Verbatim, as delivered

May 22, 2007

Remarks of Chairman Lantos at Hearing, “Iraq: Is Reconstruction Failing?”

Just one year ago, U.S. contractors and Army engineers put the finishing touches on a highly-touted renovation to a maternity hospital in Erbil, northern Iraq. The $6.8 million project promised to convert the dilapidated hospital into a modern, state of the art medical facility.

Today, the backed-up drainage system spews disgusting water through many of the hospital’s floor drains – water contaminated by used syringes, drug vials, and bandages. An incinerator necessary for medical waste disposal lies idle because the workers initially trained to operate it are no longer employed by the hospital. The new water purification system is broken. Hospital workers use dangerous and unstable old oxygen tanks rather than the improved system installed by U.S. contractors – simply because they do not feel adequately trained on the new, high-tech system.

This is just one of scores of projects among many so-called “completed” reconstruction projects in Iraq that are now literally crumbling. These are projects we handed off with so much fanfare. It is simply outrageous that we are mired in the same mud of incompetence that we got stuck in last year and the year before that. But knowing the Administration’s abysmal track record on Iraq reconstruction planning, this is no surprise.

One of the early bungles in planning for reconstruction involved financing. If we had started on a path that offered the Iraqis real incentives in rebuilding their country, today’s pitiful state of affairs might be different. In the fall of 2003, just as the reconstruction effort was beginning, the distinguished Chairman of our Appropriations Committee, David Obey, and I co-sponsored an amendment to provide half of the reconstruction funding as loans and the other half as grants.

The loans would have ensured that the Iraqis had a real stake in the success of infrastructure projects and would have encouraged them to fulfill their obligations quickly. Iraqis would have been motivated to take ownership over the rebuilding of their own country.

But the Administration and the Republican-led Congress stonewalled the loan plan – which, incidentally, would have preserved some of the reconstruction monies for the U.S. taxpayers who have been paying through the nose every day. There is no accountability. The Iraqis who secure these contracts can essentially take the money and run.

Many of them have done just that, as described again and again in the reports of our distinguished witness, Stuart Bowen, the Special Inspector General for Iraq Reconstruction. And some U.S. contractors who have lined their pockets with taxpayer dollars are not accountable to anyone, either.

This stunning mismanagement seems to be why many of the endeavors are executed so shoddily. The revelation in Mr. Bowen’s latest quarterly report that new facilities are crumbling is equally as troubling as the data on incomplete projects. Some of the supposedly completed ventures are actually houses of cards ready to collapse. In a sampling of eight projects across different sectors, Mr. Bowen’s office found that seven were no longer operating as originally designed.

The culprits on the ground apparently include plumbing and electrical failures, lack of proper maintenance, outright looting, and expensive equipment lying idle. But the real blame lays at the feet of the Administration.

The President did not follow the sage rule of his former Secretary of State: If you break it, you own it. The Administration instead applied some weak glue, and then hoped against hope it would not fall to pieces. This situation is beyond unacceptable. It is serious misconduct.

But we must be forward-looking now. And the only way to plan adequately for the future is to ascertain the most accurate state of the present.

That is why it is so crucial that the office of the Special Inspector General for Iraq Reconstruction brings an unvarnished, independent, and enormously useful viewpoint on the rebuilding of Iraq.

Let me just review a few of the startling facts Mr. Bowen has uncovered in his latest report. I do this not as an academic exercise or to erect a fruitless scoreboard, but to underscore the vast improvement we need to make in so many aspects of Iraq’s reconstruction:

· Iraq loses perhaps $5 billion a year to the waste created by corruption.

· Only eight primary health centers have been opened, nowhere near the original goal of 150.

· The country has the capacity to produce just 2 1/2 million barrels of oil per day. Our original goal and promise four years ago was over 3 million.

· Water projects have made drinkable water available to only 5 1/2 million of the 8 1/2 million people who had been expected to receive it.

With these kinds of gaps, there are clearly massive failures throughout the construction, implementation, and management of projects in all these sectors. It is plainly apparent that the Iraqis are not getting the basic services they need and are not being trained to obtain them.

An axiom of development aid says that if you give a man a fish, he’ll eat for a day – but if you teach him how to fish, he’ll eat for the rest of his life. When it comes to reconstruction, we have not even stocked the pond, let alone taught the Iraqis how to fish.

We must make sure that future plans include training the Iraqis to maintain their society, not just fill it with fly-by-night facilities that soon deteriorate or become obsolete.