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SIGIR — September 2013 Final Report to Congress

September 9, 2013 Comments off

September 2013 Final Report to Congress
Source: Special Inspector General for Iraq Reconstruction

This Final Report culminates almost a decade of oversight work and was preceded by 220 audits, 170 inspections, 36 Quarterly Reports, 9 lessons-learned studies, 3 special reports, and 1 evaluation. Together, they comprise over 20,000 pages of reporting on the use of $60 billion in U.S. taxpayer dollars for Iraq’s reconstruction. SIGIR’s work made a difference for the good. It imposed accountability and transparency upon a challenging rebuilding program, producing 90 convictions and nearly $2 billion in financial benefits. And SIGIR operated efficiently, with annual costs averaging about $25 million.

Our success stemmed from our values and our people. SIGIR’s values were straightforward and posted in our vestibule for all to see: professionalism, productivity, and perseverance. Professionalism meant ensuring fairness, integrity, and respect in every engagement. Productivity meant executing as much work as possible in tight time frames so as to aid reconstruction managers in implementing course corrections. Perseverance meant meeting our mission by pushing through the inevitable adversities that accompany war-zone work. The most devastating adversity occurred on March 24, 2008, when a rocket launched by terrorists hit the Embassy compound, killing one of my auditors, Paul Converse. Paul was one of hundreds of SIGIR personnel— auditors, investigators, and inspectors—who willingly braved the threats in Iraq to accomplish our mission. I thank all of them for their heroic service.

The first section of this Final Report provides a review of SIGIR’s history, delving into the perennial challenges we faced and various successes we achieved along the way. Section 2 updates the work of my investigative team, outlining indictments, convictions, and sentencings of those who criminally violated the sacred trust placed in them in Iraq. The Congress extended the life of our organization to achieve more investigative results; as Section 2 documents, we did. The last section provides an overview of events in Iraq this quarter, one marked by a sharp rise in violence.

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Taxes: Afghan Government Has Levied Nearly a Billion Dollars in Business Taxes on Contractors Supporting U.S. Government Efforts in Afghanistan

May 14, 2013 Comments off

Taxes: Afghan Government Has Levied Nearly a Billion Dollars in Business Taxes on Contractors Supporting U.S. Government Efforts in Afghanistan (PDF)

Source: Special Inspector General for Iraq Reconstruction

Since 2008, the Afghan Ministry of Finance (MOF) has levied over $921 million in business taxes, and associated penalties, on 43 contractors that support U.S. government efforts in Afghanistan. DOD, INL, and USAID have agreements with the Afghan government that provide exemption from certain Afghan taxes. SIGAR identified instances where contractors were taxed despite these agreements. For example, $93 million of the $921 million represented taxes levied on business receipts and annual corporate income—a tax category that both the U.S. and Afghan governments have agreed should be exempt for contractors operating under covered agreements. SIGAR also identified instances in which the MOF assessed tax liabilities on contractors even though the contractors held MOF-issued tax exemption certificates. For example, the MOF issued Business Receipts Tax and annual corporate income tax assessments on some DOD contractors, even though the contractors should have been exempt from both tax categories. Three DOD contractors in SIGAR’s sample that held MOF-issued tax exemption certificates were improperly assessed nearly $59 million in business receipts and annual corporate income taxes. U.S. and MOF officials disagree about the tax-exempt status of subcontractors. MOF officials assert that the DOD and State INL agreements provide tax-exempt status only to prime contractors, and not subcontractors, whereas U.S. government officials contend that the agreements provide tax exemption for all non-Afghan companies (both prime and subcontractors) supporting U.S. government efforts. Given these ongoing disputes and the ambiguous nature of the MOF-issued assessments, the 43 contractors in SIGAR’s sample have paid approximately $67 million of the $921 million in total tax assessments, and most still face unresolved assessments. As a result of the outstanding assessments, the MOF has restricted contractors’ freedom of movement and refused to renew business licenses, and the Afghan government has even arrested some contractor personnel. The combined effect is the potential interruption of support to U.S. military operations.

Learning From Iraq: A Final Report From the Special Inspector General for Iraq Reconstruction

March 6, 2013 Comments off

Learning From Iraq: A Final Report From the Special Inspector General for Iraq Reconstruction
Source: Special Inspector General for Iraq Reconstruction

A Final Report From the Special Inspector General for Iraq Reconstruction culminates SIGIR’s nine-year mission overseeing Iraq’s reconstruction. It serves as a follow-up to our previous comprehensive review of the rebuilding effort, Hard Lessons: The Iraq Reconstruction Experience.

This study provides much more than a recapitulation of what the reconstruction program accomplished and what my office found in the interstices. While examining both of these issues and many more, Learning From Iraq importantly captures the effects of the rebuilding program as derived from 44 interviews with the recipients (the Iraqi leadership), the executors (U.S. senior leaders), and the providers (congressional members). These interviews piece together an instructive picture of what was the largest stabilization and reconstruction operation ever undertaken by the United States (until recently overtaken by Afghanistan).

The body of this report reveals countless details about the use of more than $60 billion in taxpayer dollars to support programs and projects in Iraq. It articulates numerous lessons derived from SIGIR’s 220 audits and 170 inspections, and it lists the varying consequences meted out from the 82 convictions achieved through our investigations. It urges and substantiates necessary reforms that could improve stabilization and reconstruction operations, and it highlights the financial benefits accomplished by SIGIR’s work: more than $1.61 billion from audits and over $191 million from investigations.

SIGIR — October 2011: Quarterly Report To Congress

November 8, 2011 Comments off

October 2011: Quarterly Report To Congress
Source: Special Inspector General for Iraq Reconstruction

Sixty days from now, the mission of the U.S. Forces-Iraq will come to an end. his historic moment will close the books on nearly nine years of U.S. military engagement in Iraq. his moment also inaugurates a new phase in the strategic partnership between the United States and Iraq. Substantial U.S. inancial assistance will continue, albeit at levels lower than in previous years. But a more cooperative and collaborative aspect will eventually embrace this crucially important relationship as the State Department’s plans and programs develop.

The Iraq that the U.S. military leaves is fundamentally changed from the foundering state that existed in the spring of 2003. Iraq’s economy, then at a stand-still, is expected to grow at a robust 9.6% this year; inlation is low; the national budget is 40% larger than it was three years ago; and oil production in 2011 will almost certainly set a post-2003 record. But Iraq still sufers from daily attacks, with Iraqi Security Forces personnel and senior Government of Iraq leaders regularly subject to assassination attempts. his painful reality underscores the continuing need for Iraq to strengthen its military, police, and rule-of-law institutions. Section 1 of this Report features detailed perspectives on the security situation drawn from recent interviews with top oicials at the Ministries of Interior and Defense.

There were political clashes within the GOI this quarter over competing versions of the long-awaited new hydrocarbon law, a contentious issue that fundamentally divides the GOI and the Kurdistan Regional Government (KRG). his Report’s Focus on the Kurdistan Region provides details on what has been a largely successful reconstruction program in that part of northern Iraq, notwithstanding the unsettling issues that currently daunt relations between the GOI and KRG.

SIGIR — Quarterly Report and Semiannual Report To Congress

August 19, 2011 Comments off

Quarterly Report and Semiannual Report To Congress
Source: Special Inspector General for Iraq Reconstruction

he theme of this report, “A Summer of Uncertainty,” alludes to the question of whether the United States will maintain a military presence in Iraq beyond year’s end. Negotiations continue on this issue, with the nearly 44,000 remaining U.S. troops still scheduled to leave by December 31. Whatever the decision, the outcome will signiicantly afect the ongoing U.S. reconstruction program, which is in the throes of a series of program transitions from the Department of Defense (DoD) to the Department of State (DoS).

Among those transitions, DoS reported progress this quarter toward assuming full responsibility for the continued U.S. support of Iraq’s police forces. he Bureau of International Narcotics and Law Enforcement Afairs (INL) will manage this efort through the new Police Development Program (PDP). Executing the PDP will be challenging, involving fewer than 200 advisors based at 3 sites and supporting Iraqi police in 10 provinces. SIGIR’s eforts to audit the PDP were stymied this quarter because DoS either did not respond to repeated requests for information or provided data that was late and of limited usefulness. (SIGIR encountered similar obstacles in a separate audit of private security contractors in Iraq.)

Iraq remains an extraordinarily dangerous place to work. It is less safe, in my judgment, than 12 months ago. Buttressing this conclusion is the fact that June was the deadliest month for U.S. troops in more than two years. Shia militias—possibly armed and trained by Iran—were responsible for some of the lethal attacks. hey may have also been behind this quarter’s increase in indirect ire on the International Zone. Diyala province, lying just northeast of Baghdad, also continues to be very unstable. his Quarterly Report’s “Focus on Diyala” provides an in-depth review of the province, its people, and the efects of U.S. reconstruction eforts there.

On the corruption front, Iraq’s Council of Representatives repealed Article 136(b) of the Iraqi Criminal Procedure Code. his provision permitted Iraqi ministers to block investigations of their subordinates. Its repeal represents an important step toward implementing an efective rule-of-law system, but much remains to be done in this regard, including securing judges from attacks and stopping the assassinations of police officials.

SIGIR — July 2011: Quarterly Report and Semiannual Report To Congress

August 8, 2011 Comments off

July 2011: Quarterly Report and Semiannual Report To Congress
Source: Special Inspector General for Iraq Reconstruction

I am pleased to present this 30th Quarterly Report to the United States Congress and the Secretaries of State and Defense.

The theme of this report, “A Summer of Uncertainty,” alludes to the question of whether the United States will maintain a military presence in Iraq beyond year’s end. Negotiations continue on this issue, with the nearly 44,000 remaining U.S. troops still scheduled to leave by December 31. Whatever the decision, the outcome will significantly affect the ongoing U.S. reconstruction program, which is in the throes of a series of program transitions from the Department of Defense (DoD) to the Department of State (DoS).

Among those transitions, DoS reported progress this quarter toward assuming full responsibility for the con- tinued U.S. support of Iraq’s police forces. The Bureau of International Narcotics and Law Enforcement Affairs (INL) will manage this effort through the new Police Development Program (PDP). Executing the PDP will be challenging, involving fewer than 200 advisors based at 3 sites and supporting Iraqi police in 10 provinces. SIGIR’s efforts to audit the PDP were stymied this quarter because DoS either did not respond to repeated requests for information or provided data that was late and of limited usefulness. (SIGIR encountered similar obstacles in a separate audit of private security contractors in Iraq.)

Iraq remains an extraordinarily dangerous place to work. It is less safe, in my judgment, than 12 months ago. Buttressing this conclusion is the fact that June was the deadliest month for U.S. troops in more than two years. Shia militias—possibly armed and trained by Iran—were responsible for some of the lethal attacks. They may have also been behind this quarter’s increase in indirect fire on the International Zone. Diyala province, lying just northeast of Baghdad, also continues to be very unstable. This Quarterly Report’s “Focus on Diyala” provides an in-depth review of the province, its people, and the effects of U.S. reconstruction efforts there.

On the corruption front, Iraq’s Council of Representatives repealed Article 136(b) of the Iraqi Criminal Procedure Code. This provision permitted Iraqi ministers to block investigations of their subordinates. Its repeal represents an important step toward implementing an effective rule-of-law system, but much remains to be done in this regard, including securing judges from attacks and stopping the assassinations of police officials.

SIGIR — April 2011: Quarterly Report To Congress

May 2, 2011 Comments off

April 2011: Quarterly Report To Congress
Source: Special Inspector General for Iraq Reconstruction

As the Department of State (DoS) moves forward with its transition plans and U.S. troops prepare to depart Iraq by December 31, 2011, Prime Minister Nuri al-Maliki and his coalition partners continued this quarter with the process of forming a new government. These various transitions create fiscal, political, and security vulnerabilities that, if not carefully tended, could have significant adverse effects. For example, in taking over the police-training mission from the Department of Defense (DoD), DoS will assume enormous management and policy responsibilities—and do so with less than 200 personnel assigned to the mission. It will implement its Police Development Program (PDP) in a still-fragile security environment, working closely with an as-yet-unappointed Minister of Interior, who will oversee Iraq’s police. As of mid-April, neither the Ministry of Interior nor the Ministry of Defense had a permanent leader.

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