Statement Of Senator Patrick Leahy
New Audit raises Questions
About Iraq Aid Request
April 1, 2004

Mr. President, I want to discuss an issue concerning U.S. efforts to rebuild Iraq. Before I begin, however, I want to again recognize the bravery and sacrifices that are being made every day by Americans and Iraqis, and especially those who have been killed or wounded. There have been, almost daily, horrific, cowardly acts of terrorism, increasingly aimed at civilians. The appalling attacks this week, where the bodies of Americans were dragged through the streets, disgust and deeply sadden us all. My deepest condolences go out to the families and friends of those who have died.

Yesterday, the Inspector General of the Coalition Provisional Authority (CPA-IG) issued his first report on the reconstruction efforts in Iraq. I want to remind people that it was Senator FEINGOLD, and later in the process, Senator STEVENS -- not the Bush Administration -- who worked hard to establish the CPA-IG office during the debate on the Iraq Supplemental. I had the privilege of working with Senator FEINGOLD to help draft some of the provisions of his amendment, and he, along with Senator STEVENS, are to be commended for their leadership on this issue.

Mr. President, page 33 of the CPA-IG’s report contains a table, and I ask unanimous consent that it be placed in the Record following my remarks. The information it contains concerns me, as it should every Senator. It shows that, as of February 29, 2004, nearly four months after President Bush signed the Iraq Supplemental into law, only $900 million of the $18.4 billion appropriated for reconstruction programs has been obligated – less than 5 percent.

At a time when security is the most critical issue in Iraq, sadly demonstrated by this week’s tragic attacks in which nine Americans were killed, the Administration has obligated only $292 million of the $3.24 billion for "Security and Law Enforcement," less than 10 percent of the total appropriated. This is money that is supposed to go for training a new Iraqi army and police force to reduce the risks to American soldiers and civilians working in Iraq. On top of this, only $25 million for "Justice, Public Safety, and Civil Society" has been obligated. This is less than 3 percent of the $1 billion appropriated.

Not one dime of the $1.85 billion appropriated in the Supplemental has been obligated for "Health Care," "Private Sector Development," "Roads, Bridges and Construction," and "Transportation and Telecommunications."

It would be one thing if the Administration had warned us they were going to have trouble spending the $18 billion, but they said the opposite. They told us these funds were urgent. It was "an emergency." The money had to be appropriated immediately, and not one dime less than the amount requested. There was no time for Congress to carefully consider this legislation – it had to be rammed through as fast as possible.

The Administration resisted accountability for how it would spend these billions and billions of dollars, and that fact was, and is, a major concern that many in the Senate have had about that supplemental appropriations bill.

In a letter to Congress on September 17, 2003, the President stated: "This request reflects urgent and essential requirements. I ask the Congress to appropriate the funds as requested, and promptly return the bill to me for signature."

Ambassador Bremer testified before the Senate Foreign Relations Committee on September 24, 2003: "No one part of this $87 billion supplemental is dispensable, and no part is more important than the others . . . This is a carefully considered, integrated request. This request is urgent. The urgency of military operations is self-evident. The funds for nonmilitary action in Iraq are equally urgent. Unless this supplemental passes quickly, Iraqis face an indefinite period with blackouts eight hours a day. The link to the safety of our troops is indirect but no less real."

I would point out to Ambassador Bremer, who I respect a great deal, that less than 8 percent of the funds for "Electricity" have been obligated. That is $428 million out of $5.6 billion.

I could go on, but by now the point is clear: If every dime of the $18 billion was so necessary, as a lump sum, to pay for the reconstruction of Iraq this year, why then has so little been obligated nearly four months after the President signed the bill?

Mr. President, I did not vote for the $18 billion and at the time I discussed my reasons in detail. But one of the reasons was that it was obvious that the White House was asking for far more than they could effectively use this year because they did not want to revisit this issue in an election year. They did not want to have to defend this controversial program again in the court of public opinion. They did not want the accountability that should accompany the spending of such large sums.

This is one Senator who does not believe we should spend billions of dollars of the taxpayers’ money without proper accountability. We all knew we would have to spend billions to help rebuild Iraq. But the issue was how many billions, over what period of time, and how to pay for it in a time of rising deficits. Back when we were asked to vote on the Supplemental, I urged, as did others, that because the situation in Iraq was, and is, so unpredictable, that we appropriate only as much as could be effectively used. I said that we should then revisit the issue this year, see how the funds were being used, make any necessary adjustments to the reconstruction program, count what other nations were contributing, and then decide how much additional U.S. funding this year would be needed to fill gaps in resources.

But the White House would have none of that. The President insisted on getting every dime up front, paid for by increasing the deficit rather than reducing the President’s tax cut for the wealthiest Americans, even though, as the CPA-IG and OMB reports clearly show, they can’t possibly spend it all this year. They probably won’t be able to spend half of it. All that talk about how this had to be done in the blink of an eye and without adequate checks and balances was baloney.

Congress received some of the first indications that the Administration was going to have trouble handling all of this money when the Office of Management and Budget published a plan, on January 5, 2004, that projected CPA spending at a modest $1.4 billion by the end of the first quarter. The CPA-IG report confirms that the Administration is having difficulty handling all of this money, as many of us predicted.

We all want this money spent wisely, and no one wants any administration to spend money for the sake of spending money. Also, this is not to take anything away from the brave men and women who are working so hard, under extremely difficult conditions, to rebuild Iraq.

But the issue exposed by this report is not the Administration’s spending rate in Iraq. The issue it exposes is the Administration’s credibility. It seems self-evident that a large portion of the money was not as urgently needed as Administration officials insisted at the time, or the CPA, as press reports have suggested, is tied up in bureaucratic knots and is not able to move fast enough to rebuild Iraq. I submit that the answer is both of the above, but I will let the numbers speak for themselves.

Perhaps we will see a large ramping up of spending in the second quarter, as the Administration suggests it will do according to OMB’s spending plan. Perhaps the Administration can provide a good explanation for why these projects have proceeded so slowly. But regardless, it is clear that Congress could, and I believe should, have appropriated only a portion of the money last year. There is plenty of opportunity to act on another supplemental this year, instead of frittering away the Senate’s time on hot-button political issues designed to score points in an election year.

I believe the Congress can encourage the Administration to do better in Iraq, shaping a more effective strategy in the process. This Vermonter believes that more debate, more transparency, and even a dose of frugality -- especially when it comes to spending $18 billion of the taxpayers’ money -- would be a good thing.

I yield the floor.