Any effort an additional 4,000 judicial security personnel, but to renegotiate it would likely have to begin soon. the CoM rejected the request, leaving the HJC far The prime minister made no mention of holding a shortofthenumberoftrainedpersonnelitneeds popular referendum on the SA, something he had to guard Iraq’s 1,260 judges.39 promisedtodobymid-2009,buthedidendorse the Strategic Framework Agreement (SFA), which Violence against Christians definesthecontoursofthecontinuingpolitical, Inthebloodiestincidentofanti-Christianviolence economic, and cultural relationship between the since 2003, insurgent gunmen stormed a Syriac United States and Iraq. Unlike the SA, the SFA will Catholic church in Baghdad on October 31, continue in effect beyond 2011, unless either party 2010, killing more than 50 people.40 The remnant withdraws from the pact.43

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Table 1.1 SelectedActsofApparentTargetedViolenceagainstIraqiOfficials,10/15/2010–1/17/2011 Location Targets/Victims (Province) Date Circumstances Result

Policelieutenantcolonel SalahAl-Din 10/19/2010 Bombing Lieutenantcolonelinjured;atleast11killed Seniorpoliceofficer SalahAl-Din 10/19/2010 IEDattackonresidence Noreportedcasualties Ministry of Electricity director general Baghdad 10/25/2010 Attacked by gunmen using silencers Director general killed Ministry of Interior official Baghdad 10/25/2010 Sticky bomb attached to car MOI official killed; 3 injured Ministry of Planning undersecretary Baghdad 10/26/2010 IED attack Undersecretary unharmed; 4 injured Police colonel Baghdad 10/28/2010 Sticky bomb attached to car Colonel killed ISF commander Baghdad 10/28/2010 IED Commander injured Senior police officer Ninewa 11/1/2010 Sticky bomb attached to car Officer killed; driver injured Local government official Anbar 11/4/2010 Multiple IEDs Official and driver killed Senior national security official Ninewa 11/16/2010 Residence bombed No reported casualties CoR members from al-Iraqiya bloc Ninewa 11/19/2010 IED attack on mortorcade Members unharmed; 1 bodyguard killed Senior passport office official Anbar 11/22/2010 IED Official killed Ministry of Municipalities IG officials Baghdad 11/22/2010 Ambushed by gunmen 2 IG officials killed; 2 injured Ministry of Higher Education official Baghdad 11/23/2010 Residence attacked by gunmen Official killed Iraqi Army brigadier Baghdad 11/24/2010 Sticky bomb attached to car Brigadier killed Ministry of Interior colonel Baghdad 11/24/2010 Ambushed by gunmen Colonel injured Police brigadier Baghdad 11/28/2010 Ambushed by gunmen Brigadier killed Sunni Endowment official Baghdad 11/28/2010 IED Official injured Ministry of Health official Baghdad 12/1/2010 Sticky bomb attached to car Official injured Ministry of Human Rights official Baghdad 12/1/2010 Ambushed by gunmen Official killed Local government official Wassit 12/1/2010 Residence attacked by gunmen Official unharmed; 2 injured Senior police officer Tameem 12/1/2010 IEC attack on motorcade Officer unharmed Thi-Qar provincial intelligence officer Baghdad 12/3/2010 Ambushed by gunmen Officer injured Commission of Integrity official Diyala 12/14/2010 Sticky bomb attached to car Official unharmed Former Ministry of Electricity official Baghdad 12/16/2010 Ambushed by gunmen Former official killed President of Mosul University Ninewa 12/20/2010 Ambushed by gunmen President seriously injured Intelligence officer Baghdad 12/20/2010 Ambushed by gunmen Officer killed Shia Endowment official Baghdad 12/21/2010 Ambushed by gunmen Official injured Ministry of Health official Baghdad 12/22/2010 Ambushed by gunmen Official killed Iraqi Army brigadier Baghdad 12/23/2010 Attacked by gunmen using silencers Brigadier killed; 1 injured Police colonel Baghdad 12/23/2010 Ambushed by gunmen Colonel injured Ministry of Interior official Baghdad 12/26/2010 Automobile attacked by gunmen Official and driver injured Ministry of Foreign Affairs official Baghdad 12/28/2010 IED attack on automobile Official injured Criminal court judge Baghdad 12/29/2010 Sticky bomb attached to car Judge injured Mosul police commander Ninewa 12/29/2010 Multiple suicide bombers attacked HQ Police commander killed Ministry of Interior lieutenant colonel Baghdad 1/1/2011 Automobile attacked by gunmen Lieutenant colonel killed Sunni Endowment official Diyala 1/2/2011 Multiple IEDs Official seriously injured IEDs dismantled prior to detonation; Ninewa provincial council chairman Ninewa 1/2/2011 Multiple IEDs chairman unharmed Ministry of Interior brigadier Baghdad 1/3/2011 Ambushed by gunmen Brigadier injured Local security official Tameem 1/5/2011 IED Official injured Chief of Police Anbar 1/10/2011 IED Chief and several associates killed Provincial governor Anbar 1/17/2011 Suicide bomber Governor unharmed; several injured

Note: This table provides examples of assassinations, attempted assassinations, and other small-scale acts of violence that appear to have been aimed at specificpersonsorgroupsthis quarter. It does not purport to be all-inclusive, nor presume to imply the attackers’ respective motives.

Source: SIGIR analysis of GOI and U.S. government documents and open-source information in Arabic and English.

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Table 1.2 Selected Attacks against Iraqi Christians, 10/20/2010–1/15/2011 Muqtada al-Sadr’s Reemergence Date Incident On January 5, 2011, Shia cleric Muqtada al-Sadr’s Gunmen linked to al-Qaeda in Iraq storm Syriac Catholic church in Baghdad, plane landed in the holy city of Najaf, marking his 10/31/2010 killing approximately 50. firstofficialappearanceinIraqsince2007andhis Bombs and mortars strike Christian homes in Baghdad, killing at least 3 and 11/10 /2010 woundingmorethan20. official return to the Iraqi political scene. Al-Sadr, who rose to prominence as the scion 11/15/2010 Gunmen in eastern Mosul kill at least 7, including 2 Christians. of a well-respected family of Shia religious leaders, 11/22/2010 Gunmen in Mosul kill 2 Iraqi Christians, who were brothers. leads a political organization that has managed to 11/30/2010 Gunmen in eastern Mosul kill 1 Christian. transformitselffromrebelliousradicalstoinflu- 12/5/2010 Gunmen in Baghdad murder 2 elderly Christians. ential power brokers, controlling 39 seats in the 12/14/2010 A group of armed men abduct a female Christian student in Mosul. newCoR.Inhisfirstpublicaddressafterreturning Atleast10bombsdetonatenearthehomesofChristianfamiliesinBaghdad, 12/30/2010 killing2andwoundingabout20. to Najaf, al-Sadr urged his followers to resist the

Source: SIGIR analysis of GOI and U.S. government documents and open-source information in Arabic and United States, although stopping short of more English. violent rhetoric. He also denounced Iraqi-on-Iraqi Doubts Surround ISF’s Ability To Meet violence and expressed conditional support for Minimum Essential Capabilities PrimeMinisteral-Maliki‘sgovernment.51 OneofUSF-I’smaingoalsin2011willbework- ingwithISFtohelpitachievethe“Minimum EssentialCapability”(MEC)itneedstoeffectively provide for Iraq’s internal and external defense. ENERGY Iraqismakingsomesecurityinvestmentsof itsown,butarecentreportbyDoD’sOfficeof Oil: Production and Exports Inspector General cautioned that the ISF’s logistics This quarter, Iraq’s crude oil production averaged system remains beset by myriad challenges.44 USF-I 2.40MBPD,constitutinga3%increaseoverlast echoedtheseconcerns,notingthatadditionalin- quarter, but 1% less than in the final quarter of vestments will have to be made to ensure that the 2009.Exportsaveraged1.95MBPDthisquarter, ISFachievesMECpriortoDecember2011.45 U.S. a 4% increase from the previous quarter and 2% assistanceintheformofISFFfor2011wasautho- higher than the same quarter in 2009. No oil was rized at $1.5 billion, instead of the $2.0 billion level officiallyexportedfromtheKurdistanRegion, requested by DoD.46 continuing a trend that began in 2009.52

Sons of Iraq International Oil Companies This quarter, SOI members continued to be tar- Report Progress getedbyinsurgentforces,with17reportedkilledin In 2009, the Ministry of Oil awarded 10 service October and November. At least 387 SOI personnel contractstointernationalfirms,givingthemthe have been reported killed since October 2009.47 righttodevelopmajoroilfieldsinpartnership To date, GOI ministries have hired just over withIraq’sstate-ownedoilcompanies.TheAnglo- 39,000 SOI members, out of approximately 95,000.48 Chinese consortium developing the al-Rumaila AsaSIGIRauditreleasedthisquarterfound,the fieldreporteditshighestaveragedailyproduction GOIhaslongstruggledtokeepupwithpayingSOI level since beginning operations there last year. salaries on a monthly basis.49 Recently, however, TheGOIisalsoplanningtoexplorefornewfields, GOI officials reported some progress in making announcing in early January that it is begin- timely payments.50 For more on the SOI program, ning preparations for a fourth licensing auction see Sections 4 and 5 of this Quarterly Report. toawardoilandgasexplorationcontracts.Fora

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full report on Iraq’s oil sector, see Section 4 of this The GOI plans to develop a vehicle to succeed Quarterly Report. theDFIwhichwouldbeoverseenbytheCom- mitteeofFinancialExperts(COFE),ledbythe Electricity Supply President of Iraq’s oldest financial oversight This quarter, Iraq’s electricity supply averaged institution, the Board of Supreme Audit.58 6,339megawatts(MW),a3%declinefromlast COFE will replace the International Advisory quarter’s record high, but a 7% increase over the andMonitoringBoardforIraq. last quarter of 2009.53 Iraqisincreasinglyreli- • UNSCR 1957—ends remaining trade sanctions ant on power supplied by privately owned power limiting the importation of sensitive materi- plants. Before 2008, no privately owned power als, including certain chemicals and nuclear plants operated in Iraq. But by 2010, four privately materials.59 Asaresult,Iraqisnowableto owned plants accounted for 13% of Iraq’s electrici- engageinciviliannuclearactivities,suchasthe tysupply.InDecember,theGOIannouncedthatit development of nuclear power plants. Iraq’s will conduct a bidding round for private investors Acting Minister of Electricity greeted the UN’s where it will auction the right to build four new decision with approval, voicing his support power plants that, when completed, would add for the resumption of a peaceful Iraqi nuclear 2,750MWofnameplatecapacitytothenational program. Potential international partners were grid.54 For more on Iraq’s electricity sector, see quicktotakenoticeofopportunitiesinthis Section 4 of this Quarterly Report. area, with French officials already expressing interestincooperatingwithIraqonnuclear energy projects. • UNSCR 1958—terminates all activities relating ECONOMY totheOilforFoodprogram.60

The IMF estimates that increased economic activ- Whilethepassageoftheseresolutionsrepre- ityinthehydrocarbonsectorwillcausethegrowth sentsasignificantstepinIraq’sre-integration rate of Iraq’s gross domestic product to surge from into the international community, the GOI must areported2.6%in2010to11.5%in2011and11% workwiththegovernmentofKuwaittoresolve in2012,placingIraqamongtheworld’sfastest disputes stemming from its 1990 invasion. These growing economies.55 For purposes of comparison, include compensating Kuwaiti victims of the theIMFforecast2011growthratesof9.6%forthe invasion,accountingfortheremainsofthose People’s Republic of China and 8.4% for India.56 killed, and returning Kuwaiti property. All of thesemattersyetremainsubjecttotheUNSC’s UN Security Council Votes supervision under its Chapter VII authority, To End Some Sanctions on Iraq which permits it to take measures to maintain In mid-December, the UNSC passed three related international security. resolutions, lifting most of the remaining restric- tionsimposedonIraqduringthe1990s: Largest U.S.-controlled Detention • UNSC Resolution (UNSCR) 1956—extends Center To Become Business Center protectionofIraqioilrevenuesfrominterna- On December 29, 2010, USF-I officially transferred tional creditors until June 30, 2011, giving the Camp Bucca to the GOI. Formerly the largest U.S. GOImoretimetodevelopamechanismto detention facility in Iraq, Camp Bucca is currently replace the Development Fund for Iraq (DFI), beingconvertedtocivilianusebyaU.S.-Iraqi which has shielded oil revenues since 2003.57 consortiumthatwontherighttobuildandmanage

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Minister of Oil Discusses networkofpipelinesremainsachal- Iraq’s Future with SIGIR lenge.Hecommentedthatthesystem On November 8, 2010, the Inspector Gener- of U.S.-funded defensive works al met with then-Deputy Minister of Oil for knownasPipelineExclusionZones ExtractionAffairsAbdulKareemal-Luaibi workwellinremoteareas,butnoted athisofficeinBaghdad.Sixweeksafterthis that attacks still occur in more heavily meeting, al-Luaibi, a long-serving Ministry populated areas. SIGIR’s Inspector General meets with then- ofOiltechnocrat,waschosentoleadthe Deputy Minister of Oil al-Luaibi. • Issues with the Kurdistan Region. ministry in the new government. In the The Deputy Minister maintained that courseofhiswide-rangingdiscussion capacity are only now beginning to theMinistryofOilhasneitherfirm with the Inspector General, then-Deputy takeshape.DeputyMinisteral-Luaibi figuresontheamountofoilproduced Minister al-Luaibi discussed:61 reported that the ministry plans to in the Kurdistan Region, nor solid • Future Prospects for Iraq’s Oil Sector. construct 35 new oil-storage tanks informationaboutthecapacitiesof The Deputy Minister reported that insouthernIraqtoreplacetanksde- theunauthorizedrefineriesoperat- Iraq’sdealingswithinternationaloil stroyedincombatwiththeIranians. ingthere.DeputyMinisteral-Luaibi companies(IOCs)havegonebetterthan • Oil Exploration. Becauseoftheease reported that he recently led a delega- anticipated. He also reported that Iraq withwhichmanyofIraq’sexistingoil tion to the Kurdistan Region in an intends to reach average production fieldscouldbetapped,itwasnoteco- effort to resolve some of the lingering levels of 3.26 MBPD by December 2011, nomicallyefficientforpreviousrulers problems between it and Baghdad, but withexportsclimbingto2.3MBPD.As to devote substantial resources to remarked that lasting solutions will forthelongterm,hestatedthatcurrent exploringforoilinremotelocations. take time to reach. projections call for average production ButthenewMinisterofOilintendsto • Oil Smuggling. Deputy Minister tograduallyriseto12MBPD. changethat,explainingthattheGOI al-Luaibiconfidentlydeclaredto • BasrahPipelineandOffshoreOil isembarkingonatwo-yearplantoex- SIGIRthatoilsmugglingisnolonger Terminals. Oneofthenewgovern- plore for as-yet-undiscovered oil fields, asignificantproblem.Henotedthat ment’s priorities will be completing which, if successful, could increase theministryplanstoinstallanew the ongoing refurbishment of its Iraq’sprovedreservesto200billion metering system to monitor the flow pipelinenetworkandtheoffshoreoil barrels.Thisplanwouldalsoinvolve of oil and stated that U.S. overhead terminals off the coast of the south- auctioningoffexplorationrightsina reconnaissance assets, such as satel- ernportofUmmQasr.Planscallfor publicbiddingroundsimilartothose litesandunmanneddrones,have threenewGOI-financedundersea conductedin2009. not recently observed any suspicious pipelines:al-Fawpeninsulatotheal- • Cooperation with the Ministry of convoysoftankertrucksleavingIraq. BasrahOilTerminal(ABOT),ABOT Electricity. In speaking about the rela- But the Deputy Minister cautioned totheKhawral-AmayaOilTerminal tionship between the Ministries of Oil that he did not have any information (KAAOT),andABOTtooffshore andElectricity,theDeputyMinister onthelevelofsmugglingactivityin single-point mooring stations. The expressedthehopethattheproblems the Kurdistan Region. successful completion of the Basrah that have marred this relationship are • International Relations. Iraq shares pipelineprojectsshouldincrease allinthepast,notingthatthemain severaloilandgasfieldswithneigh- Basrah’s export capacity to 4.5 MBPD. challenge going forward will not be boring states, making the exploitation TheGOIalsoplanstoconductexten- finding enough fuel to supply to the ofthesefieldsamatterofinternational siverepairstoKAAOT,portionsof electricityplants,butinsteadproviding concern. Ministry of Oil officials whichhavecollapsedintothePersian the infrastructure needed to transport aremeetingwiththeircounterparts Gulfduetodisrepair. ittotheMOEinatimelyfashion. in Saudi Arabia, Syria, and Iran to • Oil Storage Capacity. Fighting on the • Pipeline Security. Although the discuss these issues. Deputy Minister al-Faw peninsula during the Iran-Iraq security situation is much improved al-Luaibi also reported that he also WardestroyedmuchofIraq’scapacity since 2007, Deputy Minister al-Luaibi speaksaboutthesemattersonaregu- to store oil, and efforts to restore this stated that securing Iraq’s far-flung lar basis with U.S. Embassy officials.

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overitscashpaymentstotheSOI.Sinceassum- ing full control of the SOI program in April 2009, the GOI has faced difficulties in managing the program, properly paying the SOI, and integrat- ing SOI members into Iraqi ministries. • GOI Support for the Iraq International Academy (IIA). Thepurposeofthis$26million ISFF-funded project is to develop an executive- level educational facility—the IIA—for GOI

This quarter, Iraq exported dates for the first time in two decades. civilianandmilitaryofficials.Locatedinthe TheinitialshipmentwassenttoLondon,markingthereemergence International Zone, this ongoing project is being of Iraqi farmers in the international market. (USAID photo) managedbyUSF-I’sIraqTrainingandAdvisory abusinessparkthereviaatransparentbidding Mission assigned to assist the Ministry of De- process. Scheduled to be completed by 2012, this fense (ITAM-MOD). After reviewing the relevant $236millionproject,dubbed“BasrahLogistics correspondence and interviewing MOD officials, City,” will provide a secure hub for international SIGIRdeterminedthatalthoughITAM-MOD investors doing business in southern Iraq.62 For worked with its MOD counterparts to obtain more information, see the special section on Basrah host-country buy-in for the IIA, no bilateral Province, featured in this Quarterly Report. agreements were negotiated or signed, and it remains unclear whether the GOI will budget for operating and maintaining the IIA upon comple- tion. Without such agreements, U.S. funds spent SIGIR OVERSIGHT ontheIIA’sconstruction($13.4million)areat riskofbeingwasted,asarethefundsplanned Audits toequipandfurnishthefacility($12million). This quarter, SIGIR’s Audits Directorate issued five Therefore, SIGIR recommended that USF-I take reports. Since 2004, SIGIR has published 182 audit no further action to purchase furniture and reports on the U.S. reconstruction program in Iraq. equipmentfortheIIAandinformtheGOIthatit SIGIR’s audits this quarter reviewed: istheGOI’sresponsibilitytodoso. • U.S. Military’s Management of the SOI Pro- • DoD’s Deployable Disbursing System (DDS). gram. In June 2007, the Multi-National Corps- The Defense Finance and Accounting Service Iraq(MNC-I)beganusingCERPfundstohire developed the DDS to enable DoD personnel to former insurgents to guard checkpoints, build- maintain accountability of appropriated funds ings, and key parts of neighborhoods in Iraq—a whileinthefield.Inthecourseofcollectingdata $370millionprogramtheU.S.militarycredits to perform its congressionally mandated forensic with helping reduce the overall levels of violence review of all reconstruction expenditures, SIGIR in Iraq. However, insufficient quantifiable pro- determined that some DDS data from Iraq gramdatacoupledwiththeinabilitytosegregate wasmissing.SIGIR’sreviewsuggestedthatthe possible SOI effects from other factors precluded missing data contained a substantial amount of SIGIRfromdrawingempiricallyreliableconclu- payment activity, potentially including classified sions about the program’s contribution to the re- information and personally identifiable informa- duction in violence in Iraq that began in the late tion (PII) about members of the military. Because summer of 2007. Additionally, SIGIR found the the missing data prevents SIGIR from meeting U.S. military exercised weak financial controls its forensic audit mandate, SIGIR recommended

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However, both obtained their obligation data from the Army Standard Financial System (STANFINS),andseveralpriorSIGIRreports have raised questions about whether STANFINS contains all CERP obligations.

For details on SIGIR’s audits this quarter, see Section 5 of this Quarterly Report.

Artist’s conception of the completed IIA. (USF-I/ITAM/MOD photo) Investigations As of January 15, 2011, SIGIR investigators were that the Army Financial Management Com- working at least 104 open cases. SIGIR’s investigative mand reconstruct all missing transactions and work has resulted in 54 indictments, 44 convictions, review them to determine whether they include andmorethan$140.9millioninjudiciallyman- any PII and classified information. dated fines, forfeitures, and restitution payments. A • Iraq Relief and Reconstruction Fund 1 settlement reached in one case this quarter resulted (IRRF 1). IRRF 1 funds were used to finance in the levying of $70 million in financial penalties. adiversearrayofreconstructionprograms, Highlights of this quarter’s investigative accom- including projects aimed at rehabilitating Iraq’s plishments included: water and sanitation infrastructure, refurbishing • On October 27, U.S. Army Major Roderick D. its electricity sector, and developing its rule-of- Sanchezpledguiltytoonecountofbrib- law institutions. During fiscal years 2003 and ery. According to court documents, Sanchez 2004, the Office of Management and Budget admitted that he accepted bribes from foreign apportioned virtually all of the $2.48 billion ap- companies seeking to secure Army contracts propriated by the Congress for IRRF 1. Most of whilehewasservingasacontractingofficerin these funds went to three agencies, with USAID Iraq, Afghanistan, and Kuwait between 2004 receiving $1.62 billion, DoD/U.S. Army receiving and2007.Duringthistime,Sanchezaccepted $518 million, and DoS receiving $101 million. As Rolex watches and illicit cash payments worth of September 30, 2004, these agencies’ reports morethan$200,000.OnJanuary19,2011,San- showed that virtually all of the $2.48 billion had chezwassentencedtofiveyearsinprisonand been obligated, and SIGIR’s review did not identify ordered to forfeit all property purchased with any significant issues related to IRRF 1 apportion- the proceeds of his scheme. ments, obligations, expenditures, or cancellations. • On November 5, Louis Berger Group, Inc. • Accountability of CERP Allocations to Iraq. (LBG), agreed to pay more than $69 million SIGIR found that the total CERP fund alloca- in criminal and civil penalties to settle fraud tionsthatUSF-Ireportsithasreceiveddonot chargesrelatedtoitsinternationalworkon agree with the amount that the Army Budget behalf of DoD and USAID. On the criminal Office(ABO)reportsitprovided.Accordingto side, LBG entered into a Deferred Prosecution USF-I, it has received CERP allocations totaling Agreement (DPA) with DoJ, which requires it to $4,558,000,000, while the ABO reports alloca- pay $18.7 million in penalties, adopt more robust tions of $3,890,709,829. SIGIR also found that internal controls, and retain an independent the amount of obligations is uncertain. As of monitor to evaluate its compliance with the September 30, 2010, both the ABO and USF-I DPAforatwo-yearperiod.LBGalsoreached report CERP obligations of $3,675,323,152. a $50.6 million civil settlement with the U.S.

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government, resolving allegations that it violated theFalseClaimsActbycharginginflatedrates HUMAN TOLL on government contracts. • In a related matter, LBG’s former Chief Finan- cial Officer Salvatore Pepe and former Control- U.S. Civilian Deaths ler Precy Pellettieri pled guilty and admitted DoS reported that three U.S. civilians died in Iraq toconspiringtodefraudUSAIDbyobtaining this quarter. Two died from natural causes; the contract payments billed at falsely inflated third death remains under investigation. Since overhead rates from September 2001 through 2003,atleast313U.S.civilianshavediedinIraq.63 August 2007. • On November 10, a U.S. Army lieutenant colonel Contractors was charged with conspiracy, accepting illegal The Department of Labor (DoL) received reports of gratuities,andabusinghisofficialcapacityto 13 deaths of contractors working on U.S.-funded re- convert the property of another to his own use. construction programs in Iraq this quarter. DoL also re- According to the indictment, the defendant ceived reports of 522 injuries this quarter that resulted in usedhisstatusas“mayor”ofaForwardOperat- theinjuredcontractormissingatleastfourdaysof ingBaseinIraqtoenrichhimselfbyaccepting work. Since DoL began compiling data on contractor cashandgiftsfromcontractorsinexchangefor deathsandinjuriesinMarch2003,ithasreceived favored treatment, including improperly issuing reportsofatleast1,520contractordeathsinIraq.64 weapons permits to certain contractors. • OnJanuary10,2011,MajorMarkFuller,a Journalists U.S. Marine Corps fighter pilot, was sentenced For the second consecutive quarter, multiple toserveoneyearandonedayinprisonand journalistsfellvictimtoviolentattacksinIraq.On payafineof$198,510.Thesentencingwasthe October 4, cameraman Tahrir Kadhim Jawad was resultofFuller’sAugust2010guiltypleatotwo killed in a bombing in Anbar province. A little felony counts of structuring financial transac- more than six weeks later, 18-year-old Mazen Mar- tions. Fuller had been charged in a 22-count danal-Baghdadi,ajuniorreporterforal-Mosuliya indictment with illegally depositing more than television station, was gunned down in Mosul. $440,000 into U.S. bank accounts following a According to his father, the killers gained entry to 2005 deployment to Iraq, where he served as a thefamilyhomebyclaimingthattheywerewith contracting officer. an Iraqi military intelligence unit and then opened • OnJanuary11,2011,U.S.ArmyReserves fireonal-Baghdadioncehecametospeakwith Lieutenant Colonel Bruce Gillette was sentenced them.Heisthesecondjournalistfromal-Mosuliya to one year probation and fined $2,000 for to have been killed in recent months.65 improperly exploiting his position as the U.S. On December 12, a car bomb in Ramadi killed military’sliaisontotheIndependentElectoral Omar Rasim al-Qaysi, an anchorman at al-Anbar Commission of Iraq for personal financial gain televisionstation,andinjuredoneofhiscolleagues. whilestationedinIraqin2004and2005. Ninedayslater,ajournalistworkingforal-Anwar satellite television station was seriously injured For a full report on SIGIR’s recent investigations, when an improvised explosive device exploded see Section 5 of this Quarterly Report. near his car.66 ◆

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Funding Overview 20

U.S. Funding 21

Iraqi Funding 34

International Support 36 2section

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FUNDING OVERVIEW

As of December 31, 2010, $181.26 billion had been Figure 2.1 made available for the relief and reconstruction of Funding Sources, 2003–2010 Iraqthroughthreemainsources:67 $ Billions • U.S. appropriations—$58.00 billion Total: $181.26 Total Non-U.S. • IraqifundsoverseenbytheCoalitionProvisional CPA Spending International $12.07 Bilateral Funding Authority (CPA) and expenditures of the Iraqi Total Iraqi $8.60 $13.01 Funding Multilateral capital budget—$110.25 billion $110.25 $4.42 • International commitments of assistance and IRRF loansfromnon-U.S.sources—$13.01billion $20.86

ISFF SeeFigure2.1foranoverviewofthesefunding Iraqi $19.43 Total U.S. Capital Funding sources.SeeFigure2.2forahistoricalcomparison Budgets ESF $4.72 CERP $3.99 $58.00 of U.S. and Iraqi support for reconstruction.◆ $98.19 INCLE $1.36 Other $7.63

Note: Data not audited. Numbers affected by rounding.

Sources: See Figure 2.2.

Figure 2.2 Iraqi, U.S., and Non-U.S. International Support for Reconstruction, 2003–2010 $ Billions $120

$100

$80 Iraqi U.S. $60

$40 Non-U.S. International $20

$0 20032004 2005 2006 2007 2008 2009 2010

Note: Data not audited. Numbers affected by rounding. In the fiscal-year quarter ending on June 30, 2010, SIGIR switched its metric for tracking International support from pledged dollars to committed dollars, which accounts for the apparent drop in the International contribution on that date in this chart.

Sources: P.L. 108-7; P.L. 108-11; P.L. 108-106; P.L. 108-287; P.L. 109-13; P.L. 109-102; P.L. 109-148; P.L. 109-34; P.L. 109-289; P.L. 110-28; P.L. 110-92; P.L. 110-116; P.L. 110-137; P.L. 110-149; P.L. 110-161; P.L. 110-252; P.L. 111-32; P.L. 111-117; P.L. 111-118; P.L. 111-212; P.L. 111-242; P.L. 111-290; P.L. 111-317; P.L. 111-322; OSD, response to SIGIR data call, 10/15/2010; USACE, response to SIGIR data call, 10/6/2008; USAID, responses to SIGIR data calls, 1/12/2009 and 4/8/2009; NEA-I, responses to SIGIR data call, 9/27/2010, 10/4/2010, 10/6/2010, 1/5/2011, and 1/13/2011; DoS, DRL, response to SIGIR data call, 9/22/2010; TFBSO, response to SIGIR data call, 10/4/2010; DoJ, Justice Management Division, response to SIGIR data call, 10/5/2010; DoS, ECA, response to SIGIR data call, 4/14/2010; OMB, response to SIGIR data call, 6/21/2010; OUSD(C), response to SIGIR data call, 10/14/2010; U.S. Embassy-Baghdad, response to SIGIR data call, 10/3/2009; DoJ, U.S. Marshals Service, response to SIGIR data call, 10/5/2010; DoS, PM, response to SIGIR data call, 9/21/2010; BBG, response to SIGIR data call, 10/5/2010; GOI, CoR, “Federal Public Budget Law for the Fiscal Year 2010,” 1/27/2010; GOI, MOF, “Evaluation of the Iraqi Budget, 2006–2010,” 8/2010; GOI, Presidency of the Iraqi Interim National Assembly, “The State General Budget for 2005,” 2005; GOI, “Budget Revenues and Expenses 2003, July-December,” 2003; GOI, CoM, “Draft Law of the Republic of Iraq (GOI) Federal Budget for the 2011 Financial Year,” 11/30/2010; SIGIR, Quarterly and Semiannual Reports to the United States Congress, 3/2004–10/2010.

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U.S. FUNDING

Since 2003, the United States has appropriated or • International Narcotics Control and Law otherwise made available $58.00 billion for recon- Enforcement (INCLE)—$1.36 billion struction efforts in Iraq, including the building of physical infrastructure, establishment of political Of this amount, $46.67 billion had been obli- and societal institutions, reconstitution of security gated, and $44.40 billion had been expended.70 forces,andthepurchaseofproductsandservices Ofthe$46.67billionobligatedfromthemajor forthebenefitofthepeopleofIraq.68 funds, $2.27 billion had not been expended as of As of December 31, 2010, $50.37 billion had been December 31, 2010. An additional $3.70 billion had made available through five major funds:69 not been obligated, but $1.55 billion of these funds • Iraq Relief and Reconstruction Fund (IRRF)— had expired. Only funds that have not yet ex- $20.86 billion pired—$2.15 billion as of December 31, 2010—may • Iraq Security Forces Fund (ISFF)—$19.43 billion be obligated for new projects.71 •EconomicSupportFund(ESF)—$4.72billion The Congress also made $7.63 billion available • Commander’s Emergency Response Program through several smaller funding streams.72 (CERP)—$3.99 billion For an overview of U.S. appropriations, obliga- tions,andexpendituresfromthefivemajorfunds, Figure 2.3 as of December 31, 2010, see Figure 2.3. For details Status of Major U.S. Funds onappropriationsandthestatusofallfundsasof $ Billions December 31, 2010, see Table 2.1. INCLE Unexpended Obligations $50 Total: $2.27 CERP INCLE CERP INCLE ESF Congressional Action ESF CERP $0.46 $40 ESF ISFF ISFF ESF $1.18 20% The Congress has not yet completed its consider- ISFF 52% ISFF ation of the Administration’s FY 2011 appropria- tions request. Instead, to fund FY 2011 government $30 15% operations, the Congress has passed four continu- IRRF $0.35 ing appropriations acts.73 On December 22, 2010, 7% 5% $20 the President signed into law the most recent of IRRF IRRF IRRF INCLE CERP $0.16 those acts (P.L. 111-322), which generally pro- $0.11 vides funding at FY 2010 rates through March 4, 74 $10 2011. Appropriatedtotalsforthefivemajorfunds discussed below incorporate the projected budget authority through that date.75

$0 On January 7, 2011, the President signed into Appropriated Obligated Expended law the National Defense Authorization Act for

Note: Data not audited. Numbers affected by rounding. FY 2011, P.L. 111-383. In addition to extending the

Sources: P.L. 108-7; P.L. 108-11; P.L. 108-106; P.L. 108-287; P.L. 109-13; P.L. 109-102; P.L. 109-148; P.L. 109-34; ISFF and CERP for another year, the NDAA au- P.L. 109-289; P.L. 110-28; P.L. 110-92; P.L. 110-116; P.L. 110-137; P.L. 110-149; P.L. 110-161; P.L. 110-252; P.L. 111-32; P.L. 111-117; P.L. 111-118; P.L. 111-212; P.L. 111-322; P.L. 111-242, Sec. 101(8); USAID, response to thorizes $1.5 billion in FY 2011 appropriations for SIGIR data call, 1/10/2011; USACE, response to SIGIR data call, 1/4/2011; NEA-I, responses to SIGIR data calls, theISFFand$100millionfortheCERPinIraq.76 12/20/2010, 12/21/2010, 1/7/2011, and 1/10/2011; INL, response to SIGIR data call, 1/10/2011; OSD, response to SIGIR data call, 1/13/2011; ABO, response to SIGIR data call, 12/6/2011.

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Appropriations by Fiscal Year, FY 2003–FY 2009 Table 2.1 P.L. 110-92, U.S. Appropriated Funds P.L. 110-116, P.L. 110-137, $ Millions P.L. 109-102, P.L. 110-149, P.L. 108-7, P.L. 108-106, P.L. 109-148, P.L. 109-289, P.L. 110-161, P.L. 110-252, P.L. 108-11 P.L. 108-287 P.L. 109-13 P.L. 109-234 P.L. 110-28 P.L. 110-252 P.L. 111-32

2003 2004 2005 2006 2007 2008 2009

Major Funds

IraqReliefandReconstructionFund(IRRF1andIRRF2)a 2,475 18,389

Iraq Security Forces Fund (ISFF) 5,490 3,007 5,542 3,000 1,000

Economic Support Fund (ESF)b 50 1,545 1,478 664 439

Commander's Emergency Response Program (CERP)c 140 718 708 750 996 339

International Narcotics Control and Law Enforcement (INCLE) 91 170 85 20

Subtotal 2,525 18,529 6,208 5,351 7,941 4,745 1,798

Other Assistance Programs

Migration and Refugee Assistance (MRA) and Emergency Refugee & Migration 40 78 278 260 Assistance (ERMA)

Natural Resources Risk Remediation Fund (NRRRF)d 801

Iraq Freedom Fund (Other Reconstruction Activities)e 700

P.L. 480 Food Aid (Title II and Non-Title II) 368 3 24

Democracy Fund (Democracy) 190 75

International Disaster Assistance (IDA) and International Disaster and Famine 24 7 45 85 51 Assistance (IDFA)

Iraq Freedom Fund (TFBSO) 50 50 74

DepartmentofJustice(DoJ) 37 2 10 23 25 7

Nonproliferation, Anti-terrorism, Demining, and Related Programs (NADR) 19 16 36

Child Survival and Health Programs Fund (CSH) 90

Education and Cultural Exchange Programs (ECA) 75 7 7

Overseas Humanitarian, Disaster and Civic Aid (OHDACA) 9 15 3

International Affairs Technical Assistance 13 3

U.S. Marshals Service 23221

International Military Education and Training (IMET) 122

Alhurra-Iraq Broadcasting 5

Subtotal 2,069 22 15 33 416 563 438

Reconstruction-Related Operating Expenses

Diplomatic and Consular Programsf

Coalition Provisional Authority (CPA)g 908

Project and Contracting Office (PCO)h 200 630

USAID Operating Expenses (USAID OE) 21 24 79 46 52

U.S. Contributions to International Organizations (IO Contributions) 38 30

Iraq Freedom Fund (PRT Administrative Costs) 100

Subtotal 21 908 24 279 730 84 82

Reconstruction Oversight

Special Inspector General for Iraq Reconstruction (SIGIR) 75 24 35 3 44

USAID Office of Inspector General (USAID OIG) 4 2 3 3 7 4

DoD Office of Inspector General (DoD OIG) 521

DoS Office of Inspector General (DoS OIG) 13 4 6

Defense Contract Audit Agency (DCAA) 16

Subtotal 477330573454

Total 4,619 19,536 6,250 5,694 9,144 5,426 2,371

a The Congress initially appropriated $18,649 million to IRRF 2, but earmarked $210 million to be transferred to other accounts for programs in Jordan, Liberia, and Sudan. In FY 2006, the Congress transferred approxi- mately $10 million into the IRRF from the ESF. In FY 2008, P.L. 110-252 rescinded $50 million. b FY 2003 reflects $40 million from the ESF base account that was not reimbursed and $10 million from P.L. 108-11. c Generally, the Congress does not appropriate the CERP to a specific country, but rather to a fund for both Iraq and Afghanistan. SIGIR reports DoD’s allocation to the CERP for Iraq as an appropriation. d Includes funds transferred from the Iraq Freedom Fund (IFF). e Includes funds appropriated to the IFF by P.L. 108-11, Title I, and transferred to reconstruction activities, with the exception of funds transferred to NRRRF, which are recorded under that fund. f Diplomatic and Consular Programs comprises FY 2010 supplemental funding to support U.S. Embassy-Baghdad in establishing an enduring provincial presence. g Excludes $75 million for the Special Inspector General for Iraq Reconstruction under P.L. 108-106. h Reconstruction support funding is provided for Project and Contracting Office (PCO) activities per the P.L. 109-234 and P.L. 110-28 conference reports.

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FY 2010 FY 2011

P.L. 111-117 P.L. 111-118 P.L. 111-212 P.L. 111-322 Status of Funds

12/16/09 12/19/09 7/29/10 12/22/10 TotalAppropriated Obligated Expended Expired

Major Funds

IraqReliefandReconstructionFund(IRRF1andIRRF2) 20,864 20,356 20,010 508

Iraq Security Forces Fund (ISFF) 1,000 388 19,427 18,167 16,988 435

Economic Support Fund (ESF) 383 161 4,720 4,037 3,574 289

Commander's Emergency Response Program (CERP) 240 101 3,992 3,675 3,560 317

International Narcotics Control and Law Enforcement (INCLE) 52 650 296 1,365 434 269 2

Subtotal 435 240 1,650 947 50,368 46,669 44,402 1,551

Other Assistance Programs

Migration and Refugee Assistance (MRA) and Emergency Refugee & 300 48 1,004 962 888 Migration Assistance (ERMA)

Natural Resources Risk Remediation Fund (NRRRF) 801 801 801

Iraq Freedom Fund (Other Reconstruction Activities) 700 680 654

P.L. 480 Food Aid (Title II and Non-Title II) 395 395 395

Democracy Fund (Democracy) 265 265 222

International Disaster Assistance (IDA) and International Disaster and Famine 33 9 18 272 254 202 Assistance (IDFA)

Iraq Freedom Fund (TFBSO) 174 86 65

DepartmentofJustice(DoJ) 8 3 116 89 82

Nonproliferation, Anti-terrorism, Demining, and Related Programs (NADR) 30 13 114 62 62

Child Survival and Health Programs Fund (CSH) 90 90 90

Education and Cultural Exchange Programs (ECA) 7 3 36

Overseas Humanitarian, Disaster and Civic Aid (OHDACA) 27 27 10

International Affairs Technical Assistance 16 16 14

U.S. Marshals Service 999

International Military Education and Training (IMET) 2 1 8 8 5

Alhurra-Iraq Broadcasting 555

Subtotal 380 9 86 4,032 3,748 3,504

Reconstruction-Related Operating Expenses

Diplomatic and Consular Programs 1,030 1,030

Coalition Provisional Authority (CPA) 908 832 799

Project and Contracting Office (PCO) 830

USAID Operating Expenses (USAID OE) 57 24 303

U.S. Contributions to International Organizations (IO Contributions) 33 14 115

Iraq Freedom Fund (PRT Administrative Costs) 100

Subtotal 90 1,030 38 3,286 832 799

Reconstruction Oversight

SpecialInspectorGeneralforIraqReconstruction(SIGIR) 23 10 213 201 192

USAID Office of Inspector General (USAID OIG) 7 3 32

DoD Office of Inspector General (DoD OIG) 26

DoS Office of Inspector General (DoS OIG) 7 3 24

Defense Contract Audit Agency (DCAA) 16

Subtotal 37 16 310 201 192

Total 941 240 2,689 1,086 57,997 51,450 48,897 1,551

Sources: U.S. Treasury, OTA, “Office of Technical Assistance Overview,” 12/30/2005, ustreas.gov/offices/international-affairs/assistance/,accessed10/16/2009andresponsetoSIGIR datacall,4/2/2009;U.S.Embassy-Baghdad,responsetoSIGIRdatacall,10/3/2009;U.S.MarshalsService,responsetoSIGIRdatacall,10/5/2010;DoS,PM,responsetoSIGIRdatacall, 9/21/2010;BBG,responsetoSIGIRdatacall,10/5/2010;OUSD(C),responsetoSIGIRdatacall,10/14/2010;DoS,ECA,responsetoSIGIRdatacall,4/14/2010; OMB, response to SIGIR data call,6/21/2010;USAID,“U.S.OverseasLoansandGrants[Greenbook],”2008,gbk.eads.usaidallnet.gov/query/do?_program=/eads/gbk/countryReport&unit=N,accessed4/15/2010 and responses to SIGIR data calls, 1/12/2009, 4/8/2009, 7/8/2010, and 1/10/2011; DoJ, Justice Management Division, response to SIGIR data call, 10/5/2010;TFBSO,responsetoSIGIRdata call,1/4/2011;DoS,DRL,responsetoSIGIRdatacall,9/22/2010;ABO,responsetoSIGIRdatacall,12/6/2010;INL,responsetoSIGIRdatacall,1/10/2011;USTDA,responsetoSIGIRdata call,4/2/2009;SIGIRAudit11-007,“IraqReliefandReconstructionFund1:ReportonApportionments,Expenditures,andCancelledFunds,”12/28/2010; DoS, response to SIGIR data call, 4/5/2007; OSD, responses to SIGIR data calls, 4/10/2009 and 1/13/2011; USACE, responses to SIGIR data calls, 10/6/2008 and 1/4/2011; NEA-I, responses to SIGIR data calls, 9/27/2010, 10/4/2010, 10/6/2010, 12/20/2010, 12/21/2010, 12/28/2010, 1/7/2011, and 1/10/2011.

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SIGIR Forensic Audit Figure 2.4 ISFF: Status of Funds Unexpended Obligations $ Millions SIGIR has completed its initial forensic testing Total: $1,179.7

of Department of Defense (DoD), Department MOI Infrastructure of State (DoS), and U.S. Agency for International Appropriated $19,427.5 $166.5 Obligated $18,167.4 MOD Infrastructure Development (USAID) expenditures of funds MOI Equipment 14% Expended $16,987.7 $181.8 $139.8 appropriated for the reconstruction of Iraq. This 15% 12% testinginvolvednearly180,000transactionsvalued 11% MOD Equipment at approximately $40 billion. SIGIR has reported $133.0 on specific issues related to this work, such as ques- 21% 77 tionable CERP transactions. MOI 27% Training SIGIR’s current objective is to identify pos- $242.3 Other sible cases of fraud in invoice preparation prior to $316.3 voucher payment. Additionally, a SIGIR initiative involving auditors, analysts, and investigators reviewed programs that afforded easy access tocash,resultingintheopeningof54crimi- Note: Data not audited. Numbers affected by rounding. nal investigations. This quarter, SIGIR issued a Sources: P.L. 109-13; P.L. 109-102; P.L. 109-234; P.L. 110-28; P.L. 110-92; P.L. 110-116; P.L. 110-137; P.L. 110-149; P.L. 110-161; P.L. 110-252; P.L. 111-32; P.L. 111-212; P.L. 111-290; P.L. 111-317; P.L. 111-322; P.L. 111-242, Sec. 101(8); report expressing concerns about data missing OSD, response to SIGIR data call, 1/13/2011. from the DoD Deployable Disbursing System. Becausedataismissing,SIGIRispreventedfrom This leaves $823 million available for obligation fully completing its forensic audit mandate. Also, to new projects.82 SIGIRisconcernedthatthemissingdatamay ForthestatusoftheISFF,includingabreakdown containPersonallyIdentifiableInformationand of unexpended obligations, as of December 31, 2010, classified information.78 see Figure 2.4.

ISFF Quarterly Obligations Iraq Security Forces Fund and Expenditures As of December 31, 2010, $18.29 billion (94%) of the Since 2005, the Congress has appropriated $19.43 billion appropriated to the ISFF had been $19.43 billion to the ISFF to support Iraq’s Ministry allocated to four major sub-activity groups: Equip- of Defense (MOD) and Ministry of Interior (MOI) ment, Infrastructure, Sustainment, and Training. in developing the Iraqi Security Forces (ISF) and The remaining $908 million (5%) of the ISFF has increasing ministerial capacity.79 Thisincludesap- been allocated to smaller sub-activity groups. Col- proximately $388 million provided by the latest con- lectively termed “Related Activities,” they include tinuing appropriation for FY 2011.80 The Congress the ISFF Quick Response Fund and construction has not completed its consideration of the Admin- of detention centers and rule-of-law complexes, istration’srequestfor$2.00billioninISFFfunding among other programs.83 for FY 2011, but the FY 2011 NDAA authorizes For the status and quarterly change of the ISFF, by appropriations to the ISFF of up to $1.50 billion.81 ministry and sub-activity group, as of December 31, As of December 31, 2010, $1.18 billion of 2010, see Table 2.2. obligated ISFF funds had not been expended. An additional $1.26 billion had not been obligated, but $435 million of this amount has expired.

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Table 2.2 ISFF:StatusofFunds,byMinistryandSub-ActivityGroup $ Millions Status of Funds Quarterly Change Ministry Sub-Activity Group Obligated Expended Obligated Expended

Defense Equipment 4,792.5 4,659.5 49.1 (1%) 100.3 (2%) Infrastructure 3,074.9 2,935.1 -0.9 (0%) 50.6 (2%) Sustainment 2,234.9 2,117.2 212.8 (11%) 226.9 (12%) Training 595.5 503.9 34.5 (6%) 31.8 (7%) Subtotal 10,697.8 10,215.6 295.5 (3%) 409.6 (4%) Interior Training 2,651.4 2,409.2 182.9 (7%) 11.5 (0%) Equipment 1,948.8 1,767.0 62.1 (3%) 56.2 (3%) Infrastructure 1,377.7 1,211.2 -22.6 (-2%) 31.2 (3%) Sustainment 629.2 562.3 5.9 (1%) 2.5 (0%) Subtotal 6,607.1 5,949.7 228.3 (4%) 101.4 (2%) Varies Related Activities 862.6 822.4 -11.2 (-1%) 6.5 (1%) Total 18,167.4 16,987.7 512.6 (3%) 517.5 (3%)

Note: Data not audited. Numbers affected by rounding.

Sources: OSD, responses to SIGIR data calls, 10/14/2010 and 1/13/2011. Figure 2.5 International Narcotics Control INCLE: Status of Funds and Law Enforcement $ Millions Unexpended Obligations Appropriated $1,364.6 Total: $164.2 Since 2006, the Congress has appropriated $1.36 billion Courts totheINCLEinIraqtosupportrule-of-lawactivi- $38.6 Corrections Advisors ties.84 This includes approximately $296 million 24% $25.0 15% provided by the latest continuing appropriation for FY 2011.85 The Congress has not yet completed its Construction 8% $13.2 consideration of the Administration’s request for 33% $315 million in INCLE funding for FY 2011.86 6% Rule of Law Police Advisors 6% Advisors As of December 31, 2010, $164 million of Obligated $433.7 $54.9 8% $9.9 Program Development obligated INCLE funds had not been expended. Expended $269.4 & Support Other $9.5 An additional $929 million remains available for $13.1 obligation to new projects.87 ForthestatusoftheINCLE,includinga Note: Data not audited. Numbers affected by rounding. breakdown of unexpended obligations, as of Sources: P.L. 109-234; P.L. 110-5; P.L. 110-28; P.L. 110-252; P.L. 111-32; P.L. 111-117; P.L. 111-212; P.L. 111-242; P.L. 111-290; P.L. 111-317; P.L. 111-322; INL, response to SIGIR data call, 1/10/2011. December 31, 2010, see Figure 2.5.

INCLE Quarterly Obligations and Expenditures The INCLE has been allocated to 11 programs in foursectors:criminaljustice,corrections,counter- narcotics, and other (which includes funding for program development and support). The majority

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Table 2.3 INCLE:StatusofFunds,bySectorandProgram $ Millions Status of Funds Quarterly Change Sector Program Obligated Expended Obligated Expended

Criminal Justice Courts 101.5 62.8 6.5 (12%) PoliceAdvisors 56.6 1.6 47.6(534%) 0.7(84%) Public Integrity 33.7 26.8 4.0 (13%) 4.5 (20%) Rule of Law Advisors 22.3 12.4 0.3 (1%) 0.2 (1%) MajorCrimesTaskForce 13.1 8.3 2.9(53%) Justice Integration 6.8 5.5 0.4 (9%) Legal Framework 2.5 2.5 Subtotal 236.5 119.9 51.9 (28%) 15.3 (15%) Corrections Advisors 86.5 61.5 3.7 (6%) Construction 83.7 70.5 0.8 (1%) Subtotal 170.2 132.0 4.5 (4%) Other Program Development & Support 27.0 17.5 1.4 (5%) 0.4 (2%) Total 433.7 269.4 53.3 (14%) 20.1 (8%)

Note: Data not audited. Numbers affected by rounding.

Sources: INL, responses to SIGIR data calls, 9/30/2010 and 1/10/2011.

of INCLE obligations to date have been made to Figure 2.6 programsinthecriminaljusticesector.88 ESF: Status of Funds $ Millions Unexpended Obligations For the status and quarterly change of the Total: $462.5 INCLE, by program, as of December 31, 2010, Community Appropriated $4,720.5 Action Program see Table 2.3. $65.2 PRT Quick Response Fund Obligated $4,036.6 $47.7 14% Expended $3,574.1 PRT/PRDC 10% Provincial Economic Support Fund Projects 16% Economic Growth $74.9 9% $42.9

8% Local Governance Since2003,theCongresshasappropriated Program $4.72billiontotheESFtoimproveinfra- 20% 6% $39.2 Democracy and 16% Financial Sector structure and community security, promote Civil Society Development $92.0 $28.9 democracy and civil society, and support capac- Other ity building and economic development.89 This $71.8 includes approximately $161 million provided by Note: Data not audited. Numbers affected by rounding. the latest continuing appropriation for FY 2011.90 Sources: P.L. 108-7; P.L. 109-102; P.L. 110-28; P.L. 110-161; P.L. 111-32; P.L. 111-117; P.L. 111-242; P.L. 111-290; The Congress has not completed its consideration P.L. 111-317, P.L. 111-322; USAID, response to SIGIR data call, 1/10/2011; USACE, response to SIGIR data call, 1/4/2011; NEA-I, responses to SIGIR data call, 12/20/2010, 12/21/2010, 1/7/2011, and 1/10/2011. oftheAdministration’srequestfor$383millionin ESFfundingforFY2011.91 leaves$395million,appropriatedbyP.L.111-117, As of December 31, 2010, $463 million of available for obligation to new projects.92 obligated ESF funds had not been expended. An ForthestatusoftheESF,includingabreakdown additional $684 million had not been obligated, of unexpended obligations, as of December 31, 2010, but $289 million of this amount has expired. This see Figure 2.6.

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ESF Quarterly Obligations Iraq Relief and and Expenditures Reconstruction Fund TheESFhasbeenallocatedtoprogramsinthree tracks:Security,Political,andEconomic.The TheIRRFhasbeenthelargestsourceofU.S. majority of ESF allocations have been made to the reconstructionfunds,comprising$20.86billion Security track each year.93 made available through two appropriations: IRRF 1 ForthestatusandquarterlychangeoftheESF, ($2.48billion)andIRRF2($18.39billion).94 As of by track and program, as of December 31, 2010, see December31,2010,$346millionofobligatedfunds Table 2.4. had not been expended from the IRRF 2.95

Table 2.4 ESF: Status of Funds, by Track and Program $ Millions Status of Funds Quarterly Change Track Program Obligated Expended Obligated Expended

Security Community Stabilization Program 619.3 619.0 10.3 (2%) PRT/PRDC Projects 580.4 505.5 16.4 (3%) 19.3 (4%) Local Governance Program 435.5 396.3 48.2 (14%) Community Action Program 384.3 319.1 27.7 (10%) PRT Quick Response Fund 270.7 223.0 32.3 (14%) 37.9 (20%) Infrastructure Security Protection 194.7 188.1 1.4 (1%) Subtotal 2,485.0 2,251.0 48.7 (2%) 144.8 (7%)

Political Tatweer National Capacity Development 309.4 296.8 32.1 (12%) DemocracyandCivilSociety 260.6 168.6 15.1(6%) 24.7(17%) Iraqi Refugees 95.0 93.2 2.7 (3%) Economic Governance II, Policy and Regulatory Reforms 85.0 85.0 1.1 (1%) MinisterialCapacityDevelopment 37.7 34.5 -0.1(0%) 0.1(0%) Regime Crimes Liaison Office 28.5 28.0 Elections Support 13.9 13.8 Monitoring and Evaluation 8.5 5.1 1.3 (36%) Subtotal 838.7 725.1 15.1 (2%) 61.9 (9%)

Economic O&M Sustainment 275.2 273.4 0.7 (0%) 0.1 (0%) Inma Agribusiness Development 144.8 124.0 15.4 (14%) Tijara Provincial Economic Growth 117.8 74.9 20.0 (20%) 15.8 (27%) Targeted Development Program 60.4 41.1 -2.1 (-5%) Plant-Level Capacity Development & Technical Training 50.4 50.1 0.3 (1%) Izdihar Private Sector Development 32.8 31.8 0.5 (1%) FinancialSectorDevelopment 31.6 2.7 2.7 Subtotal 713.0 598.0 21.0 (3%) 32.3 (6%) Total 4,036.6 3,574.1 84.8 (2%) 239.1 (7%)

Note: Data not audited. Numbers affected by rounding.

Sources: U.S.Embassy-Baghdad,responsetoSIGIRdatacall,7/14/2010;USAID,responsestoSIGIRdatacalls,7/13/2010,1/10/2011,and1/11/2011;USACE,responses to SIGIR data calls, 10/6/2010 and 1/4/2011; NEA-I, responses to SIGIR data calls, 4/12/2010, 4/14/2010, 9/23/2010, 10/4/2010, 10/7/2010, 12/20/2010, 12/21/2010, 1/7/2011, and 1/10/2011.

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Table 2.5 IRRF: Status of Funds, by Appropriation and Sector $ Millions Status of Funds Quarterly Change Appropriation Sector Obligated Expended Obligated Expended

IRRF 1 Subtotal 2,227.7 2,227.7 -31.0 (-1%) -20.9 (-1%) IRRF 2 Security & Law Enforcement 4,929.0 4,892.8 0.2 (0%) Electric Sector 4,108.1 4,062.1 5.2 (0%) 3.4 (0%) Justice, Public Safety Infrastructure, & Civil Society 2,309.3 2,209.4 -3.3 (0%) 0.3 (0%) WaterResources&Sanitation 1,968.0 1,956.1 -0.2(0%) 5.5(0%) OilInfrastructure 1,604.2 1,593.1 -0.1(0%) 0.1(0%) Private Sector Development 860.0 830.0 Health Care 816.7 802.4 0.1 (0%) 0.3 (0%) Education, Refugees, Human Rights, Democracy, & Governance 519.5 447.6 Transportation & Telecommunications Projects 468.8 461.4 2.1 (0%) 6.1 (1%) Roads, Bridges, & Construction 280.5 274.5 1.2 (0%) 3.1 (1%) Administrative Expenses 219.5 217.9 ISPO Capacity Development 44.9 35.2 -0.6 (-1%) 3.0 (9%) Subtotal 18,128.4 17,782.4 4.8 (0%) 21.7 (0%) Total 20,356.0 20,010.0 -26.2 (0%) 0.8 (0%)

Note: Data not audited. Numbers affected by rounding.

Sources: NEA-I,responsetoSIGIRdatacall,12/28/2010;USAID,responsetoSIGIRdatacall,7/8/2010;U.S.Treasury,responsetoSIGIRdatacall,4/2/2009;USTDA,responsetoSIGIR datacall,4/2/2009;DoS,responsetoSIGIRdatacall,4/5/2007;OSD,responsetoSIGIRdatacall,4/10/2009;SIGIRAudit11-007,“IraqReliefandReconstructionFund1:Reporton Apportionments,Expenditures,andCancelledFunds,”12/28/2010.

The IRRF 1 was canceled on September 30, 2009, Commander’s Emergency fiveyearsaftertheendoftheperiodduringwhichit Response Program was permissible to make new obligations; conse- quently, there is no longer authority to obligate or Since 2004, the Congress has provided $3.99 billion expendanyfundsfromtheIRRF1.96 For a sum- totheCERPinIraqforthepurposeofenabling maryofSIGIR’sauditoftheIRRF1,releasedthis military commanders to respond to urgent quarter, see Section 5. humanitarian relief and reconstruction require- P.L. 109-234 and P.L. 110-28 extended the ments within their areas of responsibility.98 This period of obligation for some of the IRRF 2 until includes approximately $101 million provided by September 30, 2008. Consequently, some IRRF 2 the latest continuing appropriation for FY 2011.99 funds will remain available for expenditure until The Congress has not completed its consideration September 30, 2013.97 oftheAdministration’srequestfor$200millionin ForthestatusoftheIRRF,asofDecember31, CERPfundingforFY2011,buttheFY2011NDAA 2010, see Table 2.5. authorizes FY 2011 appropriations to the CERP in Iraqofupto$100million.100 For the second consecutive quarter, the Office of the Under Secretary of Defense (Comptroller) OUSD(C) has not provided aggregate, “top-line” CERP allocation, obligation, and expenditure data as of the end of the current fiscal-year quarter.

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Figure 2.7 December 30, 2010—91 days after the end of the CERP: Status of Funds, as of 9/30/2010 fiscal quarter.102 For details on the availability of $ Millions Unexpended Funds Total: $431.6 CERP data, see the discussion below. SIGIRisunabletoprovideacomplete“project- Appropriated $3,991.9 Obligated $3,675.3 Unexpended by-project” or “category-by-category” accounting Expended $3,560.4 Obligations 27% $115.0 of all CERP obligations and expenditures because USF-Ionlyprovidesupdatesonthestatusoffunds ataproject-andcategory-levelforthecurrent fiscal-year appropriation. USF-I does not provide 73% updatesonthestatusoffundstoSIGIRortothe Unobligated $316.6 Congress during the CERP’s reporting and outlay phase(thefive-yearperiodafteranappropriation expires for new obligations).103 ForthestatusoftheCERP,byprojectcategory, as of September 30, 2010, see Table 2.6. The table compares aggregate category-level data provided Note: Data not audited. Numbers affected by rounding. by USF-I through its quarterly CERP reports to Sources: P.L. 111-242; P.L. 111-290; P.L. 111-317; ABO, response to SIGIR data call, 12/6/2010. the Congress with the accurate top-line financial dataprovidedbytheArmyBudgetOffice(ABO). Consequently, SIGIR cannot provide the top-line Because USF-I does not track CERP appropriations SIGIR cannot statusoffundsfortheCERPasofDecember31, through their entire reporting and outlay phase, its provide the top-line 2010,asitcanwithallothermajorU.S.funds. reports overstate or understate actual obligations status of funds for As of September 30, 2010, $115 million of obligated andexpendituresforeachfiscal-yearappropriation. the CERP as of CERP funds had not been expended. An additional December 31, 2010. $215 million had not been obligated from the FY 2004– Incomplete CERP Program FY2010appropriations,butthisentireamounthas Management Data expired. The only CERP funding available for obliga- There are three primary sources of CERP data, tion is the approximately $101 million provided by each with a weakness that makes it insufficient for the latest continuing appropriation for FY 2011.101 enabling SIGIR to provide a complete and accu- ForthestatusoftheCERP,includingabreak- rate “project-by-project” or “category-by-category” down of unexpended obligations, as of September accounting of the CERP: 30, 2010, see Figure 2.7. For a summary of SIGIR’s • TheArmyBudgetOfficeprovidestop-linedata audit of the CERP status of funds, released this that aggregates financial data from every CERP quarter, see Section 5. fiscal-yearappropriation.Attheaggregatelevel, it is the most complete and accurate source of CERP Quarterly Obligations CERPdata.However,itdoesnotprovideproject- and Expenditures or category-level data. The most current project- and category-level CERP • TheIraqReconstructionManagementSystem data available from USF-I is one quarter old because (IRMS)providedcurrentdataonaproject-level USF-IandOUSD(C)donotprovideinformation fromallfiscal-yearappropriations(untilitwas in time to meet SIGIR’s deadline to report to the shut down in September 2010). Its usefulness Congresswithin30daysoftheendofthequarter. was limited because USF-I did not update all OUSD(C) submitted its quarterly CERP report to projects; but among the available sources, it the Congress for the fourth quarter of FY 2010 on came closest to providing complete data.

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Table 2.6 CERP:StatusofFunds,byProjectCategory,asof9/30/2010 $ Millions Status of Funds Quarterly Change Project Category/Fiscal Year Obligated Expended Obligated Expended

StatusofFunds, Water&Sanitation 661.9 216.0 13.8(2%) 8.4(4%) by Project Category, Protective Measures 489.1 266.8 1.1 (0%) 0.8 (0%) According to Electricity 441.3 131.1 8.1(2%) 5.5(4%) the USF-I CERP Project Tracker Education 424.6 175.8 8.6 (2%) 6.8 (4%) Transportation 383.8 147.6 3.6 (1%) 2.5 (2%) Civic Cleanup Activities 239.2 115.8 1.6 (1%) 1.5 (1%) Other Urgent Humanitarian or Reconstruction Projects 216.8 81.2 3.6 (2%) 3.0 (4%) Agriculture 206.4 74.0 6.8 (3%) 5.3 (8%) Economic, Financial, and Management Improvements 181.3 75.4 14.8 (9%) 6.7 (10%) Health Care 149.5 58.7 3.8 (3%) 3.5 (6%) RuleofLaw&Governance 93.0 43.6 1.3(1%) 1.7(4%) Civic Infrastructure Repair 67.5 23.9 Repair of Civic & Cultural Facilities 62.6 27.1 2.9 (5%) 0.3 (1%) Civic Support Vehicles 54.0 29.2 5.8 (12%) 3.1 (12%) Condolence Payments 50.7 35.4 0.1 (0%) 0.1 (0%) Telecommunications 39.6 10.1 Temporary Contract Guards for Critical Infrastructure 35.6 35.3 0.1 (0%) Non-FMR 27.5 0.0 Battle Damage Repair 23.7 17.8 0.1 (0%) 0.1 (1%) TFBSO 22.5 13.9 22.5 13.9 Food Production & Distribution 20.8 7.8 0.2 (1%) 0.6 (9%) Detainee Payments 1.0 0.6 Iraqi Hero Payments 0.7 0.7 0.0 (4%) 0.0 (5%) Subtotal 3,893.0 1,587.7 98.7 (3%) 63.9 (4%) Difference FY 2004 -5.8 133.6 between ABO Financial Data FY 2005 -49.2 404.4 0.1 (0%) 0.2 (0%) and USF-I CERP FY 2006 136.6 498.6 -0.5 (0%) 0.3 (0%) Project Tracker, by Fiscal Year FY 2007 -180.5 324.0 -0.4 (0%) FY 2008 -88.5 512.4 -0.3 (0%) 1.1 (0%) FY 2009 -7.7 113.6 -1.2 (18%) 6.9 (6%) FY 2010 -22.5 -13.9 -22.5 -13.9 Subtotal -217.6 1,972.7 -24.8 (13%) -5.4 (0%) Total, According to ABO Financial Data 3,675.3 3,560.4 73.9 (2%) 58.5 (2%)

Note: Data not audited. Numbers affected by rounding. Table compares project category totals from the USF-I CERP Project Tracker with financial data from ABO, by fiscal year. Project CategoriesreportedintheUSF-ICERPProjectTrackerwereinconsistentacrossfiscalyears,butmostaberrationscouldbematchedwithaProjectCategoryprovidedforintheDoDFMR. ProjectCategoriesreportedbyUSF-IthatcouldnotbematchedtoaProjectCategoryprovidedforintheDoDFMRwereclassifiedas“Non-FMR”inthistable.“TFBSO”isnotaProject Category provided for in the DoD FMR, but DoD reported significant obligations under this heading this quarter.

Sources: ABO,responsestoSIGIRdatacalls,10/4/2010,10/8/2010,12/6/2010,and12/22/2010.

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• The CERP Project Tracker is a spreadsheet-based description,startandcompletiondates,location, system used by USF-I for congressional report- and project category. However, SIGIR has discov- ing. According to USF-I, it includes complete ered two potentially unresolvable obstacles while project-andcategory-leveldata,butonlyforthe trying to create a new database:105 current fiscal-year appropriation. • Prior to FY 2008, USF-I did not consistently include the DRN in its CERP Project Tracker, For details on the respective coverage of the three makingitimpossibletouseABOdatatotrack CERP data sources, see Figure 2.8. individual projects to completion for FY 2004– DoD has acknowledged SIGIR’s concerns about FY 2007 CERP appropriations. incomplete project- and category-level data, and • For FY 2008–FY 2010 CERP appropriations, some DoD has has reportedly taken steps to overcome these projects (mostly CERP microgrants) are bundled acknowledged limitationsinAfghanistanthroughuseofthe underasingleDRN,makingitimpossibleto SIGIR’s concerns Combined Information Data Network Exchange distinguishwhichspecificprojectsorgrantsunder about incomplete (CIDNE) for CERP data management. According thatDRNhavebeenpaidoutorcanceled. project- and category- to DoD, CIDNE provides program-management level data, and has data for the current and prior-year CERP appropri- As of now, the ABO financial data cannot be reportedly taken ations as well as existing financial data systems— readily or completely matched to individual project steps to overcome specifically, the Army Standard Financial System data provided by USF-I or, therefore, to project these limitations in (STANFINS) and Resource Management Tool categories defined by DoD’s Financial Management Afghanistan. (RMT).However,CIDNEalsocontainssensitive Regulation (FMR). SIGIR will continue working data and is therefore classified as secret. According with ABO to resolve these problems. If successful, to DoD, the data management solution in Afghani- SIGIRwillusethisnewdatabasetoreplacethe stanwill,therefore,alsoinvolveadatabasesystem IRMS as SIGIR’s data set of record for the CERP called INDURE, which will contain unclassified ataprojectandcategorylevel. data from CIDNE, thereby avoiding obstacles to oversight caused by data inaccessibility.104 CERP Used To Support TFBSO Projects SIGIRhasusedtheIRMStoprovideCERP On September 29, 2010, one day before the end of project-levelandcategory-leveldataforitsQuar- the fiscal year, the Deputy Secretary of Defense no- terly Reports, including the Insert of this Report. tifiedtheCongressofwaiversheissuedtousethe However, because the IRMS was shut down in CERP to fund three DoD Task Force for Business September 2010, it can no longer serve this func- and Stability Operations (TFBSO) projects in ex- tion.Overthepasttwoquarters,ABOhasworked cess of $2 million each. The projects had originally cooperatively with SIGIR to match the complete been funded by U.S. Army Operation and Mainte- financial data it provides to the abbreviated pro- nance funds, but DoD determined it was improper gram-management data that USF-I provides. This to do so and adjusted its accounts to charge these could conceivably yield a complete data set that is contractstotheCERP.106 both accurate at the aggregate level and detailed at ThisisthefirsttimethatTFBSOhasreceived the project- and category-level. CERPfundingtosupportitsactivities.Asrecently Building an accurate and complete CERP as July 2010, TFBSO reported to SIGIR that it had database necessitates matching financial records no intention of using the CERP. According to provided by ABO—which contain only obligations USF-I,TFBSOprojectsfundedbytheCERPwere or expenditures denoted by a unique Document coordinated directly between TFBSO and OSD. Reference Number (DRN)—to the CERP Project USF-I did not manage or account for any CERP Tracker, which includes such details as a project fundsusedforTFBSOprojectsinIraq.Asaresult,

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Figure 2.8 Comparison of the Reporting of CERP Obligations and Expenditures by IRMS, ABO, and the USF-I CERP Project Tracker, by Fiscal-Year Appropriation and Quarter

Reporting 2006 2007 2008 Period 2004 2005 Regular and Regular and Regular and 2009 2010 (FY) Supplemental Regular Supplemental Supplemental Supplemental Regular Supplemental

2004 Q1 Iraq Reconstruction ABO Top-line USF-I CERP Q2 Management System Project Tracker Circles are scaled to Q3 = $1 Billion Unexpended indicate the cumulative Obligations obligations reported for Q4 the quarter Expenditures

2005 Q1

Q2 The USF-I CERP Project Q3 Tracker updates only through the end of Q4 the respective FY

2006 Q1

Q2

Q3

Q4

2007 Q1

Q2

Q3

Q4

2008 Q1

Q2

Q3

Q4

2009 Q1

Q2

The IRMS was Q3 shut down in September 2010 Q4

2010 Q1

Q2

Q3

Q4

Note: Data not audited.

Sources: IRMS, Global Benchmark, 9/3/2010; ABO, responses to SIGIR data calls, 10/4/2010, 10/8/2010, 12/6/2010, and 12/22/2010.

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Table 2.7 CERP-fundedTFBSOProjectsinIraq,asReportedintheUSF-ICERPProjectTracker $ Millions Date Obligated Description Location Obligated Expended

11/6/2009 The USGS has conducted a series of multidisciplinary activities to develop information Nationwide 9.84 3.24 and tools that can be used to promote opportunities for business development in the natural resource sectors of Iraq. The work focused on assessing the nonfuel mineral and waterresourcesofIraq,ondevelopinganagrometeorologicalnetwork(Agromet)andon establishinganationalspatialdatainfrastructure(NSDI). 12/22/2009 GrantThornton—providessupportservicestotheGovernmentofIraqMinistryof Nationwide 9.12 8.37 Industry and Minerals to assist in the restructuring of its legal directorate and policies IAW internationalbestpracticelawsandadvisesthegovernmentontherevitalizationeffort. 1/26/2010 The purpose of the Iraq Graduate Studies Program is to provide graduate level training Baghdad, 1.00 0.00 to future leaders in Iraq’s agricultural industry—in science, management, extension, and Erbil, Babylon, policy.TheseleaderswillreturntoIraqtoensuresustainabilityandlong-termsuccess Tameem, ofMNF-I,TFBSO,PRTandotheragriculturaldevelopmentandsustainabilityinitiatives. Anbar, Najaf, Students were selected from multiple provinces. Kerbala 3/1/2010 Price, Waterhouse, Coopers—investment support to the Iraqi National Investment Baghdad 2.49 2.26 CommissiontoassistinthedevelopmentoftheeconomybypartneringAmericanand International businesses with Iraqi business officials. 9/30/2010 Estimatedtotals,correctedafter9/30/2010 Baghdad 0.05 0.00 Total 22.45 13.87

Note: Data not audited. Numbers affected by rounding.

Sources: USF-I,responsetoSIGIRdatacall,1/7/2011;DoD,CMC,responsetoSIGIRdatacall,1/13/2011.

noTFBSOprojectsfundedbytheCERParerefer- theFY2011NDAArepealsthelanguagecitedby enced in the USF-I Commanders’ CERP Narratives theDoDtopermitCERPtobeusedforTFBSO. that are reported to the Congress.107 TFBSOreportedthatitsoperationswillceaseon TwooftheTFBSOprojects,worth$9.8million January31,2011,butdidnotprovideinformation and$9.1million,areamongthetenlargestprojects regardingwhatagencywillmanagetheselarge ever funded by the CERP in Iraq. In total, $22.45 mil- CERP-fundedprojectsatthattime.110 lion(9%)oftheFY2010CERPappropriationwasused to support TFBSO activities in Iraq.108 For details on each of these projects, see Table 2.7. Smaller Funds According to the notification letter, DoD “should have requested specific authorization for The Congress has appropriated or otherwise made TFBSOprojectsinFY2010.”AlthoughtheDoD available nearly $7.63 billion in smaller funding “would strongly prefer not to use CERP funds to streamsforIraqreconstruction.SIGIRhasclassi- pay for TFBSO activities,” the notification letter fiedthemintothreecategories:111 assertsthatCERPwastheonlyavailablesourceof • Other Assistance Programs—$4.03 billion The notification letter funding for those projects. The notification letter • Reconstruction-related Operating asserts that CERP was also notes that DoD has sought the appropriate au- Expenses—$3.29 billion the only available thorities for FY 2011 and stopgap authority in the • Reconstruction Oversight—$310 million source of funding for ContinuingResolution,and“if[DoD]doesnotre- those projects. ceive the authority, [it] will be forced to select one As of December 31, 2010, at least $4.78 billion oftwooptions,bothundesirable:shutdownthe (63%) of these funds had been obligated, and at operations of the TFBSO or continue to fund por- least $4.50 billion (59%) had been expended.112 For tionsoftheTaskForceusingCERP.”109 However, details on the status of funds, see Table 2.1.◆

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IRAQI FUNDING

As of December 31, 2010, Iraq had provided 2009 oil receipts,118 andjustoverthe$47.91billion $110.25billionforreliefandreconstruction projected in the 2010 GOI budget.119 throughIraqifundingfromtheCPAeraandits Overthecourseof2010,Iraqhasreceivedan annual capital budgets.113 average of $74.57 per barrel of oil exported,120 well abovethepriceof$62.50perbarrelusedtoproject Iraqi oil revenues for 2010.121 However, during 2010, 2011 Iraqi Budget Iraq’sexportvolumewas10%lessthanprojected.122 For details, see Figure 2.9.◆ On November 30, 2010, the Iraqi Council of Min- isters (CoM) approved the draft 2011 GOI budget. Figure 2.9 The draft budget projects $67.27 billion in revenue, Monthly Oil Price, Exports, and Revenue vs. 2010 GOI Budget Projections based mostly on an estimated oil price of $73.00 Monthly Oil Price and Exports vs. Budget Projection perbarrelandanestimatedexportrateof2.25mil- $85.00 3.0 lion barrels per day (MBPD).114 Thisisanincrease of $10.50 (17%) per barrel in price and 0.15 MBPD $80.00 2.8 (7%) in export volume over the estimates used to $75.00 2.6 xot (MBPD) Exports projectthe2010GOIbudget.115 $70.00 Price 2.4 The draft budget projects $79.47 billion in expen- ditures, leaving a projected deficit of $12.20 billion. $65.00 Budget Projection 2.2

Accordingtothedraftbudget,thisdeficitwillbe Price per Barrel ($US) $60.00 2.1MBPD at $62.50/barrel 2.0 covered by unspent 2010 budget allocations and $55.00 1.8 from internal and external borrowing. Accordingly, Exports $50.00 1.6 thedraftbudgetauthorizestheMinisterofFinance JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC to borrow $4.5 billion from the International Mon- Monthly Oil Receipts vs. Budget Projection etaryFund(IMF),$2.0billionfromtheWorldBank, $ Billions $1.8billioninSpecialDrawingRights(SDR)fromthe $5.00

IMF, and an undefined amount of domestic treasury $4.75 transfers. In addition, the draft budget notes that a $4.50 Revenue $500millionloanfromthe“BritishOilCompany” will also be used to help cover the deficit.116 $4.25 Budget Projection The GOI’s draft budget broadly categorizes expen- $4.00

ditures as those related to operations ($54.72 billion) $3.75 and capital investment ($24.75 billion).117 For details Receipts $3.50 onGOIbudgetallocations,seeTable2.8. $3.25

$3.00 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC GOIRevenuefor2010 Note: Data not audited. Numbers affected by rounding. Not all oil export revenue accrues to the GOI; 5% is paid in war reparations to Kuwait, which accounts for the difference between the Receipts and Revenue lines in this chart.

In2010,theGOIreceived$48.83billioninoil Sources: U.S. Treasury, response to SIGIR data call, 1/4/2011; GOI, CoR, “Federal Public Budget Law for the Fiscal receipts,32%morethanthe$37.02billionin Year 2010,” 1/27/2010.

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Table 2.8 2011 Iraqi Budget Allocations, with Changes from 2010 and 2009 $ Millions 2011 Budget Allocations Total Allocation, Change From: 2010 2009 Category Ministry Operating Capital Total -60% -40% -20% 0% 20% 40% 60% 80% 100%

Republic Presidency Subtotal 69.6 10.1 79.7 Council of Council of Representatives 247.7 247.7 Representatives Board of Supreme Audit 57.1 3.0 60.1 Commission on Integrity 28.9 0.5 29.3 Other 117.4 117.4 Subtotal 451.0 3.5 454.5 Council of Ministries Prime Minister and Secretariat 389.2 56.3 445.6 Institution of the Martyrs 276.8 196.2 472.9 Endowments 404.3 76.1 480.3 Iraqi National Intelligence Service 140.8 34.3 175.1

Joint Staff and National Security Council 66.7 1.3 68.0 447% Militia Disarm./Integration Directorate 195.5 195.5 Other 47.5 1.8 49.4 Subtotal 1,520.8 366.0 1,886.8 Ministries Finance 11,887.2 1,003.8 12,891.0 Oil 2,047.4 5,940.2 7,987.6 148% Interior 6,146.0 167.4 6,313.4 Electricity 2,400.1 3,197.9 5,598.1 Defense 5,348.8 170.9 5,519.7 Education 5,033.5 341.9 5,375.3 Health 3,993.5 854.7 4,848.2 Commerce 3,028.8 34.2 3,063.0 Higher Education and Scientific Research 1,700.8 299.3 2,000.1 Municipalities and Public Works 727.3 957.9 1,685.3 Water Resources 199.9 1,137.9 1,337.8 Agriculture 766.6 192.1 958.7 101% Housing and Construction 233.6 658.1 891.7 285% Labor and Social Affairs 867.9 15.4 883.2 Youth and Sports 77.8 652.5 730.3 405% Industry and Minerals 99.1 551.0 650.1 Foreign Affairs 309.0 232.4 541.4 Transportation 252.8 285.2 538.0 Justice 382.5 11.5 394.0 Other 695.0 312.0 1,007.0 Subtotal 46,197.7 17,016.2 63,213.9 Independent Offices Local Councils in the Provinces 113.8 113.8 General Management in the Provinces 325.8 3,691.1 4,016.9 Investment Commissions in the Provinces 22.1 22.1 Independent High Electoral Commission 159.1 5.8 164.9 Iraqi Criminal Court 25.2 25.2 Securities Commission 3.2 3.2 Subtotal 649.1 3,696.9 4,346.0 Higher Judicial Council Subtotal 263.1 14.7 277.8 Kurdistan Region Subtotal 5,568.9 3,643.0 9,211.9 Total 54,720.2 24,750.4 79,470.6

Note: Data not audited. Numbers affected by rounding.

Sources: GOI, CoM, “Draft Law of the Republic of Iraq (GOI) Federal Budget for the 2011 Financial Year,” 11/30/2010; GOI, Presidential Council, “Federal Public Budget Law for the Fiscal Year 2010,” 2/10/2010; U.S. Treasury, response to SIGIR data call, 4/9/2009.

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INTERNATIONAL SUPPORT

As of December 31, 2010, international donors other amountsfrombothSweden($102million)andItaly than the United States had committed $13.01 billion ($133 million). Iran increased its commitments by forthereliefandreconstructionofIraq:$6.51bil- $50 million during the quarter.125 lion in grant assistance and $6.50 billion in loans. As of December 31, 2010, international donors This quarter, total commitments increased ap- hadpledged$18.02billion:$5.26billioningrant proximately $1.00 billion (8%).123 On October 1, 2010, assistance and $12.77 billion in loans.126 As of the IMF completed the first review of Iraq’s economic December 31, 2010, commitments totaled 72% of performance under the IMF’s 24-month Stand-By pledges, up from 66% of pledges last quarter, but Arrangement with Iraq, making an additional thepercentagevariedconsiderablyamongdonors. $741 million available for disbursement.124 Also con- Some donors, notably in the Middle East, have tributing to the increase were the announcement of committed far less than they pledged.127 theEuropeanCommission’sIraqassistancebudgetof For a breakdown of pledges and commitments, $124millionaswellasupwardrevisionsofassistance by type of assistance and donor, see Figure 2.10.◆

Figure 2.10 International Grants and Loans, by Type of Assistance, Status, and Donor $ Billions Loans Grants $4 $3 $2 $1 $0 $0 $1 $2

3.28 Japan 1.21 3.50 1.41 0.84 EU 0.24 0.68 UK 0.83 0.15 Italy 0.46 0.53 0.24 Status, by Donor Korea 0.20 Bilateral Multilateral Total 0.10 0.30 Canada 0.14 Committed 8.60 4.42 13.01 0.23 0.13 Pledged 10.88 7.14 18.02 Kuwait 0.50 0.11 Spain Status, by Type 0.24 0.09 Saudi Arabia Loans Grants Total 0.50 0.50 UAE 0.08 Committed 6.50 6.51 13.01 0.22 0.50 Iran Pledged 12.77 5.26 18.02 1.00 All Other 0.72 Bilateral 0.55 IRFFI 1.85

1.67 IMF 3.64 0.90 World Bank 3.00 Islamic 0.50 Development Bank

Note: Data not audited. Numbers affected by rounding. Bilateral commitments exclude IRFFI deposits. Amounts may differ from prior quarters due to changes in foreign exchange rates.

Sources: NEA-I, responses to SIGIR data call, 1/5/2011 and 1/13/2011. 36 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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The U.S. Presence in 2011 38

Contracting 44

Special Feature: Focus on Basrah 45 3section

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THE U.S. PRESENCE IN 2011

This quarter, Ambassador James Jeffrey continued to lead U.S. reconstruction and diplomatic efforts as the U.S. Chief of Mission in Iraq. As of December 31, 2010, there were approximately 910 civilian employees and5,273contractorssupportingU.S.Embassyactivi- ties in Iraq.128 An additional 3,934 contractors sup- ported U.S. Agency for International Development (USAID) activities.129 FordetailsonU.S.Embassy- Baghdad activities, staffing, and life support, see the Embassy and Contracting subsections below. “Build”isoneofthefourUSF-IprioritiesunderOperationNew AsofJanuary1,2011,therewere49,712U.S. Dawn. (USF-I photo) troops in Iraq under the command of General Lloyd Austin.130 As of November 30, 2010, 72,663 substantive staff—including political, economic, contractors supported Department of Defense public affairs, consular, and management offi- (DoD)activitiesinIraq.131 cers—to support ongoing activities. In addition, the Trooplevelsarevirtuallyunchangedfromlast Department of State (DoS) Bureau of International quarter, and the Administration anticipates a Narcotics and Law Enforcement Affairs (INL) comparableforcestrengthformostoftheduration will implement its planned Police Development of Operation New Dawn—the United States’ post- Program(PDP),andtheplannedOfficeofSecurity combat mission that began on August 31, 2010— Cooperation-Iraq (OSC-I) will implement a For- untilitdeclinesbeforethedeadlineforwithdrawal eignMilitarySales(FMS)program.134 ofallU.S.troopsonDecember31,2011.132 Of the 910 total U.S. government civilian employ- eesatU.S.Embassy-Baghdad,itisunclearhow many support reconstruction activities. Accord- U.S. Embassy-Baghdad: ingtoU.S.Embassy-Baghdad,therewereonly10 BuildingCapacityToSustain such employees supporting reconstruction efforts The Embassy’s newly the Assistance Program as of December 31, 2010—all of whom worked in restrictive definition theIraqStrategicPartnershipOffice(ISPO).The of “reconstruction” U.S. Embassy-Baghdad continues to consolidate Embassy’s newly restrictive definition of “recon- excludes programs implemented by the reconstruction activities and attempt to “normal- struction” excludes programs implemented by the PRTs, INL, USAID, ize” operations in Iraq. According to U.S. Embassy- PRTs,INL,USAID,andotheroffices,agencies,and and other offices, Baghdad, administration of the Economic Support bureaus that use foreign assistance funds under agencies, and Fund (ESF) and other reconstruction assistance the oversight jurisdiction of SIGIR. However, the bureaus that use will be performed at U.S. Embassy-Baghdad and Embassy said that there were “many other” U.S. foreign assistance its Embassy Branch Offices (EBOs) and Consul- government civilian employees supporting “tradi- funds under the ates General, as well as in Washington, D.C., after tional” assistance programs.135 oversight jurisdiction theProvincialReconstructionTeams(PRTs)shut Other elements of the U.S. Mission will provide of SIGIR. down in September 2011.133 to the EBOs and Consulates General overarch- AccordingtoU.S.Embassy-Baghdad,each ingandessentialdirectsupportintheareasof oftheEBOsandConsulatesGeneralwillhavea life support/medical, security, communications,

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and aviation.136 Forexample,accordingtoINL, Current plans call for a core staff of 157 full- armored, diplomatic-licensed vehicles will be pro- time personnel to provide overall management at vided under the latest iteration of the U.S. Army’s OSC-I: 118 military personnel, 9 U.S. government Logistics Civil Augmentation Program contract civilians,and30locallyemployedstaff.Security (LOGCAP IV) to support its PDP. Currently, INL Assistance Teams (SATs) will supplement the core has 72 vehicles, but expects this number to grow staff as required to provide advice, training, techni- to more than 150 by July 2011. Each will have digi- calassistance,andsupport.U.S.military,DoD tal communications capability, tracking devices, civilian,andcontractorpersonnelwillbedeployed and electronic countermeasures equipment.137 in SATs on a temporary basis to support specific FMS agreements to acquire defense articles and servicesthattheU.S.governmentproposestosell Office of Security or provide. U.S. Embassy-Baghdad anticipates that Cooperation-Iraq there could be approximately 750 SAT members in Iraq at the beginning of 2012, depending on the Thisquarter,USF-Icontinuedpreparations status of current and future FMS cases.140 for the establishment of OSC-I with the assis- Current plans also call for OSC-I to base tanceofthePolitical-MilitarysectionatU.S. securityassistanceactivitiesatfivelocations OSC-I is scheduled to Embassy-Baghdad. OSC-I is scheduled to assume near Iraqi military sites: Baghdad, Tikrit, Umm assume responsibility responsibility for security assistance oversight from Qasr(IraqiNavy),Taji(IraqiNationalLogistics for security assistance USF-I on October 1, 2011, and become a section Center and Iraqi Army), and Besmaya (Iraqi oversight from USF-I within U.S. Embassy-Baghdad under Chief of Army Training Center). SAT personnel may be on October 1, 2011. Mission authority.138 stationed at other locations according to FMS The overall purpose of OSC-I is to carry out the case-implementation requirements.141 securityassistancemissioninIraqasauthorizedby theForeignAssistanceActandtheArmsExport Control Act. According to U.S. Embassy-Baghdad, ISPO theseactivitiesinclude:139 • providing interface for exchange of information AccordingtoU.S.Embassy-Baghdad,ISPOcon- and advice between the Iraqi military, the U.S. tinued regular project monitoring, dialogue, and Embassy, and DoD components responsible for assistance efforts this quarter. As of December 31, security-assistance programs, including promo- 2010, ISPO was staffed by 10 U.S. civilian employ- tion of standardization, interoperability, and ees and 2 embedded U.S. military officers.142 other cooperative measures This quarter, ISPO conducted site visits to • evaluating Iraqi ability to employ and maintain twoconstructionprojectsthatarewellbehind security-related equipment and assistance their original schedules: the ESF-funded Missan • performing programming, planning, manage- Surgical Hospital, and the al-Mamoon Exchange ment, and implementation functions related andTelecommunicationsCenter,fundedbythe to FMS, the Foreign Military Finance (FMF) Iraq Relief and Reconstruction Fund (IRRF). program, the International Military Education Re-awards were made for the Missan Carriageway andTraining(IMET)program,jointexercise and the Wazareah National Electrical Training planning, and other forms of bilateral military Center.Noprojectswerede-scopedorcanceled.143 engagement Also this quarter, 22 projects managed by ISPO, worthnearly$75million,werecompleted.144 For details, see Table 3.1.

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Table 3.1 ISPO-managedProjectsCompletedThisQuarter Completion Contract Fund Project Location Start Date Date Amount ($) ESF ESF Establish Sanitation Network Alabbas Basrah 5/2/2009 11/30/2010 11,152,324

IntgrtdO&MProgramDokan-SulH²O Ntwrk Sulaymaniyah 12/26/2008 9/8/2010 4,710,000 ESF PRDC Babil Water & Sewer Master Plan Babylon 3/31/2009 9/19/2010 4,113,287 ESF Elec Engineering College Bldg, Kufa Najaf 11/12/2008 10/30/2010 3,455,250 ESFMAK33/11kVSubstation Missan 11/9/2009 10/4/2010 2,898,000 Procure Equip-Mussaib PP Fuel Babylon 5/3/2010 9/20/2010 2,714,190 Nasiriyah Slaughterhouse Rehab Thi-Qar 2/13/2009 10/15/2010 2,646,015 ESFAlSemood12CRSecondarySchool Kerbala 4/2/2009 11/27/2010 1,296,500 ESFAliBenAl-Swaid12CRPrimarySchool Thi-Qar 8/9/2009 10/15/2010 1,095,500 SoranSchoolTwo(AR) Erbil 4/15/2009 9/22/2010 963,000 SoranSchoolOne(AR) Erbil 4/15/2009 9/22/2010 963,000 ESF Al Jahel–Al Shatray Water Supply Thi-Qar 6/14/2008 11/27/2010 749,100 ESFAlEiShan50m³/hrWCU Thi-Qar 11/25/2008 11/27/2010 521,375 ESF Al Ayya Al Garraf Water Supply Thi-Qar 10/15/2008 11/27/2010 464,875 ESFAlNikhalia&AlNasirWaterProject Thi-Qar 10/22/2008 11/27/2010 464,875 Subtotal 38,207,291 IRRF Al Mamoon Exchange & TC Center Baghdad 12/26/2005 10/28/2010 14,102,957 Al Sharqat Bridge Salah Al-Din 6/16/2005 9/30/2010 7,953,796 Baghdad-Kirkuk Carriageway South Diyala 10/25/2005 9/30/2010 7,845,611 Replace26ElevatorsandRepair Nationwide 10/1/2006 10/17/2010 2,983,000 Fallujah Sewer Project Re-Award Anbar 3/12/2010 9/22/2010 1,877,200 Replace 13 Elevators Repair 11 Nationwide 10/1/2006 10/17/2010 1,792,600 Fallujah WWTP Facilities Anbar 12/13/2008 9/11/2010 108,308 Subtotal 36,663,473 Total 74,870,764

Note: Data not audited. Project costs and completion dates are not entirely consistent with data reported directly by USACE and used in the Public ServicessubsectionofthisQuarterlyReport.

Source: U.S.Embassy-Baghdad,ISPO,responsetoSIGIRdatacall,1/4/2011. As of December 31, 2010, there were 89 ongoing ISPO and are included in Table 3.1). As of Decem- ISPO-managed projects valued at $416 million. Of ber31,2010,therewere152ongoingUSACE- those ongoing projects, 25 projects with a combined implemented projects, valued at $535 million. Of cost of $236 million had previously been scheduled those projects, 110 projects with a combined cost for completion on or before December 31, 2010.145 of $419 million had been originally scheduled for completion on or before December 31, 2010.146 AsUSACEpreparestoclosedownitsoperations USACE in Iraq, it has continued to manage two nationwide sustainment programs designed to train Iraqis to Thisquarter,theU.S.ArmyCorpsofEngineers operate and manage U.S.-funded water, sanitation, (USACE) completed 63 projects at a cost of nearly andotherprojects:a$2.6millionESF-fundedseg- $227 million (some of which were managed by ment of a $4.8 million project to train professional

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Iraqi engineers and a $245,000 ESF-funded seg- Currently,PDPplanningcallsforreducednum- ment of a $5.6 million nationwide project to bers of advisors and more limited geographic reach provide one-on-one mentoring to Iraqi engineers. than originally envisioned, due to refined require- ThegoalistotrainIraqissothattheGOIisableto ments and costs as well as limited availability of benefit from U.S. government projects following funds.INLreportedthatthesecutswillnotaffect their completion and transfer to GOI control. Both theoverallmissionorgoalsofitsprogram,but sustainment programs are scheduled for comple- progress may be slowed. For the PDP implementa- tion in March 2011. tion time line, see Figure 3.1.

Basing, Staffing, and Life Support Despite the program Transitioning to the INL Police AccordingtoINL,thePDPwillincludeanesti- being smaller than Development Program mated 190 police and subject-matter expert advi- originally envisioned, sors based in three cities:148 INL maintains that the AccordingtoU.S.Embassy-Baghdad,planning • Baghdad, at a stand-alone facility on the program will continue is underway for the INL’s Police Development grounds of Joint Security Station (JSS) Shield to have a broad Program. Once up and running, the PDP will be • Basrah, co-located with the proposed Consulate geographic and theprimarymeansbywhichtheUnitedStates • Erbil,co-locatedwithU.S.Embassy-Baghdad’s functional reach. provides assistance to the Iraqi police. According to aviation personnel INL,theprogramwillseektodevelopthecapa- bilities of the Iraqi Ministry of Interior (MOI) to U.S.Embassy-Baghdadwillmanageallsecurity, manageandsustainafullrangeofinternalsecurity logistics, and life-support contracts at all locations, operations, including:147 with INL paying for its share of services. Currently, • continued development of law enforcement INLdoesnotplantobaseanyPDPpersonnelatthe institutions and personnel by developing EBOs,butmayusetheEBOsinKirkukandMosul leadership and management capacity as potential rotary-wing landing areas. The PDP • enhancing community policing and may also be supported by Quick Reaction Forces specialized skills outoftheEBOsifneeded.149 • strengthening border enforcement and cultivat- Despite the program being smaller than ing sustainable training systems originally envisioned, INL maintains that the program will continue to have a broad geographic and functional reach. According to INL, advisors Figure 3.1 will implement the program at 28 proposed sites Police Development Program: Implementation Time Line locatedin10ofIraq’s18provinces.Mostsitevisits 2010 2011 will be conducted by ground travel, but INL plans to have 12 helicopters—nine UH-1Ns in Erbil Full PSD capability and three S-61s in Baghdad—to provide aviation Special security equipment INL police facilities Remaining advisors orders commence under construction deployed service to those sites that are most effectively and safely reached by air from the hub locations.150

S-61 (medium lift) U.S. government direct-hire Static security guard helicopters ordered management staff deployed force in place Coordination between USF-I and INL Initial Private Security Detail (PSD) capability PDP at operational In anticipation of the complete withdrawal of U.S. for movement security capability

DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC forces in December 2011, USF-I and INL regularly meet to coordinate implementation of the ongoing : DoS, INL, response to SIGIR data call, 1/5/2011. Source USF-Ipolicetrainingprogramandtoplanforthe

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follow-on INL program. In addition, USF-I has a Figure 3.2 full-time military liaison officer in INL’s Baghdad Provincial Reconstruction Team Footprint, as of 12/31/2010 office,andINLhasdeployedfivepersonneltoserve as representatives on USF-I’s ITAM staff. Dahuk Indications of Iraqi Buy-In AccordingtoINL,theMOI’scurrenttraining Erbil Ninewa curriculum meets international policing standards. Itincludesmorethan400coursesconductedby Tameem Sulaymaniyah Iraqi police professionals throughout the country at Police Colleges and Regional Training Centers.151 Salah Al-Din AccordingtoU.S.Embassy-Baghdad,thePDP Baghdad will complement the MOI’s training program by emphasizing “train-the-trainer” activities so that Diyala theMOIcanmaintainitsownspecializedtraining Anbar capability when the PDP ends.152 Kerbala Babylon Wassit

U.S.Embassy-BaghdadreportsthatMOIofficials Qadissiya are“inaccord”withthePDP’smissiontomove Missan Thi-Qar beyond basic-level training and force generation—the Najaf focus of U.S. efforts to date—to a program that helps RRT 1 Basrah produce a “broad upper level police cadre.” The Iraqi PRT 15 Total 16 Muthanna Minister of Interior has reportedly endorsed the Forward Presences 7 PDPandwelcomedtheuseofthecurrentJSSShield site to carry out PDP activities. Further support, accordingtoU.S.Embassy-Baghdad,comesfrom

“all levels” of the MOI, including deputy minis- Source: U.S. Embassy-Baghdad, OPA, response to SIGIR data call, 1/4/2011. ters, directors general, provincial chiefs of police, uniformed police, career civilian professionals, and AccordingtoU.S.Embassy-Baghdad,thePRT top-level policy advisors, as well as members of the closure schedule has not been finalized. PRT staff From June to Iraqi Council of Representatives.153 However, some will gradually decrease in the coming months in September 2011, U.S. MOI officials have expressed concern to SIGIR that anticipation of formal closure, but will be “adequately Embassy-Baghdad urgently needed criminal investigative training has staffed”throughtheenddate.156 plans to close 12 PRTs. not been sufficiently prioritized.154 U.S. Embassy-Baghdad plans to maintain the After September, reconstruction current number of PRTs/RRTs at 16 through May elements will remain 2011,157 although as of January 1, 2011, OPA had at four locations. PRT Program Drawdown transferred responsibility for the activities of Erbil RRT to other Embassy sections.158 From June to AsofDecember31,2010,thePRTfootprintinIraq September 2011, U.S. Embassy-Baghdad plans to comprises 15 PRTs, 1 Regional Reconstruction Team close 12 PRTs. After September, reconstruction (RRT), and 7 Forward Presence locations. According elements will remain at four locations: the Con- to the U.S. Embassy-Baghdad Office of Provincial sulates General in Erbil and Basrah and the EBOs Affairs(OPA),whichmanagesthePRTs,therewere in Mosul and Kirkuk. These posts will continue 698civilianandmilitarypersonnelstaffingthe after the scheduled withdrawal of U.S. troops in PRTs.155 For details, see Figure 3.2 and Table 3.2. December 2011.159

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Table 3.2 Transitioning OPA/PRT Responsibilities Figure 3.3 Number of Personnel, to Other Embassy Sections Provincial Presence Mission Statement by PRT In a recent “task binning” exercise, OPA cata- The provincial presences will contribute to a Baghdad 90 logued 117 tasks performed by its staff members sovereign, stable and self-reliant Iraq by seeking to: Diyala 78 • mitigate and mediate Arab-Kurd, Sunni-Shia, that would need to be transferred to other U.S. andprovincial-Baghdadtensions Ninewa 60 Embassy-Baghdadsectionstosupporttheendur- • strengthen the Rule of Law and the capacity of Tameem 57 ing provincial presences after OPA closes. U.S. provincial institutions in key flashpoint locations Anbar 56 • balance foreign interference Embassy-Baghdad leadership incorporated this • provide a platform for the United Nations and Erbil 51 informationintotheirlong-termplanningefforts, other organizations Basrah 49 but postponed detailed planning until next quarter, • promote the safe return and resettlement of Salah Al-Din 43 displaced persons when the work demands related to Iraqi govern- • encourage foreign investment, economic growth, Thi-Qar 37 ment formation were expected to subside.160 and development Babylon 30 AccordingtoU.S.Embassy-Baghdad,thePRTs • report on strategic trends, events, and drivers of Iraqi instability Muthanna 32 have redoubled their efforts toward building the • present American policy and promote mutual Kerbala 25 capacityofprovincialgovernmentsandtomitigat- understanding and respect for American values Missan 24 inginternalconflictsandflashpointsoverthelast • provide limited services to American citizens

Najaf 24 year.Inrecentmonths,theyhaveinitiatedfewnon- Source: U.S.Embassy-Baghdad,OPA,responsetoSIGIRdatacall, Wassit 23 capacity building reconstruction projects and plan 1/4/2011. Qadissiya 19 to have ongoing projects completed as scheduled or Total 698 transitioned to enduring reconstruction elements PRTs select Iraqi NGO partners based on

Note: Totalincludescivilianand intheEBOs.ThePRTresponsibilitiesthatwill past experience and the nature of the NGO and military personnel. be handed off to EBOs and Consulates General the project to be implemented. When projects Source: U.S. Embassy-Baghdad, OPA,responsetoSIGIRdatacall, aredefinedinthe“ProvincialPresenceMission arecompleted,PRTsmeasureprojectoutcomes 1/4/2011. Statement” prepared by DoS with input from U.S. andimpacts;resultsaresaidtobeusedtohelp Embassy-BaghdadandthePRTs.161 For details, determine whether future grants are issued to the see Figure 3.3. same NGOs and beneficiaries.163 AccordingtoU.S.Embassy-Baghdad,thereis Iraqi NGO Partners no formal training required for selected NGOs. AccordingtoU.S.Embassy-Baghdad,PRTswork However, capacity-building support is occasionally with Iraqi non-governmental organizations (NGOs), offered by the PRTs. PRT Baghdad’s NGO Endur- when appropriate, to accomplish PRT work plan abilityProgram,forexample,seekstoofferbasic objectives. Areas of cooperation have included:162 training to 250–500 Iraqi NGOs that have received • English language training assistance from the Baghdad PRT, USAID, DoD, • women’sandchildren’srightsawareness and other agencies. The second phase, “Reinvesting campaigns in Success,” will focus on more intensive sustain- • women’s entrepreneurship training abilitytrainingfor30–40IraqiNGOs.164 ◆ • projectstoincreaseagriculturalproduction capacity • schoolconstructioninareaswithhigh concentrations of minorities

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CONTRACTING

Private Security Contractors The drawdown of U.S. forces apparently has not had an immediate effect on PSC operations in Attheendof2010,nearly14,500contractorswere Iraq, but the Embassy cautions that hostile groups Although DoS is the providingsecurityservicesforDoD(13,603)and seekingnewtargetsmaybeafuturethreat.The managing authority USAID (1,741).165 As USF-I approaches the end extent to which PSCs are accepted by the new gov- for PSCs in Iraq, U.S. of its mission, these agencies anticipate signifi- ernment could also affect their operating environ- Embassy-Baghdad cant declines in the number of private security ment and vulnerability.168 reported that it contractors(PSCs)theyemploy.AlthoughDoS could not provide is the managing authority for PSCs in Iraq, U.S. information for security contractors Embassy-Baghdad reported that it could not Contracting Actions and Grants by nationality or provideinformationforsecuritycontractorsby civilian agency. nationalityorcivilianagency.166 As of December 31, 2010, DoD, DoS, and USAID AccordingtoU.S.Embassy-Baghdad,PSCs had reported 69,531 contracting actions or grants, continue to cope with GOI delays in registering totaling $39.04 billion in cumulative obligations.169 weaponsandlicensingvehicles.Theoverlap- Thisaccountsfor84%ofthe$46.24billioninreported ping jurisdictions of the Ministries of Interior financial obligations from the IRRF, ESF, Iraq Security and Defense reportedly have resulted in PSCs Forces Fund (ISFF), and Commander’s Emergency being detained and experiencing unannounced Response Program (CERP).170 Thisquarter,DoD, inspectionsoftheircompoundsbymultipleGOI DoS, and USAID reported 640 new contracting agenciesnotunderstoodtobedirectlyinvolvedin actionsorgrants,resultingin$510millioninnew PSC regulation. Notwithstanding these continu- obligations and $608 million in new expenditures.171 ing challenges, the Embassy reported this quarter For an overview of the status and quarterly change that—forthefirsttime—aGOIsecurityagency of contracting actions and grants, see Table 3.3. For shared intelligence with contractor companies that acompletelistofcontractingactionsandgrants,as were being targeted by terrorist groups.167 reported to SIGIR, visit www.sigir.mil.◆

Table 3.3 Contracting Actions and Grants $ Millions Current Status Change over Quarter Fund Count Obligated Expended Count Obligated Expended

ISFF 18,124 $17,646.1 $16,581.0 359 (2%) $457.1 (3%) $489.8 (3%) IRRF 8,484 $14,407.5 $14,270.8 12(0%) -$1.3(0%) $16.6(0%) CERP 35,542 $3,449.3 $3,428.7 82 (0%) $10.5 (0%) $50.6 (1%) ESF 7,381 $3,541.5 $3,120.0 187 (3%) $43.8 (1%) $50.7 (2%) Total 69,531 $39,044.4 $37,400.5 640 (5%) $510.1 (4%) $607.7 (6%)

Note: Data not audited. Numbers affected by rounding. Tables represent only those contracting actions that were reported by the agencies; they do not reflect all obligations or expenditures made in Iraq.

Sources:CEFMS,ESF, IRRF: Construction, IRRF: Non-construction, ISFF,10/1/2010and1/10/2011;USAID,responsestoSIGIRdatacalls,1/22/2010and 1/11/2011; IRMS, Global Benchmark,9/3/2010.

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FOCUS ON BASRAH

Background IRAQ Standard Gauge Rail Lines BasrahCity,onceknownastheVenice Basrah International Standard Gauge Design Completed of the Middle East, sits 30 miles north- Airport Ports west of the Persian Gulf on the Shatt

al-Arab waterway. The GOI estimates Al-Maqal Sha IRAN Shatt al-BasrahBASRAH tt al-A Basrah’s population at 2.87 million rab people,makingitbyfarthelargest Abu Flus urban center south of Baghdad.172 Most residentsareShia,andalthoughthecity remains home to Sunnis and even some Christian enclaves, many minorities Al-Zubair wereforcedoutbyShiamilitiagroups 173 during 2006–2008. Umm Qasr Historicallyhometoathrivingand BASRAH K ho diversemerchantclass,Basrahbecame r A Al-Faw bda ll the Ottoman Empire’s administrative KUWAIT ah PERSIAN GULF hubforwhatisnowsouthernIraqin the nineteenth century.174 During the Iran-Iraq War (1980–1988), much of the port facilities suffered greatly from years province’s infrastructure was damaged of war and neglect, international inves- or destroyed, as Basrah bore witness to torsareactivelyrehabilitatingBasrah’s some of the conflict’s fiercest fighting. infrastructure. If successful, Basrah may Today, Basrah is the capital of the epony- yet stand beside the other oil-rich cities of mous, oil-rich Iraqi province that shares theGulf,realizingitsmanifesteconomic aborderwithIranandKuwait. potentialandprovidingtheGOIwitha Just to the west and north of Bas- reliable revenue stream to finance much- rahCityliesmuchofIraq’snational needed reconstruction projects. patrimony in four globally significant BasrahPalace.(UKMODCrownCopyright2004) oil fields that were only recently re- opened to large-scale international Security Basrah City and the surrounding area investment:WestQurna,al-Rumaila, On April 7, 2003, Basrah City fell to Brit- were under the control of various Shia Majnoon, and al-Zubair. Together, these ish forces led by the fabled 7th Armored militia groups.179 Figure A displays key fields hold more than 80 billion barrels Brigade, direct descendants of General events affecting Basrah’s security since in proved reserves—more than half of Montgomery’s“DesertRats”ofWWII.176 2003,andFigureBchartsthenumberof Iraq’s oil wealth.175 Unique among Iraq’s Initially, Basrah was one of Iraq’s success reported security incidents in the entire provinces, Basrah has access to the sea, stories, with a permissive security envi- province since 2004. making it the country’s gateway to the ronment that allowed UK forces to patrol The definitive event in post-Saddam wider world of international commerce. thestreetssanshelmetsandbodyar- Basrah was Operation Charge of the Basrah province is also home to the mor.177 In the years that followed, the situ- Knights. Prime Minister al-Maliki southernmost terminus of Iraq’s railway ation deteriorated, as Shia militia groups launched this operation in late March network—where the last leg of Imperial graduallygrewinprominence,forcing 2008tore-takeBasrahfromShiamilitias, Germany’s fabled Berlin-to-Baghdad the British to withdraw from downtown such as Muqtada al-Sadr’s Jaish al-Mahdi, line would have met the sea—as well Basrah to their main base at Basrah which had come to control large swaths of asafast-growinginternationalairport. InternationalAirportinlate2007.178 By the city and neighboring port facilities.180 Although the oil fields, railways, and March 2008, more than 4,000 police in Several of these armed groups received

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Figure A Basrah: Security Time Line, 2003−2010 2003 2004 2005 2006 2007 2008 2009 2010

September 19 May June March Pro-militia police detain two · Basrah provincial council Basrah Operations Command created January 1 UK forces enter UK soldiers; subsequent UK resumes cooperation by GOI to oversee security operations. UK hands over complete control Iraq from Kuwait. rescue mission leads to large with UK forces. of Basrah International Airport battle with Sadrist forces. August to the GOI. May · New UK brigade Sadrists declare 6-month cease-fire. About 26,000 July−August suffers 41 attacks and March 31 UK troops in Better organized October 7 KIA in its first two September 3 UK ends mission and turns over Iraq, mainly in Sadrist forces seize key Basrah weeks in country. GOI assumes custody of Basrah command of Coalition military the southeast. areas of Basrah City. provincial May 31 Palace as last UK troops leave operations in southern Iraq to the council PM al-Maliki declares the city center. United States. July September 17 suspends one-month state of Approximately UK forces raid Sadrist cooperation emergency in Basrah December 16 June 19 9,000 UK headquarters in Basrah; with UK City after 100 killed in UK transfers control of 2 killed in Basrah forces remain. violence subsides. forces. sectarian clashes. Basrah province to GOI. electricity protests.

Deadly explosively formed April− UK forces gradually penetrators (EFPs) withdraw from Basrah increasingly used to target September City to their main base Coalition and ISF troops. 2007 at the airport.

August 9 April 21 March 15 March Early April Basrah Multiple car Sadrist militia attack female Basrah Operation Sinbad Cease-fire between ISF and militias gradually implemented. residents riot bombs kill more University student; public ends inconclusively. April−May over fuel and than 70 in demonstrations ensue. ISF and Coalition troops clear remainder of Basrah City. electricity Basrah City. December 25 shortages. January 31 UK forces battle with March 25 SCIRI-dominated Shia coalition wins pro-militia Iraqi police units. PM al-Maliki launches Operation Charge of June 24 control of Basrah provincial council. the Knights to restore order in Basrah City. November 8 6 Royal Military Police killed by Fadhila party (Shia) finishes second; October 30 March 26−27 10 killed and more mob at a police station near secures governorship in later ballot. Shia militants kill 17 Sunni ISF encounters fierce resistance from than 40 wounded Basrah City. police recruits near a Iranian-supplied Shia militia forces; U.S. by car bomb in September 29 UK-run training center. military rushes air assets and other support. western Basrah. April 7 UK forces launch Operation Sinbad to UK forces take control of Basrah regain control of Basrah City from City and patrol with Iraqi police. Shia militia.

Note: This time line is intended to highlight selected major events since April 2003. It is not intended to be a comprehensive account of events over the past seven years.

Source: SIGIR analysis of GOI and U.S. government documents and open-source information in Arabic and English.

Figure B still occurs. Notable recent security Monthly Security Incidents in Basrah, 1/2004–12/2010 incidents include:184

500 • November 8. At least 12 people were killedandmorethan30othersinjured 400 Sadrists declare cease-fire whenacarbombexplodedonabusy 300 street in southwestern Basrah. • November–December 2010. Basrah 200 Operation Charge of the Knights International Airport was sporadi- 100 cally subjected to rocket and mortar

0 attacks. Although largely ineffective, 20042005 2006 2007 2008 2009 2010 these attacks interrupted scheduled

Source: USF-I, response to SIGIR data call, 1/4/2011. serviceand,iftheycontinue,could potentially dissuade investors from substantial support from the Iranian Rev- traveling there. olutionary Guard Corps.181 The Iraqi forces • December 6. A roadside bomb leading the operation initially encountered detonated in western Basrah near a fierce resistance, and U.S. commanders U.S. convoy, but no damage or injuries rushed reinforcements to the theater.182 were reported. But after several weeks of fighting, Iraqi Security Forces (ISF) consolidated their ISF Readiness positions and cleared most of the remain- In their meetings with SIGIR in January ing militia strongholds.183 2011, Basrah’s local Iraqi Army and U.S., British, and Iraqi representatives at a ceremony marking the completion of the British mission in At the moment, Basrah is rela- police commanders commented on Basrah.(UKMODCrownCopyright2009) tively stable, but insurgent violence thecontinuedneedforinternational

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support, even after the scheduled de- Figure C council possessing significant authori- partureofU.S.forcesinDecember2011. Basrah Provincial Election Results ties,asisthecaseintheKurdistanRe-

According to Lieutenant General Mo- 2005 2 gion) failed when they could not gather hamad, commander of Iraq’s army units 20 4 enough signatures to conduct a refer- 2009 in the province, the Iraqi police require 3 12 endum on the issue.193 However, several 5 additional investigative and forensic 6 Basrah officials recently stated that they training. But he noted that evidence- 2 2 intend to attempt another referendum in collection techniques taught to them by 20 2011.194 If Basrah were to become a semi- U.S.andU.K.trainershaveincreased autonomous region, it could potentially ISCI State of Law Al-Fadhila the number of criminals brought to Coalition keep more of the profits generated by justice. He also noted that while the Iraqi (Al-Maliki) oilexportsthanisnowthecase,thereby INL Al-Sadr Others Army and police are self-sufficient in (Allawi) deprivingthecentralgovernmentofa meeting their basic training needs, they significantsourceofrevenue. Sources: UNAMI, Elections Results, issue no. 30, 2/2009; continue to need assistance in develop- GOI, Independent High Electoral Commission, ing their medical, transportation, and www.ihec.iq/arabic, SIGIR translation, accessed 2/22/2009. logistics cadres.185 Figure C displays the results of the 2005 Life in Basrah and 2009 provincial elections in Basrah. In the 1970s, the thriving Basrah nightlife InthenewCouncilofRepresenta- attracted patrons from throughout the re- Governance tives, Basrah province is represented gion, but society grew more conservative by 24 members: 14 members of SoL, 7 over time. The community is now very Elections representatives from the Iraqi National conservative; most of Basrah’s female In Iraq’s first-ever Provincial Council Alliance (a union of Sadrists, ISCI, and residents do not leave their homes with- elections, held in January 2005, Basrah other Shia parties), and 3 members of outdonningaveil.Despitethis,alarge voters strongly backed a Shia coalition formerPrimeMinisterAyadAllawi’s percentage of college students are women. led by the Supreme Council for Islamic al-Iraqiya coalition.190 But life remains difficult for what remains RevolutioninIraq(SCIRI,whichisnow of Basrah’s Christian community, and known as the Islamic Supreme Coun- Regionalism jobs are difficult for them to come195 by. cil of Iraq, or ISCI).186 When the votes Many Basrah residents (known as Bas- Therehavebeensignificantchangesto were counted, SCIRI had won 20 of the rawis) define the province in terms of its dailylifesincetheendofBa’athistrule, 41 seats at stake. Another Shia party, relationship to the rest of Iraq, a concept with many residents now owning cars al-Fadhila, finished second, but was able often described as Janubiya, or southern- andcellphones.ApartmentsinBasrah to secure the provincial governorship ness.191 This deep-seated regional identity City rent for $500 per month in better foroneofitsown,Mohamadal-Waeli, hassolidifiedamongsomeresidentswho neighborhoods, but commercial land in February 2005.187 Under Governor al- perceivethatBasrah’snaturalresources cancostupto$5,000persquaremeter. Waeli, extremist supporters of al-Fadhila have been exploited by Iraq’s current and Basrah has also become a fiercely quickly gained control of key police past central governments with little to competitive media market. Today, almost unitsandweresoonenmeshedinoil showinreturn.Thesefeelingsofalien- everyone has television, and hundreds smuggling and extortion schemes. Vio- ationhaveledtoattemptstoobtainlocal of channels are available. Some Basrawis lence spiked as the various Shia factions autonomy.Inthe1920s,agroupofin- with whom SIGIR met stated that they fought—sometimes openly, but more fluential residents sought to establish the favored the U.S.-funded television station often, through indirect means—for con- area as a separate republic under British al-Hurra and the U.S.-funded Radio Sawa trol of lucrative port concessions.188 protection,muchlikethestatuseventu- because they appreciate their balanced Four years later, Basrah voters handed allygiventotheirKuwaitineighbors.192 approach to the news. Many middle- a decisive defeat to these Shia religious While this movement foundered, the idea class families have access to the Internet parties, with Prime Minister al-Maliki’s of Basrah as separate region is still alive at home, although the connections are StateofLaw(SoL)Coalitionwinningan in contemporary Iraq. slow and expensive. In addition, several absolute majority of seats on the Pro- In early 2009, efforts by prominent newprivateschoolshaveopenedrecently vincialCouncilintheaftermathofthe Basrahpoliticianstoformaregion and—with the increase in salaries for successful ISF offensive of March 2008.189 (whichwouldbegovernedbyalegislative GOI employees—some middle-class

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residents (most of whom work for the nationalpovertylineof$2.20perday, following the bombing of the Samarra state)areabletosendchildrentoprivate Basrah performs relatively better than mosqueinFebruary2006.According academies. Average salaries for Director therestofIraqbyseveralothermea- totheUN,85%ofBasrah’sIDPs—most General-level GOI officials in Basrah are sures.198 For example, Basrah’s infant of whom came from Baghdad—would about$3,000permonth,withlower-level mortalityrateis17%lowerthanthe like to settle locally.203 However, more government workers earning monthly national average, and 97% of births than90%ofBasrahIDPssurveyedby wages of about $1,000 to $1,500.196 areattendedbyhealthprofessionals, the UN expressed grave concerns about Public services, however, remain mea- compared with the national average local housing shortages and access to job ger. GOI officials and local residents re- of 88.5%.199 But cancer rates in Basrah opportunities in the province.204 port that new water treatment plants are appeartobehigherthanfoundelse- beingbuiltandthatthewatersectoris where in Iraq. In 1998, Basrah province oneofthegovernment’sreconstruction accounted for 9.2% of Iraq’s registered Economic Development priorities. They caution, however, that no cancercases,upfrom5.5%in1989.200 Provincial Council members stated to one trusts the water supply’s quality, and SIGIR that international firms wishing most everyone still buys bottled water Displaced Persons to do business in Basrah do not need to for drinking.197 The relative calm that has prevailed in establish a permanent base of operations Basrah since spring 2008 has made it an there. Instead, they encourage partner- Standard of Living attractive option for internally displaced ingwithlocalIraqifirms,asBasrahhas While almost one-third of Basrah persons(IDPs)whofledtheirhomes large numbers of skilled professionals province’s population falls below the during the widespread sectarian violence in need of work. The Basrah Investment

Al-Rumaila Oil Field: A Case Study The overall security situation for international oil companies In2009,aconsortiumconsistingofBritishPetroleum(BP)and operating in the province is excellent. The al-Rumaila field has the China National Petroleum Company (CNPC) won the right neverbeenattackedsinceinternationalfirmsbeganoperations to develop al-Rumaila in partnership with Iraq’s state-owned there. General Mohamad, commander of the Iraqi Army’s 14th SouthOilCompany(SOC).BPhasahistoryinthearea,having Corps and ranking officer in the province, commented that: worked extensively in Basrah before the rise of Saddam Hus- “Businessisbooming....ThepresenceofLukoil,Shell, and BP sein, leaving only in 1976.201 inBasrahisagoodindicatorofhowsecureBasrahis.Thefact Tofacilitateexploitationofthisgiantfield,BP,CNPC,and that none of these [companies’ employees] have been attacked, the SOC formed the al-Rumaila Operations Organization kidnapped,orextortedsaysalotaboutthesecuritysituation.” (ROO). This quarter, SIGIR met with the ROO’s general man- He also noted that there has been more than $1.5 billion in ager,whoreportedtheROOiscurrentlystaffedbymorethan investmentinBasrahoverthepasttwoyears,tripletheannual 4,000 personnel, about 3,400 of whom have been transferred budget for the province.205 totheROOfromtheSOC.Asofmid-January2011,morethan Securityforal-RumailaisprovidedbytheOilProtection 10,000 contractors and sub-contractors also work at the site.202 Force (OPF). ISF officials remarked that the OPF needs ad- ROOofficialsreportedtoSIGIRthatproductiontargetsset ditionaltrainingandtobeconsolidatedwiththeregularISFat for mid-2011 have already been exceeded. As of January 2011, somepoint.Tomeetthisneed,BPbelievesthattheGOIshould al-Rumaila was producing 1.25 MBPD, exceeding the initial pay for the training, whereas other foreign firms—notably baseline production of 1.05 MBPD and above the 110% of ini- CNPC and Royal Dutch Shell, which also operates in Basrah tial production threshold the consortium needed to reach to province—favor an “adopt a battalion” model, where the com- qualify for payments from the Ministry of Oil. In addition to panies finance improved training for local OPF units.206 thecriticalincreasesinproduction,theROO’sinitialsuccesses The biggest challenge facing al-Rumaila, however, is not have resulted in it entering into many contracts with Iraqi security, but maintenance. ROO is incentivizing its staff with andinternationalfirmstoprovideawidearrayofservices. bonusestogetworkerstokeepdown-timetoaminimum. ThecontractsandsubcontractssignedbytheROOhavebeen Maintenance-related delays also reduce electricity produc- substantial. The ROO’s general manager described his task tion. In commenting on the state of the field’s infrastructure, as managing “a Fortune 500 company.” To better account for thegeneralmanageroftheROOstatedthatheisfacing30–40 theROO’scashflow,BPhasbeguntraininganIraqiteamon years of accrued bad maintenance and that reversing this will internal controls, contracting, and financial management. be his main focus in 2011.207

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Commission (BIC) gives top priority to Figure D deals involving local firms, followed in Key Oil Fields and Infrastructure in Basrah Province successionbydealsinvolvingIraqisliv- West Qurna Phase-2Phhase-2h Majnoon ing abroad and then ventures involving Winning Bid: Lukoiloil (75%), Winning Bid: Shell (60%), foreign investors.208 But the Chairman of Statoil (25%) Petronas (40%) RemunerationR Fee: $1.15/ba$1.15/barrelarrela Remuneration Fee: $1.39/barrel theBICcautionedthatdevelopmentwill ProProductionroductionrooductionn Plateauu TargetTaTarget: Production Plateau Target: 1.8 million barrels per day 1.88 million barrels pererrday dday Current Production Capacity: 55,000 barrels per day take time.209 CurCurrentrrentrr Production CapCapacity:apacity:ap None Proved Reserves: 11.95 billion barrels ProvProvedvedv Reserves: 43.3 bibillion barrels (Wes(Westst Qurna Phase-1 anddP Phase-2)P Unemployment WestWesestess Qurna PhasePhase-1e-1e- West Qurna The recent growth in the hydrocarbon WinningWinn Bid: ExxonMobil il Phase-2 (80%),(80%%),% Shell (20%) sectorhasdonelittletoimprovethelot RemunerationRemmunerationm Fee: $1.90/barrel MajnoonM ProductionProduoduduction Plateau Target: of Basrah’s unemployed. About 35% of 2.822.825.825.82 millions barrels per day West Qurna CCurrenturrentu Production Capacity: Phase-1 thoseemployedworkforthegovernment, 270,00070,000000 barrbarrelsbarre per day ShuaibaS with agricultural workers making up RefineryR ry Iraq StrStrategicStrtrategicrategictegic Pipeline Pipe P another 20% of the workforce.210 GOI of- elinei e BasrahBasraBasrahsrarah ficials estimate the provincial unemploy- Al-Rumaila Al-RumailaA um Al-ZubairAl- r ment rate at 25%, with the rate among Winning Bid: BP (51%), CNPC (49%) KAAOT recent university graduates hovering near Remuneration Fee: $2.00/barrell 211 Production Plateau Target: 50%. When the State Oil Marketing 2,850,000 barrels per day Organization advertised open positions, Current Production Capacity: 1 million barrels per day To Iraq-Saudi it received more than 30,000 applications, Proved Reserves: 17.3 billion babarrelsarrelsa s Arabia Pipeline (Not in Use) ABOT and Provincial Council officials estimate that at least 52,000 residents are actively Al-Zubairair 212 looking for employment. Winning Bid: Eni (44%), %), OOccidental (31%), Southern Exports: Kogas (25%) ~1.4 million barrels per day Remuneration Fee: $2.00/barrel Production Plateau Target: 1.2 million barrels per day Hydrocarbons Current Production Capacity: 236,000 barrels per day In2009,Iraqconductedtworoundsof Proved Reserves: 7.8 billion barrels biddingforoilservicescontracts.More than 20 international companies partici- Note: Khawr al-Amaya Oil Terminal (KAAOT) and al-Basrah Oil Terminal (ABOT) are Iraq’s main offshore oil terminals, through which the vast majority of oil exports flow. pated, and 10 contracts were ultimately Sources: CIA, “Iraq: Oil Infrastructure,” 1/2003, www.lib.utexas.edu/maps/middle_east_and_asia/iraq_oil_2003.pdf, awarded.FigureDshowsthewinning accessed 1/20/2010; U.S. Embassy-Baghdad, response to SIGIR data call, 1/24/2010; GOI, Ministry of Oil, www.pcld-iraq.com, accessed 1/4/2010; OSD, responses to SIGIR data calls, 9/25/2009, 12/24/2009, and 12/31/2009; DoE, Energy Information bidders for the major fields in the vicin- Administration, Iraq Country Report, www.eia.doe.gov/emeu/cabs/Iraq/Oil.html, accessed 1/22/2010; MEES, Weekly Report, ity of Basrah. Vol. 53 No. 41, 10/11/2010, p. 2; MEES, Weekly Report, Vol. 53 No. 49, 12/6/2010, p. 2. Under the terms of their contracts consortium developing the al-Zubair • TheRusso-Norwegianventuredrilling with the GOI, the winning bidders field and the BP-CNPC consortium thepreviouslyuntappedWestQurna pledged to raise production to certain developing the al-Rumaila field an- Phase-2fieldreportedlyplanstodrill benchmarks in return for remunera- nouncedthattheybothhadmettheir about70morewellsearlyin2011. tion. This quarter, the Eni-Occidential initial production goals. Other recent • Royal Dutch Shell and Malaysia’s developments in Basrah’s oil and gas Petronasannouncedthattheyantici- sector included:213 pate producing 175,000 BPD from the • The Exxon-Royal Dutch Shell consor- Majnoon field by the end of 2012. tium developing West Qurna Phase-1 • On October 20, a Kuwaiti-Turkish raised its target for oil production joint venture won the rights to develop about 22% to more than 2.8 million Siba, a relatively small non-associated barrels per day (MBPD) in six to gas field with estimated reserves of sevenyears.Therearecurrently360 about1.5trillioncubicfeet. wellsatthefield,andplanscallfor 2,000 more to be drilled over the life Iraq’s dilapidated pipeline, power, RoyalNavysailorspatrollingnearUmmQasr. (UK MOD Crown Copyright 2003) of the 20-year contract. and transportation infrastructure has

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long inhibited its export capacity. This have identified several worthy projects, but megawatts. Industrial requirements for quarter, the Ministry of Oil announced they have yet to get them off the ground oil facilities, water plants, and hospitals thatcontractsfortwooffournewoff- because of bureaucratic difficulties. For take precedence over residential needs. shore mooring stations had been signed. example, the GOI has purchased 12 In their discussions with SIGIR, Basrah Whenfinished,thefourstationswill generators from General Electric. Basrah’s officials contended that the MOE is have the combined effect of more than provincial government has identified land divertingsomeofthepowerproducedin doubling current export capacity to an to locate four of those generators on, and the province, further exacerbating power estimated 4 MBPD.214 The Ministry of wantstouse$450millionfromitspetro- outages in residential neighborhoods. Oilalsosigneditsfirstcontractforanew dollarbudgettoinstallthem.However, With industrial activity expected to pipeline to connect to the new single- theMinistryofElectricity(MOE)wants expand this year, and no short-term in- point mooring stations this quarter. toselectthecontractorswhowilldothe crease in generation in sight, the potential installation. Basrah officials feel this is a forsevereelectricityshortagesloomsas choicethattheyshouldrightlymakeand summer approaches.220 Problems with Petrodollars expressedapreferenceforusingaU.S. An innovative provision contained in firm, even as they noted that few U.S. firms Iraq’s2010budgetprovidesprovincial want to operate there. Thus, a stalemate Agriculture governments with specific financial has ensued, and no agreements have been Many residents are strongly attached to benefits (“petrodollars”) for producing reached. Basrah officials further indicated traditional agriculture, especially the and refining hydrocarbons, including toSIGIRthattheMOEmaywishtoinstall cultivation of date palm trees.221 But the $1 for every barrel of oil produced in thesegeneratorsinNajaf,eventhough agricultural sector suffered under years of their province and $1 for every barrel Basrahhassuperioraccesstofueland Ba’athist oppression, as local needs were refined.In2010,thisamountedtoabout electricity distribution networks.218 neglected by a Sunni central government $900 million for Basrah Province.215 The that viewed Basrah as part of a per- provincial government reported receiving petually rebellious Shia south. Moreover, approximately $160 million in petrodol- Electricity becauseofthelureofoilriches,thecur- larsfromtheMinistryofFinance,but Persistent power outages also affect the rent provincial government’s economic this pool of money is encumbered by investmentclimate,aselectricityshortages development priorities lie with modern- many restrictions on its use:216 in the summer months are widespread. izing the hydrocarbon infrastructure and • Projectsfundedbypetrodollarsmust Last summer, as temperatures topped 120 refurbishingtheportfacilitiesatUmm first be approved by the Ministry of degrees Fahrenheit in Basrah, residents Qasr, leaving agricultural development a Planning and Development Coopera- took to the streets to protest the frequent second-tier priority at best.222 tion.OnlythenwilltheMinistryof blackouts. On June 19, ISF units fired on a Basrah province has three types of Financeprovidethefunds. demonstration there, killing two protes- agricultural production:223 • Petrodollars may only fund infrastruc- torsandwoundingtwoothers.Twodays • datepalmgroves,producingwhatwas ture projects; they may not be used for later,aftersimilarprotestsoccurredinthe once regarded as the world’s premier operating expenses, such as salaries. southerntownofNassiriya,theMinister date crop •Ironically,petrodollars are provided to ofElectricityresignedfromofficeandwas theprovincesinIraqidinars.Conse- replaced by the Minister of Oil.219 quently, if a province wants to enter The failure to move forward with the intoacontractwithaforeignfirm,the installation of additional generators (such CentralBankofIraqandtheTrade as the ones built by GE) raises the odds BankofIraqmustbeinvolvedinthe that Basrah will face another long, hot transaction, potentially increasing summer of blackouts and power shortages transaction costs and complicating in 2011, as local demand for inexpen- dealings with foreign firms.217 sive, state-supplied electricity continues tooutpacesupply.Inthewinter,total In January, Provincial Council demand is about 1,350 megawatts (MW), members and representatives from the climbing to 2,300 MW in the summer, An Iraqi man harvests dates, one of the key agricultural products produced in the greater governor’s office told SIGIR that they outstripping supply by several hundred Basrah area. (USF-I photo)

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• approximately 10,000 farms in the farmland near Basrah. In December, the desertssurroundingthecity,cultivat- provincial government concluded an ing tomatoes, eggplants, onions, and agreement with the UN Food and Agri- other vegetables culture Organization (FAO) to imple- • wheat- and barley-producing regions ment several agricultural development north of the city projects. FAO also agreed to develop an agricultural research center at Basrah The single-biggest problem faced by University and assist in developing the SIGIR meeting with representatives of Basrah’s Basrah’s farmers today is the post-2003 province’s fisheries.226 Farmers Union. opening of the borders to cheaper agri- investment appear to be particularly for- culturalimportsfromIranandChina. midabletoU.S.companies,notingthat Othersignificantchallengesinclude:224 Investment European and Asian investors are more • escalatingcostofmaterials,suchas As the security situation stabilized in the prevalentinBasrahthanU.S.firms.228 theplasticsheetsneededtocover second-half of 2008, local and foreign vegetable fields investors began to commit resources to Archaic Laws Hinder • lackofaccesstofoodprocessing projects outside the oil sector. In their Efficient Land Use factories recent visits with SIGIR, Basrah officials The Saddam-era “Hydrocarbons Pro- • GOI restrictions on exporting agricul- remarked on the prevalence of Chinese ductionLaw”givestheSOCtheright tural products and Turkish companies operating in to prevent development on any land theprovince,notingthattheIranian potentially affecting oil development. The date palm groves have especially presence there is focused more on cross- Arepresentativefromtheprovincial suffered. According to one prominent border trading activities, whereas the governor’s office stated to SIGIR that localfarmer,severaldecadesagothere Chinese and Turks appear to be concen- theSOChasbeenveryreluctanttogive were 11 million date palm trees in the trating on establishing a sustained com- permission to build on such properties, province, producing dates renowned— mercial presence.227 and other Basrah officials pointed to this and in high demand overseas—for their TheBICservesasaone-stopshopfor statute as one of the main obstacles to rich, succulent flavor. However, the investors seeking to do business in the economic development and new housing Iran-Iraq war destroyed much of these province. “You need to be a little bit bold to construction. The Chairman of the BIC crops, and sanctions further affected the do business in Basrah now.” This state- confirmed this observation, noting that agriculturalsectorbymakingcertain ment by a representative from the gover- about 60% of available land in the prov- tools and chemicals more difficult to ob- nor’s office sums up the current invest- ince is potentially affected by this law. tain.TheincreasedsalinityoftheShatt ment climate in Basrah—one of improving Compounding these problems is a al-Arab waterway has also hurt the date securityandgrowingpotential.TableA degree of legal uncertainty about which crop, reducing the number of varieties presents examples of some recent foreign partoftheGOIcanreformlocalland-use growntherefrom350toaround100. investment activity in the province. laws:theCoR,theprovincialgovern- Today, there are only about 2.7 million ment, Ministry of Oil, the SOC, or some date trees in Basrah.225 PRT Basrah has Barriers to Foreign Investment combination of all of them. Squatters also helpedtoconnectBasrahdatefarmers The deleterious legacy of Ba’athist central pose a problem for businesses seeking to withdategrowersinCaliforniasothat planning and bureaucracy still affects operate in Basrah, as they occupy many theycouldvisitandlearnaboutnew foreigners’ ability to conduct business potentially valuable sites. Thus, despite production techniques. (California can in Basrah. Several GOI officials contend interestbyinvestorstobuildnewhous- produce 500–700 kilograms per tree, that strict visa requirements, haphazard ing, there is a problem identifying legally whereas Iraq produces, on average, regulatory enforcement, and the lim- unencumbered land. This problem was 50–100 kilograms per tree.) ited capacity of the local government to illustrated by one Basrah official who said Thisquarter,Basrahofficials expeditiously process licenses leads some that the governor was denied permission participated in the ceremonial set- investorstotaketheircapitalelsewhere fromtheSOCtouseaparceloflandto tingofthecornerstonefora$300 rather than battle the bureaucracy in construct a hospital despite the fact that millionGOI-fundedprojectthatwill Basrah. One prominent local business anadjoiningpropertywasthesiteofa irrigate approximately 60,000 acres of leader lamented that these barriers to housing compound for SOC employees.

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Table A Recent, Non-Hydrocarbon Foreign Investment in Basrah Province Country Sector Project Status

United States Housing Build 2,500 residential housing units (contract valued at $220 million) Under contract

United States (joint Sports Constructanewsportscomplex,includingtwostadiums Inprogress venture with Iraq)

Lebanon Housing Build approximately 4,500 residential housing units (contract valued at $240 million) In progress

Pending final Romania Housing Build 6,200 residential housing units for northern Basrah approvals from GOI

Pending final Iran Housing Build 5,000 residential housing units (contract valued at $938 million) approvals from GOI

UAE (joint venture Maritime Increase port capacity by 58,000 tons per year Under contract with Iraq)

Belgium Maritime Rehabilitate port facilities at Umm Qasr (contract valued at about $69 million) In progress

Turkey Healthcare Build a hospital with approximately 400 beds Under contract

France Electricity Construct 15 new power distribution stations Under contract

Build a petrochemical complex capable of producing an array of plastics (contract South Korea Plastics Under contract valued at approximately $3 billion)

Note: All dollar values are approximate, and all reported projects are subject to delay, modification, or cancellation.

Source: SIGIR analysis of open-source Arabic- and English-language documents.

Notwithstanding these legal issues, beforethem.However,thejudgeswith obtainingonlysevenconvictionsin the housing sector remains enticing to whom SIGIR met in January admitted theentireprovince,orabout2%ofall foreign investors, with U.S., Iranian, that a yawning gap exists between issu- convictionsobtainednationwideduring and Kuwaiti firms all seeking to build inganorderorawarrantandgettingit that period.233 residential units (and the associated infra- enforced by the local police, citing a lack structure) that would be sold only to Iraqi oflocalpolicecapabilityasoneofthe citizens. Local officials also noted that the primary challenges to building the rule of Reconstruction constrained supply of new housing has law in Basrah.230 driven up prices and that this inflationary Basrah’s judiciary reported that the Coalition Presence and Programs spike is only somewhat mitigated by gov- continuedlackofjudicialsecuritywasthe From 2003 to 2009, UK military and ernment workers’ housing subsidies.229 other main challenge they encounter on a civilian personnel took the lead in dailybasis.Judgesareallottedtwosecurity stabilization and reconstruction efforts personneleach,buttheytraveltowork in Basrah province. The deteriorating Challenges to Building unarmed in their personal vehicles.231 security situation in 2006–2007, however, theRuleofLaw Corruption also remains a problem limitedtheabilityoftheBritishtoimple- Operating from a U.S.-funded court- inBasrah.InDecember,localpoliceof- ment programs and complete projects. house complex completed about two ficials reported that 199 persons wanted By September 2006, British forces needed yearsago,manyofBasrah’sjudgeshave on charges of administrative or financial to deploy an entire convoy of armored made progress in managing their dock- corruption had been arrested in Basrah personnel carriers to ferry a few police ets more efficiently in recent months, during 2010.232 The GOI’s Commission of trainerstoasinglepolicestation.Non- with85ofthembeingrecognizedbythe Integrity (COI) has traditionally found it essential movements were halted, and Higher Judicial Council (HJC) for issu- difficult to operate in Basrah. In the first much of the reconstruction program ingarulingon98%ofthecasesbrought eight months of 2010, the COI reported groundtoahalt.234

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Figure E U.S. funds as U.S.-funded Infrastructure Projects in Basrah Province, well as other by Category and Fund donor funds). % of $2,173.81 Million Oil ($555.17) SIGIR found Electrical ($554.74) that several PW & Water ($246.99) factors contributed to the substan- Security & Justice ($199.10) tial delays and cost overruns that Transportation ($170.18) plagued this project since its inception, ISFF Defense Forces ($159.81) ESF including unrealistic time frames for Health ($115.07) ISFF $124.03 $194.15 International Development ($52.81) design and construction, the security Education ($34.75) CERP situation, and the GOI not following $289.03 ISFF Interior Forces ($26.66) IRRF $1,566.60 through on its obligations. In October Private Sector Development ($25.06) 2010, the hospital opened, but is only Buildings ($23.54) seeingpatientsonalimitedbasis.Ac- Peacekeeping ($5.54) cordingtoPRTofficials,theMinistry Communication ($4.39) 0 5 10 15 20 25 30 of Health has assumed full responsibil- ity for maintaining the hospital.185 Note: Numbers affected by rounding. • Roll-On/Roll-Off Berth. This$2.7mil- Source: IRMS, Global Benchmark, 9/3/2010. lion project increased the operational Atotalof$2.17billionhasbeenspent Since 2003, USACE has managed more efficiency and capacity of the Port of bytheUnitedStatesonprojectsinBas- than 280 reconstruction contracts in Umm Qasr, allowing additional vessels rah province. As of December 31, 2010, Basrah province, including:236 to dock at the DoS’sIraqStrategicPartnershipOffice • a$51.5million,IraqReliefandRe- port, thereby (ISPO) had three ongoing or recently construction Fund (IRRF) project to increasing the completed reconstruction projects in rehabilitate Basrah’s sewer system amount of Basrah province, all funded with money • a$46millionprojecttorepairUmm imports and exports flowing through from the Economic Support Fund and Qasr’s pier and seawall, which was theportandreducingthetimefor managed by the U.S. Army Corps of funded through the Foreign Military loading and unloading freight. SIGIR’s Engineers (USACE):235 Sales program inspection report concluded that the • Al-Kibla Sewer and Storm Net- • a$13.5million,IRRF-fundedproject construction of the Roll-On/Roll-Off work—an$11millionprojectto to rehabilitate a 132 kilovolt electricity Berthwasadequate,asidefromsome design and construct a sewer system substation minor damage. is64%complete,andworkisexpected • Basrah Courthouse and Witness to be completed in June 2011. Figure E shows U.S. expenditures by Protection Facility. This $11 million • Al-Abbas Sanitation Network—an project category and fund in Basrah prov- regional courthouse and witness pro- $11.2millioncontracttoinstallap- ince since 2003. tectionfacilityisnowoperatingand proximately 26 kilometers of sewer serves as one of the province’s most lines and two pumping stations was significant virtually complete. SIGIR Oversight judicial cen- • Basrah Modern Slaughterhouse—a Since 2005, SIGIR has conducted 24 on- ters. SIGIR’s $5.6 million project to design and site assessments of U.S.-funded recon- inspection in build a sheep- and cattle-slaughtering struction projects in the greater Basrah 2008 found facility is 90% complete; estimated area. For example: someminorconstructiondeficien- completion is February 2011. A • Basrah Children’s Hospital. The cieswithastaircaseandawaterline, SIGIR inspection in 2009 found that project’sobjectivewastobuilda“state butdeterminedthatthefacilitywas this project was poorly planned and of the art” pediatric oncology hospital. adequately constructed. that the results achieved as of April The original cost of $50 million grew to 2009 were not consistent with the approximately $166 million (this total Table B shows SIGIR’s oversight work original objectives. includesmorethan$100millionin in the greater Basrah area.◆

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Table B SIGIR Oversight in Basrah Area, 2005—2009 Assessment Met Contract Number Project Name Funds Contractor Specs

SIGIRPA-06-080 Al-BasrahOilTerminal $48,239,066(IRRF) ParsonsIraqiJointVenture No $37,682,169(IRRF,CERP,and Bechtel National, Inc. & SIGIR PA-08-160 Basrah Children’s Hospital a No Child Survivor Health Fund) MID Contracting SIGIRPA-05-028 UmmQasrWaterScheme $10,517,308(IRRF) WashingtonInternational No SIGIR PA-08-159 Basrah Courthouse Construction $8,780,942 (IRRF) Local Yes SIGIR PA-05-005 Al-Hakamia Substation $5,933,973 (IRRF) Perini Yes SIGIR PA-05-007 Al-Kaffat Substation $5,933,973 (IRRF) Perini Yes SIGIR PA-05-008 Al-Seraji Substation $5,709,225 (IRRF) Perini Yes SIGIRPA-06-082 ElectricalSubstationSustainment(Samesiteas05-005) $5,654,000(IRRF) Perini Yes SIGIRPA-06-083 ElectricalSubstationSustainment(Samesiteas05-006) $5,654,000(IRRF) Perini Yes SIGIRPA-06-084 ElectricalSubstationSustainment(Samesiteas05-007) $5,654,000(IRRF) Perini Yes SIGIRPA-06-085 ElectricalSubstationSustainment(Samesiteas05-008) $5,654,000(IRRF) Perini Yes SIGIRPA-06-086 ElectricalSubstationSustainment(Samesiteas05-009) $5,654,000(IRRF) Perini No SIGIR PA-09-189 Basrah Modern Slaughter House $5,635,000 (ESF) Local No SIGIR PA-05-009 Shatt Al-Arab Substation $5,298,324 (IRRF) Perini Yes SIGIRPA-06-049 BasrahInternationalAirport–TerminalandTower $5,044,988(IRRF) NANAPacific No SIGIR PA-05-006 Hamdan Substation $5,000,933 (IRRF) Perini Yes SIGIRPA-05-027 PortofUmmQasrSecurityUpgrades $3,698,515(IRRF) Local Yes SIGIRPA-08-162 Roll-On/Roll-OffBerthinthePortofUmmQasr $2,734,500(IRRF) Local Yes SIGIRPA-06-051 PoliceStation–Safwan–IHP404 $2,550,841(IRRF) Local Yes Construct Witness Protection Basrah–Witness SIGIR PA-09-169 $2,195,235 (IRRF) See PA-08-159 See PA-08-159 Security Facility SIGIR PA-09-190 Al-Hadi Permanent Police Station $1,274,339 (ISFF) Local Yes SIGIRPA-05-026 OperationCenterandSecurity $408,433(IRRF) Local Yes SIGIR PA-06-050 Basrah International Airport–Air Side Supply $383,043 (IRRF) Reyam Ltd. Yes SIGIR PA-05-025 Military Base Umm Qasr–Ammo Supply Point $252,650 (IRRF) Local Yes

a This amount represents one segment of the overall project. Total U.S. funding exceeded $100 million.

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Governance 56

Security 65

Rule of Law 75

Economy 81

Public Services 94 4section

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GOVERNANCE

As of December 31, 2010, the United States had funded by the Economic Support Fund (ESF).238 obligated$5.55billionandexpended$5.07billion For a breakdown of selected ongoing programs, tobuildthecapacityofIraq’sgovernmentinstitu- see Table 4.1. tions, promote democracy, and provide humani- tarian assistance to Iraqi refugees and internally National Capacity Development displaced citizens.237 USAID reported expending more than $32 mil- lion of the ESF this quarter to strengthen Iraq’s national government through the National Capac- Government Formation ity Development program (called Tatweer,Arabic for “development”).239 Iraq’s major political blocs reached agreement on Tatweer staffcontinuedtoworkwiththeIraqi Iraq’s major political the new government’s composition in late Novem- MinistriesofHealth,Oil,Electricity,andAgricul- blocs reached ber, bringing to an end more than eight months of ture,aswellastheTradeBankofIraq,theCentral agreement on the intense negotiations and returning Prime Minister Organization for Standardization and Quality new government’s composition in late Nuri al-Maliki to office for a second term. In the Control (COSQC), and al-Mustansiriya University November. newlyexpanded,42-seatcabinet,theprimemin- to strengthen Iraq’s government and public institu- ister’s State of Law Coalition controls seven seats, tions. For instance, Tatweer staff held a workshop to as does the Kurdistani Alliance. The terms of the develop training curricula in selected core health- government formation agreement also accorded administration areas, and a similar workshop 10cabinetseatstoformerPrimeMinisterAyadAl- isplannedtoeducatetrainersattheMinistryof lawi’sal-Iraqiyabloc,whichwontwomoreseatsin Health (MOH) in the development of job descrip- theCouncilofRepresentatives(CoR)intheMarch tionsfortheministry.In2011,theMOHplansto 2010 elections, and 12 seats to the predominantly use Tatweer training material as it begins imple- Shia Iraqi National Alliance. Al-Iraqiya will also menting a program to train 1,000 MOH employees chairthenewNationalCouncilforHigherPolicies, annually in public and health administration.240 an entity whose powers are still being defined by Following a Tatweer workshop on procurement theCoR.ForadetailedlookatthenewIraqigov- andcontracts,theTradeBankofIraqconducted ernment, as of January 19, see Section 1. aletter-of-creditworkshopattheMinistryofOil. Elsewhere, Tatweer staff assisted the Ministry of Electricity (MOE) in developing tender templates U.S. Programs To Promote relatedtoapower-plantprojectinWassitprovince. Democracy and Develop Tatweer staff also assisted the COSQC in institut- Government Institutions ing independent inspections of imported foods and othergoodstoenhanceconsumersafety.Andthis The United States continued this quarter to admin- quarter, al-Mustansiriya became the first univer- ister several democracy and capacity-development sity to implement a post-graduate curriculum on programs at the national, provincial, and local procurement and integrated supply-chain manage- levels.Theprogramsaregenerallyadministeredby ment using Tatweer-developed material.241 the Department of State (DoS) and the U.S. Agency As part of its ongoing effort to assist the Min- for International Development (USAID) and istry of Planning and Development Cooperation

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Table 4.1 Status of U.S.-funded Capacity-development Programs

Duration Status of Funds ($ Millions) Program Start Date End Date Allocated Obligated Expended

National Capacity Development (Tatweer) 2006 projected for 2011 309.4 309.4 296.8 Local Governance Program 2006 projected for 2011 435.5 435.5 396.3 Community Action Program 2006 projected for 2012 384.3 384.3 319.1 Democracy and Civil Society 2006 ongoing 263.3 260.6 168.6 Ministerial Capacity Development 2006 ongoing 50.0 37.7 34.5 PRT Quick Response Fund 2007 ongoing 276.0 270.7 223.0 PRT/PRDC Projects 2006 ongoing 632.1 580.4 505.5

Sources: USACE,responsetoSIGIRdatacall,1/4/2011;USAID,responsetoSIGIRdatacall,1/10/2011;NEA-I,responsestoSIGIRdatacall,12/20/2010, 12/21/2010, and 1/7/2011.

(MoPDC), Tatweer this quarter helped finalize the Community Development objectives and indicators for monitoring implemen- USAID reported expending $28 million this tation of Iraq’s National Development Plan (2010– quarter for the Community Action Program 2014) (NDP). USAID reported that these indicators (CAP III), which promotes citizen participation willbeprogrammedasamoduleintotheIraq ingovernmentatthelocallevel.Theprogram Development Management System (IDMS), which alsofacilitatesMarlaRuzickaIraqiWarVictims theGOIplanstousetomonitorNDPprojects.242 Fund projects, which benefit Iraqis who have been affectedbyU.S.orCoalitionmilitaryoperations Provincial Government Development around the country.246 USAIDreportedexpending$54millionthisquar- CAP III held workshops this quarter for neigh- terfortheLocalGovernanceProgram(LGPIII), borhood and district council members and staff on In 2010, all Iraqi which supports Iraq’s Provincial Councils (PCs) topics such as citizen outreach, citizen participa- provinces met as they formulate legislation, prepare capital and tion, project proposal writing, media relations, and the deadlines for operatingbudgets,andexecutecapitalprojects.243 women’srights.MarlaRuzickaprojectsassisted submissions of their LGP III officials reported that, in 2010, all Iraqi Iraqis in finding medical services, jobs, and hous- budgets to the provinces met the deadlines for submissions of ing. CAP III advisors focused on aiding widows central government. their budgets to the central government. This has andchildrenandonprovidingprostheticlimbs beenacontinuingfocusoftrainingfortheLGP and other medical support to the injured. USAID program.In2009,onlyoneprovincewasableto reported that 222 Marla Ruzicka projects, valued at meet its deadline.244 more than $3.1 million, benefited over 57,000 Iraqis This quarter, USAID reported that LGP III advi- this quarter.247 sorshelpedPCsdevelopnewproceduralrules,leg- islative schedules, and documentation of meetings Democracy and Civil Society andresolutions.Allbutthreeprovinceshavebegun The DoS Bureau of Democracy, Human Rights publishing a gazette announcing official govern- andLabor(DRL)reportedthattwoofitsnine ment business. LGP III advisors also encouraged democracy and civil society projects were com- PC members to conduct public hearings and create pleted this quarter. The highest-value ongoing government websites to foster citizen participation, projectisa$15millionefforttoaidtheCoR,the and they helped PCs create provincial development Iraqi Kurdistan Parliament, and Iraqi political strategies aligned with the NDP.245 parties.Theaimistopromoteaccountabilityand

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transparencybyimprovingefficiencyinpassing developmentprojectsinIraq’sprovinces.Projectsare legislation and helping elected officials respond to administered through DoS and USAID. This quarter, constituents’ needs. The second-costliest ongoing DoS approved 183 projects valued at $14.1 million effortwasa$12millionpost-electionsprojectto and expended $450,000 for those new projects. In strengthen newly elected provincial and national addition, 101 DoS-administered QRF projects val- leaders, political parties, academic think tanks, ued at $3.9 million were completed this quarter.252 and democratic institutions nationwide.248 USAIDreportednoongoingQRFprojects.253 USAID administers three democracy and civil PRTs also use the Provincial Reconstruction society programs, including a new program, called Development Council (PRDC) to fund a variety of Access to Justice, that will focus on improving the water and sanitation projects, school rehabilitation access of disadvantaged and vulnerable populations projects, and other reconstruction projects. This to Iraq’s legal system. For more on this program, see quarter, PRTs completed 16 PRDC projects valued the Rule of Law subsection of this Report. The Leg- at more than $35.5 million; another 55 PRDC proj- islative Strengthening Program provides support to ects valued at almost $111.9 million were ongoing the CoR to improve institutional oversight of gov- at the end of the quarter.254 ernment operations, legislative development, and constituency representation. The Elections Support Programfocusesonprovidinglong-termtechnical Progress toward Provincial assistance to the Independent High Electoral Com- Self-reliance mission(IHEC)tosupportthedraftingofelection laws, voter registration, ballot design, and other Since 2006, U.S. PRTs have reported their observa- election-related activities.249 tionsofprovincialgovernmentcapacityusingatool first called the Capability Maturity Model (CMM) Ministerial Capacity Development and then the Maturity Model Quarterly Assessment This quarter, the Iraq Strategic Partnership Office (MMQA). This quarter, the Office of Provincial Af- (ISPO) administered four Ministerial Capacity fairs (OPA) began using a different model, called the Development projects, the largest of which was Stability Development Roadmap (SDR), to provide a$5millionprogramtotrainandmentorMOE “ananalysisofpublicopinionwhichmeasuresthe personnelinthedevelopmentofalong-termplan likelihoodofaprovincetoexperiencewide-scale for Iraq’s national power grid (which is discussed civilunrest”intheeventofa“matchstick”incident, further in the Public Services subsection of this according to OPA’s definition. Developed specifi- The SDR is intended QuarterlyReport).Theotherprojectsworkwith callyforOPA,theSDRisintendedtomeasurehow to measure how the Ministries of Water Resources, Agriculture, susceptible each province is to civil unrest and susceptible each Transportation,andPlanning,aswellastheoffice instability by analyzing public opinion polling.255 province is to civil unrest and instability. of the deputy prime minister, to provide expertise InFY2011,$2.5millionwasobligatedfortheSDR, in such areas as public policy research, ground- and$625,000hasbeenexpended.256 water sampling, and tactics for water-sharing Categories evaluated by the SDR include basic negotiations with neighboring countries.250 This services, government effectiveness, political effec- quarter,ISPOallocated$38millionandexpended tiveness, economic development, and the rule of $35millionfortheseprograms.251 law. Thirty-five metrics were measured to deter- mine overall satisfaction within each category.257 Provincial Reconstruction Foranoverviewofrankingssummarizedinthe Provincial Reconstruction Teams (PRTs) use the SDR for the period October–December 2010, Quick Response Fund (QRF) to support a variety of see Figure 4.1.

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Figure 4.1 Stability Development Roadmap, 10/2010–12/2010 Government Political Economic Province Basic Services Effectiveness Effectiveness Development Rule of Law

Anbar Babylon Baghdad Basrah Diyala Kerbala Kurdistan Region Missan Muthanna Najaf Ninewa Qadissiya Salah Al-Din Tameem Thi-Qar Wassit

Very Unstable Unstable Moderately Stable Stable Very Stable

Source: U.S. Embassy-Baghdad, response to SIGIR data call, 1/4/2011.

Basic Services of the governor. However, the political differences AccordingtotheSDR,theperceivedinadequacy were deemed unlikely to spark significant popular The perceived of basic services—such as water, sewerage, and upheaval. Although Iraqis gave low ratings to their inadequacy of electricity—isthegreatestsourceofpotentialinsta- national and provincial leadership, they rated the basic services is the bilityinIraq.Allbutoneoftheprovincesreceived election process high, and all 18 provinces received greatest source of “very unstable” ratings in enough metrics to receive “stable” or “very stable” ratings in a category called potential instability an overall rating of “very unstable” in the basic “peaceful reconciliation of differences.” OPA re- in Iraq. services category. Nine provinces received a “very ported that while sectarian differences persist, they unstable”ratingineverybasicservicesmetric.The are much less likely to fuel an outbreak of wide- most important factor for the Iraqis polled was not scaleviolencecomparedwithyearspast.259 theactualconditionofbasicservicesbutthelackof visible improvement in their condition.258 Economic Development Unemployment was viewed as the most potentially Government and Political Effectiveness destabilizing factor in the economic development U.S. Embassy-Baghdad combined the analysis of category, and a lack of confidence in banks was data for both the government and the political effec- seen as an emerging potential factor for wide-scale tivenesscategoriesinitsreport.TheSDRindicated civilinstability.Primaryconcernsincludedalack a perception of growing political infighting among of bank liquidity and the near collapse of al-Warka Provincial Council members as well as the emer- Bank, the largest private bank in Iraq. Several genceofpoliticalblocschallengingtheauthority PRTs reported brisk trade in consumer goods

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andaboominconstruction.Securinglandleases remained a major impediment to foreign direct investment, and water and irrigation capabilities remained a persistent challenge.260

Rule of Law WhiletheSDRfoundthataperceptionofcor- ruption is widespread in Iraq, results varied on whether corruption could spark unrest in different Iraqis reported being provinces.IntheRuleofLawcategory,Iraqisre- concerned about ported being most concerned about the conditions the conditions of of prisoners in Iraqi correctional facilities. In all 18 prisoners in Iraqi correctional facilities. provinces, this metric was rated as “very unstable,” indicating much pent-up public frustration that could spark unrest if a high-profile instance of Two Iraqi women stand outside their makeshift home in a squatter settlement. (UNHCR photo) prisoner mistreatment occurs.261 Figure 4.2 Key Movements of Displaced Iraqis, Internally Displaced Persons 2006–9/2008

Eu and Refugees ro pe Dahuk

Egypt and TheUnitedNationsHighCommissionerfor Leban Ninewa on Erbil Refugees (UNHCR) estimates that 1.5 million Iraqis continue to be displaced inside Iraq, and as Tameem Sulaymaniyah Salah Al-Din of November 2010, it had registered 197,996 Iraqi Baghdad refugees in neighboring countries. The actual Diyala number of Iraqi refugees in the region remains Anbar unknown, but may be much larger: neighboring Wassit KerbalaBabylon hostcountriesestimatethatasmanyas1.8million Qadissiya Missan refugees may reside in those countries.262 For an Najaf Thi-Qar overview of key movements of those displaced, Basrah see Figure 4.2. Muthanna

Loss of homes to squatters or violence and poor IDPs originating from: access to essential services were cited as reasons Diyala Baghdad Ninewa province province province some internally displaced persons (IDPs) chose to Refugees originating from Iraq remaindisplaced.However,whilethemajorityof Nearly 90% of those displaced came from provinces shaded in blue. IDPs live in rented housing, some 500,000 of them Source: GAO Report GAO-11-124, “Displaced Iraqis: Integrated currentlyliveinmakeshiftsquattersettlements International Strategy Needed to Reintegrate Iraq’s Internally ” or in public buildings.263 An estimated 200,000 of Displaced and Returning Refugees, 12/2/2010, p. 7. thattotalliveinmorethan120suchsettlements Accountability Office (GAO) report released this throughout Baghdad.264 IDPs in settlements suffer quarter, USAID and UNHCR officials noted from severe overcrowding and inadequate shelter, that integration into the communities of refuge and they have limited access to water and other remains an option for those who fear reprisals from essential services.265 AccordingtoaGovernment members of opposing religious sects in their homes

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Figure 4.3 IDP and Refugee Return, by Province, 10/2009−9/2010

IDP Return Refugee Return

Dahuk Dahuk Top reasons IDPs and refugees chose not to return to their places of origin:

Ninewa Erbil · Continued real or perceived threats of Ninewa Erbil violence in their neighborhoods · Homes were either occupied by others Tameem Tameem Sulaymaniyah or destroyed Sulaymaniyah · Lack of employment opportunities · Lack of access to essential services Salah Al-Din Salah Al-Din Returnees Diyala Diyala >5,000 Baghdad Baghdad Anbar 500-5,000 Anbar Wassit 100-500 Wassit Kerbala Babylon Kerbala Babylon 0-100 Qadissiya Missan Qadissiya Missan Najaf Najaf Thi-Qar Thi-Qar

Basrah Basrah Muthanna Muthanna

Source: UNHCR, "Monthly Statistical Update on Return—September 2010," 9/2010.

of origin. Other factors, including demographic regrettedgoinghome,and60%citedsecuritycon- shiftsandthelengthoftimespentintheirplaces cernsasthereason.270 ForanoverviewofIDPand The number of of displacement, may also convince IDPs to stay in refugee returns to places of origin, see Figure 4.3. those displaced host communities.266 still far exceeds the While tens of thousands have returned to number of people their places of origin, the flow of the displaced U.S. Support for Refugees returned. totheirhomes—measuredat9,500to15,000per and IDPs monthbeforeIraq’sMarch2010elections—has slowedtoabout7,500permonth.267 The number In FY 2010, DoS provided more than $310 million of those displaced still far exceeds the number in humanitarian assistance to Iraqi refugees, IDPs, of people returned. and conflict victims. Inside Iraq, this included The majority of returnees have been going back a $7.1 million contribution to the World Food to Baghdad and Diyala provinces.268 According to Program,$17milliontotheInternationalOrgani- Government of Iraq (GOI) data, more IDPs than zationforMigration(IOM),and$29.3millionto refugees have returned home: From January to other international organizations. It also included a November 2010, about 22% of the 112,250 return- $204.5millioncontributiontoUNHCR’sregional eeswererefugees;therestwereIDPs.269 Many who Iraq appeal.271 USAIDalsofundsprogramsto have returned lament their decision: A UNHCR supportIDPsandrefugees,reporting$20million surveyof2,353Iraqiswhohadgonebacktotwo provided in FY 2010 to support IDPs through its Baghdadneighborhoodsfoundthat61%ofthem CAP III program and implementing partners.272

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DoSBureauofDemocracy, improvethelivingconditionsofIDPs,refugees, Human Rights, and Labor and other vulnerable populations in Iraq.275 OFDA DRLfundsaprogramprovidedbytheHeartland also coordinates with international organizations, Alliance to provide psychosocial and mental NGOs, and UN agencies to help displaced people health services to IDPs in the Qalawa Camp in return to their areas of origin, integrate into the Sulaymaniyah province. U.S. Embassy-Baghdad area of displacement, or resettle to a third location. reportedthat65%ofthosewhoreceivehelpfrom OFDA also supports Return Assistance Centers Heartlandaretorturesurvivors,andtheremain- (RACs)inIraqtofacilitatethesafeandvolun- ing 35% include victims of war trauma, gender tary return of IDPs and refugees. OFDA grantees violence, and human trafficking. The Heartland continued this quarter to construct and rehabilitate Alliance also works with IDPs in Baktiari Camp shelters in 12 of Iraq’s 18 provinces. In FY 2010, in Diyala province to provide medical and mental OFDA provided more than $45 million in humani- health services.273 For information on other activi- tarian assistance to vulnerable populations in Iraq, ties conducted by the Heartland Alliance, see the including IDPs.276 This quarter, OFDA obligated Rule of Law subsection in this Quarterly Report. an additional $4.3 million to the IOM.277

DoS Bureau of Population, Refugees, and Migration GOI Support for Refugees The Bureau of Population, Refugees, and Migra- and IDPs Many Sunni refugees tion (PRM) funds programs to support voluntary will choose not to returns and reintegration of IDPs by helping them AccordingtoaGAOreportreleasedthisquarter, return home until tofindhousing,employment,andaccesstopublic the GOI does not appear committed to addressing greater progress is services. PRM refugee coordinators work with displacement issues or to working with Jordan and made toward national reconciliation. Iraqi leaders to help them allocate land to refugees Syria to repatriate Iraqi refugees residing in those and IDPs and to provide support to both displaced countries.278 However, U.S. Embassy-Baghdad groupsthroughtheIOMandtheUNWorldFood reported that U.S. officials were urging the GOI to Program (WFP). IOM focuses on socioeconomic increase its commitment to aiding the displaced reintegration needs of returnees and their host and to working with neighboring countries to as- communities using in-kind grants and assistance sist Iraqi refugees.279 IOM officials report that many to businesses. WFP runs a cash-for-work program Sunni refugees will choose not to return home that aims to rehabilitate community infrastructure until greater progress is made toward national and provide immediate employment for nearly reconciliation between Iraq’s religious and ethnic 12,000ofthemostvulnerablehouseholdsinDiyala groups.280 In a 2008 survey, Sunnis accounted for andBaghdadprovinces.PRMhasnotobligated 56% of the approximately 311,000 refugees residing newfundsforFY2011foractivitiesinIraq;instead in neighboring countries and registered with keypartners,includingUNHCR,IOM,andWFP, UNHCR. Within Iraq, the situation is reversed: areusingfundsobligatedattheendofFY2010to Shia accounted for the majority of 1.3 million inter- implement programming.274 nallydisplacedinaFebruary2010assessmentdone by the IOM.281 ForabreakdownofIraq’sIDPsand USAID/OFDA refugees by religious affiliation, see Figure 4.4. As of December 31, 2010, USAID’s Office of U.S. Embassy-Baghdad’s Refugee Coordinators Foreign Disaster Assistance (OFDA) had obli- continue to engage with the GOI’s Implementation gated more than $425.54 million and expended and Follow-up Committee for National Reconcili- $405.40 million to provide emergency support to ationtourgeitandtheMinistryofDisplacement

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Table 4.2 MoDM and Total GOI Budget and Expenditures, 2008–2010 $ Millions 2008 2009 2010 Account Budget Expenditures Budget Expenditures Budget

Operating Compensation ------4.90 4.40 7.10 Goods and Services ------3.30 1.70 3.40 Social Benefits ------40.70 52.20 170.90 Subtotal 227.60 283.40 49.00 58.30 181.40 Investment 2.50 1.90 6.70 0.50 13.70 Total MoDM 230.10 185.20 55.60 58.80 195.20 Total GOI 72,181.40 56,064.30 58,615.10 36,882.70 72,332.00

Source: GAO Report GAO 11-124, “Displaced Iraqis: Integrated International Strategy Needed to Reintegrate Iraq’s Internally Displaced and ReturningRefugees,”12/2/2010,p.35.

Figure 4.4 andMigration(MoDM)toaidIDPswhowantto Religious Affiliation of IDPs and Refugees remain in the Baghdad area.282

Religious Affiliation of IDPs in Iraq, as of 2/2010 Iraq’s2010budgetincluded$195.2million allocatedtotheMoDMoutofatotalbudgetof Total: ~1.3 Million $72.3 billion—a significant increase in budget Other/Unknown allocationfortheMoDMover2009,butlessthan 4% Christian 283 5% was allocated in 2008. Foranoverviewofthe GOIbudgetforIDPsandrefugees,seeTable4.2.

Diyala Initiative Sunni Muslim 33% 58% Shia Muslim U.S. Embassy-Baghdad reported this quarter that the Diyala Initiative, created by a GOI executive order in July 2009 to assist in the return and rein- The biggest tegration of IDPs and refugees, had not resulted challenge remains Religious Affiliation of Registered Refugees, inasignificantincreaseinthereturnofIDPsto lack of employment at the End of 2008 Diyala province. As of this quarter, the project was in the agricultural Total: ~311,000 still in the “early phase” of implementation, and sector due to war- Unspecified Muslim preliminary plans were still underway to expand damaged irrigation 4% Other/Unknown theinitiativetoBaghdad.284 The biggest challenge infrastructure and 5% remainslackofemploymentintheagricultural the effects of a Christian sector due to war-damaged irrigation infrastruc- multi-year drought. 14% tureandtheeffectsofamulti-yeardrought.285 56% Sunni Muslim After successfully aiding 500 returnee households Shia Muslim 21% in Diyala, the program is preparing to expand to reach11,682householdsinDiyalaandBaghdad provinces.286 The GOI reported that more than Note: 221,983 IDP families were assessed. 14,800 families had returned to Diyala following Source: GAO Report GAO-11-124, “Displaced Iraqis: Integrated implementation of the initiative and a reduction in International Strategy Needed to Reintegrate Iraq’s Internally Displaced 287 and Returning Refugees,” 12/2/2010, pp. 9–10. violence in the province.

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International Support Thereportsuggeststhatamoreeffectiveap- for Refugees and IDPs proach would be to integrate policies and pro- gramsintooneoverarching,Iraqi-ledstrategythat A GAO report on displaced Iraqis issued in includes clearly defined and agreed-upon goals. December2010criticizedtheinternationalcom- DoS responded to the report by noting that many munity for failing to create a coordinated approach factors had influenced U.S. aid to IDPs and refu- to reintegrating displaced Iraqis, faulting both the gees, including security conditions in Iraq, which The lack of a focused U.S.governmentandtheUNHCRforneglectingto impeded mobility and made monitoring programs international strategy make public their respective strategies.288 The report difficult. DoS also noted that the U.S. government has, in GAO’s view, lays much of the blame for the lack of integrated did not proactively encourage Iraqis to go back to hindered efforts to assess the needs of plans on limitations placed on the MoDM by the theirplacesoforigin,butrathersupportedvol- IDPs and refugees. GOI,butnotesthatthelackofafocusedinterna- untary returns and reintegration. DoS also noted tional strategy has, in GAO’s view, hindered efforts that it had consistently urged the GOI to increase toassesstheneedsofIDPsandrefugees.Specifi- its involvement in IDP and refugee issues. USAID, cally, the report cites three issues of concern:289 initsresponsetothereport,concurredwithGAO • The numerous assistance centers and mobile recommendations, noting that it had worked with unitsoperatedbyvariousentitiesthataimto PRMandothersonanunclassifiedversionofthe assist returnees are potentially inefficient. There U.S. IDP and refugee strategy.290 are many agencies working to find shelter, jobs, and essential services for IDPs and refugees, but there is no consistent way to measure their suc- Refugee Resettlement cess against international goals for reintegration. intheUnitedStates • ThegoalsandoutcomesofU.S.diplomaticef- fortsandmaterialassistanceprovidedthrough More than 58,800 Iraqi refugees and Special Im- implementing partners were classified or con- migrantVisa(SIV)holdersresettledintheUnited sidered sensitive information and were not made States between October 1, 2007, and December 31, publicly available. 2010,including54,551refugeesandatleast4,263 • TheGOIisnotsufficientlycommittedtoen- SIVs (DoS only tracks SIV holders who resettle couragingreturnsandreintegration,according through PRM). The majority of refugees have been to international organizations and U.S. officials. resettled in California, Texas, Michigan, Illinois, The MoDM issued a national policy on displace- and Arizona, while the majority of SIVs have mentbutlackstheauthoritytoleadministerial settled in Texas, California, Virginia, Washington, efforts, resulting in bureaucratic challenges and Tennessee.291◆ faced by returnees trying to recover property or receive government stipends.

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SECURITY

As of December 31, 2010, approximately 49,700 U.S. troops were deployed in Iraq.292 Under Operation New Dawn, which began on August 31, 2010,themissionofU.S.Forces-Iraq(USF-I)isto advise, train, assist, and equip the Iraqi Security Forces(ISF).AttherequestoftheGOI,USF-Imay conduct partnered counterterrorism operations andprovideothersecuritysupport.USF-Ialso The Iraqi Air Force launches a Hellfire missile from an AC-208 protects civilians working with the UN and the Cessna Combat Caravan during a training mission near Baghdad U.S.Mission-Iraqtobuildcivilcapacitythrough- on November 8, 2010. (USF-I photo) out the provinces.293 In2010,asthenumberofU.S.troopsfellbyhalf Iraq remains the scene OnJanuary15,2011,atleastoneIraqisoldier from 2009 levels, the number of security incidents fell of indiscriminate gunned down two U.S. soldiers at a training center by more than 20%.296 As of December 31, 2010, the mass-casualty inIraq.AthirdU.S.soldierwaskilledinaseparate overalllevelofviolenceinIraqwasabout90%lower attacks and frequent incident the same day—the deadliest for U.S. forces thanthepeakseenin2007.Lastyear,theaverage targeted attacks on sinceJuly2010.294 number of daily security incidents nationwide was government officials, less than 25—making 2010 the least violent year since security personnel, and U.S.operationsbeganin2003(seeFigure4.5).297 religious minorities. Recent Levels of Violence However, Iraq remains the scene of indiscriminate mass-casualty attacks and frequent targeted at- USF-Ihasreportedacontinuingriskofviolence tacksongovernmentofficials,securitypersonnel, fromanumberofknownterroristgroupsaround and religious minorities. On November 2, AQI Iraq. Al-Qaeda in Iraq (AQI) remains a dangerous launched the largest mass-casualty attack of the threat, but USF-I reported that the group’s capabili- quarter, detonating 16 bombs that killed 70 people ties have been degraded as a result of U.S. and Iraqi and injured at least 250 more in Baghdad.298 For an targeting of its operations.295 update on security indicators, see Figure 4.6.

Figure 4.5 Average Security Incidents per Day, by Quarter, 1/2004–12/2010

300 76% 4Q 2004–4Q 2010 240 91% Worst Quarter 2Q 2007–4Q 2010 180 1% 4Q 2009–4Q 2010

6% 3Q 2010–4Q 2010 120

60

0 2004 2005 2006 2007 2008 2009 2010

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Figure 4.6 Security Incidents and Fatalities in Iraq, 1/2004–12/2010

2004 2005 2006 2007 2008 2009 2010

Monthly Security Force and Contractor Fatalities 350 Iraqi Security Forces

300

250

200 U.S. Military 150

100

50 Contractors

0 Coalition Military (Non-U.S.) Monthly Security Incidents and Civilian Fatalities Security Incidents 7,000 Constitutional Referendum 6,000 Uprisings in Baghdad, Parliamentary 5,000 Falluja, and Najaf Elections

4,000 Iraqi Elections

3,000 Provincial National Elections 2,000 Elections Samarra Mosque Bombing 1,000 Iraqi Civilian Fatalities 0

Annual Security Incidents per 10,000 People, by Province Anbar President Bush Muqtada al-Sadr Awakening Announces Declares Basrah and Sadr Council Formed U.S. Surge Cease-fire City Operations

“Sunni Triangle” “Triangle of Death” Disputed Internal Boundaries

Insurgency Civil Conflict U.S. Surge State-building and Consolidation 1/1/2004−2/21/2006 2/22/2006—5/2/2007 (>150,000 Troops) 5/1/2008—12/30/2010

> 50 incidents 20–50 incidents 10–20 incidents 2-10 incidents 0–2 incidents Sunni Shia

Note: Data not audited. Numbers affected by rounding. “U.S. Surge” denotes period when at least 150,000 U.S. troops were in Iraq. ISF fatality data for deaths that occurred before 1/4/2005 is not available.

Sources: DoD, Measuring Stability and Security in Iraq, 2/2006–9/2009; DoL, responses to SIGIR data calls, 11/25/2009, 1/5/2010, 4/12/2010, 7/7/2010, 10/7/2010, and 1/14/2011; Brookings Institution, Iraq Index, 12/30/2010, pp. 12 and 14; SIGIR, Quarterly and Semiannual Reports to the United States Congress, 4/2009, 10/2009, and 1/2010; GOI, response to SIGIR data call, 12/21/2009; USF-I, response to SIGIR data call, 1/4/2011.

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Revised Security Incident Data the April 2010 SIGIR Quarterly Report “correct”data.USF-Ihasacknowledged SIGIR has relied on U.S. military au- reflectsthediscontinuityofthedataand that,“whilethegraphdepictsthedata thorities (in U.S. Central Command makes clear that the data came from two submitted,itisnotrepresentativeof (CENTCOM), USF-I, and the predecessor different sources. Supplemented with theformallyrecordedmonthlysecu- Multi-National Force entities) for the updates from USF-I, SIGIR displayed rity data.”301 The new data set shows security incident data presented in SIGIR’s thesamehistoricaldatainitsJulyand more security incidents than previously Quarterly Reports. In February 2010, October 2010 Quarterly Reports. reported for the period from mid-2006 because SIGIR did not have a historically On November 30, 2010, USF-I to mid-2007. According to USF-I, that completeset of data atthetime,CENTCOM contacted SIGIR and challenged the difference is explained by inclusion of provided SIGIR with a complete set accuracy of the security incidents data information provided by the host nation covering security incidents from January displayed in SIGIR’s October 2010 Quar- thathasbeenreportedintheDepart- 2004 through December 2008. This data terly Report. After reviewing the un- ment of Defense (DoD) Combined set came from Multi-National Corps-Iraq derlying data, USF-I acknowledged that Information Data Network Exchange (MNC-I), and it was consistent with previ- SIGIR’s graphs faithfully mirrored the (CIDNE)sinceAugust2006.Thenew ousdataprovidedbyMNC-Ionsecurity data that USF-I had provided to SIGIR— data also deviates significantly from incidents through the first half of 2009. but that the data was incorrect. USF-I the old data set starting in April 2009. In preparation for its April 2010 informed SIGIR that it had “unknow- From April 2009 through August 2010, Quarterly Report, SIGIR received an- inglyprovidedanincorrectdatafilein thereviseddatashowsa50%reduction other set of data from USF-I that covered September 2010 when responding to the in total security incidents relative to the theperiodfromApril1,2009,through quarterly data call.”299 AccordingtoUSF-I, data previously provided by USF-I. If the March26,2010.Onthesurface,this thefaultydatareflected“rawincidents new data is accurate, then all the security more recent data set seemed inconsistent (pre-analysis) across multiple categories, incident data that SIGIR received from with the older set because it showed themajorityofwhichdidnotmeetthe USF-I in 2010—not just the data received markedly more incidents in the April– refined post-analysis criteria required of in September—had inaccuracies. June 2009 period. SIGIR questioned the recordable security incidents.”300 Allsecurityincidentfiguresinthis accuracy of the data and was told that SIGIR received revised data from USF- January 2011 Quarterly Report use the itwasallthatcouldbeprovided.The IonJanuary4,2011.Figure4.7compares new, corrected data that USF-I provided “monthlyincident”lineinFigure2.11of the old “incorrect” data with the new on January 4, 2011.

Figure 4.7 Comparison of Old and Revised Monthly Security Incident Data, 2004–2010

8,000 7,000 6,000 NewData Provided by 5,000 USF-I to SIGIR on 1/4/2011 Old Data Provided by USF-I to SIGIR 4,000 Beginning 3/31/2010 through 10/4/2010 Old MNC-I Data 3,000 Provided by CENTCOM to SIGIR 2,000 on 2/22/2010 1,000 0 2004 2005 2006 2007 2008Old MNC-I Data 2009 2010 Provided to SIGIR on 7/2/2009

Sources: MNC-I, response to SIGIR data call, 7/2/2009; CENTCOM, response to SIGIR data call, 2/22/2010; USF-I, responses to SIGIR data calls, 3/31/2010, 4/1/2010, 7/1/2010, 10/4/2010, and 1/4/2011.

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Attacks on Minority Christians TheGOIreportedthat,onOctober31,2010,an estimated 50 members of Our Lady of Salvation ChurchinBaghdadwerekilled,andapproxi- mately 75 injured, after a front-group for AQI attacked the church and held worshippers hostage for several hours. The attackers detonated suicide vests and responded with gunfire as Iraqi Police (IP) stormed the building, resulting in numerous hostages and seven police officers being killed. Five GOI and church officials survey the damage after the October 31, 2010,attackonOurLadyofSalvationChurchinBaghdad. of the attackers were reportedly killed, and eight (Ankawa photo) were captured.302 Ten days later, early morning bomb and mortar attacks on homes of Christians the Iraqi National Counter-Terrorism Force.307 For in Baghdad left at least 3 people dead and 26 a breakdown, by ministry, see Table 4.3. wounded. Subsequently, Iraq’s Immigration and USF-I’sIraqTrainingandAdvisoryMission Displacement Directorate in Dahuk province an- (ITAM) reported this quarter that development of nounced that it had received more than 80 Chris- the Iraqi Joint Operations Command is underway Iraq called for tian families who fled Baghdad and Mosul.303 to support the transfer of internal security responsi- international bility to components of the IP.308 USF-I also report- assistance to clear an Landmine Removal ed that progress has been made in the integration of estimated 20 million landmines throughout On October 25, 2010, Iraq called for interna- GOI and Kurdistan Regional Government (KRG) the country. tional assistance to clear an estimated 20 million forcesservingundertheMOD.309 U.S. funding for a landmines throughout the country. The UN has portionoftheprogramtointegrateGOIandKRG reported that Iraq is heavily contaminated with forces came to an end in December 2010.310 explosive remnants of war, landmines, and other unexploded ordnance.304 During 1991–2008, Table 4.3 approximately 8,000 Iraqis, among them 2,000 Iraqi Security Forces, as of 12/31/2010 children, were estimated to have been killed or Service Assigned Personnel a maimed by mines and cluster bombs, according Ministry of Defense Iraqi Army (IA) 206,000 305 to UN figures. The United Nations Assistance Training and Support 47,000 MissionforIraq(UNAMI)hasnotedthatland- Air Force 5,000 minesaffect1.6millionIraqisandthat90%of Navy 3,500 theminesarelocatedinagriculturallands.Prime Total MOD 261,500 a Minister al-Maliki emphasized that the problem Ministry of Interior Iraqi Police 303,000 is compounded by a lack of mapping of mined Iraqi Federal Police 45,000 areas, and he has requested assistance from the Border Enforcement 60,000 306 international community. Oil Police 30,000 Facilities Protection Service (FPS) 96,000 Total MOI 534,000 Iraqi Security Forces Counter-Terrorism Forces 4,120 Total 799,620 As of December 31, 2010, nearly 800,000 security Note: Numbers affected by rounding. forcepersonnelwereservingintheMinistryof a Assigned numbers illustrate payroll data; they do not reflect present-for-duty totals. Defense (MOD), Ministry of Interior (MOI), and Source: GOI,MOIIG,responsetoSIGIRdatacall,1/15/2011.

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Notwithstanding these advances, USF-I has reported that “the U.S. faces the choice of making additional investments to fill essential gaps in ISF capabilitiesoraccepttheriskthattheywillfall short of being able to fully secure Iraq from inter- nalandexternalthreatsbythetimeU.S.forcesde- part in accordance with the Security Agreement.”311 Inadditiontologisticscapacityshortfallsraisedby the DoD Office of Inspector General (DoD OIG) this quarter, ITAM reported that corruption within SIGIR’s Deputy Inspector General meets with General Mohamad, CommanderofBasrah’sISF,onJanuary13,2011. theISFhashindereddevelopmentandledtothe inefficient allocation of human and fiscal resources, security and possess foundational capabilities as well as the absence of a requirements-driven to defend against external threats.”317 Among planning process for the maintenance of security thevariousMOIforces,onlytheFederalPolice infrastructure and equipment.312 (FP)andOilPolicearecurrentlyassessedtobe operationally capable. The IP, Department of Status of the MOD Border Enforcement (DBE), and Port of Entry USF-I reports that the ISF is now regarded as servicesareassessedashavingabasiccapability counterinsurgency (COIN) capable, and the andimprovingtechnicalskills.AllMOIsecu- qualified Iraqi trainers necessary for sustaining the rity forces, however, are expected to have gaps in Iraqi Army (IA) COIN force are in place.313 ITAM funding, command and control, and logistical reported that more than 191,000 IA personnel have infrastructurethroughthetimeUSF-Iwithdraws been fielded in 13 light infantry divisions and 1 in December 2011.318 mechanizeddivision.Morethan54,800IAsoldiers As of December 31, 2010, more than 708,600 graduated from initial and specialized training pro- personnel had been trained through MOI centers, gramsduring2010,314 and training in mechanized mainly in these three components:319 and specialized equipment schools continues on a • 459,268 IP personnel schedule that is coordinated with the IA’s equip- • 104,834 FP personnel According to DoD ment modernization program.315 • 65,541 DBE personnel assessments, both TheMODconductsIAtrainingat20locations, MOI and MOD which provide for a range of individual, leader, MOI training is conducted at 36 active training security forces and collective training courses. Current training is centers; U.S. civilian police advisors (CPAs) sup- are behind in the focused on preparing the IA for stability operations port 28 of them.320 The current training focus— attainment of andexternaldefense.The“train-the-trainer”con- in addition to the significant one-time task of Minimum Essential cept has now transitioned from USF-I to the MOD, trainingandintegratingtheFacilitiesProtection Capability. and the fielding of division-level Iraqi trainers is Service(FPS)(discussedbelow)—istohaveapro- said to be almost complete.316 fessionallytrained,sufficientlystaffedpoliceforce that is capable of defeating insurgencies, creating Status of the MOI an environment of internal security, and enforc- AccordingtoDoDassessments,bothMOIand ing the rule of law.321 ITAM reported that it is MODsecurityforcesarebehindintheattainment presently analyzing how many more advisors will of Minimum Essential Capability (MEC)—the benecessarytosupportthe273CPAscurrently standard that indicates “Iraqi security ministries, working in Iraq, and how they will be recruited institutions, and forces can provide internal and deployed.322

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Status of Facilities Protection Service Transition The plan for transitioning FPS personnel to the IP service has slowly evolved since 2008.323 In No- vember, the Minister of Interior announced that he had approved MOI funding to train approximately 76,000FPSaspoliceofficersin2011.324 Under the transition agreement, all FPS contractors are to become Iraqi Police in late January or early Febru- ary2011.Thischangeofstatuswillresolvethepay imbalances that have existed with FPS personnel at theMinistryofIndustryandtheBaghdadMunici- pality (Amanat).325 Currently, the FPS comprises approximately 91,650 personnel. Of these, about 17,330 are full- timeFPSpolice,andabout74,320areMOIcontrac- tors.Historically,contractorshaveearnedhalfas muchasthefull-timeFPSpersonnelwhilefacing thesamehardshipsanddangers.Additionally, contractors are not provided with MOI identifica- tioncards,whichauthorizethemtobearmed.In U.S. military canine and handler assigned as part of an explosive-detection team in Baghdad. (USF-I photo) the past, some MOI contractors have had their weaponsconfiscatedbyCoalitionforcesandIPof- dog handlers, 14 veterinarian assistants, and 3 ficers because they lacked this identification. These veterinarian doctors at the Baghdad Police College. Historically, contractors problems are expected to be resolved when the Certification as explosive-detection dog handlers have earned half as contractors become IP officers early in 2011.326 requiredpolicepersonneltocompletea45-day much as the full-time Twelve MOI training academies will be used program with Iraqi master canine trainers. The FPS personnel throughout Iraq to conduct the FPS training. The November 2010 graduation was the fourth group while facing the same hardships and plan calls for 11 training cycles, spanning several of canine handlers to complete the course, which dangers. months,with6,700contractorstobetrainedin has fielded a total of 164 explosive-detection teams. each four-week cycle. This will take approximately Graduates will return to their provinces, where they 18 months to accomplish. The curriculum will will work as explosive-detection teams and serve at incorporate elements of both the basic recruit security checkpoints.329 trainingandtheFPScurriculum.327 ITAM reported that expenditure of $10 million Sons of Iraq of the Iraq Security Forces Fund (ISFF) for the There has been no change to the number of Sons constructionofanFPStrainingfacilityisnowin of Iraq (SOI) personnel who have transitioned into question because “inadequate progress” had been either the ISF or non-security ministries since last made on the project.328 quarter. Since October 2008, 8,748 SOI members have been hired into the ISF, and more than 30,000 Police Canine Program have been hired into non-security ministries.330 Anexampleofrecentspecializedtrainingprograms USF-Idoesnothaveinformationaboutthenumber isthePoliceCanineProgram.OnNovember7, ofSOIenrolledinvocationaloreducationaltrain- 2010,theIraqiPoliceCanineProgramandCanine ing programs. To the extent that such programs Handlers School certified 26 explosive-detection exist, they are managed by the GOI.331

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Payment of SOI Salaries • Augustpaymentsfellbehindscheduleand As of November 2010, TheGOIprovidedmorethan$270millionto were paid out together with the September pay 387 SOI had been pay SOI salaries in 2009 and committed an equal disbursement. killed in 663 attacks. amountfor2010salaries.332 AccordingtoUSF-I, • In some areas, October salary payments, due by Attacks on the SOI thedraft2011budgetincludesfundingtoincrease November 14, were not completed by the end of appear to have been SOI salaries to $300 per month for all members November. more targeted nationwide. Current salaries vary by province • In Anbar and Tameem, payments fell signifi- in 2010. between$130and$300permonth.TheMinistry cantly behind schedule, and both October and ofFinancereportedthatthesameamountwas November payments were made simultaneously. included in its 2011 budget proposal for the CoR.333 • Novemberpaymentsinfiveofthenineprovinces Complaintsabouttheprogramcontinuetobere- where SOI operate were completed on time. The ported.However,theGOI’sOfficeofDisarmament, remaining provinces were finished by December 18. Demobilization, and Reintegration (DDR) has • December salaries were not due until January reported improvements in paying SOI members:334 14,2011.However,theGOIacceleratedpay Table 4.4 schedules. SOI in some provinces were paid for SOI Salary Payments Made on Time, since 5/2010 December at the same time November pay was Province May Jun Jul Aug Sep Oct Nov Dec distributed. All were paid by the end of Decem- Anbar X X X X ber,twoweeksaheadoftheJanuaryduedate. Babylon XXXX Baghdad X X Table 4.4 summarizes GOI payment perfor- Diyala X X X mance since May 2010, when a streamlined pay Tameem X X X process was established. Ninewa X X X X X Qadissiya XXXXAttacks on SOI Salah Al-Din X X X X SOI members have assumed considerable personal Wassit XXXXrisk during the course of the program, and the dan- ger continues even after the high-profile period of the Note: Paymentsareconsideredtobeontimeifmadebythe14thdayofthenextmonth. surge. As of November 2010, 387 SOI had been killed Source: USF-I,responsetoSIGIRdatacall,1/4/2011. in 663 attacks. Attacks on the SOI appear to have been more targeted in 2010. Although the number Table 4.5 oftotalattacksin2009was116%higherthanin2010, SOIAttacksandMembersKilledinAction,10/2008–11/2010 thenumberofSOIkilledin2010wasjust16%below Time Period Number of Attacks Total Killed the reported number of SOI killed in 2009. Moreover, Oct–Dec 2008 119 78 this comparison does not include those killed during 335 Jan–Mar 2009 137 40 the month of December 2010. For the number of Apr–Jun 2009 112 56 SOI killed and their associated attacks, see Table 4.5. Jul–Sep 2009 71 32 Oct–Dec 2009 52 40 SIGIR Audit of Sons of Iraq Program Jan–Mar 2010 28 11 SIGIR released an audit this quarter of the SOI pro- Apr–Jun 2010 69 34 gram. MNC-I spent approximately $370 million Jul–Sep 2010 41 79 of FY 2007–FY 2009 CERP funds on the program. Oct–Nov 2010 34 17 SIGIR auditors found that insufficient quantifi- Total 663 387 ableprogramdata,coupledwiththeinabilityto segregatepossibleSOIeffectsfromotherfactors, Source: USF-I, response to SIGIR data call, 1/4/2011.

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precluded SIGIR from drawing conclusions about Weaknesses Identified in MOD the program’s contribution to the reduction in and MOI Logistics Capability violence in Iraq. MNF-I officials and command- AccordingtoUSF-I,theIA’slogisticsandsustain- ers who spoke with SIGIR stated that they believe ment capability is one area that appears likely to SOIwasanimportantfactorinreducingviolence fallshortoftheMECstandardwhenU.S.forces and provided a number of anecdotal examples in redeploy in December 2011.339 Although the supportoftheiropinions.Overall,SIGIRfound commands and bases to support logistics and the MNF-I exercised weak financial controls over sustainment are largely in place, maintaining itscashpaymentstotheSOI.SIGIRfoundthat ISFF-funded equipment and infrastructure and payments were often made to an SOI leader rather managing the resources to carry out the MOD’s than to individual SOI members. Since assum- missionhaveremainedaproblem.340 Recent ingfullcontroloftheSOIprograminApril2009, DoD OIG observations of notable shortfalls of the GOI has faced difficulties in managing the MOD’s logistics system include:341 program and integrating SOI members into Iraqi • warehouse management at the Joint Repair Parts ministries. The GOI promised to employ 95,120 CommandatTaji SOI members, but has provided offers to only • theavailabilityofcriticalrepairparts 39,224. Additionally, it has not offered any jobs • theMODfuelsupplysystemincentivestorepair since November 2009. vehicles • theJointBaseWorkshopatTajiNationalDepot • logistics support of IA Divisions Security Sector Assistance • the Iraqi Asset Management Program and on- Plans for 2011 hand inventory of repair parts at medium-size workshops USF-I continues to sustain, equip, and train ISF personneloftheMODandMOIwiththestated Recent DoD OIG observations of notable short- goal of ensuring that they achieve at least MEC falls of MOI’s logistics system include:342 DoD has reported standards.336 InNovember,aDoDOIGreview • repairpartsfortheMOIandIPvehiclefleet that essential warned that “the looming deadline of December • the FP Sustainment Brigade capabilities may 2011 allows little time to develop a viable logis- • medical supplies at the FP Medical Battalion not be in place ticsandindustrialcapabilitythatcanattainand • munitions safety at the FP Headquarters before transfer of responsibility for sustain minimum materiel readiness levels for Storage Facility police training the ISF.” The report warns that failure to do so to INL. “couldresultinadownwardspiralofopera- FY 2010andFY 2011Funding tional readiness that would put Iraq’s security for U.S. Security Programs and stability at risk.”337 Moreover, DoD has As of December 31, 2010, nearly $437 million reported that essential capabilities may not be in (44%)ofthe$1.0billioninFY2010supplemental placebeforetransferofresponsibilityforpolice appropriations to the ISFF were still available for training to the DoS’s Bureau of International obligation to new projects; these funds expire Narcotics and Law Enforcement Affairs (INL). In on September 30, 2011. More than $713 million August, DoD reported that there will be endur- (71%)remainedunexpended.343 The FY 2010 ISFF inggapsinpolicecapability—notcoveredbythe spend plan includes MOD sustainment projects, INL police-training mission—“if the Iraqi Police modernization of supply-chain management, and do not achieve MEC prior to INL assuming the training-center life support for the Foreign Mili- mission independently.”338 tarySales(FMS)-equippedIraqi9thMechanized

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Division.MostISFFfundingfortheMOIiscom- equipment if the Congress ultimately appropriates mitted to training as USF-I prepares to transfer less than was requested. responsibility for the police-training program to INLwasunabletoprovideSIGIRwithaspend INL in October 2011.344 Fordetailsofthetransi- planforitsFY2011fundsonthegroundsthat tion, see Section 3 of this Quarterly Report. appropriations have not yet been finalized. INL FY 2011 assistance to the Iraqi security sector is requested approximately $315 million, $295 million uncertain because the Congress has not yet completed (94%) of which was planned to cover the expenses itsconsiderationoftheAdministration’sFY2011 ofINL’sPoliceDevelopmentProgram(PDP)for appropriations request of $2.0 billion for the ISFF approximately three months.348 For more details on and$315millionfortheInternationalNarcotics INL’splannedPDP,seeSection3. Control and Law Enforcement (INCLE). Instead, to fund FY 2011 government operations, the Congress has passed four continuing appropriations acts, the Foreign Military Sales mostrecentofwhich(P.L.111-322)providedfund- ingthroughMarch4,2011.Thelawprovided:345 The modernization of the ISF is facilitated • approximately $386 million to the ISFF, slightly through the Foreign Military Sales program. lessthantheamountforacorrespondingperiod Currently, the GOI has committed to 355 FMS thatwasprovidedinFY2010andsignificantly agreements to acquire defense articles and ser- lessthanwhatwasrequestedforFY2011 vicesthattheU.S.governmentproposestosell.As • approximately $296 million to the INCLE, the of December 31, 2010, 72% of the $8.3 billion FMS same amount of funding for the corresponding program had been committed by the GOI. Of the period provided in FY 2010 but significantly $1.97 billion in equipment and projects already more than what was requested for FY 2011 delivered or in the process of being delivered, the GOI had funded 63.9%.349 Examples of activity AccordingtoUSF-I,anFY2011ISFFspend this quarter include: plan is not available and will not be developed • AsofDecember31,2010,63ofthe140M1A1 until the final funding amounts have been deter- tanks were delivered to Iraq at an estimated mined. But USF-I has reported that the United cost of $3.6 million per tank.350 The last shipment States “faces the choice of making additional isexpectedtoarriveinIraqinAugust2011.351 investments to fill essential gaps in ISF capabili- • EightM88A2RecoveryVehicleswereproduced tiesoraccepttheriskthattheywillfallshortof and delivered to Iraq, with an estimated value of USF-I has reported beingabletofullysecureIraqfrominternaland $29.6 million.352 that the United States externalthreats”bythescheduledwithdrawalof • Operator and maintainer training for the “faces the choice of U.S. forces in December 2011. The spend plan built M1A1sandM88A2s,undertheNewEquipment making additional around the Administration’s $2.0 billion FY 2011 Training program, have been placed on contract investments to fill appropriations request allocated more than 80% of andarescheduledtobeginFebruary1,2011. essential gaps in ISF anticipated funding for MOD activities, including Included is training for two regiments (70 tank capabilities or accept $849 million for sustainment and $619 million crews) through December 31, 2011. Tank main- the risk that they will 346 fall short of being for equipment. The FY 2011 National Defense tainer training is currently scheduled through able to fully secure Authorization Act (P.L. 111-383), which the Presi- February28,2012.Thetotalcostofthistraining Iraq from internal and dent signed into law on January 7, 2011, authorizes package is estimated at $34.2 million.353 external threats.” up to $1.5 billion in FY 2011 appropriations for • A one-year contract to provide support for the ISFF.347 It is not clear whether USF-I will al- contractorlogistics($35million,estimated)is locate similar priority to MOD sustainment and scheduled to begin on February 1, 2011.354

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• The Iraqi Army Aviation Directorate accepted delivery of two new Mi-171E helicopters. This de- livery, coordinated with the USF-I’s Iraq Security Assistance Mission, increased the directorate’s total inventory of these Russian-made aircraft to eight. The helicopters will be used to conduct counter-terrorism, airlift, intelligence, surveil- lance, reconnaissance, and other missions.355

TheDepotDistributionCentralOperationstoragefacilitiesatCampTaji,completedonNovember2,2010. U.S.-funded Construction (USACE photo) Projects

TheU.S.ArmyCorpsofEngineers(USACE) reportsthatitcompleted33security-related construction projects, with a combined value of $62.4million,thisquarter.Fouroftheprojects usedatotalof$1.7millioninINCLEfunds,and threeoftheseINCLEprojectswereforsecurity upgradesatcourthouses.356 The other 29 completed projects were funded with $60.8 million from the ISFF and included threeatCampTajiinBaghdad.OnNovember2, GRD is renovating a former Iraqi military headquarters site and turning it into the future Iraqi International Academy. 2010, USACE’s Gulf Region District (GRD) com- (USACE photo) pletedconstructionoftwoidenticalstoragefacili- ties at the Camp Taji Joint Repair Parts Command. The $13.4 million ISFF-funded construction proj- Thefacilities,whichwerebuiltusing$6.3million ect is scheduled to be completed in summer 2011. oftheISFF,willserveasthemainstoragelocation USACEisrenovating10buildingsandconstruct- SIGIR found that the for IA vehicle repair parts.357 SIGIR audited earlier ingtwonewbuildingsonthecampus.360 GOI has not made phasesoftheTajiproject,includingtheGOIcom- This quarter, SIGIR released a report address- any commitment to mitment of resources to staff and sustain complex ingtheextenttowhichtheGOIwaspreparedto fund the operation logistics processes at the facilities.358 maintain and operate the IIA after construction is of the IIA after its planned opening and As of December 31, 2010, USACE had 82 ongo- completed. SIGIR found that the GOI has not made that the U.S. military ing security construction projects with a combined anycommitmenttofundtheoperationoftheIIA did not adequately valueof$295.4million.Almostallofthefunding afteritsplannedopeningandthattheU.S.military address sustainment comes from the ISFF. The largest is a $46.1 million did not adequately address sustainment needs needs. projecttobuildaNationalPoliceSustainment with the GOI in its project-planning deliberations. Brigade Complex in Baghdad.359 Additionally,DoDplanstofurnishandequipthe GRDisalsoconvertingaformerIraqimilitary facility at an estimated additional cost of $12 mil- headquarters in Baghdad into the new Iraqi Inter- lion. SIGIR recommends that the U.S. CENTCOM national Academy (IIA). The academy is designed Commander direct the USF-I Commander to take to provide executive- and senior-level GOI leaders no further action to purchase furniture and equip- with classes and workshops in strategic dialogue, ment for the IIA, and inform the GOI that it is the professional development, and English language. GOI’sresponsibilitytodoso.361◆

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RULE OF LAW

As of December 31, 2010, the United States had • improving government processes and proce- obligated$1.97billionandexpended$1.67billion durestoprovidevulnerablepopulationsbetter toimprovetheruleoflaw,includingtheobser- access to government services and legal remedies vance of human rights, in Iraq.362 According to • enhancing the public knowledge of citizens’ re- U.S. Embassy-Baghdad, programs to improve the sponsibilities, rights, and remedies under Iraqi law justice system—which focus on increasing judicial • increasing the competence and availability of security, processing criminal cases more efficiently, legal professionals and civil-society partners to and improving oversight and capacity of detention assist vulnerable and disadvantaged Iraqis facilities—remain a central component of the U.S. effort to achieve a unified, democratic, and federal Iraqthatisatpeacewithitsneighborsandanally Iraqi Justice System of the United States.363 Thisquarter,theOfficeoftheRuleofLaw Iraqi Court System Coordinator (RoLC), along with the PRTs and INL, This quarter, RoLC and INL continued to assist the continuedtoworkwithvariousministries,includ- GOI in modernizing its judicial system, including ingtheMOIandHigherJudicialCouncil(HJC), assisting in securing its court facilities and modern- to improve security conditions for judges and izing its administrative practices.367 Notwithstand- speedtheissuanceofweaponscardstojudgesand ing this assistance, some criminal courts continue to theirprotectivesecuritydetails.Withthehelpof beoverburdenedbypre-trialdetainees.Forexample, representatives from the Department of Justice’s between July 1 and September 30, 2010, the HJC re- Some criminal courts International Criminal Investigative Training As- ported that Karkh Central First Investigative Crimi- continue to be sistance Program (ICITAP) and USF-I, RoLC also nal Court completed only 950 of the 3,677 cases it overburdened by continued to embed training teams in Ministry of received,amountingtoacasecompletionrateof pre-trial detainees. Justice (MOJ) detention facilities and make regular 26%andleavingatotalbacklogof2,727casesatthe visits to MOI detention facilities to assess conditions investigative stage. During the same period, how- and mentor staff members.364 ever, the HJC reported that the al-Anbar Investiga- On November 3–4, 2010, RoLC held a Provincial tive Criminal Court completed nearly 90% of the RuleofLawConferenceatU.S.Embassy-Baghdad. cases before it. RoLC also reported that the Federal Approximately 100 military and civilian officers AppellateCourtreducedthenumberofoldcases met to exchange lessons learned and assess how on its docket in 2010. Although a distinct variance best to consolidate progress as the military draws in case completion rates among Iraqi investigative down its presence in Iraq. The conference pre- courts remains, RoLC reported that the average viewed U.S. and international engagements with completion rate for investigative courts throughout the GOI’s judicial institutions that are planned to Iraqhasconsistentlyimprovedandiscurrentlyat take place after the scheduled departure of U.S. approximately 75%.368 troops in December 2011.365 The Rusafa Court, located near the Rusafa Deten- This quarter, USAID awarded a new contract for tion Center in Baghdad, continues to complete coun- a program called Access to Justice, paving the way terterrorism caseload. U.S. military judge advocates for work with Iraqi partners to develop a curricu- general in the U.S.-Iraqi Law and Order Task Force lum aimed at:366 (LAOTF) have been working with the judiciary to

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find more efficient ways of conducting initial in- vestigative hearings and to speed cases to trial. The HJC reported that judges at the Rusafa Court heard approximately 1,488 cases and completed 748 cases between July 1 and September 30, 2010.369

INL Judicial Reform Initiatives In September 2010, INL awarded grants for court- administration capacity building to the National Center for State Courts and for data management SIGIR’sDeputyIGmeetswithBasrah’sChiefJusticeHekmat,in totheInstituteforInternationalLawandHu- Basrah, Iraq, on January 13, 2011. man Rights. Additionally, INL has signed a letter agreement with the United Nations Development • Medhat’s biggest concern continues to be secu- Programme (UNDP) to help strengthen the core rity for the judges. InJanuary,twojudgeswere administrative functions of the HJC at the national attacked, and one died. There are currently 5,230 andprovinciallevelsthrough2012.370 securitypersonnelprovidingcoverageforallof INLreportedthatitsFY2011programfunds thecourtsandIraq’s1,260judges.TheCouncil will support recently initiated programs that of Ministers (CoM) rejected the HJC’s 2011 In January, two providetechnicalexpertstoadviseonlegalreform, budget request to fund 4,000 additional security judges were attacked, courthouse security, and other administrative personnel,andtheHJCisstillwithoutarmored and one died. and managerial issues. INL also plans to continue vehicles or weapons. fundingforitsrule-of-lawadvisorsservingatthe • The GOI law mandating retirement at age 63 is U.S.EmbassyandinthePRTs.371 a serious problem. AccordingtoMedhat,there is a legislative proposal to have judges remain in HJC Update placeuntiltheageof70,whichwouldallowIraq In a meeting with SIGIR this quarter, Chief Justice to retain its most experienced personnel and Medhat al-Mahmoud provided an update of HJC assist in clearing a substantial backlog of cases. accomplishments and noted that several challenges Untilthatmeasureispassed,hemustsubmitre- still face the HJC:372 quests on a judge-by-judge basis to the President • The HJC has created investigative offices for all ofIraqtogetexemptionsthatwouldallowregu- the judges. Medhat said that as Iraq gets back lar judges to serve until the age of 65 and members to “normalcy,” the country should observe the of the Court of Cassation to serve until 68. lawsdictatingthatinvestigationsbeunderthe purview of the independent judiciary—not the police. However, because of the shortage of in- Anticorruption vestigative judges, the police have been filling the void (and in critical circumstances, the military U.S. Support for Iraq’s Anticorruption has also been assisting in what Medhat termed Institutions “hot areas”). The HJC has started to build up the Since 2003, U.S. officials have provided substan- investigative capacity of the various courts to be- tial assistance to Iraq’s primary anticorruption gintakingupmoreofthecaseload.Medhatsaid agencies—the Commission of Integrity (COI), the that the number of investigative judges would be ministry inspectors general (IGs), and the Board of increasingandthattheywillreceivetrainingin Supreme Audit. Within the Embassy’s INL office, forensics and other technical issues. the Anti-Corruption Coordination Office (ACCO)

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overseesU.S.anticorruptioninitiativesinIraq.It reports that GOI progress toward achieving its an- ticorruption goals has been slow and that security concerns, legal uncertainties, and underdeveloped institutional capacities continue to hamper the GOI’santicorruptionefforts.373 ICITAP advisors have been providing investiga- tive training to COI personnel since 2004 through fundingprovidedbyINLandaninteragency agreement between DoS and the U.S. Depart- ment of Justice.374 At the program’s peak in 2007, approximately 15 ICITAP advisors were dedicated to this mission.375 As of January 2011, three ICITAP advisors were assigned to the COI to conduct ac- tivitiesinthreeareasuntiltheprogram’sscheduled conclusion on June 30, 2011:376 • building the managerial capacity of COI manag- ers and supervisors through active mentoring

• enablingtheCOItodevelopandfullyimple- Oneof30,000children’santicorruptionmagazinesreleasedbythe ment a comprehensive, sustainable national COI in December 2010 for use in educating Iraqi school children. training strategy • enhancing the current operational proficiency of investigative judge for adjudication. As of September the COI 30, the COI had referred more than 2,000 defendants tothecourtsin2010,involvingallegationsofcorrup- With support from the U.S. Embassy’s Military tion totaling approximately $380 million. The MOD Information Support Team (MIST), ICITAP and had the largest number of employees referred to ACCO also assisted the COI in providing 30,000 investigative judges, followed by the MOI and the anticorruption magazines for distribution to Iraqi Ministry of Municipalities and Public Works.379 school children this quarter.377 The COI also reported that its investigative work The Ministry of hadledto481convictionsbetweenJanuary1and Defense had the National Anticorruption Strategy September 30, 2010, including convictions of 50 largest number of This quarter, the Ministries of Agriculture, Educa- GOI officials holding the rank of director general employees referred tion,andCulture,aswellastheCoM,conducted or above. Of those convicted, 39% were found to investigative workshops aimed at implementing provisions guilty of forgery (usually of educational certifi- judges. of the National Anti-Corruption Strategy for cates),26%fordamaginggovernmentproperty, 2010–2014 (NACS),whichtheGOIreleasedin and20%forembezzlement.380 March2010.Asoftheendof2010,themajorityof the GOI’s ministries had complied with NACS re- COI Leadership Questions quirements to complete and submit their individu- UnderIraqilaw,theofficeofCOICommissioner alanticorruptionplanstotheCOIforreview.378 hasfullauthoritytodirectandcontrolallCOI operations,381 and the Commissioner is potentially COI Investigations involved in every corruption investigation in Iraq. Upon completion of an investigation, Iraqi The office’s current occupant, Judge Raheem al- lawrequirestheCOItoreferitsfindingstoan Ugaili,wasappointedbyPrimeMinisteral-Maliki

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in December 2007. However, he has never been confirmed by the CoR and, as such, serves only in an interim capacity and is subject to replacement at the prime minister’s discretion.382 Because of its actual—and latent—authority, the position of COI Commissioner will be an important appointment forthenewgovernment.

Financial Disclosure Under Coalition Provisional Authority Order 55,whichcontinuestogovernCOIactivities, SIGIR’sInspectorGeneralmeetswithofficialsfromthenewIraqi Academy for Fighting Corruption on November 8, 2010. allmid-tohigh-rankingGOIemployeesmust fileannualdisclosureformswiththeCOI.383 On In another significant investigation, the IG for Because of its December 5, 2010, the COI reported that 76% of the MOE announced that his office had seized a actual—and latent— the members of the former (pre-March 7 elections) number of fuel tankers delivering diesel fuel to authority, the position CoR had filed the appropriate financial disclosure MOEpowerstationsinsouthernBaghdad.The of COI Commissioner forms. Other notable financial disclosure results tanker trucks were seized on the grounds that will be an important for 2010 included:384 theycontainedonlyone-thirdtheamountoffuel appointment for the new government. • 100%responseratefor34ofthe56agencies requiredbythecontractandthefuelcontained employing affected personnel in them did not meet specifications. The MOE IG • 100%responseratefortheCoM reported suspicions that a crime may have been • 92% response rate for the 24 heads of indepen- committed, and an investigation into the origins of dent (non-ministerial) agencies this alleged plot is currently underway.386 • 56% (10 of 18) response rate for provincial IGpersonnelalsocontinuetobetargetsforvio- governors lence. In early December, a member of the Ministry • 18% response rate for the more than 3,400 of Housing’s IG office was killed north of Baghdad affected personnel at the MOI by an unknown gunman who reportedly used a silenced weapon.387 Inspectors General This quarter, Iraq’s IGs continued to examine Other Significant Investigative Matters allegationsofcorruptionwithintheirministries. In late August 2010, two shipping containers packed SIGIR reported in October that an investigation withatotalof8,080laptopcomputersownedbythe into the MOI’s purchase of ineffective bomb detec- U.S. government were improperly declared “aban- tors from a British company was quashed by the doned” by Iraqi port officials in southern Iraq and invocationofArticle136(b)oftheIraqiCriminal auctionedshortlythereafter.WhenU.S.Embassy- Procedure Code, which allows for a minister to Baghdad learned that the laptops had been sold, halt judicial inquiries into the activities of person- it requested their immediate return, and with the nel working in that ministry. This quarter, the aid of Prime Minister al-Maliki, 4,020 laptops were MOIIGannouncedhisintentiontoconducta returned to U.S. government custody. But according joint investigation with British authorities into to RoLC, 4,060 laptops remain missing. the circumstances surrounding the acquisition To facilitate the COI’s ongoing investiga- ofthesedevices.AccordingtotheMOIIG,75% tion into this matter, on November 17, 2010, the ofthevalueofthecontractwenttokickbacks EmbassypermittedfiveU.S.personnelwhohad received by GOI officials.385 contact with Iraqi port officials before the auction

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date to submit written witness statements to the curriculumfromtheUN-sponsoredInternational COI. However, the COI investigator cautioned that Anti-Corruption Academy (IACA), based in he was still waiting for port officials to approve the Austria. As of mid-December 2010, more than 50 investigation,ascorruptioncasesmaybehaltedby countries, including Iraq, have formally agreed to cabinet ministers pursuant to article 136(b) of the partner with the IACA.395 Iraqi Criminal Procedure Code.388 • standardizedanticorruptiontrainingand U.S.andGOIofficialsalsoreportedseveral research support important developments in other anticorruption •country-specifictrainingandresearchsupport matters this quarter: • interdisciplinary academic degree programs • TheCoMbegantheprocessofforminganinter- (beginning mid-2011) ministerial committee to investigate diploma and • platforms for dialogue and networking (such as certificate fraud in the GOI. The Ministry of Higher alumni gatherings, special events, and anticor- Education and Scientific Research reported that it ruption conferences) has uncovered more than 7,000 forged diplomas, • anticorruption think-tank activities although it did not make clear to what extent thesefraudulentdiplomaswerebeingusedby Anti-money-laundering Initiatives Iraqis to obtain government employment.389 Since 2005, U.S. Embassy officials have helped the • The Deputy Governor of Baghdad province GOI establish modern anti-money-laundering reported approximately 29,000 cases of appar- protocols that conform with internationally entpublic-benefitsfraud.Whencalledonto accepted standards. The Financial Attaché—in produce proof of their eligibility to receive public conjunction with personnel from the Internal Rev- benefits,only750ofthe29,000coulddoso.390 enue Service’s Criminal Investigations Division— • Najaf’s Provincial Council referred a case has led these efforts, which focus on developing concerningallegedcorruptionintheconstruc- thecapacityoftheCentralBankofIraq(CBI)to When called on to tion of two sewage projects implemented by the deter, detect, and prevent money laundering. In produce proof of their Ministry of Municipalities and Public Works, July 2010, the U.S. Department of the Treasury eligibility to receive valued at about $86 million.391 began working with the CBI to help stand up its public benefits, only • Police units in charge of securing Iraq’s oil facili- MoneyLaunderingReportingOffice,aprocess 750 of the 29,000 ties seized six tanker trucks used to smuggle oil that is ongoing.396 could do so. inthesouthernpartofthecounty.392 • TheCOIbeganworkon350casesinvolving allegations of Diyala officials receiving double Human Rights government salaries.393 Safeguarding Religious Minorities Opening of Anticorruption Academy AsevidencedbytheattackontheSayidatal-Najat After more than five years of delays, the Iraqi Acad- (Our Lady of Salvation) Syriac Catholic Church emy for Fighting Corruption opened in Baghdad in Baghdad on October 31, insurgents continue on December 9, 2010. The primary mission of the to target religious minorities, causing many of Academy is to train GOI employees and Iraqi jour- themtofleetheirhomesforrefugeelsewhere.This nalistsinanticorruptionbestpractices.TheCOI quarter, U.S. Embassy-Baghdad reported that it Commissioner, under the auspices of the CoM, is has established a new working group, led by As- responsible for administering the new Academy.394 sistant Chief of Mission for Transition Assistance The Academy receives technical assistance Peter Bodde, focused on minority rights. Other and support in designing and implementing its Embassy officials met separately with the head

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of the Christian Endowment regarding how that Heartland Alliance has been documenting insti- agency could increase its assistance to the Chris- tutionalized violence against women and girls and tian community, and with the Deputy Minister of announced that it will soon release its report on the Displacement and Migration regarding services to experiencesofwomenandgirlsinthecriminaljus- displaced Christians.397 ticesystemandPersonalStatusCourts.Thereport DoS also reported that its Bureau of Democracy, is expected to include recommendations for legal HumanRights,andLabor(DRL)planstofundthe andpolicyreformsaimedatimprovingwomen’s Iraq Foundation’s Interfaith Cooperation Proj- access to Iraq’s judicial system.401 ect.This15-montheffortaimstodeepenpublic HeartlandAlliancealsoprovideslegaland knowledge and promote dialogue about Iraq’s social services for the victims of sex trafficking in diverse religious heritage and to enhance religious theKurdistanRegion,Baghdad,andBasrah.Most freedom,interfaithcooperation,trust,andmutual legal services include criminal defense representa- The Interfaith respectamongfaithcommunities.398 tion for women and girls charged with prostitu- Cooperation Project tion.HeartlandAllianceanditspartnerconduct aims to deepen public CombatingViolenceagainstWomen training and deliver presentations to law enforce- knowledge and This quarter, DoS reported that the Heartland mentofficials,serviceproviders,andthegeneral promote dialogue about Iraq’s diverse Alliance—a non-governmental organization public to raise awareness and encourage increased religious heritage. (NGO)thatreceivessupportfromDRLtoassist prosecutionoftraffickers.Recently,HeartlandAl- survivors of torture—continued to provide legal, lianceandJohnsHopkinsUniversity’sProtection social, medical, and mental health services to adult Program held their first workshop to support the and juvenile victims of gender-based violence and KRGindraftinganti-traffickinglegislation.Ac- their dependants. These services are provided cordingtoRoLC,theuniversitywasinstrumental through local implementing partners with support in working with the local government officials in and involvement by Heartland Alliance staff.399 Baghdadtodraftsimilarlegislation.402 Gender-based anti-violence protection pro- gramstakeplaceinBaghdad,Kirkuk,Basrah, Assisting War Widows Sulaymaniyah, Erbil, and Dahuk. Legal repre- DoS’s Office of Global Women’s Issues (S/GWI), sentation and social support is also provided to in conjunction with DRL, continues to assist Iraqi gender-based violence victims who want to file women through the Iraqi Women’s Democracy criminal charges against perpetrators and who Initiative and the recently launched Secretary’s wanttofilecasesinthePersonalStatusCourts. Widows Program. Under the new program, DRL MostcasesfiledinthePersonalStatusCourts andS/GWIworkwithNGOpartnerstoprovide throughout Iraq are requests for divorce based on direct support and training to Iraqi widows, claimsofdomesticviolence;alongwithrelated female heads of household, and other vulner- casesforalimonyandchildcustody.Lawyers ablewomeninIraqintheareasofhumanrights, provide legal consultation, assessment of cases, literacy, entrepreneurship, and vocational skills. andfullrepresentationtoindividuals,while The aim is to enable disadvantaged Iraqi widows to social workers mediate with families to support acquire the skill sets needed to become economi- reintegration. Women and girls are screened in callyself-sufficient,increasetheirindependence, detentioncentersorpolicestationsinallofIraq’s diversifytheirmeansoflivelihood,andcontribute provinces; and Heartland Alliance provides to the economic development of Iraq.403 ◆ physicians in all locations but Baghdad, as well as shelters for residents in the Kurdistan Region.400

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ECONOMY

With a government in place, oil-led private invest- more vulnerable to fluctuations of global oil price ment strengthening,404 and the International Mon- and demand than any other oil-exporting nation etary Fund (IMF) projecting sharp growth,405 there intheMiddleEastorNorthAfrica.408 The extent is reason to be cautiously optimistic about Iraq’s of this exposure is shown in Figure 4.8. economic prospects for 2011. However, corruption Thisquarter,theGOIreceived$13.22billionin remains high, business conditions are difficult, 406 oilexportreceipts,$1.96millionmorethanlast “We can’t just jump andtheabilityofthenewgovernmenttotackle quarter.Totalreceiptsfor2010were$48.83bil- from the Soviet model sensitive issues affecting the economy is largely lion—anincreaseof$11.81billionover2009,and to the free market. untested. Basrah Investment Commission Chair- $920millionmorethanthe$47.91billionprojected There are many steps manHaiderFadhelputthechallengeinperspective intheGOI’s2010budget.Thisoilincomerepre- in between.” whenhetoldSIGIR,“Wecan’tjustjumpfromthe sentsnearly90%ofallgovernmentrevenue,two- Soviet model to the free market. There are many thirds of the GOI’s 2010 federal budget, and 58% of steps in between.”407 Iraq’s gross domestic product (GDP).409 (Services, manufacturing, and agriculture all contribute to the remaining third.) Key Economic Trends Foradetailedlookatthelinkageofoilprice, and Developments GOI receipts, and Iraq’s GDP, see Figure 4.9.

The Iraqi economy remains heavily dependent on Inflation its oil sector and will remain so for the foresee- After declining through much of the first half of able future. With uncertainty surrounding global 2010 and holding steady during the third quar- energy markets, Iraq’s economic performance is ter, Iraq’s year-on-year core inflation rate rose to more than 3% during the final quarter. As of Figure 4.8 November, the latest monthly year-on-year figure Economic Reliance on Oil among Selected available, core inflation was 3.07%—more than a Middle East and North Africa Nations, 2010 fullpercentagepointabovethe1.9%recordedfor 80 much of the previous quarter.410 Overall inflation 411 70 wasmarginallylowerat3.05%. The increase still Iraq leaves Iraq’s inflation rate below the average pro- 60 jected for other countries in the region for 2010.412 Libya 50 Qatar Iraq’sinflationisexpectedtorisetoaround5%in

40 2011 as global commodity prices recover and poor Kuwait harvests drive up the cost of food.413 The increase Algeria Saudi Arabia Oman 30 is in line with projected global price increases of UAE Oil GDP as a % of Total GDP 20 around 5% for non-oil commodities, food, and Bahrain Yemen 414 10 Sudan industrial raw materials. Iran Forthesecondstraightyear,theCentralBank 0 40 50 60 70 80 90 100 ofIraq(CBI)hasmaintainedanunofficialex-

Oil Revenue as a % of Total Government Revenue change rate of 1,170 Iraqi dinar to one U.S. dollar. Thispolicyisexpectedtocontinueatleastthrough Source: IMF, Regional Economic Outlook: Middle East and Central Asia, 10/2010, p. 15.

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Figure 4.9 The Iraqi Economy, 2004–2010

Oil Price, Iraqi Oil Receipts, and GDP 2004 2005 2006 2007 2008 2009 2010 $8 $160 Global Recession

$7 $7.01 $140 $6 $120 Estimated Monthly GDP barrel) per ($ Price Oil $5 $90.84 $100

$4 Weekly Oil Price $4.72 $80

($ Billions) $3 $60

$2 $40 Oil Receipts and Estimated GDP $1 Monthly Oil Receipts $20

$0 $0

($ Billions) GDP $33.39 $35.99 $45.08 $56.98 $86.53 $65.84 $84.14 GOI Budget $25.77 $31.38 $32.10 $41.05 $72.18 $58.61 $72.36 Oil Receipts $16.52 $21.86 $28.13 $35.88 $58.79 $37.02 $48.83

Inflation in Iraq and the Middle East % Change from Period End (Iraq Monthly Data) or Annual Average (Middle East Average) 80%

70% Iraq Inflation 60% (Year-on-Year, Monthly)

50%

40%

30% Middle East and North 20% Africa Inflation (Annual Average) Iraq Core Inflation 10% (Year-on-Year, Monthly) 6.77% 3.07% 0% 3.05% -10% 1/2010—CBI begins using data from COSIT’s Iraq's Trade Balance Iraq Household Socio- Economic Survey $ Billions to calculate inflation rates $70 $60 $50 $40 $30 $20 $10 $0 $-10 Imports Exports $-20 Current Account Balance $-30 2004 2005 2006 2007 2008 2009 2010

Note: Data not audited. Numbers affected by rounding. Daily oil price represented by Weekly Iraq Kirkuk netback price at U.S. Gulf. All dollar values are in current prices. GDP figures from 2009–2010 are estimates.

Sources: U.S. Treasury, responses to SIGIR data calls, 6/8/2010, 7/13/2010,10/13/2010, and 1/14/2011; IMF, World Economic and Financial Surveys: World Economic Outlook Database, 10/2010, www.imf.org/external/pubs/ft/weo/2010/02/weodata/index.aspx, accessed 1/14/2011, and Regional Economic Outlook: Middle East and Central Asia, 10/2009, pp. 55–57, and 10/2010, pp. 68–70; EIA, “Weekly Iraq Kirkuk Netback Price at U.S. Gulf,” www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WEPCKIRK&f=W, accessed 1/14/2011; GOI, CBI, “Key Financial Indicators,” 12/29/2010, www.cbi.iq/documents/key_financial.xls, accessed 1/12/2011.

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2011.415 However, any downturn in oil prices or political setback significant enough to cause an erosion of confidence would require the CBI to support this rate by tapping the country’s substan- tialforeignexchangereservestobuydinars.416

Growth Citing lower-than-expected oil production and ex- ports, the IMF in October cut its estimate for Iraq’s 2010realGDPgrowthbymorethanhalf,from SIGIR’s Deputy Inspector General addresses the IAMB meeting in Geneva, on January 6, 2011. 7.3% to 2.6%. 417 However,theacceleratingpaceof new foreign direct investment in Iraq’s oil fields • OnDecember29,PrimeMinisteral-Maliki is expected to boost overall oil-related economic signedadecreetograntinvestorsownership activity to an extent that the IMF has raised its of land for residential housing projects with no earlier projections for GDP growth in 2011 from initialdownpaymentinexchangeforthestateto 7.9%to11.5%,andin2012from7.6%to11%.418 receive a specified percentage of units built. The Despite announcements this quarter of major decree also provides for leasing and allocation of new housing construction projects,419 estimates land for a variety of other commercial invest- for non-oil-related real GDP growth for 2011 ment projects, including those in agriculture, remain unchanged at around 4.5%.420 Because the tourism, and industry.425 oil sector provides only a small fraction of Iraq’s Even double-digit jobs, even double-digit GDP growth appears Still,Iraqremainsadifficultplacetodobusiness. GDP growth appears unlikely to cut deeply into the current high job- Initslatestrankingsontheeaseofdoingbusiness, unlikely to cut deeply less rate or to accommodate the large numbers of theWorldBankrankedIraq166outof183countries. into the current high young Iraqis who enter the job market annually.421 In measuring the ease of starting a business, Iraq jobless rate. The most recent unemployment figure listed by rankedninthfromthebottom.426 Transparency In- theGOI’sCentralOrganizationforStatistics ternational’s Corruption Perceptions Index rated Iraq and Information Technology—15.3%—is from as the fourth most corrupt nation in the world and 2008.422 Moreover, the outlook for the agricul- the most corrupt in the Middle East region.427 turalsector,oneofthecountry’slargestemployers, remains uncertain following two years of below- Chapter VII Sanctions average rainfall.423 On December 15, the United Nations Security Council (UNSC) took significant steps to return Investment Climate Iraq to the legal and international standing it held The GOI took steps this quarter to improve the prior to the 1990 invasion of Kuwait by passing investment climate of Iraq’s economy: three resolutions that close most of the remaining • Iraq’sHigherJudicialCouncilestablisheda Chapter VII mandates. specialcourtinBaghdadtoadjudicatedisputes • End of WMD-related Trade Sanctions. UN involving foreign investors. According to an Security Council Resolution (UNSCR) 1957 ends HJC spokesperson, the court’s main goal is to trade sanctions set in place to isolate Saddam shield foreign investment capital “to push the Hussein’s government politically and prevent it investment process forward, along with Iraq’s from developing weapons of mass destruction reconstruction.”Additionalbranchesofthe (WMD).428 The sanctions at one point prevented courtareplannedforBasrahandMosul.424 theimportofnearlyallproductsbutfoodand

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medicines, including chemicals and other materi- than $200 million in seized, vested, or other alscommonlyusedinindustrialandagricultural funds may remain in various DFI accounts.436 production, as well as any nuclear materials—such • Oil for Food Program. UNSCR 1958 ends all as those used for medical purposes.429 While lift- activities related to the Oil for Food Program, ingthelastofthesesanctionswaslargelyapolitical whichoperatedduring1996–2003andallowed statement, it does enable Iraq to develop a peaceful theIraqigovernmenttouseoilrevenuestopur- civilian nuclear power program. 430 chasefoodandmedicines.Followingpassageof • Protection of Iraqi Oil Revenues. UNSCR 1956 theresolution,theresidualOilforFoodProgram providesafinalextension,untilJune30,2011, fundsweretobetransferredintotheDFI,lessan to protect Iraqi oil revenues from international amount up to $151 million, which was retained creditors still seeking compensation for Iraq’s to pay expenses and provide indemnification. 437 actions during the Saddam era.431 The interna- tional debt burden from that era totaled more Aspects of Iraq’s relations with Kuwait remain sub- than$120billionattheendof2004,432 but more ject to Chapter VII conditions, including the obligation recently has been estimated at $46 billion–$87 bil- to continue payment of reparations to Kuwait:438 lion.433 The Development Fund for Iraq (DFI), The Development which has served as a protective shelter for Fund for Iraq (DFI), Iraq’soilrevenues,willbedissolved—aswillthe Oil and Gas which has served as a International Advisory and Monitoring Board protective shelter for for Iraq (IAMB), which has had oversight re- Crude Oil Production Iraq’s oil revenues, will be dissolved. sponsibilities for the DFI since it was created by and Field Development theUNin2003.434 The Committee of Financial Crude oil production averaged 2.40 million barrels Experts (COFE), headed by the President of Iraq’s per day (MBPD) this quarter, an increase of 3% BoardofSupremeAudit,isexpectedtomanage over the previous quarter, but 1% below the same the DFI successor.435 At an IAMB meeting on quarter in 2009.439 For crude oil production and January6,2011,SIGIRprovidedanupdateonthe export levels since 2003, see Figure 4.10. resultsoffourauditsoftheDFIconducteddur- The GOI provided a detailed analysis this quarter ing2009and2010.Theauditsfoundthatmore ofhowitexpectstoachieveitsambitiousgoalof

Figure 4.10 Crude Oil Production and Exports, by Month, 10/2003–12/2010 Million Barrels per Day 3.0 Production 2.5

2.0

1.5

1.0 Exports

0.5

0.0 2003 2004 2005 2006 2007 2008 2009 2010

Sources: NEA-I, responses to SIGIR data calls, 6/4/2010, 7/6/2010, and 1/11/2011.

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Figure 4.11 GOI and IEA Projected Oil Production, by Year, 2009–2030 Million Barrels per Day

14 Other Production (North) 12 All Fields from 2nd Licensing Round Total Production Projected by GOI Other Fields from 1st and 2nd Other Production (South) 10 Licensing Rounds Majnoon 8 North

West Qurna Phase-2 6

West Qurna Phase-1 4 South

2 Al-Rumaila 0 2010 2015 2020 2025 2029 International Energy Agency Estimates

Source: GOI, Ministry of Oil, meeting with SIGIR, 11/8/2010. producing12MBPDby2017,aboutfivetimes years.447 ForabreakdownoftheGOI’sprojections the current production level. Three southern oil and a comparison with the IEA’s estimates, see fields—al-Rumaila,WestQurna,andMajnoon— Figure 4.11. areexpectedtoproduce9.24MBPD,ormorethan Major international oil companies continued three-quarters of the total.440 In November, the to ramp up operations in Iraq’s southern oil fields MinistryofOilprojectedproductionwouldreach this quarter: 3.26 MBPD by the end of 2011.441 • At al-Rumaila, British Petroleum (BP) and the Outside experts tend to agree that Iraq’s produc- Chinese National Petroleum Corp., reported in tion potential is substantial, but view the GOI January they had increased production by more goal skeptically.442 Meeting the official production than 10% above the initial production rate of Outside experts tend target would require not only making a significant 1.066 MBPD agreed on in December 2009. BP to agree that Iraq’s investment—estimatedbysometobe$150billion reported that 20 new rigs are now mobilized in production potential or more443—but also overcoming considerable po- the field and 41 wells were drilled in 2010.448 The is substantial, but litical, logistics, transportation, and infrastructure two international oil companies have joined with view the GOI goal challenges.444 A2007reportcompiledbytheU.S. Iraq’sSouthOilCompanytoformanewentity, skeptically. engineering company Foster Wheeler concluded theal-RumailaOperationsOrganization(ROO), that excessive corrosion levels in major pipelines whosegoalistofurtherincreaseproduction. placed them at risk of failure.445 BP is providing training, controls, systems, and In its World Energy Outlook 2010 published in expertise to the ROO.449 December, the International Energy Agency (IEA) • At al-Zubair, the Eni-led consortium reportedly anticipates it would take until the 2030s for Iraq’s averaged production rates of 236,000 barrels oil production to exceed 6 MBPD—just half the perday(BPD)asitworkedtowardalong-term GOI’s2017goalof12MBPD.446 Still, the IEA noted target of 1.2 MBPD. The current production rate that even this more modest increase would make represents an increase of 29% from an initial up a large share of projected rises in OPEC produc- starting volume of 183,000 BPD.450 tion over the next quarter century and enable Iraq • For West Qurna Phase-1, ExxonMobil and Royal to equal Iran’s oil output sometime in the next five Dutch Shell committed to raising output by an

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government, announced in December that contractsfortwooffournewoffshoresingle-point mooring (SPM) stations planned for construc- tioninthePersianGulfsouthofBasrahhad been signed.457 Independent assessments suggest thefirsttwostations,togetherwithnew48-inch undersea pipelines to the al-Basrah Oil Terminal (ABOT)willlikelybecompletedbyearly2012, withthethirdfollowinginlate2012.Completion ofthefourthisestimatedtobebetweenmid-2013 Oneof20newrigsnowoperatingintheal-Rumailaoilfield. andsometimein2015.458 Completion of the pipe- (BP photo) linesandallfourSPMstationswouldmorethan additional500,000barrelsperdaybytapping doubleexportcapacitytobetween4MBPDand additional reservoirs in the field. The new goal 4.5 MBPD.459 Aprojecttobuild35newoilstorage atWestQurna-1istoboostcurrentoutputof tanks is underway in southern Iraq. These tanks 244,000barrelsperdayto2.825MBPDwithin willreplace66oilstoragetanksintheal-Fawarea six years.451 that were destroyed during the Iran-Iraq War.460 • AttheMajnoonfield,ShellandPetronasan- nounced in November that they had signed a Oil Metering contract with Halliburton and two other compa- Installation of a comprehensive oil metering niesforconstructinganoperationscampand systemisbehindschedule;and,attherequest drilling at least 15 wells.452 of the IAMB, PricewaterhouseCoopers (PwC) expanded the scope of work of its 2010 interim Installation of a InnorthernIraq,theNinewaOilCommissionan- auditoftheDFItoincludeareviewofthepro- comprehensive oil nouncedinNovemberthatproductionattheBatna gram.461 Meteringtheflowofcrudefromsource metering system is oilfieldhadresumedforthefirsttimein20years.453 toendpointenablesauthoritiestotrackoilvolume behind schedule. Amid this increased activity, the U.S. govern- andalsoalertsthemtoanyillegalsiphoning.Both ment interagency International Oil Company Sup- thepaceandqualityofoilmeterinstallationhave portTeamcreatedinAugust2010hasbeenliaising longbeenissuesofconcernforIAMB.InDecem- with IOCs (regardless of country of origin) to help ber2008—nearlyfouryearsafteritfirstrecom- them deal with administrative, logistical, and bu- mendedanoilmeteringsystemforalloilfields, reaucratic challenges to their operations.454 oilterminals,andrefineries—theIAMB’sexternal auditors found only a third of the planned meters Crude Oil Exports and hadbeeninstalled.462 Capacity Expansion InNovember,theGOIprovidedtheUNSCwith Crudeoilexportsaveraged1.95MBPDthis information showing that by September 30, 2010, quarter,upby4%fromthepreviousquarterand ithadcompletedworkon51%ofthe3,302meters 2% higher than the same quarter in 2009.455 Oil planned for installation by that date (see Table 4.6). exports could get an immediate boost of up to Italsoreportedthatworkwascontinuingona 150,000BPDiftheGOIdisputewiththeKRGthat systemtometercrudeoilexportedfromABOT.A halted exports of oil from the Kurdistan Region in systemcomprising12metershadbeencompleted 2009 can be resolved soon.456 attheKhawral-AmayaOilTerminal463 The GOI Iraq’sDeputyPrimeMinisterHusseinShah- meteringplancallsforatotalof4,898meters.464 ristani,whoheldtheoilportfoliointheprevious PwCreportedthatnotallinstalledmeterswere

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Table 4.6 Implementation of the Installation Plan for Oil Meters Planned to Implemented Percentage of Company Total Plan 9/30/2010 to 9/30/2010 Implementation

Exporting South Oil Company 137 16 43 269% Companies Maysan Oil Company 65 12 29 242% North Oil Company 188 76 86 113% Distributors Midlands Refineries Company 592 107 187 175% North Gas Company 69 28 39 139% Oil Pipelines Company 410 402 365 91% North Refineries Company 239 239 195 82% Gas Filling Company 49 34 25 74% South Gas Company 20 8 3 38% South Refineries Company 137 67 24 36% Oil Products Distribution Company 2,992 2,313 695 30% Total 4,898 3,302 1,691 51%

Source: UNSC, S/2010/567, “Note verbale dated 28 October 2010 from the Permanent Mission of Iraq to the United Nations addressed to the President of the Security Council,” 11/2/2010. being used as intended. To fully implement the Natural Gas installationschedulebytheendof2011,PwC AccordingtotheMinistryofOil,productionof recommended appointment of a technically associated natural gas averaged 1,413 million cubic qualified independent party to verify the plan’s feet(MCF)perdayduringthefirst11monthsof completeness,effectiveness,andefficiencyonceit 2010,and51%ofthatamountwasflared.468 is fully implemented.465 On November 14, the Ministry of Oil signed preliminary contracts to develop two of the three Refineries and Petroleum Products non-associated natural gas fields offered in the Domestic production of gasoline, diesel fuel, October 20 bidding. One contract was signed kerosene, and liquefied petroleum gas (LPG), as with a consortium comprising Turkey’s TPAO, well as the total supply of each of those petro- the Kuwait Energy Company (KEC), and the leum products was up significantly this quarter Korean Gas Corporation (Kogas) to develop the The Ministry of Oil compared with the same quarter in 2009. To Mansuriya gas field in eastern Iraq.469 The second signed preliminary meet growing demand, Iraq continues to import agreement was signed with TPAO and KEC to contracts to develop gasolineandLPG—butforthefirsttimeinover work the smaller Siba gas field in southern Iraq.470 two of the three non- ayear,wentthreemonthswithoutimportingany Completion of a third contract for development associated natural gas diesel fuel. Iraq also continued to be self-sufficient of the Akkas field in the western Anbar province fields offered in the in producing kerosene during the quarter. Refinery has been delayed amid reports of local resistance October 20 bidding. output of diesel fuel increased by 27% this quarter, to the terms of contract.471 Akkasisthelargestof gasoline by 37%, kerosene by 26%, and LPG by the three fields,472 which collectively have proved 17% compared with same quarter of 2009. Nearly reserves of 7.6 trillion cubic feet—just under 7% of one-fourth of the country’s gasoline supply was Iraq’stotalprovedgasreservesof112trillioncubic imported this quarter, down from 32% during the feet.473 All three deals would require approval by same period in 2009.466 Iraq plans construction Iraq’s CoM before they are implemented.474 Much offournewGOIrefineries,whichwouldroughly ofIraq’snaturalgasisexpectedtobeconsumed double existing refinery capacity.467 domestically in power plants designed to use the

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fuel once the infrastructure is in place to process Ministry of Planning—have led to delays in getting and deliver the gas. projects started.478

Attacks on Oil and Gas Infrastructure Poverty Reduction Pipeline security remains a challenge; however, CompletedbytheMoPDCinlate2009,thepover- the number of daily attacks has been significantly ty-reduction strategy sets out six areas for priority reduced as government cooperation grows with lo- investmenttoreversethreedecadesofdeclinein cal residents. Pipeline exclusion zones have proven Iraq’s social indicators and reduce the number of useful only in remote areas, such as that between peopleinpovertyby30%—fromabout7millionof Kirkuk and Baiji. However, GOI officials reported Iraq’smorethan30millionpeopletoabout5mil- In general, the that these security zones in more populated lion by 2014. The strategy includes steps to boost pipeline network areas—forexample,southofBaghdad,wherelocal incomes for the working poor, to improve health in southern Iraq is residents live, work, and cross the pipeline at nu- care, to heighten education quality and achieve secure, while areas merous points—have been less effective. In general, near-universal primary schooling, to cut illiteracy north of Baiji and thepipelinenetworkinsouthernIraqissecure, rates in half, and to replace aging, substandard near the Turkish border are considered both in populated and unpopulated areas, while dwellings with better housing.479 The strategy also to be “hot.” areasnorthofBaijiandneartheTurkishborderare callsforreducingthegendergapinopportunity. considered to be “hot.”475 Some 87% of Iraqi women were outside the labor force in 2007.480 Iraq’s poverty-reduction agenda reflects the National Development country’s socioeconomic decline over the past and Poverty Reduction three decades. According to World Bank figures, GDP per capita decreased by almost $600 (16%) The$79.5billion2011draftbudgetapprovedbythe between1980and2008(seeFigure4.12).481 Farm CoM and sent to the Council of Representatives yields also dropped sharply as a result of underin- in late December reflects the influence of both the vestment, neglect, and drought.482 In 1980, Iraq’s National Development Plan (2010–2014) (NDP) and lifeexpectancywasroughlysimilartoitsneigh- the five-year National Strategy for Poverty Reduc- boringcountries;butin2006,amongnationsin tion.Thebudgetcallsforthecreationof172,000 theMiddleEastandNorthAfrica,onlyDjibouti’s jobs—mainly in non-oil sectors, including health care and education—and addresses poverty-reduc- Figure 4.12 tion goals, including housing.476 Change in GDP per Capita in Selected Countries, 1980–2008 $USD

Funding New Development 2,500 In2010,theMinistryofFinance(MOF)released 2,000

more than $250 million in Petrodollar Project 1,500 fundstotheprovincesofBasrah($160million)and 1,000 477 Kirkuk ($100 million). The funds were allocated 500 under the terms of Iraq’s budget law, which grants 0 provinces up to $1 per barrel of crude oil produced -500 or refined and per 150 cubic meters of natural gas -1,000 extracted. Restrictions on the expenditure of these Iran Jordan MoroccoEgypt Syria Pakistan Afghanistan Iraq funds—forexample,theymustbespentoninfra- Source: The World Bank, World Development Indicators Databank, http://data.worldbank.org/data- structure projects that are first approved by the catalog/world-development-indicators, accessed 12/30/2010.

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Figure 4.13 lifeexpectancywaslower(Figure4.13).483 In 1980, Life Expectancy Changes in Selected Countries, 1980–2006 Iraq’s primary school enrollment rate, at nearly

80 100%,wastheregion’shighest.Today,atjustunder 75%, it is among the lowest.484 75 The poverty-reduction strategy and the NDP 70 both call for greater private-sector involvement in 65 the economy to create the jobs and boost productiv- ityinnon-oilsectors.Ifachieved,bothgoalswould 60 help the government reduce spending on social 55 safety nets that today constitutes by far the largest 50 in the Middle East.485 The draft 2011 budget calls for 486 45 spending of $10.2 billion on social welfare. About 99%ofthepopulationcurrentlyreceivessomeform 40 487 OmanSaudi Iran Syria Turkey Jordan Kuwait Lebanon Iraq Djibouti of government subsidy. World Bank data support- Arabia ing the poverty-reduction strategy showed that, in Life Expectancy in Years (1980) Life Expectancy in Years (2006) 2008, those transfers amounted to 8.8% of GDP.488 Source: World Bank, World Development Indicators, 2008 (CD version) as reported in GOI, Poverty Reduction Figure4.14showsacomparisonofIraq’ssafety- Strategy High Committee, and World Bank, Middle East Department, “Iraq Poverty Data Report,” Vol. 1: Main Findings, 3/2010, p. 41. net spending compared other nations, regions, or groups of countries. Figure 4.14 The poverty-reduction strategy also calls for Public Spending on Safety Nets as a % of GDP, 2008 significantnewinvestmentinagricultureand housing. Results of the 2006–2007 Iraq Household Lebanon Socio-Economic Survey (IHSES) found that, on East Asia Pacific average, 39% of Iraq’s rural residents were living South Asia belowthepovertyline,comparedwith16%among Yemen their urban counterparts.489 Of the country’s Latin America 490 and Caribbean working poor, 29% were engaged in agriculture. Jordan The 2011 draft budget allocates $192 million to the Egypt Ministry of Agriculture for capital spending—10% Morocco more than last year. If the budget is approved, the Eastern Europe Ministry of Housing and Construction would and Central Asia Tunisia also receive more funds in 2011—just under $1 bil- lion,491 to address housing shortages in the country. OECD TheNDPsuggeststhattherecouldbeasmanyas Iran 492 Africa 3.5 million substandard dwellings in the county. (Sub-Saharan) As discussed below, a series of major housing con- Middle East and North Africa tracts were signed recently. Algeria Djibouti Iraq

012345678910

Note: Data for Iraq updated from MOF and Bayt al-Hikma to reflect 2008 spending.

Source: Weigand and Grosh, Social Protection Discussion Paper No. 0817, World Bank: Washington, D.C., 2008 as reported in GOI, Poverty Reduction Strategy High Committee, and World Bank, Middle East Department, “Iraq Poverty Data Report,” Vol. 1: Main Findings, 3/2010, p. 52.

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Private Sector Development in Non-Hydrocarbon Areas Housing and Construction Provincial and municipal officials awarded con- tracts this quarter to build thousands of dwellings for low- and moderate-income families in the Baghdad and Basrah areas.493 In November, the Basrah Investment Commission let three contracts worthnearly$1.4billiontoIranian,Lebanese, andU.S.engineeringcompaniestobuild12,000 TheRotanaHotelManagementCorporationopeneda201-room housing units.494 Maryland-based World Solutions hotel in Erbil this quarter. (Rotana Hotel Management Corp. photo) Internationalsaiditspartoftheproject,worth $220 million, called for building 2,500 apartments services for clients working in the power, energy, and stand-alone homes on a 200-acre plot near andaviationindustries.502 Basrah.495 The Baghdad Municipal Government awarded a four-year, $11.3 billion contract to a Agriculture consortium of Turkish construction companies to Revivingtheagriculturalsectorisapriorityofthe build75,000housingunitsinSadrCity.496 NDPaswellasanessentialsteptowardtheGOI’s TheGOIforecaststhatthecountryneedsto stated goal of broadening its economy to reduce build2.5millionhousingunitsby2015.497 Govern- dependence on oil. Agriculture is politically im- The GOI forecasts ment-funded infrastructure projects, plus spending portant because it accounts for about one-fifth of that the country by international oil companies and other private Iraq’s total employment.503 Adverse farming condi- needs to build investors, are expected to support a broader growth tions—including dust storms, diminished water 2.5 million housing of construction activity. levelsintheEuphratesandTigrisRivers,anddecay- units by 2015. TheKRGissuedalicenseduringthefourth ingirrigationsystems—continuetodepressfarm quarter of 2010 to build a $1.1 billion smelter yields and rural income levels.504 In an exception to and steel plant in Sulaymaniyah province.498As this larger picture, Iraq’s wheat crop harvested in construction picks up, French cement producer spring 2010 exceeded expectations. At 2.6 million LafargeSA,whichproduces25%ofIraq’scement, metric tons, it was close to double the drought-re- announced plans to increase its annual production ducedcropsoftheprevioustwoyears.505 However, inIraqby2milliontonsoverthenexttwoyears.499 late planting this winter over a reduced area has led to lower projections for crops that will be harvested Services in spring 2011.506 During 2010, Iraq continued its The global accounting firm Deloitte Touche practice of importing large volumes of wheat.507 Tohmatsu Limited and the New York-based risk TheGOIisintalkswithTurkeyandSyriainan management company Marsh both announced effort to ensure that water-usage projects in those decisions to establish a presence in Iraq.500 Deloitte countries allow adequate river flow into Iraq’s said it will open an office in Baghdad during the main agricultural areas.508 Agriculture accounts first quarter of 2011 and work with clients mainly for the vast majority of water consumption in Iraq; intheoilandgasindustry.501 Marsh plans to 92% of total freshwater consumption is used for partner with Iraq’s only licensed insurance broker- irrigation and food production.509 While favor- age—Anglo Arab Insurance Brokers—to offer able late autumn rainfalls have improved growing insurance, risk management, and claims-handling conditions in parts of the north, including Ninewa

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techniques. Almost 2,000 Iraqis participated in the training.516 In a major stride for Iraq’s date industry, the first shipment of Iraqi dates in two decades was sold in London in September. The sale followed an Inma-hosted conference earlier intheyeartorevivedateexports.517 In the 1970s, Iraqproducedmorethanhalftheworld’sdates,but exports dwindled after the 1991 Gulf War.518 This quarter, Inma conducted a seminar that focused on developmentofanorganizationtocollectanddis- tribute useful marketing data to date producers.519 Greenhouse training being conducted by the USAID Inma Agribusiness Program. (USAID photo) After receiving no bids this quarter, USAID canceled its procurement for the new Rural and andDahukprovincesandmuchoftheKurdistan Agricultural Incomes with a Sustainable Environ- The first shipment Region,areasofcentralandsouthernIraqcon- ment (RAISE PLUS) program. USAID is currently of Iraqi dates in two tinuetobeaffectedbyreducedwateravailability engaged in consultations with the GOI about pos- decades was sold in andotherpoorgrowingconditions.510 sible next steps, including the design of a follow-on London in September. To help improve crop yields, the Ministry of procurement in the agriculture sector, but no spe- AgriculturereceivedapprovalinNovemberfrom cific procurement is planned.520 The U.S. Depart- Prime Minister al-Maliki to begin implement- ment of Agriculture’s Foreign Agricultural Service ing$70millioninirrigationimprovements.511 has requested $5 million for FY 2011 for programs In another development, Oregon State Univer- supporting the Ministry of Agriculture, four other sity, the Ministry of Higher Education, and an federal ministries, and private entities.521 Oregon-based private foundation this quarter signed a memorandum of understanding (MOU) Financial Sector Developments that included a five-year program to develop Before the installation of the new government, the sustainable agriculture and dry-land farming.512 outgoing Minister of Finance ruled out any priva- In Basrah, provincial government officials laid tization of state-run banks within the next four the cornerstone of the $300 million Shatt al-Arab years, declaring such a move would have a negative Canal project that will help irrigate 60,000 acres of impactonIraq’seconomy.Insteadthefocuswillbe farmland in the province.513 Despite the arrival of to restructure the banks with the goal of making international oil companies to develop the oil fields them more competitive in a global economy.522 The around Basrah, local government officials there see decision followed publication in late October of agriculture—and the jobs it brings—as key to the theIMF’sfirstreviewofIraq’s$3.6billionStand- area’s economic revival.514 By Arrangement (SBA) that judged GOI efforts to reform two state-owned banks as “problematic.”523 U.S.-funded Agricultural Programs The lack of progress in restructuring the Rasheed USAID’s Inma (Arabic for “growth”) Agribusi- Bank and Rafidain Bank, the country’s two largest nessProgramisnearingtheendofitsfunding lendinginstitutions,cameinanotherwiseposi- cycle.Alloftheprogram’s$144.8millionallocated tive assessment of Iraq’s performance in meeting from the ESF has been obligated, and $20.8 million the SBA conditions. The IMF categorized the remains for expenditure.515 This quarter, Inma GOI performance as “broadly satisfactory.”524 In activities included training programs in irrigation a September 2010 letter of intent to the IMF about procedures and in basic and advanced greenhouse the issue, Iraq’s then-Minister of Finance Baqir

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enterprises.527 (SIGIR is currently engaged in an auditofUSAID’sCommunityActionProgram, whichincludestheCHFactivities.)Itwasbyfarthe largestprogramOPIChasfinancedsinceitbegan workinIraqin2005.Alsoin2010,OPICprovided $212,000 in political risk coverage to the Inter- national Rescue Committee for its humanitarian activities and services.528 AU.S.-Iraqifinancialservicesfirmwasestab- lished this quarter. The U.S.-based investment- banking company Taylor-DeJongh partnered with theBaghdadinvestmentbankPhoenixCapital LLC, a subsidiary of a Delaware-based company established solely to assist with Iraq’s reconstruc- tion.529 ThepartnershipwillopenfirstinWashing- Assistant Chief of Mission for Transition Assistance Peter W. Bodde cuts the ribbon of the state-owned Rafidain Bank branch opening ton and Baghdad, with plans for additional offices inMuqdadiyah,Iraq,onNovember29,2010.(USF-Iphoto) in Basrah and Erbil. The partnership expects to Jabr al-Zubeidi and CBI Governor Sinan al-Shabibi specialize in the energy sector and work with inter- pledgedtoestablishandsuperviseaBankReconcil- national and Iraqi public- and private-sector clients iation Unit (BRU) to complete the restructuring by in several fields, including project finance, mergers theendofJune2011.TheBRUwouldhandlelegacy and acquisitions, and direct investment.530 external liabilities, identify and write off non-per- forming loans to defunct state-owned enterprises Tijara (SOEs), propose ways to deal with other remaining As of December 31, 2010, USAID’s Provincial Eco- accounts that could not be reconciled, and update nomic Growth Program (Tijara, Arabic for “trade”) foreign currency-denominated balance-sheet items had expended $74.9 million of the $117.8 million to reflect their current values. The unit would draw allocated for its mission to increase private-sector staff from both of the banks, the CBI, the MOF, the access to finance, particularly for micro, small, BSA,andexpertsfromErnst&Young,theinterna- and medium businesses.531 Since it began in 2003, tional accounting and consulting firm that assisted Iraq’s microfinance industry has made more than the MOF in restructuring Iraq’s external debt.525 240,000 microloans with a total disbursed value of The CBI has mandated that the country’s $558 million. As of December 31, 2010, more than private banks raise their capital holdings five- 72,000 clients held an outstanding loan portfolio of fold to 250 billion dinar (nearly $214 million). A $103 million.532 Slightly more than $1 million was CBI representative said the move was needed to spentin2010toreduceadministrativeinefficiencies The CBI has strengthen the banks so they could help meet the and improve the overall business and investment mandated that the expectedgrowthinfinancialservicesneedsof climate in Iraq. Program staff offered recommen- country’s private companies involved in major reconstruction and dations to GOI ministries on policy development banks raise their capital holdings oil-development projects.526 and regulatory reform.533 USAID reported that five-fold. The Overseas Private Investment Corpora- Tijara achieved specific goals set in June 2010 to tion (OPIC) provided financing for one program strengthen the microfinance industry, including in 2010—$90 million to the Cooperative Hous- establishment of the Iraqi Microfinance Network ing Foundation (CHF) for funding microfinance anddevelopmentofaloanportfolioabovethe and downstream loans for small and medium stated goal of $100 million.534

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Trade Development Figure 4.15 General Motors Vehicles Sold in Iraq, WTO Accession 2007–2010 Tijara’s International Trade and WTO Accession 20,000 Projectiswaitingforthenewgovernmenttobegin work before determining whether to offer further assistance to the GOI for accession to the World 15,000 Trade Organization (WTO).535 After comments by theMinisterofLaborandSocialAffairsinAugust 10,000 2010raisingdoubtsabouttheGOI’sinterestin WTO membership, the Minister of Trade has

since made statements supportive of accession. 5,000 Still, according to USAID, his approach has led to “a much more cautious rate of progress” toward accession.536 Between April 1, 2008, and September 0 2007 2008 2009 2010 30, 2010, $6.5 million in Tijara funds were spent to Source: General Motors, correspondence to SIGIR, 1/17/2011. prepare Iraq for membership in the WTO.537 TheExport-ImportBankoftheUnitedStates U.S.-Iraq Trade Developments issued no loans, guarantees, or insurance policies General Motors (GM) turned Iraq into a com- for transactions between July 22, 2010, when it first mercial success during 2010, selling just over beganitsworkinIraq,andDecember31,2010.How- 19,000vehiclesduringtheyear,a52%jumpover ever, the bank did participate in business develop- GM now counts Iraq the 12,494 it sold in 2009. In this quarter alone the mentactivitiesthisquarter,includingaseminarin as one of its two automaker sold over 8,000 vehicles—more than Baltimore in October entitled “Iraq is Open for Busi- largest markets in the double the number it sold in Iraq during the same ness,” sponsored by the U.S. Commercial Service.541 Middle East region. quarter of 2009.538 GM, which sells Cadillac, AtrademissionsponsoredbytheU.S.Chamber Chevrolet, and GMC models in the region, now of Commerce—initially scheduled for November, countsIraqasoneofitstwolargestmarketsinthe then rescheduled for February—is now likely to Middle East region. (The other is Saudi Arabia.)539 take place sometime in the spring of 2011. The GM resumed sales to Iraq in late 2003 and as Chamber said one reason for the latest delay is to al- recently as 2007 registered annual sales of under lowmoretimeforthetransitionofU.S.responsibili- 1,500 vehicles (Figure 4.15).540 tiesinIraqfromDoDtoDoStorunitscourse.542◆

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PUBLIC SERVICES

Iraqisviewconditionswithbasicservices—suchas when compared with last quarter’s record-high electric power, safe drinking water, sewerage, and supply of 6,540 MW. This drop from the preceding trash collection—as their most pressing problem. quarter resulted primarily from two factors. First, The general public Notwithstanding the verifiable improvements that insufficient flows of water in Iraq’s rivers once again perceives basic have occurred over the past seven years, recent reduced average output from hydroelectric plants. services to be getting polling data shows that the general public perceives Second, as is typical during the October–December worse, not better. basicservicestobegettingworse,notbetter.543 period each year, more generating units were taken Statements by GOI officials reflect these concerns. out of service for routine maintenance.546 Also in line with the normal yearly pattern, this quarter’s estimated demand for electricity was Electricity lower than last quarter’s. Average estimated de- mandwas224,620MWhperday,or9,359MW—a As of December 31, 2010, the United States had 26% decrease from last quarter, but a 12% increase obligated $5.06 billion and expended $4.96 bil- fromthesamequarterayearearlier.Supplymet lion to improve Iraq’s generation, transmission, 68% of estimated demand this quarter, compared anddistributionofelectricity.544 With U.S. and with52%lastquarterand71%duringthesame international assistance, Iraq was able to increase quarterlastyear.547 itsannualsupplyofelectricpoweronthenational grid by two-thirds from 2004 to 2010. Over that Figure 4.16 same period, however, estimated demand doubled, Electricity Supply and Estimated Demand, by Quarter, 10/2009−12/2010 resultinginpersistentshortages. MW To address the issues facing Iraq’s power sec- tor—including a projected tripling of demand 14,000 overthenext20years—theMinistryofElectricity and Parsons Brinckerhoff have prepared the Iraq 12,000 Electricity Masterplan fortheexpansionofIraq’s 10,000 electricity program. They intend to publicly release Estimated Demand the plan at a conference in Istanbul on February 1 8,000 and2.ISPOhasprovided$5millioninMiniste- Total Supply rial Capacity Development funds to support this 6,000 Imports 545 Diesel effort. Hydroelectric 4,000 Thermal Supply and Demand Iraq’ssupplyofelectricitytothegridthisquarter 2,000 Combustion averaged 152,145 megawatt-hours (MWh) per day, Turbine 0 or6,339megawatts(MW).AsshowninFigure Q4 Q1 Q2 Q3 Q4 4.16, this was an increase of 387 MW, or 7%, from 2009 2010

the same quarter in 2009—roughly matching the Sources: ITAO/ESD, Electric Daily Performance Reports, 10/1/2009–12/31/2010. growth rate in feasible power-plant production ca- pacityoverthatone-yearperiod—buta3%decline

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Figure 4.17 came on line this quarter. Together, these four Average Electricity Supply to Grid, by Source and Year, 2004–2010 privately owned plants provided 13% of Iraq’s MW total electricity supply to the grid in 2010. In the 551 7,000 lastmonthoftheyear,theyprovided17%. 6,353 6,000 5,940 813 Thetrendofincreasingrelianceonelectric- 1,210 ity from privately owned and operated plants 5,000 4,548 is expected to continue. Mass Global has been 4,092 3,931 4,000 3,764 3,832 566 buildinganew500MWplantinDahukand expects it to be fully operational by mid-2011. 3,000 Contributors to Twooftheplant’sfour125MWgeneratingunits 2,589 MW Growth were synchronized with the grid in December 2,000 and early January. Mass Global is also expand- Imports 1,000 Privately Owned ingthecapacityofitsplantinSulaymaniyahby Power Plants 250MWanditsplantinErbilby500MW.When 0 MOE Power Plants these construction and expansion projects are 2004 2005 2006 2007 2008 2009 2010 completed, the three privately owned plants in the Sources: DoS, Iraq Status Report, 10/25/2006, slide 11; ITAO/ESD, Electric Daily Performance Reports, 6/1/2006–12/31/2010. KurdistanRegionwillhaveacombinedname- platecapacityof2,250MW.Allthreeplantsuse Growing Reliance on Purchased Power GeneralElectric(GE)combustionturbines.552 Iraq’s average annual supply of electricity increased The MOE is also moving forward with plans to from3,764MWin2004to6,353MWin2010.As have private investors build, operate, and maintain shown in Figure 4.17, less than half of this 2,589 powerplantsusingsomeoftheturbinesitpur- MW increase came from MOE power plants. chased from GE under the “Mega Deal.” On De- These four privately Althoughtheseplantsstillprovidethebulkof cember 18, the MOE, together with Iraq’s National owned plants provided powertothegrid,theircontributiontototalsupply Investment Commission and GE, held a conference 13% of Iraq’s total droppedfromabout96%in2004to76%in2010.548 inBaghdadtoannouncedetailsofthebidding electricity supply to the The balance of the supply increase during that round for four such projects. Offers from pre- grid in 2010. period came from power purchased by, as opposed qualified bidders are due in February. Three of the to produced by, the MOE: proposedIPPsites—al-Samawa,Diwaniyah,and • Electricity imports increased by 566 MW over al-Amarah—will each have four 125 MW generat- thepastsixyears.In2010,imports(mostlyfrom ing units. The fourth site, the Shatt al-Basrah plant, Iran) accounted for 11% of the total supply.549 • Privatelyownedpowerplantsin Iraq accounted for the remaining 813 MW growth in supply since2004.Noneoftheseplantswereinservice until2008,whenthefirstoftwocombustion turbine plants built and owned by Mass Global Investment Company, an independent power producer (IPP) headquartered in Jordan, came online in the Kurdistan Region.550 In 2010, two floatingdieselpowerplantsbuiltandownedby the Turkish firm Kartet began supplying electric- Thenewprivatelyownedandoperated500MWgas-firedpower ity to Basrah. The second of these “powerships” plantinDahukisscheduledtobefullyoperationalbymid-2011. (Mass Global photo)

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will have 10 of these units. Together, these IPP Figure 4.18 plants would add 2,750 MW of nameplate capacity Currently Planned MOE Power-plant 553 Capacity Additions, 2010–2015 to the national grid. MW EPC Projects 5,000 The MOE’s engineering, procurement, and con- 4,000 struction(EPC)contractsfortwositesincluded in the GE Mega Deal—al-Khairat in Kerbala and 3,000 Qudas in Baghdad—are awaiting approval from 2,000 theCoM.ThethirdEPCsiteintheGEMegaDeal initial bidding process—al-Qayria in Ninewa—has 1,000

been referred back to the CoM for permission to 0 go to the second-lowest bidder. These three plants 2010 2011 2012 2013 2014 2015 together will have 2,500 MW of nameplate capac- Note: Does not include capacity additions in the Kurdistan Region. ity.Laterthisyear,theMOEplanstosolicitbidsfor Source: MOE and Parsons Brinckerhoff, Iraq Electricity Masterplan, Final Report, Vol. 1, Executive Summary, 12/2010, p. 22. threeadditionalGEMegaDealsites:Haydariyain Kerbala (500 MW), Najebia in Basrah (500 MW), parallel development of fuel supplies and further and Akkas in Anbar (250 MW).554 investments of about $4 billion to upgrade the TheEPCprojectsthatwilluseturbinesfromthe transmission and distribution infrastructure and Mega Deal with Siemens have been delayed pend- to connect the plants to the grid.557 ingCoMapprovalofanincreaseinthescopeof Beyond 2015, demand for electricity is expected services to be provided by Siemens.555 to continue rising along with economic growth, ThelettersofcreditfortheEPCcontractsfor andtheproductivityofexistingpowerplantswill thethreeGE“FastTrack”sitesarenowfully continuetodiminishastheyage.TomeetIraq’s funded.ThesesitesarelocatedinTaji(180MW), long-term electricity needs, the Iraq Electricity Hilla (250 MW), and Kerbala (250 MW). Accord- Masterplan estimates that an additional $29 billion ingtoU.S.Embassy-Baghdad,noneofthesenew will need to be invested in generating capacity powerplantswillbecompletedbeforethemiddle from 2016 through 2030. If no additional plants are of 2012.556 built beyond those that are currently committed, then the supply-demand gap is expected to return Long-term Planning around 2017.558 The MOE has committed to adding more than 12,000 MW of new generating capacity in the Plant and Fuel Types The MOE has 2010–2015 period, with most of this new capacity AsshowninFigure4.16,fourtypesofpowerplants committed to resulting from the GE and Siemens Mega Deals. currently feed Iraq’s grid: thermal, combustion adding more than Figure 4.18 shows the timing for the currently turbine,diesel,andhydroelectric.Theygenerate 12,000 MW of new planned additions. According to the Iraq Electric- powereitherbyburningcrudeoil,refinedprod- generating capacity in the 2010–2015 ity Masterplan, if the commissioning of these ucts, or natural gas or by harnessing the kinetic period. plantsoccursonschedule,Iraqwillhavesufficient energy of flowing water.559 AccordingtotheIraq capacity (with adequate reserves) to meet projected Electricity Masterplan,almostthree-fourths(in demand by 2013 or 2014. Implementing these con- terms of energy content) of the fuel burned in MOE structionplanswillrequireaninvestmentofabout powerplantsin2009consistedofcrudeoiland $26billion.Ensuringthatthecompletedplantsare refined products (Figure 4.19). The plan makes the able to deliver on their promise will require the following observations:560

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Figure 4.19 were halted in June 1981 when Israeli aircraft Fuel Burned in MOE Power Plants, 2009 attacked and destroyed the unfinished Osirak nuclearreactoratal-TuwaithanearBaghdad.Israel Crude Oil contended that the facility, which was built with 13.3% assistance from France, could be used to produce 32.7% Heavy Fuel Oil nuclear weapons.562 Ten years later, after the first Gulf Natural Gas 26.2% War, UNSCR 687 and UNSCR 707 restricted Iraq’s ability to engage in civilian nuclear activities.563 27.8% With the passage of UNSCR 1957 on Decem- ber 15, 2010, those restrictions have been mostly Diesel lifted,andIraqnowisfreetoaddnuclearfacilities Note: Percentages are estimates based on energy content of the fuels. toitsmixofpowerplants.564 Deputy Prime Minister Source: MOE and Parsons Brinckerhoff, Iraq Electricity Masterplan, Final Shahristani,whoholdsadoctorateinnuclearchem- Report, Vol. 1, Executive Summary, 12/2010, p. 11. istry and was serving as acting Minister of Electric- • Theuseofcrudeoilinpowerplantsisvery ity when UNSCR 1957 passed, made it clear that he Iraq now is free to add expensive to the Iraqi economy in terms of lost supported“apeacefulnuclearprogramincoordina- nuclear facilities to its export income. tion with the relevant authorities.”565 Earlier in 2010, mix of power plants. • Diesel is a premium fuel, and Iraq’s refineries theFrenchambassadortoIraqreportedlystated have not produced enough of it to meet domestic that France again was prepared to help Iraq develop needs, thus requiring imports. anuclearpowerprogram.566 • Theamountofheavyfueloilburnedisabout Most work on the Iraq Electricity Masterplan half of the available supply. was completed before passage of UNSCR 1957 on • Theuseofnaturalgascoulddoubleifgasthatis December 15. Based on the documents that SIGIR currently flared could be captured, processed, has reviewed, the plan does not consider the option and delivered to power plants. of nuclear power.

Gas-fired Combined-cycle Plants: Recently Completed and Ongoing The Preferred Option U.S.-funded Electricity Projects The Iraq Electricity Masterplan concludes that USACEreportsthatitcompletedtwoelectricity natural gas is “the economic fuel of choice,” and it projects, with a combined value of $4.1 million, recommends that existing and currently planned thisquarter.BothwerefundedbytheESF.The generatingunitsthatburncrudeoilbeconverted largestwasa$2.9millionprojecttoconstructasub- tonaturalgasassoonaspractical.Forthelong stationinMissan,andtheotherwasa$1.2million term,theplancallsforbuildinggas-firedcom- project to provide operations and maintenance bined-cyclepowerplants,whichcombinecombus- (O&M) services for three substations and over- tion turbines with waste-heat boilers and thus are head lines in Dahuk.567 more efficient than the combustion turbine plants As of December 31, 2010, USACE had 16 ongo- nowinservice.Theplandoesnotrecommend ingelectricityprojectswithacombinedvalueof building additional thermal plants because they $116.0 million. The two largest continued to be the are“nottheleast-costsolution.”561 $48.2millionprojecttobuildtheFarabiandJamila substations in Sadr City and the $29.3 million Nuclear Power: A Revived Option project to build a substation in Ramadi. These are Any plans that Iraq might have previously had to USACE’s last IRRF-funded electricity projects. addnuclearpowertothemixofgeneratingunits The other 14 ongoing projects are funded by the

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of its public water and sanitation facilities.572 Ac- cording to UN documents, management of Iraq’s aquifers has been minimal, and the country has had to rely heavily on precipitation falling outside its borders, exacerbating disputes with Turkey and Syria over water resources. Water levels in lakes and reservoirs, as well as the Tigris and Euphrates UNESCO estimates Rivers, are diminished to a point the UN described that more than as “critical.” The result has been a shortage in ac- 7.6 million Iraqis cesstowaterandsanitation:theUnitedNations lack access to safe drinking water. Students attend classes on operations and maintenance of Educational, Scientific and Cultural Organization water treatment plants at the Baghdad Amanat Training Center. (UNESCO) estimates that more than 7.6 million (USACE photo) Iraqis(about25%ofthepopulation)lackaccessto ESF and include an $8.0 million project to sup- safe drinking water.573 ply emergency spare parts and equipment for the Toaddresstheshortage,theUnitedStates,UN, al-MusayabGasPowerPlantinBabylonand and others are working with Iraqi ministries to a$6.8millionprojecttosupplyequipmentfor rehabilitate infrastructure and enhance the quality substations in Diyala.568 and quantity of water delivered to underserved AccordingtoUSF-I,38electricityprojects residential areas. This quarter, UNESCO launched funded with FY 2010 CERP appropriations were ascientificsurveyofIraq’sgroundwatertoimprove completed as of September 30, 2010, at a cost of the GOI’s ability to address water scarcity.574 The $9.5 million. An additional 36 projects, collec- GOI announced that the first phase of the survey tively funded with $13.3 million from FY 2010 will be completed in March 2011.575 CERP appropriations, were still in process at the beginning of this quarter. Five of the ongoing Recently Completed and Ongoing projects were valued at more than $500,000 and U.S.-funded Water Projects ranged from $523,948 to $748,847. Three were for USACE reported that it completed 12 water- thedesign,installation,andtestingoffeederlines relatedprojectsthisquarteratacombinedcostof in Qadissiya, and two were for substation mainte- $116.4 million.576 Amongthemwerethefollow- nance in Wassit.569 inghigh-valueprojects: • The Eastern Euphrates Drain. Originally slated forcompletioninJanuary2009,this$38.5mil- Water and Sanitation lionprojectwasfinishedonDecember31,2010. The project aims to boost Iraq’s irrigation capa- As of December 31, 2010, the United States had bilitiesbyreclaimingmorethan58,000hectares obligated $2.65 billion and expended $2.57 billion (143,000 acres) of agricultural land and remov- to rehabilitate Iraq’s water and sanitation sectors.570 ing excess saline water from more than 400,000 AccordingtotheInter-AgencyInformationand hectares (990,000 acres) of irrigated land.577 AnalysisUnitoftheUN,theGOImayhavedif- • The Falluja Sewer System. With a construction ficulty meeting its Millennium Development Goal cost of $29.6 million, this project is the “back- of providing 91% of Iraqi households with access to bone” of the Falluja Waste Water Treatment safe drinking water by 2015.571 The country contin- System.Startedin2006,constructionofthe ues to suffer from a water shortage caused by years system has been subject to multiple delays due of drought, as well as mismanagement and neglect to design complexity, a lack of available skilled

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labor, and security issues. Previously slated for additional13ongoingprojectswereexpectedto completion in April 2010 following the an- cost more than $400,000 each.583 nouncement of scaled-down plans, the project was completed on December 14, 2010. For the results of SIGIR’s inspection of the project in Transportation and 2008, visit www.sigir.mil.578 Communications • Meshkab Water Supply Project. This $23.1 mil- lionprojecttobuildawatertreatmentplantinNa- As of December 31, 2010, the United States had jafprovincewascompletedonDecember30,2010. obligated$1.14billionandexpended$1.07billion The facility is designed to provide clean drinking to rehabilitate Iraq’s transportation and communi- water to about 200,000 residents in the town of cations sectors.584 Meshkab and surrounding rural areas.579 AccordingtoUSF-I,57transportationprojects funded with FY 2010 CERP appropriations were At the end of the quarter, USACE had 18 completed as of September 30, 2010, at a cost of ongoing water projects with a collective value $8.1 million. An additional 41 projects, collectively of$37.8million.Thetwolargestwerefundedby fundedwith$8.6millionfromFY2010CERPap- theESF,including: propriations, were still in process at the beginning • Al-Kibla Sewer and Storm Network. This of this quarter. Eight of the ongoing projects were $11.1 million project to design and construct each valued at $400,000 or more.585 a sanitary sewer and storm water collection system—includingpumpstations,forcemains, Ports manholes, inlets, and individual house con- USACE reported that construction of supporting nections—inBasrahprovinceisexpectedtobe facilities at the Umm Qasr Pier and Seawall—a completed in June 2011.580 $46millionpartofthe$53million,GOI-funded • FallujaAreaAHouseConnections.This project that included power distribution, water sup- $4.6 million project to connect 9,300 homes to ply and distribution, refueling infrastructure, road theFallujaWasteWaterTreatmentSystemis access,andlightingattheIraqiNavyBase—was expected to be completed in March 2011.581 completed in October 2010.586 At the beginning of the quarter, the largest ongoing transportation USACE expects to complete all of its water proj- projectfundedwithFY2010CERPappropriations ectsbyJuly2011whileprovidingO&Mtraining USACE expects to for water treatment engineers, including two O&M complete all of its classesatBaghdad’sAmanatTrainingCenter.582 water projects by AccordingtoUSF-I,138waterandsanitation July 2011. projects funded with FY 2010 CERP appropria- tions were completed as of September 30, 2010, at a cost of $11.1 million. An additional 118 proj- ects, collectively funded with $28.9 million from FY 2010 CERP appropriations, were still ongoing at the beginning of this quarter. Seven of the ongo- ingprojectswerevaluedatmorethan$500,000 and ranged from $650,000 to $998,520. The largest wasforconstructionoftheHabbaniyaBioLagoon An Army major assigned to PRT Basrah inspects shipping containers during a visit to the Port of Umm Qasr in December sewage treatment system in Anbar province. An 2010. (U.S. Army photo)

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wasa$498,000projecttosupplyandinstall10 navigationbuoysatthePortofUmmQasr.587 U.S. Embassy-Baghdad reported this quarter that the Joint Interagency Task Force (JIATF) completed its first training course (developed by theU.S.CoastGuard)forport-facilitysecurity officers. Additionally, the U.S. Bureau of Customs andBorderProtectioncompletedanassessment ofsecurityandcontainermovementatthePortof UmmQasr,andtheJIATFmetwithIraqiofficials todiscussremovingmorethan2,000abandoned containers from the Port of Umm Qasr.588

Railroads USACE reported that the second phase of training continues for Iraqi workers who operate and main- tainthe$48.1millionDigitalMicrowaveRadio Communications Network, which is used to oper- A retired Federal Aviation Administration controller contracted by the ICAA advises an Iraqi air traffic controller at Baghdad ate Iraq’s railroad service. The first phase of train- International Airport. (U.S. Air Force photo) ing, an $826,000 project, ended in September 2010. The second phase, funded at $3.71 million, began in February 2011. The ICAA has received approval in August 2010 and is scheduled to run through to hire an additional 50 controllers.590 Control of April 2011. This quarter, the U.S. Department of airspaceatallaltitudesisslatedtotransitionto Transportation/Volpe Center worked with Iraqi theICAAatvarioustimesthroughout2011asim- Republic Railway Company trainees to correct provements to Iraq’s communications, navigation, minor technical problems and to begin the process and surveillance capabilities are completed.591 of making track subdivisions operational.589 The Embassy has reported that the ICAA continuestomakepositivestepstowardmeet- Airports ing International Civil Aviation Organization U.S. Embassy-Baghdad reported that the transfer (ICAO) standards in most areas, but improve- Control of airspace at of air-traffic control to the Iraq Civil Aviation ments are needed at the local and national levels all altitudes is slated Authority (ICAA) was delayed this quarter because tobringIraqinlinewithinternationalair-traffic to transition to the of technical and controller resource issues that were standards. This quarter, the Ministry of Trans- ICAA at various times expectedtoberesolvedbytheendofthequarter. portation (MOT) approved and sent to the CoM throughout 2011. The ICAA already controls air traffic above 15,000 anationalaviationsecurityplan,whichisabasic feet in the north of the country, and it expects to requirementoftheICAO.TheICAAnowoperates have a sufficient number of controllers by Febru- anationalaviationsecuritycommitteeandaBagh- ary 2011, to take control of airspace above 15,000 dad International Airport security committee, and feetinthesouthernhalfofIraq.Thisquarter,the workisunderwaytoestablishsimilarcommittees ICAA sent 27 Iraqi student controllers to the Pan at the other civilian airports in Iraq. Addition- Am Academy in Miami, Florida. Ten of the stu- ally, the ICAA has requested that two audits be dents graduated in December and are continuing conducted by the ICAO regarding airport safety on-the-job training at the Baghdad Area Control and security—a process that normally takes one to Center. The remaining 17 are expected to graduate two years to complete.592

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Iraqregainedtherightthisquartertovotein proceedings of the ICAO for the first time since Iraq regained the the 1990 Iraqi invasion of Kuwait.593 Iraq is a right this quarter to member of the ICAO but stopped participating vote in proceedings following its invasion of Kuwait.594 of the ICAO for the The MOT announced this quarter that it had first time since the signed agreements with Qatar, Oman, and the 1990 Iraqi invasion Netherlands to begin commercial flights.595 The of Kuwait. MOTalsogaveapprovaltoal-NasrAirlinetobegin commercial flights between Iraqi airports and TheMissanSurgicalHospitalasitlookedonDecember12,2010. (USACE photo) Sweden, Germany, and Britain.596 Austrian Air and Lufthansa had planned to start operations at Bagh- Missan Surgical Hospital dadInternationalAirportlastsummer,butthose Slow progress continued this quarter on construc- planswereonholdthisquarterpendingfurther tionoftheMissanSurgicalHospital,a$12.6mil- discussions of security, air traffic procedures, and lionprojectthathassufferedproblemsanddelays ground handling. Austrian Air plans to determine sinceconstructionofthe80-bedfacilitybeganin in mid-January whether it will start operations. November 2007. U.S. Embassy-Baghdad reported There is no new start date for Lufthansa. Mean- thatthecontractorisbehindscheduleandthat while, France became the latest European country USACE and ISPO were working to improve to plan commercial flights to Iraq, and French air- thecontractor’sperformance.600 According to line Aigle Azur made a ceremonial flight carrying USACE, the project is scheduled for completion dignitaries to Baghdad on October 31, 2010.597 in June 2011.601

Telecommunications Ba’quba Surgical Wing The completion date for construction of the USACE reported that the $8 million surgical wing $18.3 million al-Mamoon Exchange and Telecom- attheBa’qubaGeneralHospitalinDiyalaprov- municationsCenterinBaghdadisnowestimated ince was set to be completed this quarter, but U.S. tobeMarch31,2011.Theoriginalforecasted Embassy-Baghdadreportedthatconnectionstothe completion date was December 2006, but the essential services utility grid were not yet in place project has suffered from sabotage and contracting and that USACE and ISPO were working with the problems, and was re-awarded in 2009. USACE Iraqi Ministries of Electricity and Health to remedy reported that as of December 31, 2010, the IRRF- the situation.602 funded project was 74% complete.598 Ibn Sena Hospital Workonthe$3.6millionIbnSenaHospitalin Health Care Mosul was at a standstill this quarter because al- Warka Bank in Mosul failed to transfer $345,000 U.S.-funded Health Care Projects sentbyUSACEtothecontractor,citingbanking This quarter, USACE continued to oversee three liquidityissues.Asaresult,thecontractorcould ESF-funded health care projects with a com- not pay subcontractors, workers, and suppliers. binedcostof$24.2million:theMissanSurgical According to the Embassy, USACE, the Ninewa Hospital, the surgical wing at Ba’quba General PRT, the Embassy’s Financial Management Of- Hospital,andupgradesoffacilitiesattheIbn fice,USF-I,andtheFinancialAttachéareworking Sena Cardiac Center.599 to solve the problem.603

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Basrah Children’s Hospital The $165 million Basrah Children’s Hospital, inaugurated in May and opened in October 2010, was treating patients this quarter, and efforts are underway to complete the delivery and installa- tion of equipment donated by Project Hope.604 Fiveyearsbehindschedulewhenitopened,the hospitalfellshortofitsmandatetoprovideon- cology services. “Though construction has been completed and basic pediatric medical services are being offered, oncology services are several USACE personnel hand out books to students at a primary school near Taji, Iraq. (USACE photo) months away,” Assistant Chief of Mission Peter Bodde said.605 than $1 million.608 AllthreewerebuiltusingESF funds. In addition, USACE reported 20 ongoing USAID’s Health Promotion Program projects to build or rehabilitate schools; U.S. USAID’s $5 million Health Promotion Program Embassy-Baghdad reported 26 ongoing educa- in Iraq aims to help the Ministry of Health design, tion projects.609 implement, and evaluate the Iraqi public’s aware- AccordingtoUSF-I,242educationprojects ness of health issues, such as malnutrition and funded with FY 2010 CERP appropriations were childhood obesity. This quarter, USAID reported completed as of September 30, 2010, at a cost of that expenditures totaled $958,000. The program, $18.2million.Anadditional125projects,col- initially set to end on September 30, 2010, has been lectively funded with $18.3 million from FY 2010 extended until April 15, 2011.606 CERP appropriations, were still in process at the beginning of this quarter. Eight of these projects were valued at $400,000 or more, the largest of Education whichwasa$499,990projectforconstructionofa provincialtrainingandconferencecenterinMis- FollowingaworkshopintheKurdistanRegion, san province.610 Education experts education experts from Baghdad and 11 provinces began to review the began this quarter to review the country’s educa- Other Education Projects country’s education tion sector, marking the first step in a process Oregon became the first U.S. state to sign an sector, marking the that they hope will result in a revamping of Iraq’s education-related memorandum of understand- first step in a process that they hope will educationalsystem.Theeffortispartofaninitia- ing with GOI officials. For additional informa- result in a revamping tive launched by UNESCO and the United Nations tion on this project, see the Economy subsection of Iraq’s educational 611 Children’s Fund to provide a forum to improve of this Report. system. essential services, including education.607 This quarter, 100 Iraqi faculty members were chosen to participate in a training course at U.S.-funded Education Projects U.S. universities in an effort to aid Iraqi stu- USACE reported that as of December 31, 2010, dentswhowanttopursuepostgraduatework it had completed 1,166 construction projects in abroad.612 The Iraqi Ministry of Higher Edu- the education sector, including three completed cation also announced plans to build 15 new this quarter: the $3.5 million Electrical Engi- universitiesoverthenextseveralyears,ofwhich neering College building at Kufa University; and 8 have been approved, to accommodate Iraq’s two 12-classroom schools, each costing more growing population.613 ◆

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SIGIR Audits 104

Collaborative Forensic Audits/ 117 Investigations Initiative

SIGIR Investigations 118

SIGIR Evaluations 129

SIGIR Hotline 130

SIGIR Website 131

Legislative Update 132 5section

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SIGIR AUDITS

Since March 2004, SIGIR has issued 182 reports. SIGIR Audits Completed FromNovember1,2010,toJanuary31,2011,SIGIR This Quarter issuedfiveauditsaddressingawiderangeofrecon- struction issues. They included: Iraq Relief and Reconstruction Fund 1: • a report addressing concerns regarding GOI Report on Apportionments, Expenditures, sustainment of the Iraqi International Academy and Canceled Funds • areportonthestatusofIRRF1fundsappropri- (SIGIR 11-007) atedforIraqreliefandreconstruction • a report addressing concerns over the loss of Introduction electronic data from the Deployable Disbursing In April 2003, Public Law (P.L.) 108-11 appropri- System ated $2.48 billion to the President for humanitarian • areportaddressingDoD’sinabilitytoreconcile assistance, rehabilitation, and reconstruction in Commander’s Emergency Response Program Iraq, referred to as the Iraq Relief and Reconstruc- data tionFund1(IRRF1).TheOfficeofManagement • a report on the management of the Sons of Iraq and Budget (OMB) apportioned these funds, for program the most part, to the U.S. Agency for International Development (USAID), the Department of Defense For a list of these audit products, see Table 5.1. (DoD)/U.S. Army, the Department of State (DoS), and the U.S. Department of the Treasury (Trea- SIGIR currently has 18 ongoing audits, and sury).Thefundswereavailablefornewobligations others are expected to start this quarter. SIGIR through September 30, 2004, and were in expired performs audit work under generally accepted accounts for the next five years, until September 30, government auditing standards. 2009.Whileinexpiredaccounts,thefundswere only available for legitimate adjustments to obliga- Table 5.1 tionsincurredduringtheperiodandwerenot SIGIR Audit Products since 10/31/2010 available for new obligations. As of September 30, Report Date 2009,theaccountwasclosed,andremainingfunds Number Report Title Issued were not available for any purpose. Iraq Relief and Reconstruction Fund 1: 11-007 Report on Apportionments, 1/2011 SIGIRisreportingonthestatusofthevarious Expenditures, and Canceled Funds fundsusedforIraqreliefandreconstruction.The Interim Report: Action Needed objective for this report is to address the status of 11-008 To Address Missing Deployable 1/2011 Disbursing System Data the IRRF 1, including the amounts apportioned to IraqiGovernmentSupportforthe U.S. government organizations, obligated dur- 11-009 1/2011 Iraqi International Academy ing the period of availability, adjusted during the Sons of Iraq Program: Results Are five years the funds were in expired accounts, and 11-010 UncertainandFinancialControls 1/2011 Were Weak canceled when the account was closed. Commander’s Emergency Response 11-012 1/2011 Program Obligations Are Uncertain Results Duringfiscalyears(FYs)2003and2004,OMBappor- tioned virtually all of the $2.48 billion appropriated

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forIRRF1.OMBapportioned$2.25billionfornew TheorganizationsexpendedIRRF1under14 obligations, with most going to three organizations: reliefandreconstructionprograms.USAIDhad USAID received $1.62 billion; DoD/U.S. Army re- sevenprograms,andits“RestoreEconomically ceived $518 million; and DoS received $101 million. Critical Infrastructure” program was the largest— P.L.108-11alsospecifiedthatfundsweretobeused with expenditures of $1.12 billion. USAID primar- to fully reimburse accounts administered by DoS, ilyusedIRRF1tohelpin(1)rebuildingIraq’s Treasury, and USAID for related obligations in- roads and ports, (2) facilitating transportation curred prior to enactment. OMB apportioned about of humanitarian assistance, and (3) restoring the $239milliontomeetthesepreviouslyincurred power supply to health, educational, and water sup- obligations: $212 million went to USAID, which ply facilities. DoD/U.S. Army had three programs: subsequently returned $10 million to OMB, and thetwolargestused$464.96milliontohelprestore DoS received about $25 million as reimbursement Iraq’s electricity and oil sectors. for prior obligations. This report does not address IRRF 1 was quickly apportioned by OMB, and thestatusofthefundsthatOMBprovidedforthese the organizations receiving funds also acted quickly previously incurred obligations. to obligate the funds. As the funds moved from As of September 30, 2004, the organizations’ re- available for obligation, to expired funds, and then portsonbudgetexecutionandbudgetaryresources to canceled funds and closed account, no significant show that virtually all of the $2.25 billion had been issues related to IRRF 1 apportionment, obligation, obligated, and only $257,000 was not obligated. In expenditure, and cancellation were identified. thefirsttwoyearsofthefive-yearexpired-funds period,about$28millionwasdeobligatedand Recommendations reobligated,accountingforvirtuallyallofthede- Thisreportdoesnotcontainrecommendations. obligations/reobligations during the expired funds period. DoD/U.S. Army deobligated/reobligated Management Comments the most funds—deobligating $14.52 million in and Audit Response FY 2005 and reobligating $10.66 million in that Becausethisreportcontainsnorecommendations, samefiscalyearandtheremainderinFY2006— the responsible agencies were not required to, and butthesefundsstillaccountedforlessthan3%of did not, submit comments. its$518.28millioninapportionedfunds. TheIRRF1accountwasclosed,andfundswere canceled as of September 30, 2009, with $18.46 million Interim Report: Action Needed To Address beingreturnedtoTreasury’sgeneralfund.Mostofthe Missing Deployable Disbursing System Data fundswerereturnedbyUSAID($14.13million)and (SIGIR 11-008) DoS ($3.53 million). As of that date, USAID had about $2.08 million of obligations incurred under Introduction IRRF1thatwillbepaidfromotheravailablefunds. In December 2008, SIGIR announced an audit of Furthermore, USAID had a negative cash balance Department of Defense (DoD) appropriation, ob- in its account as of September 30, 2009, and, as a ligation,andexpendituredatarelatedtoIraqrelief result, its account was not closed but was adjusted in andreconstructionprojects(Project9005).SIGIR FY2010.USAIDofficialssaidthatthenegativecash is performing this analysis to meet its mandate to balance occurred because of an erroneous journal forensicallyauditallIraqreconstructionfunds. entry.Theysaidthattheneedforadjustmentstarted Duringthecourseofthedatacollectionprocess, in FY 2006 and that adjustments for the account SIGIR reconciled financial data in the Deployable will be finalized in early FY 2011. Disbursing System (DDS), which was developed in

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2005toserveasanon-site,tacticaldisbursingsys- SIGIR found that the missing data may include a tem for deployed military units with congressional large volume of CERP transactions. DoD person- appropriations and other DoD financial system data nel in Iraq are responsible for handling the money, and found that some DDS data was missing. The creating paper records, and entering the transac- missingdataisofconcerntoSIGIRbecausethedata tionsintoDDStorecordthepayments;andthe is needed to complete SIGIR’s forensic audit man- riskofDoDpersonnelcolludingoncriminalactsis date, and SIGIR’s forensic audit work has shown heightened because the entire disbursement process significant problems with controls over the Com- ishandledatthelocallevel.Todate,SIGIRinvesti- mander’s Emergency Response Program (CERP)— gationshaveresultedinsixconvictionsofDoDper- particularly for cash disbursements, which appear sonnel involving CERP-related payment activities. toaccountforalargepartofthemissingdata. SIGIR’s review of DDS data has found that it in- Additionally, it is likely that the missing data also cludes the names of military and civilian personnel contains Personally Identifiable Information (PII) responsible for making payments of Iraq recon- of military members and may also include classified struction funds. DoD’s Guidance on Protecting PII information. This interim report addresses SIGIR’s (August 2006) requires that all PII be evaluated for concernsovermissingDDSdataandseeksDoD impactoflossorunauthorizeddisclosureandpro- assistance in recovering the data. tected accordingly. The Army Financial Manage- ment Command has not assessed the circumstances Results of the breach to determine whether notification SIGIR found that some DDS data was missing of impacted personnel is required. Moreover, in andthatsomeofthemissingdatamaycontainPII 2009, the DoD IG reported that DoD personnel had andclassifiedinformation,andthatthelossofthe entered classified information into the DDS,615 so it data may indicate an intentional breach of inter- ispossiblethatthemissingDDSdataSIGIRidenti- nal controls for the CERP. In early 2010 Defense fied may contain classified information, such as the Finance and Accounting Service (DFAS) and the names of intelligence sources, which could expose Army Financial Management Command officials thesourcesandtheirassociatestoconsiderablerisk. told SIGIR that the DoD Inspector General (IG) had already made them aware of the situation. Recommendations According to Army Financial Management Com- SIGIR recommends that the U.S. Army (Financial mandofficials,themissingdata—fromtheperiod Management and Comptroller) direct the Army October 2005–March 2007 at one location and Financial Management Command to: October 2005–August 2006 at another location—is 1. Reconstruct all missing transactions by using missing because of a computer malfunction and available DFAS records and provide this infor- because some DDS users did not follow the ap- mation to SIGIR. propriate procedures. For example, a unit appropri- 2. Review the reconstructed transactions to de- ately transferred data from one computer that had termine whether they include any PII and clas- reached its hard drive capacity to another, but that sified information and take appropriate action second computer’s hard drive crashed. In another pursuant to federal law and applicable guidance. instance, units transferred their data to disks but reportedlybroughtthedatahomewhentheyleft Management Comments Iraq and subsequently lost the disks. The DoD IG and Audit Response made recommendations to address this problem,614 Management comments are included in the final and in April 2009, new procedures were established report,whichcanbefoundontheSIGIRwebsite: governingthehandlingandstorageofDDSdata. www.sigir.mil.

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As of November 1, 2010, $3.24 million has been spent and an estimated 24% of the work has been completed. The project’s second phase to furnish andequipthefacilityisestimatedtocost$12 million, but no funding has yet been requested, and furniture and equipment requirements have not been discussed with the Government of Iraq (GOI). SIGIR conducted this review to determine the extent to which the GOI had agreed to sustain andoperatetheIIAaftertheU.S.ArmyCorpsof Engineers, Gulf Region District, completes the renovationandconstructionofIIAfacilities.

One of three classroom buildings at the Iraqi International Academy. (USF-I/ITAM/MOD photo) Results SIGIRfoundthattheGOIhasnoplantofund Iraqi Government Support for theoperationoftheIIAafteritopensinSep- the Iraqi International Academy tember 2011, and that the U.S. military did not (SIGIR 11-009) adequately address with the GOI the need for the GOItosustainandoperatetheIIAinitsproject- Introduction planning deliberations. In early 2009, the Multi-National Security Transi- Toillustrate,allthreeMODofficialsSIGIR tion Command-Iraq616,U.S.Embassy-Baghdad, interviewed stated that they had discussed the and the Government of Iraq (GOI) discussed the conceptoftheIIAwithU.S.officialsandagreed need for an English-language training academy to that the GOI needed such an educational insti- consolidate the Ministry of Defense (MOD) and tution.However,theyinformedSIGIRthatthe theMinistryofInteriorEnglish-languageteaching ITAM-MOD had not raised the issue of Iraqi sites and to develop a unified curriculum. At the financialsupportwiththemand,asoneofficial time, the estimated cost was more than $20 mil- stated,hesimplyassumedtheUnitedStateswould lion.InJanuary2010,theU.S.militaryexpanded fundtheoperationoftheIIAforatleastoneyear. its vision of the academy to that of a regional Additionally, Iraqi officials provided other reasons educational institute similar to the George C. whyfundingoftheIIAremaineduncertain.One Marshall Center in Germany.617 The expanded ini- officialstatedthatheknewtheIraqiswouldhaveto tiative, now called the Iraqi International Academy take responsibility for the IIA but had not received (IIA) would offer instruction in security studies thenecessarycostdatafromtheU.S.militaryin such as international relations, public administra- areas such as the number and types of faculty that tion, and academic and executive-level English. would be needed to develop operating, mainte- The estimated $26 million project is funded by the nance, and sustainment costs. He also said that the IraqSecurityForcesFund(ISFF)andmanaged GOI had not designated a lead ministry for the IIA by that part of the U.S. Forces-Iraq (USF-I) Iraq and that it was unlikely that any ministry would Training and Advisory Mission assigned to assist step up and request funding under its budget until the Iraqi Ministry of Defense (ITAM-MOD). A theGOIdidso. construction contract was awarded on Septem- ITAM-MOD’s planning documents discussed ber20,2009,for$11,710,000,andthreecontract itsvisionfortheIIAbutdidnotaddressthefuture modificationsincreasedcoststo$13,437,822. operating and sustainment costs, or the need to

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obtain a commitment from the GOI. ITAM-MOD Sons of Iraq Program: Results Are Uncertain officialstoldSIGIRthatitseffortstoobtaina and Financial Controls Were Weak financial support commitment to date have been (SIGIR 11-010) unsuccessful. ITAM-MOD correspondence with the MOD and internal GOI memos and letters be- Introduction tween2009and2010didnotdiscussanyinstances In June 2007, the Multi-National Corps-Iraq where ITAM-MOD raised the issue of the GOI’s (MNC-I) began using Commander’s Emergency futureresponsibilitiesfortheIIA.ITAM-MOD Response Program (CERP) funds to hire former officialssaidtheyrecognizethatthelackofaGOI insurgents and their passive supporters to guard commitment to fund the IIA is a problem and checkpoints, buildings, and key parts of neigh- that they should have addressed this issue earlier, borhoods in Iraq. Known as the Sons of Iraq buttheyareattemptingtocatchupatthistime. (SOI)program,theefforthasbeencreditedwith Additionally, they said that the seven-month delay helping reduce the overall levels of violence in informinganewgovernmenthasinhibitedtheir Iraq. During the course of the program, MNC-I efforts to obtain GOI support because the GOI spent approximately $370 million drawn from has not decided which ministry will be respon- fiscalyear2007-2009CERPfunds.PastSIGIR sible. ITAM-MOD officials stated that they will reports have identified weaknesses in the man- continue to work with their GOI counterparts to agement of CERP funds. resolve this issue. SIGIR’s reporting objectives for the SOI pro- gram are to determine (1) the program’s contribu- Recommendations tion to reducing violence in Iraq, (2) the effective- SIGIR recommends that the Commander, U.S. ness of financial management controls, and (3) the CentralCommand,directtheCommanding statusofGOIeffortstointegrateSOIpersonnel General, USF-I, take no further action to purchase into Iraqi ministries. furnitureandequipmentfortheIIAandinform theGOIthatitistheGOI’sresponsibilitytodoso. Results Insufficient quantifiable program data coupled Lessons Learned with the inability to segregate possible SOI effects As Iraq’s ability to function as a sovereign nation from other factors precluded SIGIR from drawing improves, a written and signed bilateral agreement empiricallyreliableconclusionsaboutthepro- betweentheUnitedStatesandIraqshouldbea gram’s contribution to the reduction in violence prerequisite for development assistance projects to inIraqthatbeganinthelatesummerof2007. ensure that U.S. funds are not wasted. Multi-National Force-Iraq (MNF-I) officials and commanders SIGIR spoke with stated that they Management Comments believetheSOIprogramwasanimportantfactor and Audit Response in reducing violence and provided a number of Management comments are included in the final anecdotal examples in support of their opinions. report,whichcanbefoundontheSIGIRwebsite: However,itisnotpossibletodrawmoredefinitive www.sigir.mil conclusions about the program’s effects. Specifical- ly, there was no comprehensive plan for SOI with specific goals, metrics, or milestones from which to measure the individual or collective impact of the effort. Additionally, there was no requirement forcommanderstodocumentwhatSOIgroups

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Figure 5.1 SOI Numbers from 6/2007−2/2009

120

100 104105 104 102 99 99 95 92 93 91 91 91 80 82 73 68 60 57

40 40 SoI Strength (in Thousands) 27 29 20 24 12 0 JJASONDJFMAMJJASONDJF 2007 2008 2009

Note: By August 2008, there were approximately 779 individual SOI agreements to cover almost 100,000 SOIs over 9 provinces in Iraq. There were 95,120 SOI registered to be transferred to the Iraqi government.

Source: USF-I presentation of monthly SOI numbers.

achieved or for any other organization to assess estimated to cost $331,200, the pay agent simply overall program impact in areas such as reductions automatically provided $82,800 each month for a in insurgent attacks. Given the absence of detailed totalof$331,200.Inthefewinstanceswherepay- information on SOI effects and the reality of many ments were made to individual SOI members, the other factors affecting the levels of violence in Iraq payments were usually lower than estimated. For during the same time period, such as the influx of example, in one project file, 545 SOI members were largenumbersofadditionalU.S.forcesduringthe on the official registry, but only 454 signed the pay surge,SIGIRisunabletodrawreliablysupportable roster and collected their salaries. This reduced empiricalconclusionsaboutthefullextentofSOI actualcosts17%,fromanestimated$62,884to contributions in this area. $52,384. Furthermore, key financial control docu- For a timeline of SOI membership from 2007 to mentation including cash controls, receipts, and 2009, see Figure 5.1. vouchers were usually missing from project files. Overall, SIGIR found that the MNF-I exercised Since assuming full control of the SOI program weakfinancialcontrolsoveritscashpaymentsto inApril2009,theGOIhasfaceddifficultiesin the SOI. SIGIR found that payments were often managing the program, properly paying the SOI, made directly to the SOI leader rather than to and integrating SOI into Iraqi ministries. The GOI individual SOI members. In addition, in some files, promised to employ 95,120 SOI members, but to thepayagentsimplyprovidedthesameamount date has provided offers to only 39,224. Additional- of money each month without determining how ly, it has not offered any jobs since November 2009. many SOI members were actually working and for The GOI has paid the SOI members on time only how many hours they ostensibly worked during 42% of the time. According to USF-I, the percep- the month. For example, for a four-month project tion of broken promises and GOI indifference has

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eroded public confidence, furthered SOI distrust Results of the GOI, and increased fear of insurgent influ- As of September 30, 2010, ABO reports that ence over SOI personnel. While the GOI has made $3,890,709,000 was allocated for CERP projects progressduringaperiodwhenitwasunableto in Iraq. Of this amount, $3,675,323,152 (94.5%) form a government, such problems raise questions has been obligated. Of the amount obligated, as to whether the GOI can maintain reconciliation $3,560,356,040 (96.9%) has been disbursed, and with the SOI. $114,967,222 (3%) remains unliquidated. The dis- bursement data provided by ABO agrees with the Recommendations disbursement reported by USF-I. Further, SIGIR SIGIRrecommendsthattheSecretaryofDefense conducted a forensic review of the Department of direct the Under Secretary of Defense (Comptroller) Defense’s electronic disbursements of CERP funds to revise CERP guidance to include direction on lookingforanomalies,whichwerethengivenad- whenrelatedprojectsshouldbemanagedasapro- ditional review. SIGIR’s anomaly testing focused gram with clearly defined objectives, implementing on vouchers that have been paid. SIGIR’s testing regulations, and metrics for assessing results. has not disclosed significant issues. The CERP fund allocations that USF-I reports Management Comments it has received do not agree with the amount that and Audit Response ABOreportsitprovided.AccordingtoUSF-I,ithas Management comments are included in the final received CERP allocations totaling $4,558,000,000, report,whichcanbefoundontheSIGIRwebsite: while ABO reports allocations of $3,890,709,829—a www.sigir.mil. difference of approximately $667,290,171. The dif- ferencesoccurredinfiscalyears(FYs)2008,2009, and2010.InFY2008,USF-Ireportsitreceivedallo- Commander’s Emergency Response cationstotaling$1,250,000,000,whileABOreports Program Obligations Are Uncertain allocationsof$995,909,000;andinFY2009,USF-I (SIGIR 11-012) reportsitreceivedallocationstotaling$747,000,000, while ABO reports allocations of $339,050,000. Introduction Finally, in 2010, the ABO report shows an alloca- The Army Budget Office (ABO) reports that, since tion of $239,850,829, while USF-I reports about 2003, it has allocated about $3.89 billion for Com- $245,000,000, a difference of about $5 million. mander’s Emergency Response Program (CERP) SIGIR requested supporting documentation projects in Iraq. According to Money as a Weapon from USF-I for its higher reported allocations, but System (MAAWS),theU.S.Forces-Iraq(USF-I) USF-I was unable to provide it. As of September 30, policyandproceduresmanualthatdirectsprogram 2010,bothABOandUSF-IreportCERPobliga- execution and establishes the goals for CERP fund- tionsof$3,675,323,152.However,bothobtained ing, two information systems track CERP data: the their obligation data from STANFINS. Several CERP Project Tracker, which is a resource manage- priorSIGIRreportshaveraisedquestionsabout menttoolthatidentifiesthestatusofeachCERP whether STANFINS contains all CERP obligations. project, and the Army Standard Financial System Forthereasonsdiscussedabove,SIGIRwasun- (STANFINS), which identifies CERP obligations able to develop reliable data on how much USF-I andexpenditures.Theobjectiveofthisreviewisto spent for specific categories of CERP projects. determinetheextenttowhichfundsappropriated USF-I provided information on how it has used for the CERP have been obligated and liquidated, itsCERPfunding,suchasforprotectivemeasures and how those funds have been used. and water and sanitation. However, the largest

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categoryofspendingis“NoCategoryListed,” • Project1103:AuditoftheStatusofSIGIRRec- which accounts for 21% of all of its CERP funding. ommendations Made to the Department of State AccordingtoUSF-Iofficials,thiscategoryisused • Project 1102: Audit of the Status of SIGIR when units do not identify a category for their Recommendations Made to the Department of CERP projects. Defense • Project1101:AuditoftheUseofFundsforthe Recommendations Commander’s Emergency Response Program in This report does not contain recommendations. Iraq for Fiscal Year 2011 • Project 1021: Audit of the Status of International Management Comments Narcotics and Law Enforcement Funds Appro- and Audit Response priated for Iraq Reconstruction Becausethisreportcontainsnorecommenda- • Project 1020: Audit of the Departments of Justice tions, the responsible agencies were not required to and State Management of Rule of Law Activities submit comments. in Iraq • Project1019:AuditoftheStatusofOversightof Private Security Contractors in Iraq Ongoing and Planned Audits • Project1018:AuditoftheCost,Outcome,and Management of the Falluja Wastewater Treat- SIGIR primarily conducts performance audits that ment Plant Project assesstheeconomy,efficiency,effectiveness,andre- • Project1017:AuditoftheU.S.ArmyCorpsof sultsofIraqreconstructionprograms,oftenwitha Engineers’ Plans and Processes To Transfer focus on the adequacy of internal controls and the Ongoing Reconstruction Projects to the Govern- potentialforfraud,waste,andabuse.Thisincludes ment of Iraq aseriesoffocusedcontractauditsofmajorIraqre- • Project1015:AuditoftheControlsOverthe construction contracts, which will support SIGIR’s QuickResponseFund response to congressional direction for a “forensic • Project 1014b: Audit of the Status of Funds Ap- audit” of U.S. spending associated with Iraq recon- propriatedfortheIraqReliefandReconstruc- struction. Additionally, SIGIR has conducted and tion Fund 2 will continue to conduct in-depth assessments of • Project 1013: Audit of Cooperative Agreements grants to include the reasonableness, allowability, Awarded to Cooperative Housing Foundation andallocabilityofcosts.SIGIRwillalsoclosely International monitor and review reconstruction activities as the • Project1009:AuditoftheContractforWare- DoD presence declines and the DoS management housing and Distribution Services at Abu responsibilities for reconstruction increase. GhraibandthePortofUmmQasr • Project1008:AuditoftheStatusofDoD’s Ongoing Audits Theater-wide Internal Security Services (TWISS) SIGIR is currently working on these audits: Contracts • Project 1105: Audit of the Department of De- • Projects9005,9012,and9013:AuditsofAppro- fense Use of Iraqi Funds Provided for the Iraqi priation, Obligation, and Expenditure Transac- Commander’s Emergency Response Program tion Data Related to Iraq Relief and Reconstruc- • Project1104:AuditoftheStatusofSIGIR tion of the Department of Defense, Department Recommendations Made to the U.S. Agency for of State, and the U.S. Agency for International International Development Development

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Planned Audits contracts and reconstruction activities; made rec- SIGIR’s audit planning is aligned with three key ommendations to improve economy and efficiency goalscontainedinitsstrategicauditplan: of U.S. operations and make activities less vulnera- • improving business practices and accountability bletofraud,waste,andabuse;andprovidedlessons in managing contracts and grants associated learnedforuseinotherreconstructionendeavors. with Iraq reconstruction Moreover, SIGIR has made 444 recommenda- • assessingandstrengtheningtheeconomy,effi- tionstoimprovereconstructionactivitiesinIraq, ciency, and effectiveness of programs and opera- and management has already agreed to and imple- tions, designed to facilitate Iraq reconstruction mented 123 of them. These recommendations are • providing independent, objective leadership discussed more in depth in the next section. and recommendations on policies designed to Much of SIGIR’s audit results can be attributed addressdeficienciesinreconstructionandstabi- to SIGIR’s presence in Iraq. This presence has lization efforts in Iraq enabledSIGIRtoprovidereal-timeaudits—often starting and completing within six months—that SIGIR’s strategic plan recognizes the legislative address critical reconstruction issues. SIGIR’s mandatetocompleteaforensicauditreportonall in-countryauditactivitiesenableface-to-facecom- amounts appropriated or otherwise made available munications and relationship building with De- for Iraq reconstruction. As part of that effort, SIGIR partment of Defense (DoD), Department of State has completed 20 focused contract and grant audits (DoS),andGovernmentofIraq(GOI)officials,and dealing with outcomes, costs, and the oversight as- theyprovideanin-depthandhistoricalknowledge sociated with major reconstruction contract in Iraq, ofthereconstructionprograminthecountry. as well as vulnerabilities to fraud, waste, and abuse. SIGIR has worked proactively with previous Additionally, SIGIR conducted two grant audits that and current U.S. Ambassadors and Commanding looked at outcomes and whether specific costs were Generals, providing insights on issues that need to reasonable, allowable, and allocable according to be addressed. For example, in August 2009, SIGIR federal regulations. From these SIGIR has identified identifiedfortheCommandingGeneralandthe questionable costs. Similar contract or grant audits U.S. Ambassador areas that needed to be dealt with are ongoing, and others are planned. to ensure a smooth transition as reconstruction Inthefuture,SIGIRwillfocusoncontracts management shifts from DoD to DoS, as the U.S. fundedbytheIraqSecurityForcesFundandthe presence downsizes and the ministerial capacity of Economic Support Fund. Additionally, SIGIR will the GOI increases. continue to address issues related to the downsiz- ingoftheDoDpresenceinIraqandthetransition Major Issues Addressed in Audits of reconstruction activities to DoS. Inthecourseofitswork,SIGIRhasidentified broad, recurring issues that were the key contribut- ingcausestothedeficienciesnotedinthebodyof SIGIR Audits: 2003–2010 SIGIR’s audits. To illustrate, in July 2008, SIGIR issued an audit report that discussed four persistent Since 2003, SIGIR has published 182 audits ad- issues affecting the management of reconstruction dressing a wide range of topics, such as oversight activities in Iraq. They were: of contracts and specific reconstruction programs, • the need to better understand the problems as- as well as the cost and oversight of private security sociated with implementing reconstruction pro- contractors. Throughout its tenure, SIGIR audits gramsinanunstablesecurityenvironment.(For have identified deficiencies in the management of example, security issues and their costs were

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often not adequately taken into consideration (Theseinvolvedeficienciessuchasinadequatere- in designing and implementing reconstruction view of contractor invoices, inadequate contrac- activities and estimating costs.) tor oversight, missing or incomplete documenta- • the impact of not having an integrated manage- tion of contract actions, and inadequate staffing.) ment structure to provide clear lines of author- • morethan35recommendationstoworkmore ity on program coordination and successful closely with the GOI in areas such as design- deliveryofprojects.(Thelackofsuchunity ing and transferring projects to improve the of command led to situations where the U.S. prospects that the GOI will sustain U.S.-funded government could not determine the full extent facilitiesandprogramssothatU.S.effortswill of all agencies’ activities on a single issue, such as not be wasted anticorruption or capacity development.) • the importance of anticipating staffing needs Additionally, SIGIR has provided recommenda- and reducing staff turnover tionstoimprovethemanagement,efficiency,and • recognition of how essential working closely outcome of—significant and high-cost programs with host governments is to the long-term that will continue even as the U.S. reconstruction success of U.S. investments in reconstruction effortinIraqscalesback: projects • SIGIR has issued 11 reports and made 24 recom- mendations addressing the need to improve the Additionally, SIGIR audits of contracts have management of the Commander’s Emergency pointed out numerous areas where contract man- Response Program (CERP). This program agement needed to be improved to provide better authorizes U.S. field commanders to use CERP economy and efficiency and make the contract less fundstorespondtourgenthumanitarian,relief, vulnerable to fraud, waste, and abuse. and reconstruction requirements that immedi- ately assist indigenous populations and achieve SIGIR Recommendations focused effects. This quarter, SIGIR completed a To Improve the Management review of the CERP-funded Sons of Iraq program of Reconstruction Activities and concluded that, because of insufficient data, SIGIR made recommendations to deal with these it was not possible to determine exactly what the management problems. In a number of cases, a program achieved. Another CERP report identi- single recommendation addressed more than one fied the inability of DoD to reconcile data on the oftheissuesoutlinedabove.Toillustrate,SIGIR levelsofCERPobligations,aswellasincomplete has provided: information on the uses of CERP funds. • morethan175recommendationstoimprove • SIGIRhasissuedmorethan27reportswhich, program management, including the need to to varying degrees, addressed U.S. efforts to adequately staff offices and reduce staff turnover develop functioning Iraqi Security Forces (ISF). • morethan70recommendationstoimprove Thisefforttakesonincreasingimportanceas interagency coordination and cooperation and the U.S. military footprint decreases and now to better share information that the principal agency created to implement • morethan185recommendationstoimprove this goal—the Multi-National Security Transi- oversightofcontractsandcontractorstoencour- tion Command-Iraq (MNSTC-I)—has been age economy and efficiency and minimize the subsumed into the U.S. Forces-Iraq (USF-I). To potentialforfraud,waste,andabuse date, SIGIR has made five recommendations • morethan175recommendationstoimprove regarding ministerial capacity development, accountability and internal control weaknesses. oversight of weapons provided to the ISF, asset

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transfer, use of CERP funds, anticorruption because it had issued guidance on preserving efforts, and other topics—including logistics, reconstruction records just prior to the publication maintenance responsibilities, and training of oftheauditreport.Inthiscase,SIGIRcommends securityforcespersonnel.Thisquarter,SIGIR USF-I for issuing the guidance but concludes that reported that U.S. efforts to build and create an theguidancedoesnotfullysatisfytheintentof Iraqi International Academy are vulnerable to therecommendationtodevelopaplantoensure waste because the GOI has not agreed to fund allcurrentandhistoricalrecordsarepreserved. andsustainitsoperation. Moreover, SIGIR audits continue to find problems with USF-I’s maintenance and storage of these Insomecases,agenciesdonotrespondtoa vital records, and that there has been little effort to report’s recommendations in a timely manner. For locatemissingrecords—particularlyforCERP- example, in SIGIR’s July 2010 audit report “Plans funded projects. Therefore, SIGIR is keeping the To Preserve Iraq Reconstruction Program and recommendation open until USF-I can document ContractRecordsNeedToBeImproved”(SIGIR that it has improved its record management and 10-021), SIGIR made recommendations to the preservation system. Secretaries of Defense and State, the Administrator SIGIR has recently announced reviews of the of the U.S. Agency for International Development actions DoD, DoS, and USAID have taken, or plan (USAID),andsomeDoDorganizationsinIraqto to take, to address open recommendations and improve their management of records document- reporttheseactionstotheCongressasrequiredby ing the U.S. reconstruction effort. The Secretar- OMBCircularA-50andtheInspectorGeneralAct ies of Defense and State and the Commanding of 1978, as amended. General, USF-I, did not respond to the recommen- dations in the time required. Ultimately, the DoS Financial Impacts of SIGIR Audits Bureau of Near Eastern Affairs, on October 4, 2010, SIGIR’s audits have had financial impacts, as shown respondedonbehalfoftheSecretaryofStateand in Table 5.2. Through its audits, SIGIR has been concurred with the recommendations. The Bureau able to identify: providedthespecificmeasuresitwastakingtoad- • funds that would be put to better use (mean- dress SIGIR’s recommendations to assign an office ingthatfundscouldbeusedmoreefficientlyif the responsibility for records preservation, to take management took an action such as reducing those steps that were listed in the recommendation, outlaysordeobligatingfundsfromaspecific and to provide the Embassy detailed guidance. program or operation) The Office of the Secretary of Defense has yetto • payments that SIGIR questioned and recom- provide its response to the SIGIR recommendation, mended the agency consider recovering (because as required by Office of Management and Budget SIGIR determined that the payments were either (OMB) Circular A-50. not adequately supported in documentation or did Additionally, SIGIR recommended that the not appear to be allowable, reasonable, or allocable Commanding General, USF-I, direct that plans be according to regulations and or other agreements developed to preserve Iraq Security Forces Fund governingtheexpenditureofthefunds) and CERP records by means such as developing • funds that were saved (because the agency under standard operating procedures. The USF-I Inspec- review accepted SIGIR’s recommendation that tor General directed that the U.S. Central Com- funds be put to better use by management or to mand respond, which it did—but it did so a day recover monies that were inappropriately spent after the audit report was issued. USF-I responded by a contractor, grant recipient, or other organi- that it did not concur with the recommendation zation receiving U.S. funding)

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Table 5.2 SIGIR has also questioned $112.63 million in SIGIR Financial Impacts payments to contractors and grant recipients under $ Millions cost-reimbursement contracts or grant agreements Accomplishments This Quarter Cumulative because the costs claimed were not supported a Funds To Be Put to Better Use 12.00 586.62 byadequatedocumentation,suchasreceiptsor b Questioned Costs 0.00 112.63 invoices; were unallowable under government Saved and Recovered 0.00 610.61 regulations; were unreasonably high; or were not a TheInspectorGeneralActof1978,§5.(f)states: allocabletotheproject.Forexample,SIGIRfound (4) the term “recommendation that funds be put to better use” means a recommendation by the Office that funds could be used more efficiently if management of an establishment took actions to implement that a recipient of a DoS democracy-building grant and complete the recommendation, including-- (A) reductions in outlays; did not follow government regulations requiring (B) deobligation of funds from programs or operations; (C) withdrawal of interest subsidy costs on loans or loan guarantees, insurance, or bonds; that it obtain agency approval before purchasing (D) costs not incurred by implementing recommended improvements related to the operations of the establishment, a contractor or grantee; almost $700,000 in security vehicles, and therefore (E) avoidance of unnecessary expenditures noted in preaward reviews of contract or grant agreements; or SIGIR questioned the cost. (F)anyothersavingswhicharespecificallyidentified. ThroughJanuary31,2011,agencymanagement b TheInspectorGeneralActof1978,§5.(f)states: (1)theterm“questionedcost”meansacostthatisquestionedbytheOfficebecauseof-- has concurred with certain SIGIR audit findings (A)anallegedviolationofaprovisionofalaw,regulation,contract,grant,cooperativeagreement,or other agreement or document governing the expenditure of funds; andrecommendations,whichhasresultedinabout (B)afindingthat,atthetimeoftheaudit,suchcostisnotsupportedbyadequatedocumentation;or (C) a finding that the expenditure of funds for the intended purpose is unnecessary or unreasonable; $610.61millioninsavedandrecoveredfunds.For (2)theterm“unsupportedcost”meansacostthatisquestionedbytheOfficebecausetheOfficefound that, at the time of the audit, such cost is not supported by adequate documentation. example,$23millionofthefundssavedemanated

Source: AnalysisofSIGIRauditreportsandrecommendations,1/2011. from recommendations regarding improved inven- tory control of equipment purchased for primary SIGIR has identified a total of $586.62 million healthcare centers, and $94 million was saved thatcouldbeusedmoreefficientlyandeffectively throughimprovedcontractorinvoicereviewproce- if used elsewhere. For example, this quarter SIGIR dures in the Iraqi police training program. identified$12millionplannedtofurnishandequip Table 5.3 lists SIGIR’s financial impact the Iraqi International Academy that would be bet- auditreportsandthevalueofthefinancial ter spent elsewhere because the GOI has not made accomplishments.◆ a commitment to fund the operation and mainte- nance of the Academy.

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Table 5.3 SIGIR Financial Impact Reports $ Millions Report Funds Better Questioned Unsupported Dollars Saved & Number Report Title Used Costsa Costs Recovered

Federal Deployment Center Forward Operations at the 04-003 18.20 18.20 Kuwait Hilton Audit of the Accountability and Control of Materiel Assets of 04-011 19.70 19.70 theCoalitionProvisionalAuthorityinBaghdad Coalition Provisional Authority’s Contracting Processes 04-013 5.19 5.19 Leading Up To and Including Contract Award Administration of Contracts Funded by the Development 05-008 0.04 0.04 Fund of Iraq Management of Rapid Regional Response Program Grants in 05-015 2.70 2.70 0.05 South-Central Iraq Management of the Contracts and Grants Used To Construct 05-016 1.30 1.30 and Operate the Babylon Police Academy Award Fee Process for Contractors Involved in Iraq 05-017 7.80 Reconstruction Management of the Contracts, Grant, and Micro-Purchases 05-020 0.15 0.15 Used To Rehabilitate the Karbala Library Management of Rapid Regional Response Program 05-023 0.57 0.57 Contracts in South-Central Iraq 06-009 Review of Task Force Shield Programs 12.80 12.80 ReviewoftheMulti-NationalSecurityTransitionCommand- 06-010 Iraq Reconciliation of the Iraqi Armed Forces Seized Assets 1.51 3.46 3.46 4.97 Fund Interim Audit Report on the Review of the Equipment Purchased for Primary Healthcare Centers Associated 06-016 23.30 23.3 with Parsons Global Services, Contract Number W914NS- 04-D-0006 Review of DynCorp International, LLC, Contract Number S 06-029 LMAQM-04-C-0030, Task Order 0338, for the Iraqi Police 5.46 5.46 Training Program Support 07-007 Status of U.S. Government Anticorruption Efforts in Iraq 3.80 Outcome,Cost,andOversightofWaterSector 08-018 0.57 Reconstruction Contract with Fluor AMEC, LLC Cost, Outcome, and Oversight of Local Governance Program 09-003 0.19 0.19 ContractswithResearchTriangleInstitute IraqReconstructionProjectTerminationsRepresentaRange 09-004 16.62 of Actions Long-standing Weaknesses in Department of State’s 10-008 Oversight of DynCorp Contract for Support of the Iraqi 448.49 93.53 518.11 Police Training Program DepartmentofStateContractToStudytheIraq 10-010 5.00 5.00 Reconstruction Management System Commander’sEmergencyResponseProgram:Projectsat Baghdad Airport 10-013 16.10 Provided Some Benefits, but Waste and Management Problems Occurred Improved Oversight Needed for State Department Grant to 10-022 0.69 0.69 the International Republican Institute National Democratic Institute Grant’s Security Costs and 11-001 Impact Generally 0.08 0.08 Supported, but Department of State Oversight Limited Iraqi Government Support for the Iraq International 12.00 11-009 Academy Totals 586.62 112.63 11.35 610.61

Note: a Questioned costs include unsupported costs.

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COLLABORATIVE FORENSIC AUDITS/ INVESTIGATIONS INITIATIVE SIGIR’sAuditsandInvestigationsDirectoratesare SIGIR’s approach combines automated data engaged in a number of collaborative forensic audit mining with standard audit and investigative and investigation initiatives designed to identify techniques to detect problematic transactions and fraud, waste, and abuse. Public Law 108-106, as develop relevant evidence for use in administra- amended, requires that SIGIR prepare a final tive actions or civil or criminal fraud prosecutions. forensicauditreportonallfundingappropriated Matters most appropriately addressed by admin- for the reconstruction of Iraq, which totals about istrative resolution, such as cost disallowance and $58billion.Overthepastthreeyears,SIGIRhas recovery,willbereferredthroughauditreportsto conductedaseriesof18auditsofmajorrecon- agency contracting officials for appropriate action. struction contracts that were intended, in part, to The SIGIR Audits and Investigations Director- identify internal control weaknesses. Because such ates continue to expand the proactive joint effort weaknesses provide opportunities for fraud, waste, thatwasestablishedinJanuary2009.Thiseffort andabuse,SIGIRusedtheresultsoftheseaudits focusesonIraqreliefandreconstructionprograms to develop targeted forensic auditing approaches thataffordeasyaccesstocashassociatedwithweak to identify potential instances of wrongdoing. A controls over expenditures. To date, SIGIR has forensic audit is a systematic examination of the opened 54 criminal investigations as a result of this internal controls over a program’s expenditures or effort.Thisprojecthasalsoprovidedsupportto other financial data to identify anomalies in indi- ongoing criminal investigations. vidual transactions that may be indicative of fraud, Additionally, SIGIR continues to provide support waste, or abuse. The analytic process is portrayed on conducting forensic audits to the Special Inspec- in Figure 5.2. tor General for Afghanistan Reconstruction.◆

Figure 5.2 Forensic Audit Process

Source Data Analysis Results

Anomaly Testing and Data Mining

Iraq Reconstruction Financial Data Identification of Anomalous (financial analysis of all DoD, DoS, and Activity Indicative of Potential USAID transactions 2003–2009) Fraud, Waste, and Abuse

SIGIR Audits/Investigations Initiative (targeting programs with weak internal Criminal Investigations, Resulting in Indictments/Convictions controls that afford easy access to cash) 0 10010 Focused Contract Audits 1011 (audits that target costs, outcomes, 110 Audits of Vendors Resulting in 0 Recoveries and Addressing Internal and oversight of specific contracts 1001 and vendors) 11 Control Weaknesses

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SIGIR INVESTIGATIONS

SIGIR Investigations continues to actively pursue Figure 5.3 allegationsoffraud,waste,andabuseinIraq,with SIGIR Investigations: Criminal and Monetary Results 104 open investigations. During this reporting pe- riod, SIGIR had 3 investigative personnel assigned 50 $75 to Baghdad; 7 at SIGIR headquarters in Arlington, Monetary Results 13 Virginia; and 13 in offices in Pennsylvania, Florida, 40 $60 Texas,Ohio,NewYork,Oklahoma,andCalifornia. Investigative accomplishments this quarter include, 8

30 Millions $ 4indictments,3convictions,and2sentencings.To $45

date, the work of SIGIR investigators has resulted 13 in 31 arrests, 54 indictments, 44 convictions, and 20 $30 Criminal Results 13 more than $140 million in fines, forfeitures, recov- 3 5 eries, restitution, and other monetary results. 7 10 1 6 $15 This quarter, SIGIR continued to conduct a 4 number of significant criminal investigations 4 9611 17 7 relatedtoIraqreconstructionandworkclosely 0 $0 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 with prosecutors, U.S. partner investigative Q1 agencies, coalition partner investigators, and law Indictments Convictions Sentencings enforcement personnel from other countries. As a result of SIGIR investigations, 3 defendants are • AnArmyofficerwaschargedwithconspiracy, pendingindictmentbaseduponarrestcomplaints, acceptinggratuities,andconvertingpropertyof 7 defendants are awaiting trial, and an additional another to his own use. 16 defendants are awaiting sentencing. (Figure 5.3 • A Marine Corps major was sentenced for finan- shows the substantial increases in the number of cial crimes involving more than $440,000. judicial actions and monetary results achieved in • An Army lieutenant colonel was sentenced for eachofthelasttwoyearsbasedonSIGIRinves- acts affecting a personal financial interest. tigations.Thistrendisexpectedtocontinue,as substantial numbers of additional cases are in the Fraud Scheme Results in Convictions hands of prosecutors.) For a comprehensive list of of Two High-level Employees and More convictions compiled by the Department of Justice, Than $69 Million in Criminal Penalties see Table 5.4 at the end of this section. SIGIR notes and Civil Settlement these investigative activities this quarter: On November 5, 2010, the Louis Berger Group, Inc. • A fraud scheme involving reconstruction con- (LBG), a New Jersey-based engineering consult- tracts resulted in convictions of two high-level ingcompany,resolvedcriminalandcivilfraud employees, a deferred prosecution agreement chargesrelatedtoitsinternationalworkonbehalf by the company, and more than $69 million in oftheUnitedStatesAgencyforInternational criminal penalties and civil settlement. Development (USAID) and the U.S. Department of • An Army contracting officer pled guilty and was Defense (DoD). sentenced for bribery related to contracts in Iraq, In addition, two former senior LBG employees Kuwait, and Afghanistan. pled guilty to their roles in the scheme. Salvatore

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Pepe, LBG’s former Chief Financial Officer, and overseas. The scheme to defraud the government Precy Pellettieri, the former Controller, admitted wascarriedoutbyPepeandPellettieri,atthe toconspiringtodefraudUSAIDbyobtainingcon- direction of a former executive. tractpaymentsbilledatfalselyinflatedoverhead Pepe directly supervised Pellettieri, who rates. Pepe and Pellettieri pled guilty to separate supervised LBG’s general accounting division. criminal informations charging them with con- Both were responsible for ensuring the integrity spiring to defraud the government with respect to of LBG’s cost data with respect to the calculation claims. of overhead rates that LBG charged to USAID and The components of the settlement include: other agencies. LBG charged the federal govern- • A Deferred Prosecution Agreement (DPA), menttheserateson“costplus”contracts,which pursuant to which the U.S. Attorney’s Office in enabled contractors to pass on their overhead costs NewJerseywillsuspendprosecutionofacrimi- to the agency in general proportion to how much nal complaint charging LBG with a violation laborLBGdevotedtothegovernmentcontracts. oftheMajorFraudStatute.Inexchange,LBG Pepe and Pellettieri admitted that from September will, among other things, pay $18.7 million in 2001 through August 2007, they agreed with each relatedcriminalpenalties;makefullrestitution other and others to bill USAID and other federal to USAID; adopt effective standards of conduct, agencies for LBG’s overhead costs at falsely inflated internal controls systems, and ethics training overhead rates. They agreed to target an overhead programs for employees; and employ an inde- rate above 140%—meaning that for every dollar pendentmonitorwhowillevaluateandoversee of labor devoted to a USAID contract, LBG would the company’s compliance with the DPAfor a receive an additional $1.40 in overhead expenses two-year period. andtotalprofitsallegedlyincurredbyLBG. • A civil settlement that requires the company ThecaseagainstLBGcametolightwhena to pay the government $50.6 million to resolve former employee who worked in its accounting allegations that LBG violated the False Claims departmentfiledawhistleblowerlawsuitinthe Act by charging inflated overhead rates that were District of Maryland charging LBG with several used for invoicing on government contracts. violations of the civil False Claims Act. Under the • An administrative agreement between LBG and quitam,orwhistleblower,provisionsoftheFalse USAID,whichwastheprimaryvictimofthe ClaimsAct,aprivatepartycanfileanactionon fraudulent scheme. behalfoftheUnitedStatesandreceiveaportionof the government’s recovery. Accordingtodocumentsfiledinthesecases The government’s civil investigation, led by the and statements made in court, LBG provides en- Justice Department’s Civil Division and the U.S. gineering and other consulting services to private Attorney’s Office for the District of Maryland, and public entities, including federal agencies, examinedLBG’saccountingfromJuly1,1991, stateagencies,andforeigngovernments.Several to June 30, 2008. The false claims uncovered by of LBG’s largest contracts were with USAID. the civil investigation included LBG’s mischarg- USAIDawardedseveralmultimillion-dollar ing a portion of its headquarters costs and part of contractstoLBGforrehabilitativeandrecon- its Washington office costs to overhead accounts structiveworkinIraqandAfghanistan.Fromat so they appeared to have originated in LBG’s least 1999 through August 2007, LBG, through its government international division. In addition to former executives and management employees, mischargingUSAID,thefalseclaimsalsoinflated intentionally overbilled the U.S. government in billings on contracts performed overseas for the connection with contracts for work performed U.S.ArmyandU.S.AirForce.

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Under the settlement, LBG will pay $46.3 mil- ThecaseisbeingconductedjointlybySIGIR, lioninadditiontothecreditsof$4.3millionithas U.S. Army Criminal Investigation Command- alreadyprovided,commencinginJulyandAugust Major Procurement Fraud Unit (CID-MPFU), 2007, on contracts performed for USAID. LBG and DCIS, and FBI. parent company Berger Group Holdings, Inc., also entered into an administrative agreement with U.S. Army Officer Is Charged with USAIDwhereinthecompanieshaveagreedtocon- Conspiracy, Accepting Gratuities, tinued cooperation and strategies going forward. and Converting Property of Another ThecaseisbeingconductedjointlybyUSAID, to His Own Use Defense Criminal Investigative Service (DCIS), On November 10, 2010, a U.S. Army lieutenant SIGIR, and Federal Bureau of Investigation (FBI). colonel(LTC)waschargedinafour-countindict- ment with conspiracy, accepting gratuities, and, as U.S. Army Contracting Officer Pleads a public official, converting property of another to Guilty and Is Sentenced for Bribery his own use. The LTC was deployed to Iraq from On January 19, 2011, U.S. Army Major Roderick October 2003 through April 2004 and during that D.SanchezwassentencedinU.S.DistrictCourt, timeservedasthe“Mayor”ofaforwardoperating Denver, Colorado, to serve 60 months in prison, base (FOB). In this capacity he had authority over with three years supervised release following the theday-to-dayoperationsoftheFOB. prisonterm,andtopayafineof$15,000.Inaddi- According to the indictment, the LTC used his tion, Sanchez was ordered to forfeit Rolex watches, status to enrich himself by accepting more than real estate, and other property purchased with the $10,000 in cash, as well as gifts of jewelry and cloth- proceeds of the bribery scheme. The sentencing is ing, from contractors. In return, the LTC encour- the result of Sanchez’s guilty plea on October 27, agedawardingcontractstospecificcontractors, 2010,toaone-countcriminalinformationcharg- bypassingandrelaxingsecurityproceduresatthe ing him with bribery for accepting money and FOB for specific contractors, issuing weapons per- itemsofvalueinreturnforbeinginfluencedinthe mits without legal authority and without following awarding of Army contracts. proper protocol to contractor employees, direct- Accordingtocourtdocuments,atvarioustimes ing government employees to use equipment and from approximately 2004 through 2007, Sanchez supplies that benefited specific contractors, and wasemployedbytheU.S.Armyanddeployed converting government property in control of the overseasinIraq,Afghanistan,andKuwaitasacon- LTCforusebythesecontractors. tracting officer. Sanchez’s duties included reviewing The indictment also contained a forfeiture de- bids submitted by contractors for Army contracts, mand for $12,100 in currency, men’s and women’s recommending the award of Army contracts to jewelryandclothing,andtwoprayerrugs. specific contractors, and ultimately awarding those ThecaseisbeingconductedjointlybySIGIR, contractstogovernmentcontractors.Sanchez DCIS, and CID-MPFU, and is being prosecuted by admittedthatduringthattimeperiodheaccepted a SIGIR Prosecutorial Initiative (SIGPRO) Attorney. illicitbribepaymentsfromforeigncompaniesseek- ing to secure Army contracts. In return, Sanchez U.S. Marine Corps Major Sentenced usedhisofficialpositiontosteerArmycontractsto for Financial Crime Involving these companies. During the course of this crimi- More Than $440,000 nal scheme, Sanchez accepted Rolex watches, cash On January 10, 2011, Major Mark R. Fuller, a U.S. payments, and other things of value totaling more Marine Corps fighter pilot, was sentenced in U.S. than $200,000. District Court, Phoenix, Arizona, to serve one year

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andonedayinprisonandtopayafineof$198,510 community service; and he is prohibited from pos- and a special assessment of $200. The sentencing sessingafirearmfortheperiodofprobation.The was the result of Fuller’s August 4, 2010, guilty sentencing was the result of Gillette’s guilty plea on plea to two felony counts of structuring financial October 6, 2010, to a one-count criminal informa- transactions. Fuller had been charged in a 22-count tion charging acts affecting a personal financial indictment returned by a federal grand jury in interest. Phoenix, Arizona, with illegally depositing more Accordingtothecourtdocuments,onJune28, than $440,000 into U.S. bank accounts follow- 2004,theCPAtransferredpowertoasovereignIn- ingasix-monthdeploymentinIraqin2005asa terim Iraqi Government, which was responsible for contracting officer. holding an election for a 275-member Transitional According to court documents, Fuller was de- National Assembly, with the help of the United Na- ployed to Iraq from February 15, 2005, to Septem- tions (UN). The election transpired on January 30, ber27,2005,whereheservedasaprojectpur- 2005.TheIndependentElectoralCommissionof chasing officer for the Commander’s Emergency Iraq (IECI) was established in May 2004 and tasked Response Program (CERP) and was assigned to the with administering one of the largest electoral 5th Civil Affairs Group, Camp Fallujah. In this ca- logisticsoperations,asmorethan1milliontons pacity, Fuller identified and selected reconstruction of election materials—including ballots, polling projects, awarded reconstruction projects to Iraqi kits, and voting screens—had to be delivered from contractors, negotiated contract terms, and veri- various locations around the world to more than fied the completion of projects. CERP funds were 20 warehouses throughout Iraq. To assist the IECI distributedtotheIraqicontractorsintheformof with the election, the UN established a logistics brand-new$100U.S.currencynotes. supportoperationtoaidincoordinatingthesup- Soonafterreturningfromhisdeploymentin port,planning,andsupervisionofthedeliveryof Iraq, Fuller began making cash deposits with electoral equipment. brand-new$100U.S.currencynotes.Between To help Iraq prepare for both this election and October 2005 and April 2006, Fuller made 91 cash future elections, including a planned constitutional deposits,totalingmorethan$440,000,intobank referendum and political election, the United States accounts with Bank of America, Chase Bank, and obligated approximately $130 million to provide the Navy Federal Credit Union. Fuller made mul- non-securityassistancetotheIECIandotherIraqi tiple cash deposits under $10,000 into various bank entities. In addition, as part of the Multi-National accounts for the purpose of evading the reporting Force-Iraq (MNF-I), the United States provided requirements under federal law. both security and logistical support to the Iraqi This investigation was conducted jointly by governmentinconnectionwiththeelections.This SIGIR, Internal Revenue Service-Criminal Investi- support included, among other things, transport- gation, DCIS, and the Naval Criminal Investigative ing election materials to polling places and count- Service (NCIS). ingstationsthroughoutIraq. In December 2004, the UN Office of Project Ser- U.S. Army Lieutenant Colonel vices(UNOPS)invitedbidsforafreight-forwarding Sentenced for Acts Affecting contractandawardedthecontractinJanuary2005 a Personal Financial Interest to a freight forwarder in New York. The contractor OnJanuary11,2011,U.S.ArmyReservesLieu- received in excess of $40 million for successfully tenant Colonel Bruce Gillette was sentenced in completing the terms of the UNOPS contract. U.S. District Court, New York, New York, to one According to court documents, Gillette was on yearprobation,a$2,000fine,and160hoursof activedutyinIraqfromAugust2004toAugust

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2005 and was assigned as the Chief of the Elec- involved in approximately 40 prosecutorial matters tion Cell for the MNF-I, Civil Military Operations andcontinuetoplayintegralrolesinthedevelop- Directorate. In that position, Gillette served as the ment and prosecution of 104 cases being worked by MNF-I’s liaison to the IECI, the Department of the SIGIR Investigations Directorate. State, and Iraqi government entities. He also par- ticipated in the UN’s decision to award the UNOPS contract. Gillette helped develop and implement Suspension and Debarment theplantomoveelectionmaterialsfromdifferent parts of the world to Iraq, including among other Since December 2005, SIGIR has worked closely things, coordination with the contractor. In March with DoJ, CID-MPFU, DCIS, and the Army Legal 2005,GillettewasawardedtheBronzeStarMedal Services Agency’s Procurement Fraud Branch (PFB) forhisserviceinIraq“whileservingasthechiefto to suspend and debar contractors and govern- [the] Election Cell,” during which he “developed ment personnel for fraud or corruption within the thestrategy,andorchestratedthelargestelections Army, including those involving Iraq reconstruc- cargomoveinhistory.” tion or Army support contracts in Iraq. These cases Gillette engaged in discussions and negotiations arise as the result of criminal indictments filed in concerning prospective employment with the con- federal district courts and allegations of contractor tractor at the same time that negotiations between irresponsibility that require fact-based examination UNOPSandthecontractorweretakingplace by the Army’s Suspension and Debarment Official. through the time that the contract was awarded. Between October 1 and December 31, 2010, the This investigation was conducted by CID-MPFU, Army suspended 5 contractors based on allegations FBI, DCIS, and SIGIR. offraudinIraqandKuwait.Inaddition,theArmy proposed 4 contractors for debarment and finalized 11 debarments of individuals and companies dur- SIGPRO Update ing that period. To date, the Army has suspended 101individualsandcompaniesinvolvedinsustain- The SIGIR Prosecutorial Initiative continues to ment and reconstruction contracts supporting the make a substantive impact. In late 2009, in an effort ArmyinIraqandKuwait;and136individualsand to further align resources with its expanding case- companies have been proposed for debarment, load, SIGIR developed a program wherein it hired resulting in 114 finalized debarments that range in threehighlyexperiencedandrespectedformer durationfrom9monthsto10years.PFBisaggres- Department of Justice (DoJ) prosecutors. They were sively pursuing additional companies and individu- detailedasaunittotheFraudSectionoftheCrimi- als associated with fraud related to Army contracts nal Division of DoJ to prosecute SIGIR investiga- in Iraq, Kuwait, and other locations in Southwest tioncases,handlingtheirownDoJcaseloadsand Asia, with additional suspension and debarment ac- working closely with the SIGIR General Counsel tions projected during 2011. Suspension and debar- and other DoJ prosecutors who are assigned SIGIR mentactionsrelatedtoreconstructionandArmy cases. The SIGPRO attorneys are now firmly en- support-contract fraud in Afghanistan are reported sconced at DoJ with full dockets of criminal fraud to the Special Inspector General for Afghanistan matters emanating from the Iraq reconstruction Reconstruction (SIGAR). For a list of debarments, context. They are currently leading or significantly seeTable5.5.Foracompletelistofsuspensionsand debarments, see Appendix E◆

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Table 5.4 Convictions (as compiled by the Department of Justice) Date of Name Charges Conviction Sentence

Salvatore Pepe Conspiracy to defraud 11/5/2010 Pending Precy Pellettieri Conspiracy to defraud 11/5/2010 Pending 5 years in prison; 3 years supervised Maj. Roderick Sanchez, USA Bribery 10/27/2010 release; and $15,000 fine Maj. Richard Harrington, USMC Receiving illegal gratuities 10/18/2010 Pending 1 year probation; $2,000 fine; 160 Lt.Col.BruceGillette,USAR Actsaffectingapersonalfinancialinterest 10/6/2010 hours community service; and inability to possess a firearm Mariam Steinbuch, former Bribery 10/5/2010 Pending USMC staff sergeant Ismael Salinas Kickbacks 10/1/2010 Pending Dorothy Ellis Conspiracy 9/2/2010 Pending Wajdi Birjas, former DoD Bribery, money laundering 8/11/2010 Pending contract employee 1yearand1dayinprison;$198,510 Maj. Mark Fuller, USMC Structuring financial transactions 8/4/2010 fine;and$200specialassessment 21monthsinprison;2yearsofsuper- Maj. Charles Sublett, USA False statements 7/7/2010 visedrelease;andorderedtoforfeit $107,900 and 17,120,000 in Iraqi dinar 15monthsinprison;1yearsupervised release;orderedtopayafineof Capt. Faustino Gonzales, USA Receipt of a gratuity by a public official 6/24/2010 $10,000;orderedrestitutioninthe amount of $25,500; and ordered a special assessment of $100 Reprimand; reduction in rank from MSGT Terrance Walton, USMC Bribery, graft, failure to obey a direct order 5/17/2010 E-8toE-3;$65,000fine;and62days confinement Capt.EricSchmidt,USMC Wirefraud,filingafalsefederaltaxform 5/17/2010 Pending 42monthsinprison;3yearssupervised William Collins, USA civilian Bribery 4/21/2010 release;andorderedtopayafineof $1,725andtoforfeit$5,775 SFC Ryan Chase, USA Illegal gratuities, money laundering, false statements 4/21/2010 Pending Marcus McClain Acceptance of illegal gratuities 4/15/2010 Pending Kevin A. Davis Acceptance of illegal gratuities 4/13/2010 Pending Janet Schmidt, contractor Filing a false tax return and fraud 3/18/2010 Pending and military spouse TerryHall,contractor Conspiracy,bribery 2/17/2010 Pending Theresa Russell, former Five years probation and ordered to Money laundering 1/28/2010 USA staff sergeant pay $31,000 in restitution 30monthsinprison;3yearssupervised release; $200,000 restitution; and forfeit his interest in all personal Capt.MichaelD.Nguyen,USA Theftandstructuringfinancialtransactions 12/7/2009 property bought with the stolen money as well as the remaining funds seized by thegovernmentatthetimeofhisarrest Ronald Radcliffe Bribery and money laundering 10/16/2009 40 months in prison and $30,000 fine Joselito Domingo Bribery 11/19/2009 Pending Continued on the next page

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Date of Name Charges Conviction Sentence

Gloria Martinez Bribery and conspiracy 8/12/2009 5 years in prison Robert Jeffery Conspiracy and theft 8/11/2009 4 years in prison 3yearsprobation,toinclude6months William Driver Money laundering 8/5/2009 homeconfinement,and$36,000 restitution 12monthsand1dayinprison;2years Nyree Pettaway Conspiracy to obstruct justice 7/28/2009 of supervised release; and $5 million restitution Michel Jamil Conspiracy 7/27/2009 40 months in prison 97 months in prison; 3 years supervised Robert Young Conspiracy and theft of government property 7/24/2009 release; forfeiture of $1 million; and restitution of $26,276,472 24 months in prison; 3 years supervised Samir Itani Conspiracy 7/21/2009 release;$100,000fine;and$100special assessment 110monthsinprison;1yearsupervised Tijani Saani Filing false tax returns 6/25/2009 release;$1.6millionfine;and$816,485 inrestitutiontotheIRS 6monthsinprison;12-monthhouse Diane Demilta Wire fraud 5/27/2009 arrest; 2 years supervised release; $20,000 fine; and $70,000 restitution Benjamin R. Kafka Misprision of a felony 5/18/2009 Pending 60 days intermittent confinement; 2yearssupervisedrelease;forfeit ElbertW.GeorgeIII Theftofgovernmentproperty;conspiracy 5/18/2009 $103,000; and pay jointly and severally with co-conspirator Roy Greene $52,286.60 in restitution 3yearssupervisedrelease;forfeit $103,000; and pay jointly and severally Roy Greene, Jr. Theft of government property; conspiracy 5/18/2009 with co-conspirator Elbert George $52,286.60 in restitution 3 years probation and $2,072,967 FrederickKenvin Conspiracy 4/30/2009 restitution 3 years probation; $41,522 restitution; Stephen Day Conspiracy to defraud the United States by misrepresentation 4/13/2009 and $2,000 fine Jeff Alex Mazon, contractor, 1yearprobation;6monthshome MajorfraudagainsttheUnitedStatesandwirefraud 3/24/2009 KBR confinement; and $5,000 fine 70monthsinprison;3yearsof Carolyn Blake, Conspiracy and money laundering 3/19/2009 supervised release; and $3.1 million Sister of Maj. John Cockerham restitution Michael Carter, Project 61monthsinprisonand3years Engineer, Force Protection Violating the Anti-Kickback Act 1/25/2009 supervised release Industries Harith al-Jabawi, contractor Conspiracy, bribery, and false statements 1/22/2009 Pending Maj. Christopher Murray, 57monthsinprison;3yearssupervised Bribery and false statements 1/8/2009 USA Contracting Officer release; and $245,000 restitution Maj. Theresa Baker, 70monthsinprisonand$825,000 Conspiracy and bribery 12/22/2008 USAR Contracting Officer restitution Col. Curtis Whiteford, 5 years in prison; 2 years supervised USAR Senior Official, CPA- Conspiracy, bribery, and wire fraud 11/7/2008 release; and $16,200 restitution South Central Region 42monthsinprison;3yearssupervised Lt. Col. Michael Wheeler, USAR Conspiracy,bribery,wirefraud,interstatetransportationof 11/7/2008 release; $1,200 restitution; and $100 CPA Reconstruction Advisor stolenproperty,andbulkcashsmuggling special assessment Continued on the next page

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Date of Name Charges Conviction Sentence

David Ramirez, contractor, 50monthsinprison;3yearssupervised Readiness Support Bulk currency smuggling and structuring transactions 10/9/2008 release;and$200specialassessment Management, Inc. Lee Dubois, contractor, 3 years in prison and repayment of Future Services General Theftofgovernmentproperty 10/7/2008 $450,000 that represented the illegal Trading and Contracting proceeds of the scheme Company 1 year probation; 180 days home confinement; 104 hours community Jacqueline Fankhauser Receipt of stolen property 8/28/2008 service; $10,000 fine; and $100 special assessment Robert Bennett, contractor, ViolatingtheAnti-KickbackAct 8/28/2008 1yearprobationand$6,000restitution KBR Maj. James Momon, Jr., Conspiracy and bribery 8/13/2008 Pending USA Contracting Officer Lt. Col. Debra M. Harrison, Conspiracy, bribery, money laundering, wire fraud, interstate 30monthsinprison;2yearssupervised USA Acting Comptroller for transportation of stolen property, smuggling cash, and 7/28/2008 release; and $366,640 restitution CPA-South Central Region preparing false tax returns 1yearinprisonand1yearsupervised Capt. Cedar Lanmon, USA Accepting illegal gratuities 7/23/2008 release 210monthsinprison;3yearsof Maj. John Lee Cockerham, Jr., Bribery, conspiracy, and money laundering 6/24/2008 supervised release; and $9.6 million USA Contracting Officer restitution 41monthsinprison;3yearsof Melissa Cockerham, Conspiracy and money laundering 6/24/2008 supervised release; and $1.4 million Wife of Maj. John Cockerham restitution Lt. Col. Levonda Selph, Conspiracy and bribery 6/10/2008 Pending USAR Contracting Officer Raman International Corp. Conspiracy and bribery 6/3/2008 $500,000 fine and $327,192 restitution 24monthsconfinement;2years Capt.AustinKey, Bribery 12/19/2007 supervisedrelease;andorderedtopay USA Contracting Officer a$600assessmentandforfeit$108,000 10yearsinprison;3yearssupervised Maj. John Rivard, Bribery, conspiracy, and money laundering 7/23/2007 release; $5,000 fine; and $1 million USAR Contracting Officer forfeiture order Kevin Smoot, 14monthsinprison;2yearssupervised Managing Director, Violating the Anti-Kickback Act and making false statements 7/20/2007 release;$6,000fine;and$17,964 Eagle Global Logistics, Inc. restitution Anthony Martin, 1yearand1dayinprison;2years Subcontractor Administrator, Violating the Anti-Kickback Act 7/13/2007 supervisedrelease;and$200,504 KBR restitution JesseD.Lane,Jr. 30monthsinprisonand$323,228 USAR 223rd Finance Conspiracy and honest services wire fraud 6/5/2007 restitution Detachment Steven Merkes, DoD Civilian, 12 months and 1 day in prison and Accepting illegal gratuities 2/16/2007 Operational Support Planner $24,000 restitution Chief Warrant Officer Peleti “Pete” Peleti, Jr., USA, Army’s 28monthsinprisonand$57,500fine Bribery and smuggling cash 2/9/2007 Food Service Advisor for and forfeiture Kuwait,Iraq,andAfghanistan Jennifer Anjakos, 3 years probation; $86,557 restitution; USAR 223rd Finance Conspiracy to commit wire fraud 11/13/2006 and $100 assessment Detachment Continued on the next page

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Date of Name Charges Conviction Sentence

Sgt.CarlosLomeliChavez, 3 years probation; $28,107 restitution; USAR 223rd Finance Conspiracy to commit wire fraud 11/13/2006 and$100assessment Detachment Sgt. Derryl Hollier, 3 years probation; $83,657.47 USAR 223rd Finance Conspiracy to commit wire fraud 11/13/2006 restitution;and$100assessment Detachment Sgt. Luis Lopez, 3 years probation; $66,865 restitution; USAR 223rd Finance Conspiracy to commit wire fraud 11/13/2006 and$100assessment Detachment Bonnie Murphy, 1 year supervised release and Accepting unlawful gratuities 11/7/2006 Contracting Officer $1,500 fine Samir Mahmoud, employee of 1daycreditfortimeservedand2years Making false statements 11/3/2006 U.S. construction firm supervised release Gheevarghese Pappen, 2yearsinprison;1yearsupervised Soliciting and accepting illegal gratuities 10/12/2006 USACE civilian release; and $28,900 restitution Lt. Col. Bruce Hopfengardner, 21monthsinprison;3yearssupervised Conspiracy, conspiring to commit wire fraud and money USAR Special Advisor to CPA- 8/25/2006 release; $200 fine; and $144,500 laundering, and smuggling currency South Central Region forfeiture 3 years in prison; 2 years supervised Faheem Mousa Salam, ViolatingtheForeignCorruptPracticesAct’sAnti-Bribery 8/4/2006 release; 250 hours community service; Interpreter, Titan Corp. Provisions and$100specialassessment

Mohammad Shabbir Khan, 51monthsinprison;2yearssupervised Director of Operations for Violating the Anti-Kickback Act 6/23/2006 release; $10,000 fine; $133,860 Kuwait and Iraq, Tamimi restitution; and $1,400 assessment Global Co., Ltd. Witness tampering 8/10/2009 Pending 46monthsinprison;2yearssupervised Philip Bloom, Owner: Global release;$3.6millionforfeiture; Business Group, GBG Holdings, Conspiracy, bribery, and money laundering 3/10/2006 $3.6 million restitution; and $300 and GBG-Logistics Division special assessment 12 months and 1 day in prison; Stephen Seamans, Wire fraud, money laundering, and conspiracy 3/1/2006 3 years supervised release; $380,130 Subcontracts Manager, KBR restitution;and$200assessment 30monthsinprison;2years Christopher Cahill, Regional supervisedrelease;$10,000fine;and Vice President, Middle East MajorfraudagainsttheUnitedStates 2/16/2006 $100 assessment (a civil settlement andIndia,EagleGlobal with EGL arising from the same facts Logistics, Inc. resulted in a settlement of $4 million) 9 years in prison; 3 years supervised Robert Stein, Felon in possession of a firearm, possession of machine guns, release;$3.6millionforfeiture;$3.5 CPA-South Central Comptroller 2/2/2006 bribery, money laundering, and conspiracy million restitution; and $500 special and Funding Officer assessment 15monthsinprison;3yearssupervised Glenn Powell, MajorfraudandviolatingtheAnti-KickbackAct 8/1/2005 release; $90,973.99 restitution; and Subcontracts Manager, KBR $200 assessment

Note: Does not include non-U.S. court results from joint SIGIR/foreign law enforcement investigations.

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Table 5.5 Debarment List Name Debarred Name Debarred

Liberty Al-Ahlia General Trading and Carolyn Blake 3/17/2010 12/13/2010 Contracting Company Nyree Pettaway 3/17/2010 Bronze Al-Taqoos Al-Afjan 12/13/2010 Robert Young 3/9/2010 International Quality Kitchens Ardiya 12/13/2010 ElbertWestleyGeorgeIII 1/21/2010 John Napolian 12/13/2010 Roy Greene 1/21/2010 Joseph Sebastian 12/13/2010 Ofelia Webb 1/21/2010 N.K. Ismail 12/13/2010 Patrick Faust 1/21/2010 Biju Thomas 12/13/2010 AliN.Jabak 9/30/2009 Combat General Trading Company 12/13/2010 Liberty A. Jabak 9/30/2009 Jank Singh 11/24/2010 Liberty's Construction Company 9/30/2009 Blue Marine Services 11/24/2010 Tharwat Taresh 9/30/2009 BlueMarinesGeneralTrading,LLC 11/24/2010 Babwat Dourat Al-Arab 9/30/2009 Blue Marines 11/24/2010 Dourat Al-Arab 9/30/2009 Blue Marines Group 11/24/2010 Hussein Ali Yehia 9/30/2009 BMS Logistics 11/24/2010 Amina Ali Issa 9/30/2009 BMS Group 11/24/2010 Adel Ali Yehia 9/30/2009 BMS General Trading, LLC 11/24/2010 Javid Yousef Dalvi 9/25/2009 Christopher Murray 11/10/2010 MohamedAbdelLatifZahed 9/10/2009 Curtis Whiteford 10/22/2010 Gerald Thomas Krage 9/4/2009 William Driver 10/22/2010 Andrew John Castro 9/4/2009 Allied Arms Company, Ltd. 9/28/2010 Airafidane, LLC 9/4/2009 Allied Arms Company, W.L.L. 9/28/2010 Kevin Arthis Davis 8/20/2009 Shahir Nabih Fawzi Audah 9/28/2010 Jacqueline Fankhauser 8/7/2009 Defense Consulting and Contracting 9/28/2010 Group, LLC Debra M. Harrison, LTC, USAR 8/7/2009 Amwaj Al-Neel Company 9/22/2010 Nazar Abd Alama 7/1/2009 Baladi Company 9/22/2010 San Juan Company 7/1/2009 MississippiCompanyforthe Desert Moon Company 9/22/2010 7/1/2009 General Contract Ameer S. Fadheel 9/22/2010 Lee Dynamics International 6/17/2009 Oday Abdul Kareem 9/22/2010 Lee Defense Services Corporation 6/17/2009 Maytham Jassim Mohammad 9/22/2010 George H. Lee 6/17/2009 Michael Dung Nguyen 8/19/2010 Justin W. Lee 6/17/2009 Michael Wheeler 7/28/2010 Oai Lee 6/17/2009 Austin Key 7/14/2010 Mark J. Anthony 6/17/2009 Ashraf Mohammad Gamal 4/16/2010 Levonda J. Selph 6/17/2009 Triple A United General Trading 4/16/2010 and Contracting Starcon Ltd., LLC 6/17/2009 Jeff Thompson 3/29/2010 Cedar J. Lanmon, CPT, USA 6/3/2009 John Cockerham 3/17/2010 D+J Trading Company 5/14/2009 Melissa Cockerham 3/17/2010 JesseD.Lane,Jr. 1/30/2009 Continuednextcolumn Continuednextcolumn

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Name Debarred Name Debarred

Jennifer Anjakos 1/30/2009 BruceD.Hopfengardner,LTC,USAR 9/20/2007 Carlos Lomeli Chavez 1/30/2009 Robert J. Stein, Jr. 8/16/2007 Derryl Hollier 1/30/2009 PhilipH.Bloom 8/8/2007 Luis A. Lopez 1/30/2009 GlobalBusinessGroupS.R.L. 8/8/2007 Mohammed Shabbir Kahn 10/10/2008 Stephen Lowell Seamans 7/27/2007 Kevin Andre Smoot 9/30/2008 Gheevarghese Pappen 6/28/2007 9/17/2008, Faheem Mousa Salam 6/28/2007 Green Valley Company 5/18/2007 QAHMechanicalandElectricalWorks 6/27/2007 TriadUnitedTechnologies,LLC 9/17/2008 Abdullah Hady Qussay 6/27/2007 Dewa Europe 9/17/2008 AlRiyadhLaboratoriesandElectricityCo. 1/26/2007 Dewa Trading Establishment 9/17/2008 Thomas Nelson Barnes 1/24/2007 Al Ghannom and Nair General Trading 9/17/2008 Danube Engineering and General Company 12/28/2006 Contracting Dewa Projects (Private), Ltd. 9/17/2008 Alwan Faiq 12/28/2006 FutureAIMUnited 9/17/2008 Christopher Joseph Cahill 11/9/2006 FirstAIMTradingandContracting 9/17/2008 AhmedHassanDayekh 9/26/2006 Vasantha Nair 9/17/2008 5/14/2009, Diaa Ahmen Abdul Latif Salem K. V. Gopal 9/17/2008 6/2/2006 Falah Al-Ajmi 9/17/2008 Jasmine International Trading and Service 5/14/2009, Company 6/2/2006 Trans Orient General Trading 9/17/2008 Custer Battles 3/17/2006 Zenith Enterprises, Ltd. 9/17/2008 Robert Wiesemann, CW2, USA 3/6/2006 Peleti “Pete” Peleti, CWO, USA 6/15/2008 Glenn Allen Powell 2/16/2006 Al Sawari General Trading and 3/13/2008 Contracting Company Amro Al Khadra 1/12/2006 JohnAllenRivard,MAJ,USAR 1/14/2008 Dan Trading and Contracting 1/12/2006 Samir Mahmoud 11/29/2007 Steven Ludwig 9/29/2005 Robert Grove 10/30/2007 DXBInternational 9/29/2005 Steven Merkes 9/27/2007 Continuednextcolumn

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SIGIR EVALUATIONS

SIGIR’s Evaluations Directorate has implemented Program in Iraq. SIGIR expects to report on this a multifaceted approach to evaluating the impact evaluation, announced in September 2010, in the of programs that the U.S. government funded to near future. support the stabilization and reconstruction of Iraq. This quarter, SIGIR Evaluations also issued SIGIRplanstoevaluateacross-sectionofthemajor its fourth evaluation announcement: “Review of U.S. programs initiated for this purpose. In addition Ministerial Capacity Building Efforts in Iraq.” The to developing findings, conclusions, and recom- objectives of this study are to determine the status mendations to agency management, the evaluations of U.S. government-funded programs for building willidentifyandreportontheoutcomesandeffects capacityinselectedministriesoftheGovernment of stabilization and reconstruction programs. of Iraq and to assess whether the programs have This quarter, SIGIR Evaluations continued its enhanced the capacity of the ministries to perform work, both in the U.S. and in Iraq, on its evalua- critical government functions. SIGIR expects to tion of the Commander’s Emergency Response report on this evaluation by the end of April 2011.◆

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SIGIR HOTLINE

The SIGIR Hotline facilitates the reporting of Table 5.6 fraud, waste, abuse, mismanagement, and reprisal Summary of SIGIR Hotline Cases, as of 12/31/2010 in all programs associated with Iraq reconstruc- tion efforts funded by the U.S. taxpayer. The SIGIR Open Cases Hotline receives walk-in, telephone, mail, fax, and Investigations 54 online contacts from people in Iraq, the United Audits 12 States, and throughout the world. Most cases are Total Open 66 received through SIGIR’s website and electronic Closed 2nd Qtr 3rd Qtr 4th Qtr mail.WhenacasereceivedbytheSIGIRHotlineis Cases 2010 2010 2010 Cumulative*

not related to a program or operations funded with FOIA000 4 amounts appropriated or otherwise made available OSC Review 0 0 0 2 forthereconstructionofIraq,SIGIRrefersthat Assists 0 0 1 47 case to the appropriate entity. Dismissed223136 Fourth Quarter Reporting Referred 7 15 4 360 Inspections10080 As of December 31, 2010, the SIGIR Hotline had Investigations001119 initiated 831 cases. Of these cases, 765 have been Audits10017 closed, and 66 cases remain open. For a summary Total Closed 11 17 9 765 of these cases, see Table 5.6. Cumulative* Open & Closed 831

*CumulativetotalscovertheperiodsincetheSIGIRHotlinebegan New Cases operations—from 3/24/2004 to 12/31/2010. During this reporting period, the SIGIR Hotline received 9 new complaints, bringing the cumula- Referred Complaints tivetotalto831Hotlinecases.Thenewcomplaints Afterathoroughreview,SIGIRreferred4com- were classified in these categories: plaintstooutsideagenciesforproperresolution: • 7 involved contract fraud. • 2 were sent to the Department of State Office of • 2 involved miscellaneous issues. Inspector General. • 1 was sent to the Department of Defense Office Ofthe9newHotlinecomplaints,4werereceived of Inspector General. through the SIGIR website, 3 were received through • 1 was sent to the Department of Justice Office of electronic mail, 1 was received by telephone, and 1 Inspector General.◆ wasreceivedthroughtheU.S.PostalService.

Closed Cases During this quarter, SIGIR closed 9 Hotline cases: • 4 were referred to other inspector general agencies. • 3 were dismissed. • 1wasclosedbySIGIRInvestigations. • 1wasclosedasanassist.

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SIGIR WEBSITE

This quarter, the SIGIR websitewww.sigir.mil ( ) Figure 5.4 recorded these activities: Average Number of Visitors per Day to SIGIR Website, by Quarter, 10/1/2009–12/31/2010 • Morethan115,000usersvisitedtheSIGIRweb- site—more than 1,250 users per day. 1,500 1,424 • TheArabiclanguagesectionofthesitereceived 1,291 1,257 more than 3,350 visits. 1,227 1,090 • The most frequently downloaded documents were SIGIR’s most recent Quarterly Reports. 1,000 • Morethan26,000webfeedswerevisitedduring this quarter. Information is updated to the web feeds, which are automatically downloaded to 500 subscribers’ computers and can be viewed by feed reader programs. 0 Q4 Q1 Q2 Q3 Q4 ForanoverviewofdailyvisitstotheSIGIR 2009 2010 website, see Figure 5.4.◆ Source: DoD, IMCEN, response to SIGIR data call, 1/19/2011.

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LEGISLATIVE UPDATE

Appropriations Subsection (d) redefines the CERP as the pro- gram that Several laws were enacted this quarter that provided (1) authorizes United States military commanders for“continuing,”forvariousperiodsinFY2011, to carry out small-scale projects designed to meet urgent humanitarian relief requirements or urgent appropriationsusedtofundvariousreconstruction reconstruction requirements within their areas of activities in Iraq, generally at levels contained in fis- responsibility; and cal year 2010 appropriations. The most recent such (2) provides an immediate and direct benefit to the law, the “Continuing Appropriations and Surface people of Iraq or Afghanistan. Transportation Extensions Act, 2011” (Public Law The change from the previous definition, among 111-322) generally provided such appropriations other things, removes any ambiguity about whether through March 4, 2011. the word “urgent” modified both “humanitarian relief” and “reconstruction.” (The statute previ- Ike Skelton National Defense ously referred to “urgent humanitarian relief and Authorization Act for Fiscal Year 2011 reconstruction.”) The new definition also intro- During this quarter, Congress completed work on duces the expression “small-scale” and clarifies that the Ike Skelton National Defense Authorization anybenefittothepeopleofAfghanistanorIraq Act (NDAA) for Fiscal Year 2011, Public Law 111- must be “direct” in addition to being “immediate” 383, which was signed by the President on January (as had previously been provided). Finally, the defi- 7,2011.ThefollowingprovisionsaffectIraqrecon- nitionomitsareferencetotheoriginalCPACERP structionprogramsormattersrelatedtothem. program, which had been used to justify a range of activities no longer considered consistent with the CERP Congress’ current views of CERP’s purpose. Section1212extendsandmodifiestheCommand- er’s Emergency Response Program (CERP). ISFF Subsection (a) authorizes the obligation in fiscal Section1510authorizes$63.2billionforoperation year 2011 of up to $100 million in operation and and maintenance for the Army for fiscal year 2011. maintenance funds for CERP in Iraq. It also authorizes $9.4 billion for operation and Subsection (b) is a permanent provision that maintenance, defense-wide, and $1.5 billion for the amends the existing reporting requirement to require Iraqi Security Forces Fund (ISFF). that reports be submitted in a searchable electronic Section1532providesaseriesofnewlimita- form that permits the sorting of the amount expended, tionsontheuseoftheISFF.ItplacestheISFF the location of projects, the “type of project, or any under the strictures of previous authorizations otherfieldofdatathatisincludedinthereport.” for the ISFF, such as section 1512 of the NDAA Subsection (c) is a permanent provision that for FY 2008, as amended. funds may not be obligated or expended under OnenewlimitationontheISFFisthatiffunds theauthorizationprovidedfor“tocarryoutany are made available for the purchase of any item project if the total amount of funds made available orservice,thefundsmaynotcovermorethan80 forthepurposeofcarryingouttheproject,includ- percentofthecostoftheitemorservice.Bywayof ing any ancillary or related elements of the project, exception, this rule does not apply (a) to items de- exceeds $20,000,000.” termined by the Secretary of Defense to be “an item

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of significant military equipment” as defined bya ForcesinIraq,or(b)toexerciseUnitedStatescon- cited provision of the Arms Export Control Act, or trol over Iraq’s oil resources. (b)toitemsontheUnitedStatesMunitionsList. Sections 1213, 1214, and 1218 extend and A second new limitation is that not more than modify provisions originally contained in section $1billionmaybeobligatedinfiscalyear2011until 1233and1234oftheNDAAforFY2008relating the Secretary of Defense certifies to Congress that to the reimbursement of certain coalition nations the Government of Iraq has demonstrated a com- for support to U.S. military operations, to the mitmenttoeachofthefollowing: transfer of defense articles and the provision (A)Toadequatelybuildthelogisticsandmainte- of defense services to the military and security nance capacity of the Iraqi security forces. forcesofIraqandAfghanistan,andtotheexten- (B) To develop the institutional capacity to manage sion of logistical support for coalition forces such forces independently. supporting operations in Iraq and Afghanistan. (C) To develop a culture of sustainment for equip- Section1234requirestheprovisionofareporton ment provided by the United States or acquired with the implementation of coalition support authori- United States assistance. ties for Operation Iraqi Freedom and Operation The certification must include a description of Enduring Freedom. the actions taken by the Iraqi government that the Section 1233 modifies the Defense Secre- Secretary has determined support the certification. tary’s report on “responsible redeployment of The requirement that at least 5 days’ notice be United States Armed Forces from Iraq” includ- giventoCongressbeforefundsmaybeobligated ing by requiring: fromtheISFFischangedtorequire15days’notice. [a]n assessment of progress to transfer responsibil- ity [of] programs, projects, and activities carried out in Iraq by the Department of Defense to other Other Iraq-related Provisions United States Government departments and agen- cies, international or nongovernmental entities, or theGovernmentofIraq[and][a]nassessmentof Title VIII—Acquisition Policy, Acquisition progress toward the goal of building the minimal Management, and Related Matters essential capabilities of the Ministry of Defense and the Ministry of the Interior of Iraq, including … the Section 835 amendssection863oftheNDAAfor level of commitment, both financial and political, FY 2008 to modify the annual joint report and made by the Government of Iraq to develop such ca- pabilities, including a discussion of resources used by Comptroller General review on contracting in the Government of Iraq to develop capabilities that Iraq and Afghanistan. This provision requires a the Secretary determines are not minimum essential wide-ranging (that is, not reconstruction-specific) capabilities for purposes of this paragraph. “joint report on contracts in Iraq or Afghanistan” The section also requires that the report be from the Secretaries of State and Defense and the provided to the Secretary of State, who may AdministratorofUSAID.TheComptrollerGen- include an appendix containing comments or eral is to review the joint report and make a report additional information. on the review. Section 1236 requiresareportonthesituation of certain Iraqis who have been affiliated with the Title XII—MattersRelatingtoForeignNations UnitedStates,includingthestatusofthosewho Section 1211 repeats past language providing that have applied for resettlement in the United States no funds appropriated pursuant to an authoriza- under certain provision of law. The Secretaries tion of appropriations in the Act may be obligated of Defense, State, and Homeland Security are re- orexpended(a)toestablishanymilitarybaseor quired to develop a plan “to expedite the process- installation for the purpose of providing for the ingofthoseapplicationsinthecaseofIraqisatrisk permanentstationingofUnitedStatesArmed as the United States withdraws from Iraq.”

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Title XV—Authorization of Additional Appropriations Congressional Appearances for Overseas Contingency Operations Section 1533 applies the prohibition on the use Since the last Quarterly Report, the Inspector Gen- ofU.S.fundsinsection1508(a)ofPublicLaw eral appeared before a congressional committee on 110-417(theDuncanHunterNationalDefense one occasion: Authorization Act for Fiscal Year 2009) to funds •November18,2010—Senate Committee on authorized to be appropriated by Title XV (most Homeland Security and Governmental Af- relevantly, ISFF and operation and maintenance fairs, Ad Hoc Subcommittee on Contracting funds for FY 2011). Section 1508(a) prohibited Oversight—Hearingon“OversightofRecon- the use of funds “for the acquisition, conversion, struction Contracts in Afghanistan and the rehabilitation, or installation of facilities in Iraq Role of the Special Inspector General.” The fortheuseoftheGovernmentofIraq,political Inspector General testified on the advantages subdivisions of Iraq, or agencies, departments, or ofSpecialInspectorsGeneralintheoversight forces of the Government of Iraq or such political of contingency operations. Responding to an subdivisions.” (The prohibition does not apply to, inquiry in the Chairman’s letter of invitation, among other things, amounts authorized to be the Inspector General noted that it has been appropriated for CERP.) difficult for standing Inspectors General to Section 1235, which generally requires re- free up and deploy the resources required to porting police training activities in or related to deal with contingency operations. It has also Afghanistan, also requires a broad (not Afghani- provenexpensiveandtime-consumingto stan-specific) report by the President on U.S. gov- establish, staff, and deploy new Special Inspec- ernment police training and equipping programs tors General for specific overseas contingen- outside the United States, including an assessment cies. As an alternative, the Inspector General of “what changes, if any, are required to improve supported establishing a small, standing “Special thecapacityoftheUnitedStates…tomeet… Inspector General for Overseas Contingency requirements” for such training and equipping, an Operations” (SIGOCO), which would have the “evaluationoftheappropriateroleofUnitedStates taskofpreparingtoquicklyexpandanddeploy Government departments and agencies in coor- auditors, investigators, and other professionals dinating on and carrying out police training and in contingency situations. With its leadership equipping programs,” attention to the role of and chosen and procedures established in advance, oversight over contractors, and “recommendations effectiveoversightcouldbeprovidedattheearli- forlegislativemodifications…toexistingauthori- est possible moment, saving taxpayer money and ties relating to police training and equipping.” helping to ensure more effective outcomes.

The complete prepared statements of SIGIR officialswhohavetestifiedbeforetheCongresscan be found at www.sigir.mil/publications/testimony/ index.html.◆

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Introduction 136

Other Agency Audits 137

Other Agency Investigations 140 6section

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INTRODUCTION

InMarch2004,SIGIRformedtheIraqInspec- For Defense Contract Audit Agency (DCAA) torsGeneralCouncil(IIGC)toprovideaforum updates, see Appendix G. for discussion of oversight in Iraq and to enhance In previous quarters, SIGIR has provided up- collaboration and cooperation among the inspec- dates on the U.S. Department of the Treasury and torsgeneral(IGs)oftheagenciesthatoverseeIraq theU.S.DepartmentofCommerce,buttheseagen- reconstruction funds. Representatives of member cies have no current Iraq reconstruction oversight organizations have met quarterly to exchange de- activities ongoing or planned for FY 2011. SIGIR no tails about current and planned audits, to identify longer reports on these agencies in this section. opportunities for collaboration, and to minimize Section 842 of the National Defense Authoriza- redundancies. tionActforFiscalYear2008(PublicLaw101-181) Inlightofthecontinuingscale-downofefforts requires that SIGIR, in consultation with other inIraq,theIIGCistransitioningitsworkunder inspectors general, develop “a comprehensive plan the umbrella of the Department of Defense Office foraseriesofaudits”of“federalagencycontracts, of Inspector General (DoD OIG) Southwest Asia subcontracts, and task and delivery orders for the Joint Planning Group. As such, the quarterly IIGC performance of security and reconstruction func- meetings will no longer take place. SIGIR plans to tions in Iraq.” Following the enactment of Section continue close cooperation with the entire over- 842, SIGIR has worked closely with the DoD OIG sight community engaged in Iraq oversight and Southwest Asia Joint Planning Group, which has anticipates the creation of a sub-group within the facilitated the production of the Comprehensive Joint Planning Group that will ensure continued Oversight Plan for Southwest Asia. That document, focus on the Iraq mission. In November 2010, the compiledbytherelevantIGs(includingSIGIR), Joint Planning Group held its fifteenth meeting. summarizes ongoing and near-term planned Each quarter, SIGIR requests updates from mem- auditsforIraqandtheregion.◆ berorganizationsontheircompleted,ongoing,and planned oversight activities. This section summa- rizes the audits and investigations reported to SIGIR this quarter by the following organizations: •DoDOIG • Department of State Office of Inspector General (DoS OIG) • GovernmentAccountabilityOffice(GAO) • U.S.ArmyAuditAgency(USAAA) • U.S. Agency for International Development Office of Inspector General (USAID OIG)

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OTHER AGENCY AUDITS

This section updates the audits that IIGC member • For more information on other agency audits, agencies reported to SIGIR: including audit summaries, see Appendix F. • For recently completed oversight report activity, • Foracompletehistoricallistofauditsand see Table 6.1. reviewsonIraqreconstructionbyallentities,see • For ongoing oversight report activity of other Appendix G.◆ U.S. agencies during this reporting period, see Table 6.2.

Table 6.1 Recently Completed Oversight Reports of Other U.S. Agencies, as of 12/31/2010 Agency Report Number Report Date Report Title

DoD D-2011-028 12/23/2010 ContractOversightfortheBroadAreaMaritimeSurveillanceContractNeedsImprovement DoD D-2011-019 11/24/2010 Live Fire Testing of Light Tactical Wheeled Vehicles was Effective for the Portions Completed Assessment of U.S. Government Efforts to Develop the Logistics Sustainment Capability of the Iraq DoD SPO-2011-001 11/17/2010 Security Forces DoD D-2011-014 11/2/2010 WeaknessesinAwardingFeesfortheBroadAreaMaritimeSurveillanceContract Displaced Iraqis: Integrated International Strategy Needed to Reintegrate Iraq’s Internally Displaced and GAO GAO-11-124 12/2/2010 Returning Refugees GAO GAO-11-63 10/15/2010 DoD Should Improve Adherence to Its Guidance on Open Pit Burning and Solid Waste Management Iraq and Afghanistan: DoD, State, and USAID Face Continued Challenges in Tracking Contracts, Assistance GAO GAO-11-1 10/1/2010 Instruments, and Associated Personnel USAAA A-2011-0047-ALL 12/22/2010 Container Management in Iraq—Condition and Contents USAAA A-2011-0048-ALL 12/17/2010 Excalibur Accountability Gap Management and Visibility of Government Property Provided to the Contractor Performing Base Support USAAA A-2011-0030-ALL 12/1/2010 OperationsinKuwait USAAA A-2011-0020-ALL 11/16/2010 Commander’s Emergency Response Program (CERP), U.S. Forces-Afghanistan (USFOR-A) USAAA A-2011-0010-ALL 11/16/2010 Fuel Farm Operations, Camp Buehring, Kuwait Review of USAID/Iraq’s Contractors’ Compliance With the Trafficking Victims Protection Reauthorization USAID E-267-11-002-S 12/12/2010 Act of 2008 USAID E-267-11-001-S 11/29/2010 Survey of Incidents Reported by Private Security Contractors of USAID/Iraq’s Contractors and Grantees Audit of USAID/Iraq’s Payroll Payments to Foreign Service Nationals, Third Country Nationals, and U.S. USAID E-267-11-001-P 11/22/2010 Personal Services Contractors

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Table 6.2 Ongoing Oversight Activities of Other U.S. Agencies, as of 12/31/2010 Agency Project Number Date Initiated Report Title

DoD D2011-D000JB-0098.000 12/8/2010 Contracting for Force Protection for U.S. Installations in Iraq Follow-upofHealthCareProvidedbyMilitaryTreatmentFacilitiestoContractorsinSouthwest DoD D2011-D000LF-0041.000 11/2/2010 Asia DoD D2011-D000CH-0032.000 10/19/2010 Contractor Logistics Support Contract for Stryker Vehicles with General Dynamics Land Systems Controls and Processes Pertaining to the Defense Logistics Agency’s Procurement Automated DoD D2010-D000LD-0264.000 8/30/2010 Contract Evaluation System DoD D2010-D000AS-0266.000 8/9/2010 Army Warfighter Field Operations Customer Support Contract DoD D2009-DIP0E3-0260.000 8/5/2010 Evaluation of the DoD Combating Trafficking in Persons (CTIP) Program DoD D2010-D000JA-0241.000 7/21/2010 Special Operations Forces Plans for the Drawdown and Reset of Property in Iraq DrawdownandResetofEquipmentinIraq–SupplySupportActivityandCentralReceivingand DoD D2010-D000JB-0219.000 5/7/2010 Shipping Point Operations in Iraq DoD D2010-D000JB-0211.000 5/6/2010 Realignment of Contractor Support in Response to the Drawdown of U.S. Forces from Iraq DoD D2010-D000JB-0158.000 2/17/2010 Contracting for U.S. Facilities in Iraq DoD D2010-D000AE-0139.000 1/29/2010 DoD Countermine and Improvised Explosive Device Defeat Systems Interrogation Arm Material Purchases Made Through the Partnership Agreement with Sikorsky Aircraft Corporation DoD D2010-D000CH-0077.001 11/18/2009 at Corpus Christi Army Depot Material Purchases Made Through the Partnership Agreement with the Boeing Company at DoD D2010-D000CH-0077.000 11/17/2009 Corpus Christi Army Depot ControlsOvertheDispositionofEquipmentattheDefenseReutilizationandMarketingOfficeat DoD D2010-D000JA-0054.000 10/27/2009 Camp Arifjan, Kuwait DoD D2010-D000AS-0031.000 10/27/2009 Logistics Civil Augmentation Program IV Support Contract Commercial Vendor Services Compliance With Federal Tax Reporting Requirements for DoD D2009-D000FH-0292.000 9/23/2009 ContractorsSupportingOperationsinSouthwestAsia DoD D2009-D000JB-0307.000 9/16/2009 Controls Over the Accountability and Disposition of Government Furnished Property in Iraq DoD D2009-DIPOE3-0306.000 9/11/2009 ReviewofArmyResponsetoSodiumDichromateExposureatQarmatAli,Iraq—PartII U.S. Government Efforts to Transition the Security Assistance Mission Supporting the Government DoD D2009-D00SPO-0287.000 8/5/2009 of Iraq from Department of Defense Authority to Department of State Authority DoD D2009-D000AS-0266.000 7/31/2009 Contracts Supporting Base Operations in Kuwait DoD D2009-D000CH-0244.000 7/7/2009 InternationalOilTradingCompanyContractstoSupplyFueltoU.S.TroopsinIraq Assessment of the Defense Hotline Allegations Concerning Traumatic Brain Injury Research DoD D2009-D00SPO-0242.00 6/11/2009 Integrity in Iraq DoD D2009-D000AE-0210.000 4/28/2009 Marine Corps Fulfillment of Urgent Universal Need Statements for Laser Dazzlers FY 2008 Marine Corps Global War on Terror-Related Costs Processed Through the Standard DoD D2009-D000FG-0183.000 4/7/2009 Accounting, Budgeting, and Reporting System DoD D2009-D000AS-0163.000 3/2/2009 Army and Navy Small Boats Maintenance Contracts Deployment of the Standard Procurement System in the Joint Contracting Command Iraq/ DoD D2009-D000FB-0112.000 1/5/2009 Afghanistan DoD D2009-D000CK-0100.000 12/9/2008 Maintenance and Support of the Mine Resistant Ambush Protected Vehicle DoD D2008-D000CD-0256.000 8/7/2008 DoD Body Armor Contracts DoD D2007-D000FL-0252.000 8/31/2007 Internal Controls and Data Reliability in the Deployable Disbursing System DoS 11MERO3004 12/1/2010 Review of Embassy Baghdad’s Operations and Maintenance Contract with PAE DoS 10MERO3016 7/1/2010 Review of Embassy Baghdad Transition Planning—Phase II (DoD Downsizing) GAO 351552 10/21/2010 MarineCorpsEquippingStrategiestoResetEquipmentReturningfromIraqandAfghanistan Continuedonnextpage

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Agency Project Number Date Initiated Report Title

GAO 351559 10/8/2010 Army’s Strategies to Reset Non-Standard Equipment Returning from Iraq GAO 351525 8/2/2010 DoD Task Force on Business GAO 351514 6/14/2010 ArmyAdviseandAssistBrigades GAO 351476 4/1/2010 DoD Iraq Drawdown Planning GAO 351431 1/7/2010 Army’sEquippingStrategiestoResetEquipmentReturningfromIraq GAO 320734 11/1/2009 U.S. Strategy and Joint Campaign Plan for Iraq GAO 351393 8/15/2009 DoD Medical Wartime Personnel Requirements GAO 120931 7/1/2009 Close-out of Iraq Contracts USAAA A-2011-ALL-0135.000 1Q/FY 2011 Micro-Purchases of Field Ordering Officers—Afghanistan USAAA A-2011-ALL-0107.000 1Q/FY2011 TheU.S.EquipmentTransfertoIraq(USETTI)Program—PhaseII USAAA A-2011-ALL-0098.000 1Q/FY 2011 Bulk Fuel Operations in Afghanistan Management Controls Over Payments for Overseas Contingency Operations Transportation— USAAA A-2011-ALL-0087.001 1Q/FY 2011 ARCENT Audit of Management Controls over Department of Defense Activity Address Codes (DODAAC), USAAA A-2011-ALL-0087.000 1Q/FY 2011 U.S. Army Central Command USAAA A-2010-ALL-0541.000 4Q/FY 2010 Bulk Fuel Operations in Iraq USAAA A-2010-ALL-0480.000 3Q/FY 2010 Agreed-Upon Procedures Attestation for USFOR-A LOGCAP Course of Action – Afghanistan USAAA A-2010-ALL-0260.000 3Q/FY 2010 Followup Audit of Retrograde Operations in Southwest Asia – Multi Class Supplies USAAA A-2010-ALM-0394.000 3Q/FY 2010 Follow-up Audit of Automatic Reset Induction USAAA A-2010-ALL-0258.000 3Q/FY 2010 Followup Audit of Retrograde Operations – Class VII Equipment in Iraq USAAA A-2010-ALC-0125.003 3Q/FY 2010 Human Capital Issues–Current Plans (Reachback Capabilities) USAAA A-2010-ALL-0421.000 2Q/FY 2010 LOGCAP IV Contract Requirements Determination–Afghanistan USAAA A-2010-FFF-0372.000 2Q/FY 2010 Improvised Explosive Device Defeat (IED-D) Home Station Training USAAA A-2010-ALL-0338.000 2Q/FY 2010 Redistribution Property Assistance Teams USAAA A-2010-ALL-0312.000 2Q/FY2010 U.S.EquipmentTransferredtoIraq USAAA A-2010-ALL-0311.001 2Q/FY 2010 Disposal of Army Equipment and Materials Into Dump Sites in Iraq USAAA A-2010-ALL-0103.000 2Q/FY 2010 Controls Over Vendor Payments Phase II – Afghanistan USAAA A-2010-ALL-0232.000 1Q/FY2010 ForwardOperatingBaseClosures–PropertyTransferstoGovernmentofIraq USAAA A-2009-ALL-0593.000 4Q/FY 2009 Controls over Shipping Container Accountability and Visibility—Iraq USAAA A-2009-ALL-0571.000 4Q/FY 2009 Contract for Recycling and Disposing of Waste Material at Camp Steeler, Iraq USAAA A-2009-ALL-0118.000 2Q/FY 2009 Controls over Vendor Payments – Southwest Asia (Phase II) USAAA A-2009-ALC-0093.000 1Q/FY2009 LogisticsCivilAugmentationProgram(LOGCAP)III,ContractClose-out Survey of USAID/Iraq’s Prime Recipients Compliance with Audit Requirements for Its Sub- USAID Not reported 4Q/FY 2010 Recipients Audit of Audit of USAID/Iraq’s Microfinance Activities Under its Provincial Economic Growth USAID Not reported 3Q/FY 2010 Program USAID Not reported 2Q/FY 2010 Audit of USAID/Iraq’s Community Action Program III Activities USAID Not reported 1Q/FY 2010 Audit of USAID/Iraq’s Agribusiness Program

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OTHER AGENCY INVESTIGATIONS

SIGIR regularly coordinates with other govern- ment agencies conducting investigations in Iraq. For statistics of investigative activities from other agencies, see Table 6.3.◆

Table 6.3 Status of Investigative Activities of Other U.S. Agencies, as of 12/31/2010 Agency Investigators in Iraq Investigators in Kuwait Open/Ongoing Cases*

U.S. Army Criminal Investigation Command, 32114 Major Procurement Fraud Unit Defense Criminal Investigative Service 6 1 178 DoS OIG 10 16 FBI 51 81 Naval Criminal Investigative Service 0 1 3 U.S. Air Force Office of Special Investigations 2 0 4 USAID 10 14 Total 18 5 410

*NumbersincludependingcasesworkedwithotheragencieswithintheJointOperationsCenter.

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Jan11.indb 141 1/23/2011 9:26:45 PM ENDNOTES

1. OSD, response to SIGIR data call, 1/4/2011. 26. Deputy Secretary of Defense, letter to Con- 52. NEA-I, responses to SIGIR data calls, 2. U.S. Embassy-Baghdad officials, meetings gress, 9/29/2010. 6/4/2010, 7/6/2010, and 1/11/2011; GOI, with SIGIR, 1/2011. 27. GOI,CoM,responsetoSIGIRdatacall, Ministry of Oil, www.oil.gov.iq/oil%20arab/, 3. DoD IG, Report SPO-2011-001, “Assessment 1/7/2011; SIGIR analysis of open-source accessed 12/9/2010. of U.S. Government Efforts to Develop the Arabic- and English-language documents, 53. ITAO/ESD, Electric Daily Performance Re- Logistics Sustainment Capability of the Iraq 11/2010–1/2011. ports,10/1/2009–12/31/2010. Security Forces,” 11/10/2010; USF-I, response 28. Additional members of the former govern- 54. ITAO/ESD, Electric Daily Performance to SIGIR data call, 1/4/2011. ment may have been named to cabinet-level Reports,1/1/2010–12/31/2010;Wärtsilä 4. GOI, Ministry of Oil, Then-Deputy Minister positions after the issuance of this report. Corporation, press release, “Wärtsilä al-Luaibi, meeting with SIGIR, 11/8/2010. 29. GOI,CoM,responsetoSIGIRdatacall, Receives O&M Agreement for Iraqi Floating 5. IMF, Country Report No. 10/316, “Iraq: First 1/7/2011; SIGIR analysis of open-source Power Plants,” 5/12/2010, www.wartsila. Review Under the Stand-By Arrangement, Arabic- and English-language documents, com/,en,press,releases,all_releases,,200681311 Request for Waiver of Nonobservance of a 11/2010–1/2011. 03430,no,7800.htm, accessed 1/12/2011. Performance Criterion, Waiver of Applicability, 30. GOI,CoM,responsetoSIGIRdatacall, 55. IMF,CountryReportNo.10/316,“Iraq:First and Rephasing of Access,” 10/2010. 1/7/2011; SIGIR analysis of open-source Review Under the Stand-By Arrangement, 6. USAID, response to SIGIR data call, Arabic- and English-language documents, Request for Waiver of Nonobservance of a 1/10/2011;USACE,responsetoSIGIRdata 11/2010–1/2011. Performance Criterion, Waiver of Applicability, call, 1/4/2011; NEA-I, responses to SIGIR data 31. U.S. and GOI officials, meetings with SIGIR, and Rephasing of Access,” 10/2010, p. 13. calls, 12/20/2010, 12/21/2010, 1/7/2011, and 1/2011. 56. IMF, “World Economic Outlook Database,” 1/10/2011; DoS, INL, response to SIGIR data 32. DoS, Iraq Status Report,11/17/2010,slide6. www.imf.org/external/pubs/ft/weo/2010/02/ call,1/10/2011;OSD,responsetoSIGIRdata 33. GOI,CoM,responsetoSIGIRdatacall, weodata/index.aspx, accessed 1/15/2011. call,1/13/2011;ABO,responsetoSIGIRdata 1/7/2011; SIGIR analysis of open-source 57. UNSCR 1956, 12/15/2010. call, 12/6/2011. Arabic- and English-language documents, 58. UNSCR 1956, 12/15/2010; SIGIR Audit 7. P.L. 111-322; DoD, “Fiscal Year 2011 Budget 11/2010–1/2011. 10-006, “Forensic Audit Methodologies used Request: Overview,” 2/2010, Chapter 6, pp. 9. 34. GOI,CoM,responsetoSIGIRdatacall, ToCollectandAnalyzeElectronicDis- 34; SIGIR analysis of CERP funds, 1/2011. 1/7/2011; SIGIR analysis of open-source bursements of Iraq Reconstruction Funds,” 8. GOI, CoM, “Draft Law of the Republic of Iraq Arabic- and English-language documents, 10/2010; SIGIR Audit 10-014, “Process for (GOI) Federal Budget for the 2011 Financial 11/2010–1/2011. Continuing Invoice Payment for the Develop- Year,” 11/30/2010. 35. SIGIR analysis of GOI data and open-source ment Fund for Iraq Needs Attention,” 4/2010; 9. GOI, CoM, “Draft Law of the Republic of Iraq Arabic documents, 11/2010–12/2010. SIGIR Audit 10-020, “Development Fund (GOI) Federal Budget for the 2011 Financial 36. SIGIR analysis of GOI data and open-source for Iraq: Department of Defense Needs To Year,” 11/30/2010. Arabic documents, 11/2010–12/2010. Improve Financial and Management Con- 10. GOI, CoM, “Draft Law of the Republic of Iraq 37. GOI, MOI, response to SIGIR data call, trols,” 7/2010; SIGIR Audit 11-002, “Guidance (GOI) Federal Budget for the 2011 Finan- 1/11/2011. Needed for Use of Residual Iraqi Vested and cial Year,” 11/30/2010; GOI, CoR, “Federal 38. SIGIR analysis of open-source Arabic- and Seized Funds,” 10/2010. Public Budget Law for the Fiscal Year 2010,” English-language documents, 11/2010– 59. UNSCR 1957, 12/15/2010. 1/27/2010. 12/2010. 60. UNSCR 1958, 12/15/2010. 11. EIA,“WeeklyIraqKirkukNetbackPriceatU.S. 39. GOI,HJC,ChiefJusticeMedhatal-Mah- 61. GOI,MinistryofOil,Then-DeputyMinister Gulf,” www.eia.gov/dnav/pet/hist/LeafHandler. moud, meeting with SIGIR, 1/16/2011. al-Luaibi, meeting with SIGIR, 11/8/2010. ashx?n=PET&s=WEPCKIRK&f=W, accessed 40. DoS, Iraq Status Report,11/3/2010,slide10. 62. GOI,BasrahInvestmentCommissionChair- 1/14/2011. 41. UN, IAU, IOM, “Displacement of Chris- man, meeting with SIGIR, 1/13/2011. 12. GOI, CoR, “Federal Public Budget Law for the tians to the North of Iraq,” www.iauiraq. 63. DoS, response to SIGIR data call, 1/10/2011. Fiscal Year 2010,” 1/27/2010. org/documents/1257/IOM%20Emer- 64. DoL, response to SIGIR data call, 1/14/2011. 13. NEA-I, responses to SIGIR data calls, gency%20Assessments-Displacement%20 65. Committee to Protect Journalists, www.cpj. 6/4/2010, 7/6/2010, and 1/11/2011. of%20Christians%20to%20the%20 org/mideast/iraq/, accessed 1/17/2011. 14. GOI, CoM, “Draft Law of the Republic of Iraq North%2015%20Dec%2010.pdf, accessed 66. Committee to Protect Journalists, www.cpj. (GOI) Federal Budget for the 2011 Financial 1/18/2011. org/mideast/iraq/, accessed 1/17/2011. Year,” 11/30/2010. 42. SIGIR analysis of open-source Arabic- and 67. U.S.Treasury,OTA,“OfficeofTechnical 15. GOI, CoM, “Draft Law of the Republic of Iraq English-language documents, 1/2011. Assistance Overview,” 12/30/2005, ustreas. (GOI) Federal Budget for the 2011 Financial 43. 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P.L. 111-242, Sec. 101(8); P.L. 111-290; P.L. call,10/5/2010;OUSD(C),responsetoSIGIR data call, 1/4/2011. 111-317; P.L. 111-322; DoD, “Fiscal Year 2011 data call, 10/14/2010; DoS, ECA, response to 19. U.S. Embassy-Baghdad, Political-Military Budget Request: Overview,” 2/2010, Chapter SIGIR data call, 4/14/2010; OMB, response Affairs Section, response to SIGIR data call, 6, p. 5; DoS, “FY 2011 Foreign Assistance to SIGIR data call, 6/21/2010; USAID, “U.S. 1/4/2011. Congressional Budget Justification: Summary OverseasLoansandGrants[Greenbook],” 20. DoD, DSCA, www.dsca.osd.mil/, accessed Tables,” 3/8/2010, p. 23. 2008, gbk.eads.usaidallnet.gov/query/do?_pro- 1/16/2011. 47. USF-I, response to SIGIR data call, 1/4/2011. gram=/eads/gbk/countryReport&unit=N, 21. DoS, INL, response to SIGIR data call, 48. SIGIR Audit 11-010, “Sons of Iraq Program: accessed 4/15/2010; DoJ, Justice Manage- 1/5/2011. Results Are Uncertain and Financial Controls ment Division, response to SIGIR data call, 22. DoS, INL, response to SIGIR data call, Were Weak,” 1/2011. 10/5/2010; TFBSO, response to SIGIR data call, 1/5/2011. 49. SIGIR Audit 11-010, “Sons of Iraq Program: 1/4/2011;DoS,DRL,responsetoSIGIRdata 23. GOI, MOI officials, meetings with SIGIR, Results Are Uncertain and Financial Controls call,9/22/2010;ABO,responsetoSIGIRdata 12/2010–1/2011. Were Weak,” 1/2011. call,12/6/2010;DoS,INL,responsetoSIGIR 24. OSD, response to SIGIR data call, 1/4/2011. 50. OSD, response to SIGIR data call, 1/4/2010. data call, 1/10/2011; USTDA, response to SIGIR 25. USF-I, response to SIGIR data call, 1/7/2011; 51. SIGIR analysis of open-source Arabic- and data call, 4/2/2009; SIGIR Audit 11-007, “Iraq IRMS, Global Benchmark,9/3/2010. English-language documents, 1/2010. Relief and Reconstruction Fund 1: Report on

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Apportionments, Expenditures, and Canceled 75. To calculate the budget authority provided un- 93. USAID, response to SIGIR data call, 1/10/2011; Funds,” 1/2011; DoS, response to SIGIR data der P.L. 111-322, SIGIR multiplied the fraction USACE, response to SIGIR data call, 1/4/2011; call, 4/5/2007; OSD, responses to SIGIR data of the fiscal year provided for through March NEA-I, responses to SIGIR data calls, calls, 4/10/2009 and 1/13/2011; USACE, 4, 2011, (154/365) by each fund’s FY 2010 ap- 12/20/2010, 12/21/2010, 1/7/2011, and 1/10/2011; responses to SIGIR data calls, 10/6/2008 and propriation (regular and supplemental). SIGIR, Quarterly and Semiannual Reports to the 1/4/2011; USAID, responses to SIGIR data calls, 76. DoD, “Fiscal Year 2011 Budget Request: Over- United States Congress,3/2004–10/2010. 1/12/2009, 4/8/2009, 7/8/2010, and 1/10/2011; view,” 2/2010, Chapter 6, p. 5; P.L. 111-383. 94. P.L.108-106;P.L.109-102;P.L.109-234;P.L. NEA-I, responses to SIGIR data calls, 9/27/2010, 77. SIGIRAudit11-008,“InterimReport:Action 110-252. The Congress initially appropriated 10/4/2010, 10/6/2010, 12/20/2010, 12/21/2010, Needed To Address Missing Deployable $18,649 million to the IRRF 2, but earmarked 12/28/2010, 1/5/2011, 1/7/2011, 1/10/2011, and Disbursing System Data,” 1/2011. $210 million to be transferred to other accounts 1/13/2010; GOI, CoM, “Draft Law of the Re- 78. SIGIRAudit11-008,“InterimReport:Action for programs in Jordan, Liberia, and Sudan. In public of Iraq (GOI) Federal Budget for the 2011 Needed To Address Missing Deployable FY 2006, the Congress transferred approximately Financial Year,” 11/30/2010; SIGIR, Quarterly Disbursing System Data,” 1/2011. $10millionintotheIRRFfromtheESF.InFY and Semiannual Reports to the United States 79. P.L.109-13;P.L.109-102;P.L.109-234;P.L. 2008, P.L. 110-252 rescinded $50 million. Congress,3/2004–10/2010. 110-28;P.L.110-92;P.L.110-116;P.L.110-137; 95. NEA-I, response to SIGIR data call, 68. USAID, response to SIGIR data call, 1/10/2011; P.L. 110-149; P.L. 110-161; P.L. 110-252; P.L. 12/28/2010; USAID, response to SIGIR data USACE, response to SIGIR data call, 1/4/2011; 111-32; P.L. 111-212; P.L. 111-242, Sec. 101(8); call, 7/8/2010; U.S. Treasury, response to SIGIR NEA-I, responses to SIGIR data calls, P.L. 111-322. data call, 4/2/2009; USTDA, response to SIGIR 12/20/2010, 12/21/2010, 1/7/2011, and 1/10/2011; 80. P.L. 111-242, Sec. 101(8); P.L. 111-322; data call, 4/2/2009; DoS, response to SIGIR INL, response to SIGIR data call, 1/10/2011; OUSD(C), memorandum guidance for DoD data call, 4/5/2007; OSD, response to SIGIR OSD, response to SIGIR data call, 1/13/2011; budget authorities, “Apportionment of the data call, 4/10/2009; SIGIR Audit 11-007, “Iraq ABO, response to SIGIR data call, 12/6/2011. Fourth Continuing Resolution (CR) for Fiscal Relief and Reconstruction Fund 1: Report on 69. P.L. 108-7; P.L. 108-11; P.L. 108-106; P.L. 108-287; Year 2011,” 12/22/2010. Apportionments, Expenditures, and Cancelled P.L. 109-13; P.L. 109-34; P.L. 109-102; P.L. 109- 81. DoD, “Fiscal Year 2011 Budget Request: Over- Funds,” 1/2011. 148;P.L.109-289;P.L.110-28;P.L.110-92;P.L. view,” 2/2010, Chapter 6, p. 5; P.L. 111-383. 96. P.L.108-11;OMBCircularA-11,Preparation, 110-116;P.L.110-137;P.L.110-149;P.L.110-161; 82. OSD, response to SIGIR data call, 1/13/2011; Submission, and Execution of the Budget, P.L. 110-252; P.L. 111-32; P.L. 111-117; P.L. 111-118; P.L. 111-212. 8/2009,Sec.10,p.3,andSec.20,pp.15,20. P.L. 111-212; P.L. 111-322; P.L. 111-242, Sec. 101(8). 83. OSD, response to SIGIR data call, 1/13/2011; 97. P.L.108-106;P.L.109-102;P.L.109-234;P.L. 70. USAID, response to SIGIR data call, SIGIR, Quarterly and Semiannual Reports to 110-252; OMB Circular A-11, Preparation, 1/10/2011; USACE, response to SIGIR data the United States Congress, 10/2005–10/2010. Submission, and Execution of the Budget, call, 1/4/2011; NEA-I, responses to SIGIR data As of December 31, 2010, USF-I had not yet 8/2009,Sec.10,p.3,andSec.20,pp.15,20. calls, 12/20/2010, 12/21/2010, 1/7/2011, and distributed $228 million (1%) of the ISFF to 98. DoD, “Fiscal Year 2011 Budget Request: Over- 1/10/2011; INL, response to SIGIR data call, any sub-activity group. view,” 2/2010, Chapter 6, p. 9. 1/10/2011; OSD, response to SIGIR data call, 84. P.L.109-234;P.L.110-5;P.L.110-28;P.L.110- 99. P.L. 111-322. 1/13/2011; ABO, response to SIGIR data call, 161; P.L. 110-252; P.L. 111-32; P.L. 111-117; P.L. 100. P.L. 111-383; DoD, “Fiscal Year 2011 Budget 12/6/2010. 111-212. Request: Overview,” 2/2010, Chapter 6, p. 9. 71. USAID, response to SIGIR data call, 85. P.L. 111-322. 101. P.L. 111-393; ABO, response to SIGIR data call, 1/10/2011; USACE, response to SIGIR data 86. DoS, “FY 2011 Foreign Assistance Congres- 12/6/2010; OMB Circular A-11, Preparation, call, 1/4/2011; NEA-I, responses to SIGIR data sional Budget Justification: Summary Tables,” Submission, and Execution of the Budget, calls, 12/20/2010, 12/21/2010, 1/7/2011, and 3/8/2010, p. 23. 8/2009,Sec.10,p.3,andSec.20,pp.15,20. 1/10/2011; INL, response to SIGIR data call, 87. P.L.109-234;P.L.110-5;P.L.110-28;P.L. 102. OUSD(C), cover letter, report to the Congress 1/10/2011; OSD, response to SIGIR data call, 110-161; P.L. 110-252; P.L. 111-32; P.L. 111-117; on appropriated funding for the Command- 1/13/2011; ABO, response to SIGIR data call, P.L. 111-212; INL, response to SIGIR data call, er’s Emergency Response Program for the 12/6/2010. 1/10/2011. fourth quarter of FY 2010, 12/30/2010. 72. DoS, PM, response to SIGIR data call, 88. INL, response to SIGIR data call, 1/10/2011. 103. OMB Circular No. A-11, Preparation, Submis- 9/21/2010; BBG, response to SIGIR data call, 89. P.L.108-7;P.L.109-102;P.L.110-28;P.L.110- sion, and Execution of the Budget, 8/2009, Sec. 10. 10/5/2010; U.S. Marshals Service, response 161; P.L. 111-32; P.L. 111-117. An appropriation’s reporting and outlay phase to SIGIR data call, 10/5/2010; U.S. Trea- 90. P.L. 111-322. extends five years beyond the date on which it sury, OTA, “Office of Technical Assistance 91. DoS, “FY 2011 Foreign Assistance Congres- expires for new obligations, or until the funds Overview,” 12/30/2005, ustreas.gov/offices/ sional Budget Justification: Summary Tables,” aretotallydisbursed.TheFY2004CERPap- international-affairs/assistance/, accessed 3/8/2010, p. 23. propriation was canceled on September 30, 2009. 10/16/2009; U.S. Embassy-Baghdad, response 92. USAID, response to SIGIR data call, The FY 2005 CERP appropriation was canceled to SIGIR data call, 10/3/2009; OUSD(C), 1/10/2011; USACE, response to SIGIR data on September 30, 2010. All other fiscal year response to SIGIR data call, 10/14/2010; DoS, call, 1/4/2011; NEA-I, responses to SIGIR data appropriations to the CERP are all still in their ECA, response to SIGIR data call, 4/14/2010; calls, 12/20/2010, 12/21/2010, 1/7/2011, and reporting and outlay phase. OMB, response to SIGIR data call, 6/21/2010; 1/10/2011. SIGIR calculates expired funds 104. DoD, Report to Congress in Accordance with USAID, “U.S. Overseas Loans and Grants as appropriations less obligations, as of the P.L. 111-118 Sec. 9005 and P.L. 111-84 Sec. [Greenbook],” 2008, gbk.eads.usaidall- expiration date. Some ESF was transferred to 1222, “Department of Defense Review of the net.gov/query/do?_program=/eads/gbk/ other agencies under the Foreign Assistance Commander’s Emergency Response Program countryReport&unit=N, accessed 4/15/2010; Act of 1961, Sec. 632(b). NEA-I did not indi- (CERP),” 7/2010, pp. 22–23; DoD, CMC, OMB, response to SIGIR data call, 6/21/2010; cate whether its reported obligations include response to SIGIR data call, 1/13/2011. DoJ, Justice Management Division, response such transfers, so SIGIR’s calculations may 105. ABO, response to SIGIR data call, 12/6/2010; to SIGIR data call, 10/5/2010; TFBSO, overstate expired funds. In addition, NEA-I USF-I, response to SIGIR data call, 1/10/2011. response to SIGIR data call, 1/4/2011; DoS, was not able to provide the complete status For FY 2004–FY 2006, the CERP Project DRL, response to SIGIR data call, 9/22/2010; of funds for the $50 million in FY 2003 ap- TrackerdidnotincludeaSTANFINSDRN. USAID, responses to SIGIR data calls, propriations to the ESF; only approximately For FY 2007, USF-I sometimes used the 1/12/2009 and 4/8/2009; USACE, response to $9 million were reported obligated and CIDNE system project number instead of SIGIR data call, 10/6/2008; NEA-I, responses expended as of December 31, 2010. It is likely theSTANFINSDRN,makingitimpossible to SIGIR data calls, 9/27/2010, 10/4/2010, that more of these funds were obligated and to match records with STANFINS financial 10/6/2010, and 1/7/2011. expended than reported, which would affect data.OnlyinFY2008–FY2010didUSF-I 73. P.L. 111-242; P.L. 111-290; P.L. 111-317; P.L. 111-322. the overall status of funds and the amount of consistently match records to a STANFINS 74. P.L. 111-322. expired funds. DRN. However, even when a DRN is used in

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the CERP Project Tracker for FY 2008–FY 113. GOI, CoR, “Federal Public Budget Law for 132. DoD, Joint Staff J-5, response to SIGIR data 2010, micro grants were often bundled under theFiscalYear2010,”1/27/2010;GOI,MOF, call, 1/13/2011. asingleDRNtoenabletheCommanderto “Evaluation of the Iraqi Budget, 2006–2010,” 133. U.S. Embassy-Baghdad, OPA, response to easily draw the cash needed to source multiple 8/2010; GOI, Presidency of the Iraqi Interim SIGIR data call, 1/4/2011. micrograntsatvariouslocations.Because National Assembly, “The State General Budget 134. U.S. Embassy-Baghdad, OPA, response to multiple projects are bundled under a single for 2005,” 2005; GOI, “Budget Revenues and SIGIR data call, 1/4/2011. DRN, it is impossible to determine after the Expenses 2003, July–December,” 2003. SIGIR 135. U.S. Embassy-Baghdad, response to SIGIR endofarespectivefiscalyearifanyoneof calculates the GOI’s contribution to recon- data call, 1/4/2011. those bundled projects (rather than another) struction by summing the following amounts: 136. U.S. Embassy-Baghdad, OPA, response to was deobligated or liquidated. the amount of Iraqi funds overseen by the SIGIR data call, 1/4/2011. 106. Deputy Secretary of Defense, letter to Con- CPA; the official capital budget for 2003–2005; 137. DoS,INL,responsetoSIGIRdatacall, gress, 9/29/2010. MOF-reported capital expenditures for 1/13/2011. 107. USF-I, response to SIGIR data call, 1/10/2011. 2006–2009; and the official capital budget for 138. U.S. Embassy-Baghdad, Political-Military 108. USF-I, response to SIGIR data call, 1/7/2011; 2010.Thistotallikelyoverstatestheactual AffairsSection,responsetoSIGIRdatacall, DoD, CMC, response to SIGIR data call, contribution made by the GOI, since official 1/4/2011. 1/13/2011. capital budgets typically exceed capital expen- 139. U.S. Embassy-Baghdad, Political-Military 109. Deputy Secretary of Defense, letter to Con- ditures. Currently, certified expenditure data AffairsSection,responsetoSIGIRdatacall, gress, 9/29/2010. is not available from the MOF for 2003–2005, 1/4/2011.NoFMFassistancehasyetbeen 110. TFBSO, response to SIGIR data call, 1/4/2011. and only partial expenditure data is available requested for Iraq. 111. DoS, PM, response to SIGIR data call, for 2010. 140. U.S. Embassy-Baghdad, Political-Military 9/21/2010; BBG, response to SIGIR data 114. GOI, CoM, “Draft Law of the Republic of Iraq AffairsSection,responsetoSIGIRdatacall, call, 10/5/2010; U.S. Marshals Service, (GOI) Federal Budget for the 2011 Financial 1/4/2011. response to SIGIR data call, 10/5/2010; Year,” 11/30/2010, Article 1. 141. U.S. Embassy-Baghdad, Political-Military U.S. Treasury, OTA, “Office of Techni- 115. GOI, CoM, “Draft Law of the Republic of Iraq AffairsSection,responsetoSIGIRdatacall, calAssistanceOverview,”12/30/2005, (GOI) Federal Budget for the 2011 Financial 1/4/2011. ustreas.gov/offices/international-affairs/ Year,” 11/30/2010, Article 1; U.S. Embassy- 142. U.S. Embassy-Baghdad, ISPO, response to assistance/, accessed 10/16/2009; U.S. Baghdad,FinancialAttaché,responseto SIGIR data call, 1/4/2011. Embassy-Baghdad, response to SIGIR data SIGIR data call, 7/15/2010. 143. U.S. Embassy-Baghdad, ISPO, response to call,10/3/2009;OUSD(C),responsetoSIGIR 116. GOI, CoM, “Draft Law of the Republic of Iraq SIGIR data call, 1/4/2011. data call, 10/14/2010; DoS, ECA, response (GOI) Federal Budget for the 2011 Financial 144. U.S. Embassy-Baghdad, ISPO, response to to SIGIR data call, 4/14/2010; OMB, Year,” 11/30/2010, Article 2. SIGIR data call, 1/4/2011. response to SIGIR data call, 6/21/2010; 117. GOI, CoM, “Draft Law of the Republic of Iraq 145. U.S. Embassy-Baghdad, ISPO, response to USAID,“U.S.OverseasLoansandGrants (GOI) Federal Budget for the 2011 Financial SIGIR data call, 1/4/2011. [Greenbook],” 2008, gbk.eads.usaidall- Year,” 11/30/2010. 146. USACE, response to SIGIR data call, 1/4/2011. net.gov/query/do?_program=/eads/gbk/ 118. U.S. Embassy-Baghdad, Financial Attaché, 147. DoS, INL, response to SIGIR data call, countryReport&unit=N, accessed 4/15/2010; responses to SIGIR data call, 1/6/2011 and 1/5/2011. DoJ, Justice Management Division, response 1/14/2011. 148. 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165. OSD, response to SIGIR data call, 1/3/2011; 179. Commanding General Mohamad, 14th Iraqi 200. SIGIR PA-08-160, “Report on the Basrah Chil- USAID, response to SIGIR data call, 1/3/2011; Army Corps, meeting with SIGIR, 1/12/2011. dren’s Hospital, Basrah, Iraq,” 7/28/2009, pp. 1–4. USACE, response to SIGIR data call, 1/7/2011. 180. Marisa Cochrane, “The Battle for Basra: 201. ROO General Manager, meeting with SIGIR, The Department of Defense figures were March 2003–May 31, 2008,” The Institute for 1/13/2011. for November 30, 2010. All others were for the Study of War, 6/23/2008, pp. 6–8, www. 202. ROO General Manager, meeting with SIGIR, December 31, 2010. U.S. Embassy-Baghdad understandingwar.org/report/battle-basra, 1/13/2011. did not report the number of contractors sup- accessed 1/3/2011. 203. IAU, “Basrah Governorate Profile,” 12/2010, porting its activities. 181. AmbassadorRyanCrocker,Congressional www.iauiraq.org/reports/GP-Basrah.pdf,ac- 166. 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232. COI, GOI, response to SIGIR data call, 1/2011. 263. UNHCR, press release, “Iraq: Helping Inter- 281. GAO Report GAO-11-124, “Displaced Iraqis: 233. COI, GOI, www.nazaha.iq/en_default.asp, nally Displaced Persons Improve Their Lives Integrated International Strategy Needed to accessed 1/2/2011. and Finding Durable Solutions, Key Aspects Reintegrate Iraq’s Internally Displaced and 234. MichaelKnightsandEdWilliams,“The of Peace-building,” 9/29/2010, www.ohchr. Returning Refugees,” 12/2010, pp. 9–10. Calm before the Storm: The British Experi- org/en/NewsEvents/Pages/DisplayNews. 282. DoS, PRM, responses to SIGIR data calls, ence in Southern Iraq,” Policy Focus No. aspx?NewsID=10389&LangID=E, accessed 9/24/2010 and 1/13/2011. 66, The Washington Institute for Near East 12/13/2010. 283. GAO Report GAO-11-124, “Displaced Iraqis: Policy, 2/2007, p. 30, www.washingtonin- 264. 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GOI, Poverty Reduction Strategy High newspik049_250px.jpg&id=337&type=html, call, 4/10/2009; IRMS, USF-I CERP Category Committee, and World Bank, Middle East accessed 1/3/2011. Report,9/20/2010. Department, “Iraq Poverty Data Report,” Vol. 518. Inma, press release, “Fresh Date Exports 545. U.S. Embassy-Baghdad, response to SIGIR 1: Main Findings, 3/2010, p. 30. End 20-Year Lull,” www.inma-iraq. data call, 1/4/2011; MOE and Parsons 491. GOI,CouncilofMinisters,responsetoSIGIR com/?pname=open&f=doc100337_ Brinckerhoff, Iraq Electricity Masterplan, data call, 1/11/2011. newspik049_250px.jpg&id=337&type=html, FinalReport,Vol.1,ExecutiveSummary, 492. GOI, MoPDC, “The National Development accessed 1/3/2011. 12/2010; Parsons Brinckerhoff, press release, Plan (2010–2014) Summary,” 10/2010, p. 4. 519. USAID, response to SIGIR data call, 1/3/2011. “IraqMinistryofElectricityToPresentthe 493. DoS, Iraq Status Report, 11/10/2010, slide 17; 520. USAID, response to SIGIR data call, 1/3/2011. 2010–2030MasterPlanatIstanbulConfer- GOI, Baghdad Amanat, response to SIGIR 521. U.S. Embassy-Baghdad, response to SIGIR ence,” 1/5/2011, www.pbworld.co.uk/index. data call, 1/15/2011. data call, 1/4/2011. php?doc=7&aid=143, accessed 1/5/2011. 494. World Solutions International, response to 522. DoS, Iraq Status Report,11/17/2010,slide15. 546. ITAO/ESD, Electric Daily Performance Re- SIGIR data call, 1/13/2011; DoS, Iraq Status 523. IMF, Country Report No. 10/316, “Iraq: First ports,10/1/2009–12/31/2010. Report, 11/10/2010, slide 17. Review Under the Stand-By Arrangement, 547. ITAO/ESD, Electric Daily Performance Re- 495. DoS, Iraq Status Report, 11/10/2010, slide 17. Request for Waiver of Nonobservance of a ports,10/1/2009–12/31/2010. 496. GOI, Baghdad Amanat, response to SIGIR Performance Criterion, Waiver of Applicability, 548. DoS, Iraq Status Report,10/25/2006,slide data call, 1/15/2011. and Rephasing of Access,” Executive Summary; 11; ITAO/ESD, Electric Daily Performance 497. Dos, Iraq Status Report,12/1/2010,slide15. EIU, Country Report: Iraq,11/2010,p.14. Reports,6/1/2006–12/31/2010.

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549. DoS, Iraq Status Report,10/25/2006,slide meeting-iraq, accessed 1/14/2011. U.S. Embassy-Baghdad, responses to SIGIR 11; ITAO/ESD, Electric Daily Performance 565. GOI, Office of the DPM of Energy Affairs, data call, 1/5/2011 and 1/13/2011. Reports,6/1/2006–12/31/2010. 1/23/2011. 592. U.S. Embassy-Baghdad, response to SIGIR 550. DoS, Iraq Status Report,10/25/2006,slide 566. MEES, Weekly Report,Vol.53No.33, data call, 1/5/2011. 11; ITAO/ESD, Electric Daily Performance 8/16/2010, p. 14. 593. GOI, MOT, press release, “Iraq Regains Right Reports,6/1/2006–12/31/2010;MassGlobal 567. USACE, response to SIGIR data call, 1/4/2011. to Vote in the ICAO,” 10/26/2010, www. Investment Company, presentation on com- 568. USACE, response to SIGIR data call, 1/4/2011. motrans.gov.iq/english/index.php?name=Ne pany’s IPP projects in the Kurdistan Region, 569. ABO, response to SIGIR data call, 12/22/2010. ws&file=article&sid=171, accessed 12/5/2010. MEED Iraq Utilities 2010 Conference, Istan- 570. USACE, response to SIGIR data call,1/4/2011; 594. DoS, “Background Note: Iraq,” www. bul, Turkey, 12/14/2010. NEA-I, response to SIGIR data call, state.gov/r/pa/ei/bgn/6804.htm, accessed 551. ITAO/ESD, Electric Daily Performance 12/28/2010; IRMS, USF-I CERP Category 12/21/2010. Reports,1/1/2010–12/31/2010;Wärtsilä Report,9/20/2010. 595. GOI, MOT, press releases, “Resumption of Corporation, press release, “Wärtsilä 571. UN,IAU,“WaterinIraqFactsheet,”10/2010, Flights Between Baghdad—Doha and Bagh- Receives O&M Agreement for Iraqi Floating www.iauiraq.org/reports/Water%20in%20 dad—Muscat,” 11/22/2010, www.motrans.gov. Power Plants,” 5/12/2010, www.wartsila. Iraq%20Factsheet-Final.pdf, accessed iq/english/index.php?name=News&file=arti com/,en,press,releases,all_releases,,200681311 12/12/2010. cle&sid=187, accessed 12/1/2010, and “MOT 03430,no,7800.htm, accessed 1/12/2011. 572. DoS, Iraq Status Report,11/17/2010,slide18. Agrees to Operate Flights from Amsterdam to 552. Mass Global Investment Company, 573. UNESCO, press release, “UNESCO Baghdad,” 10/27/2010, www.motrans.gov.iq/ presentation on company’s IPP projects in Launches Initiative To Identify Ground- english/index.php?name=News&file=article& the Kurdistan Region, MEED Iraq Utili- water and Alleviate Water Shortages in sid=172, accessed 12/5/2010. ties 2010 Conference, Istanbul, Turkey, Iraq,” 10/3/2010, www.unesco.org/en/iraq- 596. GOI, MOT, press release, “In the Near Future 12/14/2010; U.S. Embassy-Baghdad, office/dynamic-content-single-view/news/ Resuming the Flights to Sweden, Germany, response to SIGIR data call, 1/13/2011; GE, unesco_launches_initiative_to_identify_ and Britain,” 10/25/2010, www.motrans.gov.iq/ press release, “Two Independent Power groundwater_and_alleviate_water_short- english/index.php?name=News&file=article& Plants in Kurdistan Featuring GE Tech- ages_in_iraq/back/9623/cHash/39e003025c, sid=170, accessed 12/5/2010. nology Will Help Meet Northern Iraq’s accessed 12/15/2010; U.S. Embassy-Bagh- 597. U.S. Embassy-Baghdad, response to SIGIR data Growing Energy Demands,” 2/17/2010, dad, response to SIGIR data call, 1/13/2011. call, 1/5/2011; GOI, MOT, press release, “MOT www.gepower.com/about/press/en/2010_ 574. UN,IAU,“WaterinIraqFactsheet,”10/2010, Receives French Trade Minister at Baghdad In- press/021710b.htm, accessed 11/16/2010; www.iauiraq.org/reports/Water%20in%20 ternational Airport,” 11/8/2010, www.motrans. GE, press release, “GE Turbines to Help Iraq%20Factsheet-Final.pdf, accessed gov.iq/english/index.php?name=News&file=art Meet Northern Iraq’s Growing Energy 12/12/2010. icle&sid=177, accessed 12/5/2010. Needs,” 12/6/2010, www.genewscenter. 575. GOI, National Media Center, press release, 598. SIGIR, Quarterly Report to the United States com/Press-Releases/GE-Turbines-to-Help- “1st phase of Hydro-geology Survey,” Congress,4/30/2010,p.75;USACE,response Meet-Northern-Iraq-s-Growing-Energy- 12/19/2010, www.nmc.gov.iq/english/ to SIGIR data call, 1/5/2011. Needs-2d52.aspx, accessed 12/13/2010. lnews_e/2010/12/19_2.htm, accessed 1/5/2011. 599. U.S. Embassy-Baghdad, response to SIGIR 553. MOE, announcement, “Investment Tender 576. USACE, response to SIGIR data call, 1/5/2011. data call, 1/5/2011; USACE, response to SIGIR No. (IPP/1/2010),” www.moelc.gov.iq/ 577. USACE, response to SIGIR data call, 1/5/2011. data call, 1/5/2011. default_en.aspx, accessed 12/13/2010; MOE, 578. USACE, response to SIGIR data call, 1/5/2011; 600. USACE, response to SIGIR data call, 1/5/2011; “IPP Announcement (2),” www.moelc.gov.iq/ SIGIR PA-08-144 to PA-08-148, “Falluja Waste U.S. Embassy-Baghdad, response to SIGIR default_en.aspx, accessed 12/27/2010. Water Treatment System, Falluja, Iraq,” 10/2008. data call, 1/5/2011. 554. U.S. Embassy-Baghdad, responses to SIGIR 579. USACE, response to SIGIR data call, 1/5/2011. 601. USACE, response to SIGIR data call, 1/5/2011. data call, 1/4/2011 and 1/13/2011. 580. USACE, Cumulative Fact Sheet,1/1/2011; 602. U.S. Embassy-Baghdad, response to SIGIR 555. U.S.Embassy-Baghdad,responsetoSIGIR USACE, response to SIGIR data call, 1/5/2011; data call 1/5/2011; USACE, response to SIGIR data call, 1/4/2011. U.S. Embassy-Baghdad, response to SIGIR data call 1/5/2011. 556. U.S. Embassy-Baghdad, responses to SIGIR data call, 1/13/2011. 603. U.S. Embassy-Baghdad, response to SIGIR data call, 1/4/2011 and 1/13/2011. 581. USACE, Cumulative Fact Sheet,1/1/2011; data call 1/5/2011; USACE, response to SIGIR 557. MOE and Parsons Brinckerhoff, Iraq Electric- USACE, response to SIGIR data call, 1/5/2011. data call 1/5/2011. ity Masterplan,FinalReport,Vol.1,Executive 582. USACE, response to SIGIR data call, 1/5/2011; 604. U.S. Embassy-Baghdad, responses to SIGIR Summary, 12/2010, pp. 3, 22, 25. USACE, press release, “Capacity Development data calls, 10/4/2010, 10/14/2010, and 1/5/2011; 558. MOE and Parsons Brinckerhoff, Iraq Electricity a High Priority as USACE in Iraq Aims for U.S. Embassy-Baghdad, Economic Coun- Masterplan,FinalReport,Vol.1,Executive Mission Completion,” 10/5/2010, www.grd. selor, meeting with SIGIR, 9/27/2010; SIGIR, Summary, 12/2010, pp. 4, 5, 12, 14, 18. usace.army.mil/news/releases/NR10-10-05. Quarterly Report to the United States Congress, 559. ITAO/ESD, Electric Daily Performance Re- pdf, accessed 12/17/2010. 4/2010, p. 88; SIGIR PA-08-160, “Report ports, 10/1/2010–12/31/2010. 583. ABO, response to SIGIR data call, 12/22/2010. ontheBasrahChildren’sHospital,Basrah, 560. MOE and Parsons Brinckerhoff, Iraq Electric- 584. USACE, response to SIGIR data call, Iraq,” 7/28/2009; GRD, press release, “Basrah ity Masterplan,FinalReport,Vol.1,Executive 1/4/2011;NEA-I,responsetoSIGIRdatacall, Children’s Hospital Receives Toys, $10,000 in Summary, 12/2010, pp. 10–11. 12/28/2010; IRMS, USF-I CERP Category SpecialDelivery,”3/19/2010,www.grd.usace. 561. MOE and Parsons Brinckerhoff, Iraq Electric- Report,9/20/2010. army.mil/news/releases/NR09-03-19-03.pdf, ity Masterplan,FinalReport,Vol.1,Executive 585. ABO, response to SIGIR data call, 12/22/2010. accessed 10/20/2010. Summary, 12/2010, pp. 3, 19. 586. SIGIR, Quarterly Report and Semiannual 605. U.S. Embassy-Baghdad, responses to SIGIR 562. BarryR.Schneider,“RadicalResponsesto Report to the United States Congress,1/2010, data calls, 10/4/2010, 10/14/2010, and 1/5/2011, Radical Regimes: Evaluating Preemptive p. 61; USACE, response to SIGIR data call, and Economic Counselor, meeting with Counter-Proliferation,” McNair Paper Num- 1/5/2011; USF-I, response to SIGIR data call, SIGIR, 9/27/2010; SIGIR, Quarterly Report to ber 41, National Defense University, Institute 1/10/2011. the United States Congress,4/2010,p.88;SIIGR for National Strategic Studies, 5/1995, pp. 587. ABO, response to SIGIR data call, 12/22/2010. PA-08-160, “Report on the Basrah Children’s 13–14. 588. U.S. Embassy-Baghdad, response to SIGIR Hospital, Basrah, Iraq,” 7/2009; GRD, press 563. UNSCR 687, 4/3/1991; UNSCR 707, 8/15/1991. data call, 1/5/2011. release, “Basrah Children’s Hospital Receives 564. White House, Office of the Vice President, 589. U.S. Embassy-Baghdad, responses to SIGIR Toys,$10,000inSpecialDelivery,”3/19/2010, factsheet,“UNSecurityCouncilHigh data calls, 10/30/2010 and 1/5/2011. www.grd.usace.army.mil/news/releases/ LevelMeetingonIraq,”12/15/2010,www. 590. U.S. Embassy-Baghdad, response to SIGIR NR09-03-19-03.pdf, accessed 10/20/2010; USF- whitehouse.gov/the-press-office/2010/12/15/ data call, 1/5/2011. I, press release “Iraq’s First Children’s Cancer fact-sheet-un-security-council-high-level- 591. DoS, Iraq Status Report, 9/8/2010, slide 12; Hospital Opens in Basrah,” 10/26/2010, www.

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army.mil/-news/2010/10/26/47156-iraqs-first- 613. GOI, MOHED, press release, “Al-Ajeeli: 100 childrens-cancer-hospital-opens-in-basra, Faculty Members Receive Training in USA,” accessed 1/7/2011. 11/22/2010, www.mohesr.gov.iq/EngPages/ 606. USAID, response to SIGIR data call, 1/3/2011. universitiesestablishedE.htm, accessed 607. UNESCO, press release, “Iraqi Institu- 12/1/2010. tions Support Education Reform as the 614. DoDIG,D-2010-037,“InternalControls Path to Brighter Future for the Coun- Over United States Marine Corps Commer- try,” 9/30/2010, www.unesco.org/en/ cial and Miscellaneous Payments Processed iraq-office/dynamic-content-single-view/ Through the Deployable Disbursing System,” news/iraqi_institutions_support_educa- 1/25/2010. tion_reform_as_the_path_to_a_bright- 615. DoD IG, D-2009-054, “Identification of er_future_for_the_country/back/23142/ Classified Information in Unclassified DoD cHash/143aa68e21/?tx_ttnews%5Bcat%5D SystemsDuringtheAuditofInternalCon- =132%2C135%2C466%2C133%2C134%2C4 trols and Data Reliability in the Deployable 59%2C460&tx_ttnews%5Byear%5D=2010, Disbursing System,” 2/17/2009. accessed 1/5/2011. 616. This command was part of the Multi-National 608. U.S. Embassy-Baghdad, response to SIGIR Force-Iraq, and both of these commands were data call, 1/5/2011; USACE, response to SIGIR subsumed into the U.S. Forces-Iraq on Janu- data call, 1/4/2011. ary1,2010. 609. U.S. Embassy-Baghdad, response to SIGIR data 617. The Marshall Center works to create a more call 1/5/2011; USACE, Cumulative Fact Sheet, stable security environment among the na- 1/1/2011, and response to SIGIR data call, 1/4/2011. tions of North America, Europe, and Eurasia 610. ABO, response to SIGIR data call, 12/22/2010. by advancing democratic institutions and 611. DoS, Iraq Status Report, 11/10/2010, slide 16. relationships, especially in the field of defense; 612. GOI, MOHED, press release, “Al-Ajeeli: promoting active, peaceful security coopera- 100FacultyMembersReceiveTrainingin tion; and enhancing enduring partnerships. USA,” 11/24/2010, www.mohesr.gov.iq/ EngPages/trainingUSAeE.htm, accessed 12/1/2010.

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or disbursed. USF-I feels this is more accurate Each of these projects was listed as “planned” than IRMS or CIDNE data. or “proposed” in the report’s Status field. SOURCES AND USF-I’s response to the data contained in draft insert is that it is not representative, is Project start and completion dates: Project costs NOTES FOR missing roughly 11K in projects, $224 million aretreatedasobligatedasofthedateindicatedin in obligations and $141 million in disburse- the Actual Start fieldandexpendedasofthedate THE INSERT ments, and contains incomplete project cat- indicatedintheActual Completion field.Inmost egory information and provincial breakouts. graphics and tables, SIGIR included all projects that were started (that is, obligated) even if they SIGIR has long recognized and reported on had not been completed by the September 1, 2010, Sources the limitations of the IRMS. SIGIR agrees with cut-off date. Projects with no project completion IRMS, Global Benchmark, 9/3/2010; DoD, Report USF-I that the IRMS is limited by the accuracy and dates were assumed to be ongoing for the purposes to Congress in Accordance with P.L. 111-118, Sec. completeness of what U.S. Divisions input into the of analysis in the box-plot chart. The CERP data 9005, and P.L. 111-84, Sec. 1222, “Department of system, and SIGIR acknowledges that the quarterly used did not include any canceled projects, so there Defense Review of the Commander’s Emergency and total fiscal-year appropriation values for obli- is,bydefinition,nocountingofobligationsthat Response Program (CERP),” 7/2010; DoD, CERP gations and expenses as reported in the IRMS do were terminated prior to completion. In one record, Management Cell, responses to SIGIR data calls, not equal top-line values provided through ABO. SIGIR replaced the date provided in the Actual 1/6/2011and1/13/2011;DoD,Financial Manage- The discrepancy is explained in detail in Section 2 Start field with the date provided in the Projected ment Regulation,Vol.12,Chap.27;USF-I,Money of this Quarterly Report. Start field because the former fell two years before asaWeaponSystem(MAAWS),3/31/2010;SIGIR However, SIGIR disagrees with the assertion CERP funding was available and therefore was Audit11-010,“SonsofIraqProgram:ResultsAre that the USF-I CERP Project Tracker is a better clearly incorrect. Uncertain and Financial Controls Were Weak,” source of data. In any given fiscal year, the USF-I 1/2011; SIGIR Audit 11-012, “Commander’s CERP Project Tracker only tracks data for the Project categories: Not all of the project categories Emergency Response Program Obligations Are respective fiscal-year appropriation. Creating a defined in the DoD’s FMR were contained in the Uncertain,” 1/2011. complete data set would necessitate matching proj- IRMS database. Specifically, “Temporary Contract ect details from the USF-I CERP Project Tracker Guards for Critical Infrastructure” and “Hero Pay- with financial records provided by ABO. However, ments” were not represented. Analysis of individual SIGIR has identified potentially unresolvable ob- records shows that projects that should have been Notes staclestocreatinganewdatabasebythismethod. classified as “Temporary Contract Guards for Criti- Data source: Data from the IRMS Global Bench- Without the ability to match the CERP Project cal Infrastructure”—particularly those supporting mark report formed the basis of the great majority Tracker to ABO financial data—and in so doing the Sons of Iraq and Daughters of Iraq programs— of charts, tables, descriptive statistics, and other correctmistakesapparentintheCERPProject were classified under the project category “Protec- quantitative analysis in this Insert. SIGIR chose Tracker and accurately record project comple- tive Measures.” SIGIR did not attempt to identify to use the IRMS because it is the most complete tion or cancellation—the CERP Project Tracker is which projects belong in the former category; data source available for the CERP, accounting for not an adequate source of CERP data for SIGIR’s projects of both types are reported in the Insert $3.45 billion (94%) of the $3.68 billion in CERP analysis.AsofSeptember30,2010,theUSF-ICERP under the “Protective Measures” heading. It is not obligations reported by the U.S. Army Budget Project Tracker accounted for $3.89 billion (106%) clear under what project category in the IRMS Office (ABO) and $3.43 billion (96%) of the $3.56 of the $3.68 billion in CERP obligations reported “Hero Payments” were recorded. billion in CERP expenditures reported by ABO, as by ABO and $1.59 billion (45%) of the $3.56 billion A total of 161 projects, valued at $24.7 million, of September 30, 2010. in CERP expenditures reported by ABO. In other were not assigned a CERP project category in the USF-I disagreed with SIGIR’s conclusion that words, the USF-I CERP Project Tracker overstates IRMS database; manual review indicated that they IRMS was the most complete data source available obligations (presumably because some obligations were exclusively irrigation or canal projects, and for the CERP. According to USF-I vetting com- werecanceledaftertheendoftherespectivefiscal SIGIR classified them under the “Agriculture” ments on the Insert: years) and understates expenditures (because not project category. USF-I is unable to validate/verify the all projects were completed before the end of the In four records, the IRMS database incorrectly numbers used in the insert as it is data SIGIR respective fiscal years). listed an IRRF Benchmark Category in place of a pulled from IRMS before IRMS was shut down For details, see Section 2 of this Quarterly CERP Project Category. Based on the project de- August 2010. The report implies the reporting Report. In the absence of complete and accurate scriptions in those four records, SIGIR reclassified: covers all FY 2004–FY 2010 CERP projects. project reporting from USF-I, SIGIR believes that • “Roads & Bridges (82000)” as “Transportation” However, the IRMS data from August 2010 is the IRMS remains the least problematic available • “Nationwide Hospital & Clinic Improvements incomplete and does not include the remainder source of CERP data. (90000)” as “Health Care” of FY 2010 CERP data. • “PublicBuildings-Construction&Repair As an example, the draft report shows Data processing: Data has not been audited, and (81000)” as “Civic Infrastructure Repair” 35,000 in total projects; USF-I tracks 51,000 in numbers are affected by rounding. The IRMS was • “Security & Law Enforcement (900000)” as total projects from FY 2004–FY 2010. The draft shut down on September 1, 2010, after which date “Protective Measures” report also shows expenditures of $3.4 billion no new data was inputted into the system. SIGIR while USF-I tracks $3.7 billion in obligations pulledallCERPrecordsfromtheIRMSGlobal Districts and provinces: There were several in- and $3.6 billion in disbursements. The break- Benchmark report on September 3, 2010, for use in consistencies and apparent mistakes in assigned outs by project categories and provinces do not this Insert; it is therefore the most complete data districts and provinces for records in the IRMS match USF-I numbers either. set available from the IRMS. SIGIR then took the database. Based on analysis of project descrip- Both USF-I and ABO have previously following steps to prepare the data for use: tions and actual locations of districts in Iraq, provided SIGIR with data pulled from ODS/ • SIGIR excluded all CERP funding sources that SIGIR reclassified: STANFINS and our quarterly CERP Trackers, were not U.S. appropriations—specifically • “HAMZA” district in “AN NAJAF” province as which provide more accurate information thoseidentifiedas“InterimIraqGoverment “Hamza” district in “Qadissiya” province regardingCERPexpendituresthanIRMS. Funds” [sic] and “Iraqi Cmdr’s Emrgcy Resp •“KHANAQIN”districtin“BAGHDAD” Additionally, the data in IRMS is subjective to Prog”intheFund Type field. province as “Khanaqin” district in “Diyala” what the USDs input into the system and only • SIGIR excluded all records that did not strictly province contains supporting documentation to the belong to the CERP program—specifically • “BAGHDAD INTERNATIONAL AIRPORT” project. ODS/STANFINS tracks all of the dollar those identified as “FY05 – CHRRP” and “FY06 district in “BAGHDAD” province as “Karkh” amounts associated with an individual project, –CHRRP”inthereport’sFund Type field. district in “Baghdad” province including partial payments, final disbursement • SIGIR excluded all projects (238 in total, valued • “NAJAF” district in “NINAWA” province as date and the dates funds were obligated and/ at $42.7 million) that did not have a start date. “Sinjar” district in “Ninewa” province

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Acronym Definition Acronym Definition

ACRONYMS AND Combined Information Data DFI Development Fund for Iraq CIDNE Network Exchange DEFINITIONS DoD Department of Defense Council of the Inspectors Department of Defense Office CIGIE General on Integrity and DoD OIG of Inspector General Thissectioncontainsalloftheabbrevia- Efficiency tions and acronyms found in this Report. CMC CERP Management Cell DoE Department of Energy currency or monetary DoJ Department of Justice CMIR instruments transaction report DoL Department of Labor CMM Capability Maturity Model DoS Department of State Acronym Definition ChinaNationalPetroleum Department of State Office of CNPC DoS OIG Company Inspector General ABO ArmyBudgetOffice Committee of Financial Experts COFE DoT Department of Transportation ABOT al-Basrah Oil Terminal (Board of Supreme Audit) Deferred Prosecution Anti-Corruption Coordination Commission of Integrity DPA ACCO Agreement Office (U.S. Embassy-Baghdad) COI (previously known as Commission on Public Integrity) Bureau of Democracy, Human DRL AFAA AirForceAuditAgency Rights, and Labor (DoS) COIN counterinsurgency AQI al-Qaeda in Iraq DRN Document Reference Number CoM Council of Ministers Bureau of Administration’s EBO Embassy Branch Office AQM Office of Acquisition COM Chief of Mission Management (DoS) Bureau of Educational and ECA CoR Council of Representatives (GOI) Cultural Affairs (DoS) ARCENT Army Central Central Organization for ECP entry control point Army Department of the Army COSIT Statistics and Information Technology (GOI) Energy Information Bureau of Alcohol, Tobacco, EIA ATF Administration (DoE) Firearms, and Explosives (DoJ) Central Organization for COSQC Standardization and Quality engineering, procurement, and Broadcasting Board of EPC BBG Control (GOI) construction Governors CPA Coalition Provisional Authority Emergency Refugee & Migration ERMA BIC Basrah Investment Commission Assistance CPA Civilian Police Advisor BP British Petroleum ESF Economic Support Fund CPJ Committee to Protect Journalists BPA blanket purchase agreement Food and Agriculture CongressionalResearchService FAO CRS Organization (United Nations) BPD barrels per day (Library of Congress) FBI Federal Bureau of Investigation BRU Bank Reconciliation Unit CSG CERP Steering Committee Foreign Military Finance BSA Board of Supreme Audit Child Survival and Health FMF CSH program Business Transformation Agency Programs Fund BTA Financial Management (Army) FMR CWG CERP Working Group Regulation (DoD) CAG community action group Development Assistance FMS Foreign Military Sales CAP Community Action Program DAD Database (United Nations Development Program) FOB forward operating base CBI Central Bank of Iraq Department of Border FP Federal Police (GOI) DBE CCC-I Central Criminal Court of Iraq Enforcement (GOI) Facilities Protection Service FPS Corps of Engineers Financial DCAA Defense Contract Audit Agency (GOI) CEFMS Management System Deputy Commanding General FY fiscal year DCG-O CENTCOM U.S. Central Command for Operations Government Assistance GAD Commander’s Emergency Defense Criminal Investigative Database CERP DCIS Response Program Service U.S. Government Accountability GAO Cooperative Housing Office of Disarmament, Office CHF Foundation DDR Demobilization, and Reintegration (GOI) GDP gross domestic product U.S. Army Criminal Investigation CID-MPFU Command-Major Procurement Deployable Disbursing System GE General Electric DDS Fraud Unit (DoD) Continuednextcolumn Continuednextcolumn Continuednextcolumn

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Acronym Definition Acronym Definition Acronym Definition

GM General Motors Iraq Financial Management Iraq Training and Advisory IFMIS ITAM Information System Mission GOI Government of Iraq IG inspector general ITAO Iraq Transition Assistance Office GOR grant officer representative Independent High Electoral Iraq Transition Assistance Office/ IHEC ITAO/ESD GRD Gulf Region District (USACE) Commission Electric Services Division HJC Higher Judicial Council Iraq Household Socio-Economic JIATF Joint Interagency Task Force IHSES Survey H.R. House Resolution KA Kurdistani Alliance Headquarters, Department of Iraq International Academy HQDA IIA KAAOT Khawr al-Amaya Oil Terminal the Army (ISFF) KDP Kurdistan Democratic Party IA Iraqi Army IIGC Iraq Inspectors General Council KEC KuwaitEnergyCompany International Anti-Corruption Institute for International Law IACA IILHR Academy and Human Rights km kilometer International Advisory and International Military Education Kogas Korean Gas Corporation IAMB IMET MonitoringBoardforIraq and Training program KRG Kurdistan Regional Government UN Inter-Agency Information IMF International Monetary Fund IAU kV kilovolt andAnalysisUnit INA Iraqi National Alliance LAOTF Law and Order Task Force IBI Iraq Business Initiative International Narcotics Control ICAA Iraq Civil Aviation Authority INCLE and Law Enforcement account LBG Louis Berger Group, Inc. (INL) International Civil Aviation Local Governance Program ICAO LGP Organization Bureau of International (USAID) INL NarcoticsandLawEnforcement U.S. Immigration and Customs Affairs (DoS) Logistics Civil Augmentation ICE LOGCAP Enforcement Program “Growth” in Arabic— Inma International Compact with Iraq Agribusiness Program (USAID) LOJ Letter of Justification ICI (GOIandUN)-replacedwith LOS Letter of Sustainment UNDAFinMay2010 IOCs international oil companies International Organization for LPG liquefied petroleum gas International Criminal IOM ICITAP Investigative Training Assistance Migration LSA Logistical Support Area Program (DoJ) IP Iraqi Police m3 cubic meter Iraq Crude Oil Export Expansion ICOEE IPP independent power producer Money as a Weapon System Project MAAWS International Reconstruction (USF-I) ICS Iraqi Correctional Service IRFFI Fund Facility for Iraq MBPD million barrels per day International Development IDA International Republican Association (World Bank) IRI Ministerial Capacity Institute MCD Development Program (formerly International Disaster Assistance MCTD) IDA Iraq Reconstruction (USAID humanitarian trust fund) IRMS Management System MCF million cubic feet International Disaster and IDFA IRR Iraqi Republic Railway Company Famine Assistance MEC Minimum Essential Capability Iraq Relief and Reconstruction Iraq Development Management IRRF MEES Middle East Economic Survey IDMS Fund System Middle East Partnership Internal Revenue Service- MEPI IRS-CI Initiative (DoS) IDP internally displaced person Criminal Investigation MFI microfinance institution IEA International Energy Agency ISCI Islamic Supreme Council of Iraq Independent Election Military Information Support IECI ISF Iraqi Security Forces MIST Commission of Iraq (later IHEC) Team (U.S. Embassy-Baghdad) ISFF Iraq Security Forces Fund Maturity Model Quarterly IED improvised explosive device MMQA Iraqi Special Operations Force Assessment ISOF Implementation and Follow- (also, Counter-Terrorism Force) IFCNR Up Committee for National MNC-I Multi-National Corps-Iraq Reconciliation (GOI) ISP Infrastructure Security Program MNF-I Multi-National Force-Iraq IFF Iraq Freedom Fund Iraq Strategic Partnership Office ISPO MOA Memorandum of Agreement (replaces ITAO) Continuednextcolumn MOD Ministry of Defense Continuednextcolumn Continuednextcolumn

154 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

Jan11.indb 154 1/23/2011 9:26:48 PM ACRONYMS AND DEFINITIONS

Acronym Definition Acronym Definition Acronym Definition

Ministry of Displacement and Army Operation and Police Development Program MoDM O&M PDP Migration Maintenance funds (INL) MOE Ministry of Electricity operations and maintenance PDS Public Distribution System O&M (general terms) MOF Ministry of Finance PEZ Pipeline Exclusion Zone Office of the Assistant Secretary MOH Ministry of Health OASD Procurement Fraud Branch of Defense PFB (Army Legal Services Agency) MoHR Ministry of Human Rights Office of the Assistant Secretary OASD(LA) personally identifiable of Defense (Legislative Affairs) PII MOI Ministry of Interior information Office of the Assistant Secretary MOJ Ministry of Justice OASD(PA) of Defense (Public Affairs) PM Prime Minister Ministry of Planning and MoPDC Office for the Coordination of Bureau of Political-Military Development Cooperation OCHA PM Humanitarian Affairs (UN) Affairs (DoS) MOT Ministry of Transportation Office of Foreign Disaster purchase request and OFDA PR&C MOU Memorandum of Understanding Assistance (USAID) commitment Migration and Refugee Office of the General Counsel Provincial Reconstruction MRA OGC PRDC Assistance (Army) Development Council Mine Resistant Ambush Overseas Humanitarian, Disaster Bureau of Population, Refugees MRAP OHDACA PRM Protected vehicle and Civic Aid and Migration (DoS) MSC major subordinate command OIF Operation Iraqi Freedom PRT ProvincialReconstructionTeam Modified Table of Organization Office of Management and PSC private security contractor MTOE OMB and Equipment Budget PSD protective security detail MW megawatt OP Oil Police (GOI) PUK Patriotic Union of Kurdistan MWh megawatt-hour OfficeofProvincialAffairs(U.S. OPA PwC PricewaterhouseCoopers Embassy-Baghdad) Iraq’s National Anti-Corruption NACS QRF Quick Response Fund Strategy for 2010–2014 Office of Overseas Prosecutorial OPDAT Development and Assistance RAC Return Assistance Center (GOI) Nonproliferation, Anti- Training (DoS) NADR terrorism, Demining, and Rural and Agricultural Incomes Related Programs Overseas Private Investment RAISE PLUS with a Sustainable Environment OPIC Corporation (USAID) National Capacity Development NCD Program (USAID) (also referred OfficeofSecurityCooperation- RMT Resource Management Tool OSC-I to as Tatweer) Iraq OfficeoftheRuleofLaw National Council for Higher Office of the Secretary of RoLC Coordinator (U.S. Embassy- NCHP OSD Policies (GOI) Defense Baghdad) Naval Criminal Investigative Office of Technical Assistance al-Rumaila Operations NCIS ROO Service OTA (U.S. Department of the Organization Treasury) NCSC National Center for State Courts RRT Regional Reconstruction Team Office of the Under Secretary National Defense Authorization RSO Regional Security Office NDAA OUSD(AT&L) of Defense (Acquisition, Act Technology and Logistics) RTI Research Triangle Institute NDI National Democratic Institute Office of the Under Secretary of OUSD(C ) SA Security Agreement (U.S.-Iraq) Iraq’s National Development Defense (Comptroller) NDP Sadrist Independent Liberals Trend Plan (2010–2014) Office of the Under Secretary of OUSD(P) Bureau of Near Eastern Affairs- Defense (Policy) SATs Security Assistance Teams NEA-I Iraq (DoS) Office of the Under Secretary SBA Stand-By Arrangement (IMF) OUSD(P&R) of Defense (Personnel and NGO non-governmental organization Supreme Council for Islamic Readiness) SCIRI NMC National Media Center (GOI) Revolution in Iraq P.L. Public Law National Police Sustainment SDR Stability Development Roadmap NPSB PA Pay Agent Brigade complex (Baghdad) SECDEF U.S. Secretary of Defense Natural Resources Risk PC Provincial Council NRRRF SFA Strategic Framework Agreement Remediation Fund PCO Project and Contracting Office Continuednextcolumn Continuednextcolumn Continuednextcolumn

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Acronym Definition Acronym Definition

OfficeofGlobalWomen’sIssues UNDP UN Development Programme S/GWI (DoS) United Nations Educational, Special Inspector General for UNESCO Scientific and Cultural SIGAR Afghanistan Reconstruction Organization Special Inspector General for UN High Commissioner for SIGIR UNHCR Iraq Reconstruction Refugees SIGPRO SIGIR Prosecutorial Initiative UNOPS UN Office of Project Services SIV special immigrant visa UNSC United National Security Council SME Small- and Medium-Enterprise United Nations Security Council UNSCR Resolution SOC South Oil Company (Iraq) USAAA U.S. Army Audit Agency SOE state-owned enterprise USACE U.S. Army Corps of Engineers SOI Sons of Iraq U.S. Agency for International StateofLawCoalition(headed USAID SoL Development by Nuri al-Maliki) U.S. Agency for International State Oil Marketing SOMO USAID OIG Development Office of Organization Inspector General SPM single-point mooring USD-C United States Division-Central Synchronized Predeployment SPOT USD-N United States Division-North and Operational Tracker USD-S United States Division-South STANFINS Army Standard Financial System USF-I U.S. Forces-Iraq STT Stability Transition Team U.S. Forces-Iraq Deputy National Capacity Development Tatweer USF-I DCG-O Commanding General for Program (USAID) Operations Task Force for Business and TFBSO USFOR-A U.S. Forces-Afghanistan Stability Operations (DoD) USMC U.S. Marine Corps TGA Total Government Allegiance U.S. Refugee Admissions Provincial Economic Growth USRAP Tijara Program Program (USAID) USSOF U.S. Special Operations Forces TNA Transitional National Assembly U.S. Trade and Development USTDA Treasury U.S. Department of Treasury Association Theater-wide Internal Security Vice-Chairman, Joint Chiefs of TWISS VCJCS Services (DoD) Staff UK United Kingdom WG working group UN United Nations WTO World Trade Organization UNAMI UNAssistanceMissionforIraq WTP water treatment plant UNCT United Nations Country Team UN Development Assistance UNDAF FrameworkforIraq2011–2014 Continuednextcolumn

156 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

Jan11.indb 156 1/23/2011 9:26:48 PM For inquiries, please contact SIGIR Public Affairs: Email: [email protected] Phone: 703.428.1100 Mail: Office of the Special Inspector General for Iraq Reconstruction 400 Army Navy Drive Arlington, VA 22202-4704

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