OVERSIGHT: HARD LESSONS LEARNED IN IRAQ

AND BENCHMARKS FOR FUTURE

RECONSTRUCTION EFFORTS

HEARING
BEFORE THE

SUBCOMMITTEE ON INTERNATIONAL
ORGANIZATIONS, HUMAN RIGHTS AND OVERSIGHT
OF THE

COMMITTEE ON FOREIGN AFFAIRS

HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION

FEBRUARY 24, 2010

Serial No. 11182

Printed for the use of the Committee on Foreign Affairs

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COMMITTEE ON FOREIGN AFFAIRS

HOWARD L. BERMAN, California, Chairman
GARY L. ACKERMAN, New York
ILEANA ROS-LEHTINEN, Florida
ENI F.H. FALEOMAVAEGA, American
CHRISTOPHER H. SMITH, New Jersey
Samoa
DAN BURTON, Indiana
DONALD M. PAYNE, New Jersey
ELTON GALLEGLY, California
BRAD SHERMAN, California
DANA ROHRABACHER, California
ELIOT L. ENGEL, New York
DONALD A. MANZULLO, Illinois
BILL DELAHUNT, Massachusetts
EDWARD R. ROYCE, California
GREGORY W. MEEKS, New York
RON PAUL, Texas
DIANE E. WATSON, California
JEFF FLAKE, Arizona
RUSS CARNAHAN, Missouri
MIKE PENCE, Indiana
ALBIO SIRES, New Jersey
JOE WILSON, South Carolina
GERALD E. CONNOLLY, Virginia
JOHN BOOZMAN, Arkansas
MICHAEL E. MCMAHON, New York
J. GRESHAM BARRETT, South Carolina
JOHN S. TANNER, Tennessee
CONNIE MACK, Florida
GENE GREEN, Texas
JEFF FORTENBERRY, Nebraska
LYNN WOOLSEY, California
MICHAEL T. MCCAUL, Texas
TED POE, Texas
SHEILA JACKSON LEE, Texas
BOB INGLIS, South Carolina
BARBARA LEE, California
GUS BILIRAKIS, Florida
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
MIKE ROSS, Arkansas
BRAD MILLER, North Carolina
DAVID SCOTT, Georgia
JIM COSTA, California
KEITH ELLISON, Minnesota
GABRIELLE GIFFORDS, Arizona
RON KLEIN, Florida
VACANT
RICHARD J. KESSLER, Staff Director
YLEEM POBLETE, Republican Staff Director

SUBCOMMITTEE ON INTERNATIONAL ORGANIZATIONS,

HUMAN RIGHTS AND OVERSIGHT
RUSS CARNAHAN, Missouri, Chairman
BILL DELAHUNT, Massachusetts
DANA ROHRABACHER, California
KEITH ELLISON, Minnesota
RON PAUL, Texas
DONALD M. PAYNE, New Jersey
TED POE, Texas
JERRY HALDEMAN, Subcommittee Staff Director
PAUL BERKOWITZ, Republican Professional Staff Member
MARIANA MAGUIRE, Staff Associate

(II)

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CONTENTS
Page

WITNESS
Mr. Stuart W. Bowen, Jr., Special Inspector General for Iraq Reconstruction,
Office of the Special Inspector General for Iraq Reconstruction ......................

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Russ Carnahan, a Representative in Congress from the Commonwealth of Massachusetts, and Chairman, Subcommittee on International Organizations, Human Rights and Oversight: Prepared statement .
Mr. Stuart W. Bowen, Jr., Special Inspector General for Iraq Reconstruction,
Office of the Special Inspector General for Iraq Reconstruction ......................

3
10

APPENDIX
Hearing notice ..........................................................................................................
Hearing minutes ......................................................................................................

34
35

(III)

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OVERSIGHT: HARD LESSONS LEARNED IN

IRAQ AND BENCHMARKS FOR FUTURE RECONSTRUCTION EFFORTS
WEDNESDAY, FEBRUARY 24, 2010

SUBCOMMITTEE

HOUSE OF REPRESENTATIVES,
ON INTERNATIONAL ORGANIZATIONS,
HUMAN RIGHTS AND OVERSIGHT,
COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC.
The subcommittee met, pursuant to notice, at 9:35 a.m. in room
2172, Rayburn House Office Building, Hon. Russ Carnahan (chairman of the subcommittee) presiding.
Mr. CARNAHAN. The International Organizations Subcommittee
will come to order. I want to thank Stuart Bowen, the Special Inspector General for Iraq Reconstruction, for testifying here today.
He has undertaken an enormous task, and I really want to thank
him for his service.
With over $50 billion in U.S. taxpayer funds spent for Iraq reconstructionthe largest reconstruction ever since the Marshall
Planthrough Fiscal Year 2010, there are a number of lessons to
be learned. I believe if we fail to learn these lessons we are doomed
to repeat many of these mistakes. Some money was spent properly,
but far too much has been wasted, misspent or wholly mismanaged. There have been numerous examples of poor accountability and inadequate procurement processes, just to name a few
of the problems.
With reconstruction efforts in Afghanistan, Haiti and others sure
to take place, we need to ensure we take the lessons learned in
Iraq and turn the corner. While there is certainly no one size fits
all, we need to make sure there is a process in place that meets
not only our goals of reconstruction, oversight and accountability,
but also one that ensures we are meeting our development and diplomacy goals as well.
Mr. Bowen has put forward a proposal that seeks to answer the
question of who should be accountable for planning, managing and
executing stabilization and reconstruction operations that are part
of an overseas contingency operation. The question is being asked
because there was not a coordinated U.S. Government approach to
reconstruction operations, which has resulted in, among other
things, mismanagement of U.S. taxpayer funds.
I am very interested in hearing you testify about your proposal
today. I am especially interested in hearing how your proposed U.S.
Office for Contingency Operations would increase effectiveness and
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2
accountability while dramatically decreasing instances of waste,
fraud and abuse. I am also interested in hearing how this proposal
would enhance our diplomacy and development goals.
When Secretary Clinton announced the inaugural QDDR this
past July, she indicated that it would provide a comprehensive assessment for organizational reform and improvements to our policy,
strategy and planning processes with respect to diplomacy and development; our smart power, specifically. Diplomacy and development are essential to any reconstruction operations, so I am interested to also hear how these goals can be met with your proposal.
Again, Mr. Bowen, I want to thank you for your work on these
issues and for your willingness to testify. I would now like to invite
the ranking member, Mr. Rohrabacher from California, to give his
opening remarks.
[The prepared statement of Mr. Carnahan follows:]

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4
Mr. ROHRABACHER. Thank you very much, Mr. Chairman. My
first duty this morning is to welcome you to the subcommittee and
congratulate you on ascending to this spot. I hope you will enjoy
your time here as much as I enjoyed with your predecessor, Mr.
Delahunt, and we were able to utilize this position both ranking
member and chairman to look into issues that were really important and we enjoyed broad areas of disagreement, but we also
found a lot of areas of agreement, and I hope that we have that
same type of very positive relationship that will serve our country
and will make sure that we are not just wasting our time; we are
getting something done. That is what Stuart Bowen is all about:
Getting something done.
Mr. CARNAHAN. Would the gentleman yield?
Mr. ROHRABACHER. I certainly will.
Mr. CARNAHAN. I just want to thank you for those remarks. You
know, our colleague, Mr. Delahunt, has not left us. He is still a
member of the committee and I know he looks forward to continuing here, but you and I have talked privately and I also very
much look forward to a really strong and positive working relationship with you and all the members of the committee. Thank you.
Mr. ROHRABACHER. Thank you. As I was saying, Mr. Bowen and
I have known each other many years, and he has been here as a
person who is really dedicated his life to trying to make sure that
we accomplish our goals in some very trying circumstances and trying to do it with the American taxpayer in mind and it has been
he has met the ultimate challenges and he has got some ultimate
insights as to maybe the way we can do these things in the future
in a better, more efficient manner. I have, of course, long been frustrated by our reconstruction efforts in Iraq, there is a lot of goodwill that has been there but we have wasted some of that goodwill;
before that we have wasted a lot of money too.
We need to figure out ways of how we can do this more effectively in the future, when we meet future challenges. I willlet me
notewhen I say that we have wasted some money, certainly
things could have been done better. Let me just add to that I am
very proud that the people of the United States have helped free
the people of Iraq from a brutal tyrant, Saddam Hussein, who murdered their people by the hundreds of thousands and created a
reign of terror among his people. We should never forget when we
are analyzing what is going on here that that monster, that Hitler
of the Middle East has been eliminated and the world will be better for it and certainly the people of Iraq; not only will be, but are
better for it today.
So let us not forget when we criticize and we try to figure out
better ways of doing things that while the critical eye is there we
also are recognizing the good things that have been accomplished
even though at a high cost. Between defense spending and reconstruction spending we see that Iraq has cost us almost $1 trillion,
and that is an enormous amount of money to be spent on the part
of the United States especially considering that we are borrowing
a significant amount of money each year in order to pay for that
type of operation
Mr. Chairman, you were not here when this vote happened, but
there was a proposal by my Democratic colleagues early on in the

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5
Iraqi operation that the Iraqi Government should be expected to
pay for the expenses of our operations to free them from Saddam
Hussein from future oil revenues.
I dont know what was wrong with the last administration. I
dont know why George Bush decided that oh, that is a terrible
idea, but the fact is that I was one of only three Republicans that
voted in favor of that Democratic proposal, and I would suggest
that right now that we reaffirm to people that America will not
spend one more penny in Iraq until it is agreed to that the American people are going to be reimbursed.
We cant afford to do this anymore. I mean, yes, we can be proud
that we eliminated Saddam Hussein, but we cannot afford to go
around the world and spend this kind of money when our own people are in terrible need right now, so I would hope that is one thing
we could be thinking about in this committee of moving forward
that type of proposal, as well as the specific structural changes that
Mr. Bowen has in mind.
I would like to remind everybody about that particular issue that
I just mentioned because if that would have passed at that time
it would have saved America a lot of money and American people
at a time when we needed it the most, but it didnt pass because
people were afraid to be saying well, this war is about oil. It is
blood for oil. You heard that, blood for oil.
Well, who has won the oil contracts now that the war against
Saddam Hussein is over and the situation is stabilized in Iraq?
Who is winning those oil contracts? Not the United States, but the
Chinese. So here we are. We have borrowed money from the Chinese in order to repay them with interest of course in order to free
Iraq so that they can give contracts to the Chinese.
This certainly isnt representing the best interests of the people
of the United States, and we need to make sure that we dedicate
ourselves, that we are not going to get into this mess again and
that we are going to have some structural changes, as Mr. Bowen
is suggesting to us today, but also some solid, fundamental policy
standards that we will have to meet before we commit ourselves to
these type of operations.
Let us note that even as it has stabilized, even as we have spent
so much money and blood in Iraq, some of the fundamentals have
still not been dealt with there. For example, if you trace this back
all the way to the beginning of when our trouble started with Iraq
it was an Iraq conflict with Kuwait that started this whole dynamic
that led to all of this expenditure of blood and money.
Well, Iraq is still dealing and has not brought up and not compensated Kuwait for the damages that it inflicted on Kuwait. I
mean, it still has U.N. sanctions that it still has to deal with. Iraq
still owes Kuwait billions of dollars of compensation.
Now, let me just note that the Ambassador from Kuwait has notified me that Kuwait is willing to reach out to Iraq and any
amount of money that is repaid of those billions of dollars for the
damages for the destruction that the Iraqis did on Kuwait, they are
willing to invest that directly back into Iraq. That is a wonderful
compromise, and yet Iraq has not been willing to step forward and
deal with that specific fundamental issue.

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6
We also havent seen, for example, there hasnt been an Ambassador sent by Iraq to Kuwait. Again, a fundamental issue. It needs
to be resolved. Is there going to be peace between Kuwait and Iraq
or is there not? Get that done. We need to make sure that gets
done or otherwise everything we have spent, all the lives that have
been lost, are for nothing.
Let us note there was a border dispute between Kuwait and Iraq.
These are things that can be resolved politically. These are doable,
and we should, as we are looking at reforms and the way we handle ourselves, we should look to make sure what are the fundamental things that need to happen so we can close this book on the
Iraqi involvement of American troops and so much massive presence there.
Let me just note that includes the fact that Iraq must pass a carbon law and must get their own back together so that they can become a prosperous and free and secure country. We cant do that
for them forever. So they havent even got themselves organized to
the point where that issue is solved as to where the profits will be
channeled and the revenue from oil resources in their country.
So let us remember that we cant do everything for Iraq. Let us
try to push them in the right direction, but we can set standards
for ourselves in future operations, which is what this hearing is
about. Let us make sure the Iraqis know that these opportunities
they have to solve these problems themselves were paid for dearly
with American treasure and American blood.
Again, I rarely hear a thank you from our Iraqis that come to
visit us, and I think that we, the American people, deserve that.
And today I thank you for hosting this hearing, and let us see if
we can get some valuable insights out of it.
Mr. CARNAHAN. Thank you. And I would now like to introduce
our witness for todays hearing, Mr. Stuart W. Bowen, Jr. Mr.
Bowen is currently the Special Inspector General for Iraq Reconstruction, a position he has held since October 2004, where he is
responsible for ensuring effective oversight of $52 billion appropriated for the reconstruction of Iraq.
Just prior to assuming this position, in January 2004, Mr. Bowen
was appointed as the Inspector General for the Coalition Provisional Authority. Previously, Mr. Bowen was a partner at Patton
Boggs, LLP, and has held various positions in the George W. Bush
administration as Deputy Assistant to the President, Deputy Staff
Secretary and Special Assistant to the President, and Associate
Counsel.
He also served on the Bush-Cheney transition team and prior to
that held several positions as counsel to then-Governor Bush in
Texas, where he was also an Assistant Attorney General from 1992
to 1994. Additionally, Mr. Bowen spent 4 years as an intelligence
officer in the U.S. Air Force, achieving the rank of Captain. He
holds a B.A. from the University of the South and a J.D. from St.
Marys Law School.
Welcome, and thank you for joining the subcommittee today for
this important hearing. We now turn to Mr. Bowen for his opening
remarks.

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STATEMENT OF MR. STUART W. BOWEN, JR., SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION, OFFICE OF
THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

Mr. BOWEN. Thank you, Chairman Carnahan, Ranking Member

Rohrabacher, for the opportunity to appear before you this morning
on this important topic. I am especially honored, Mr. Chairman, to
appear at your first hearing of your chairmanship.
I think that the issue that you have taken on is highly relevant
to ongoing stabilization and reconstruction operations in Iraq and
Afghanistan and very applicable to an issue that must be resolved;
that is, how the United States should approach managing, executing, planning for stabilization and reconstruction operations.
There is no clear answer for that and that, sadly, is one of the
hardest lessons from Iraq.
A year ago my office put out Hard Lessons, a comprehensive review of all that has happened in the reconstruction program over
the last 7 years. We had some tough stories to tell, but I think perhaps the toughest is that we simply did not have a structure in
place adequate to the mission that we took on in 2003.
As you rightly pointed out in your opening statement, Mr. Chairman, this program was undertaken at great cost and, because of
that lack of organization, great waste; as we pointed out before, upwards of $4 billion in waste, wasted taxpayer dollars, the consequences of failing to properly prepare.
The issue that we have addressed this week, this hard lesson in
our latest lessons learned report, Applying Iraqs Hard Lessons to
the Reform of Stabilization and Reconstruction Operations, is the
need for a new office to bring together the disparate elements that
are scattered across the government now among several departments to plan and execute stabilization and reconstruction operations.
As we say in the opening of this report, the question of who is
in charge is not clearly answered. The United States has taken
steps to address this matter over the last 10 years, and we spell
that out in Part 1 of the report, but those steps have not yielded
a coherent response. Those steps produced a series of ad hoc organizations in Iraq, most of which no longer exist, so the accountability issue is lost.
Those responsible for that waste were parts of organizations that
have ceased to be. A more permanent solution is necessary, we
firmly believe, to ensure that there is accountability, for results
and that there is clarity on the responsibility for planning and execution.
We have also pointed out in this report that there are 10 things
that the United States could do now to improve stabilization and
reconstruction operations. They best be undertaken by a new office,
the U.S. Office of Contingency Operations, but those 10 straightforward, targeted reforms are still relevant todayreflective of the
fact that our lessons have not been sufficiently learned to date from
Iraq.
For example, there is not coherently implemented policy for stabilization and reconstruction operations (SORs) by the NSC yet,
and we recommend that the NSC develop a more concrete and im-

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8
plemented process for overseeing these important missionsmissions that are not development, not diplomacy, not defense, but elements of all three; thus they are unique and fundamentally interagency with respect to protecting U.S. interests abroad.
There is a system in place that was adopted 3 years ago, the
Interagency Management System. It is fairly complex. It has a
Country Reconstruction Stabilization group that oversees these operations. It has an interagency planning cell that is supposed to
help resolve conflicts and it proposes active response teams. The
problem is it is not implemented. Three years down the road and
it is a dead letter right now.
Other reforms include developing sensible budgets in advance,
understanding what the obligations of the taxpayers are going to
be in future scenarios, developing contingency contracting regulations of the kind that we repeatedly argued for, developing more
effective oversight, permanent oversight that ensures that from the
start of a stabilization and reconstruction operation that there is
an IG presence, developing IT systems that ensure that we can
track the projects we are doing.
We only know 70 percent of what we have built in Iraq because
there was no system developed until our audits identified that
problem and one was developed. We still havent been able to capture all the data. That is an enormous weakness. How can you
make good decisions with a 70 percent picture?
These are existing problems, well documented by our work and
all supportive of our core recommendation: The need to bring together the disparate elements that now have parts of the mission
of stabilization and reconstruction operations into one office, the
U.S. Office for Contingency Operations (USOCO).
USOCO would capture what I think is perhaps the most revolutionary development at the Department of Defense in years, the
Stabilization and Operations Branch, a huge capacity that has
been developed in Iraq and applied in Afghanistan, but not well coordinated by any means, by any analysis.
The lack of coordination is obvious to those that are involved in
this. I hear it on the ground at the embassy when I visit with U.S.
Forces-Iraq individuals. I hear again and again the challenges in
coordination at the operational level, and it is because of a lack of
an integrated system.
At the Department of State, as you know, over $100 million has
been appropriated and invested in developing the Coordinator for
Reconstruction and Stabilization, a 5-year old organization that is
now shaping a Civilian Response Corps. They have about 89 on
board now, split between U.S. Agency for International Development and SCRS, about 16 on the ground in Afghanistan, three in
Haiti, so it is not terribly robust, but, more importantly, it is not
well integrated with the Department of Defense for operations that
are fundamentally civil military operations.
U.S. Agency for International Development, Office of Transition
Initiatives and also part of the Civilian Response Corps, but again
another agency with part of a mission, but with no purview, with
no authority, with no capacity to carry out this essential process,
this essential kind of operation to protect our interests abroad.

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What is the consequence, besides waste, of failing to have a coordinated planning system? The consequence is the lack of unity of
command. The hundreds of people I interviewed for Hard Lessons
and those that we discussed for this latest report and frankly virtually every tripI am going on my 26th trip to Iraq in the near
future, and I hear on every visit recognition that there is a lack of
unity of command.
Lack of unity of command yields a lack of unity of effort exemplified, interestingly, most recently by two audits, one by my office,
one jointly by the DoD and State IGs, addressing the same issue,
police training. Two and a half billion, the largest contract in State
Department history, in Iraq, and a contract in excess of $1 billion
in Afghanistan, reaching the same conclusion: There was a lack of
capacity to oversee and properly protect taxpayer interests with regard to the training of police in Iraq and Afghanistan.
How important is that issue? General McChrystal says it is number one, so the urgency of this reform is evident I think at the
ground level in these latest reports. Indeed, the State-DoD IG report said the Chief of Mission in Afghanistan thought the lack of
unity of command was what was responsible for the failure of this
contract.
USOCO is a new idea. Some have criticized it as perhaps a
layering of bureaucracy or unnecessary. To the contrary. It is a reorganization. The government, when it is confronted with systemic
problems, has responded in recent years to meaningful reform that
has improved the United States approach to critical problems. The
Department of Homeland Security is one example. The Director of
National Intelligence is another example.
Those are new offices, but they really are ways that have
brought together unity of effort, unity of command, to critical
issues of national security interest. This is another perfect example
that needs such reform, and those with experience on the ground
in Iraq and on this issue recognize it.
General Scowcroft, perhaps the godfather of contingency operations, recognizes this issue as well as anyone on the planet and
believes this is the right answer. Ambassador Ryan Crocker 2
years in Iraq lived with this issue, worked with me daily on helping set the course right, sees this as the right solution. Spike Stevens, on the ground at the beginning as Director for the U.S. Agency for International Development, sees this as a plausible approach.
So this is the product of 6 years of careful study, an issue that
we identified 3 years ago that we vetted heavily on the ground,
through the departments, through experts and thus firmly believe
that some reform is necessary. We think this is the right reform.
Though not a panacea, it is a positive step forward.
Thank you, Mr. Chairman, Ranking Member Rohrabacher, for
this opportunity, and I look forward to your questions.
[The prepared statement of Mr. Bowen follows:]

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Mr. CARNAHAN. Thank you, Mr. Bowen. Again, I think your remarks here this morning really reflect those hundreds of interviews
and years of work and expertise, experience, listening, and learning
on the ground from people that are trying to achieve our goals in
Iraq and seeing how we can move forward in a better way. So I
really appreciate you being here today, and this is very timely as
we look at other operations going forward.
These reports that have been prepared I think are very instructive and your ideas are very instructive. I guess I want to start
with a question about the estimated $4-plus billion that you have
indicated has been wasted in Iraq.
Can you break that down in terms of where you think that has
come from and also simply how can we prevent that going forward
because in an era where we have limited resources? We need to be
sure the dollars that we are putting forth here are getting where
they need to be. Obviously some of that is overlap, lack of coordination at best and at worst mismanagement, fraud and beyond. So
give us an idea of where that is coming from.
Mr. BOWEN. Yes. I can give sort of the macro picture of why it
happened and specific examples. In 2003, specifically March 2003,
the vision for Iraq reconstruction was about $2 billion. It is now 25
times that. How did we get there? A significant change in policy
for which there was no structure undergirding it to implement.
That policy change occurred in the summer of 2003 that produced the Iraq Relief and Reconstruction Fund, $18.4 billion, and
then following upon that the Commanders Emergency Response
Program, $3.5 billion spent, the Iraq Security Forces Fund, another
$18.5 billion. These numbers boggle the mind, eventuallyhow
much we ultimately put into an effort that was anticipated to be
very short and very modest.
The fact that there was no structure in place to carry out these
missions meant that ad hoc structures were all created and ad
hocracy evolved in Iraq and a series of acronyms that people have
forgotten: PCO, CPA, ERMO, ITAO, MNSTCI. All of these are
temporary agencies that have gone away, but they spent billions
and they spent billions on the fly figuring out how to do it, addressing problems that were there without sufficient contingency contracting capacity, without quality assurance.
And that gets to our audits. Three hundred inspections and audits yield some important lessons of the causes of this waste. We
sort of exposed, frankly, the massive drop in the U.S. Government
contract capacity. For whatever reason in the 1990s, perhaps as
part of the Cold War dividend and the outsourcing movement, the
contracting corps at DoD was dramatically cut. The consequences
of that were severely realized in Iraq because there werent enough
warranted officers there to oversee.
Second, the lack of capacity to ensure quality assurance. Quality
assurance means the government makes sure contracts do what
they are supposed to do. We didnt have enough people going out
and visiting projects. A lot of times my inspectors would arrive at
a project and we were the first Americans that the contractors had
seen in a long time. That obviously is a grave weakness.
It results in things like Kahn Bani Saad Prison, $40 million
spent for a monument to failure in the desert an hour north of

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Baghdad. It will never house an Iraqi prisoner I dont think because not much was accomplished. Money was poured into failure
after failure because of poor oversight, just one example of projects
that simply did not get completed.
The other significant waste areas included asset transfer,
projects that didnt get finished but we declared concluded and just
unilaterally handed over to the Iraqis. It happened hundreds and
hundreds and hundreds of times where they refused to accept it
and so the Corps of Engineers would just sign a unilateral transfer,
hand it to them and that is it. It is a project again not accomplishing anything.
These various elements, the macro weaknesses, the failure to
have a system in place of the kind I have discussed in my opening
statement, the fact that an ad hocracy of now nonexistent agencies
spent billions, 50 times more than expected, and the fact that the
oversight on the ground and the aptitude, the expertise, was not
present to ensure that projects got done and that money was properly spent yielded this waste.
We are here today with really that hardest lesson before us on
the table essentially saying never again, and never again means
preventing it from happening, which means improving how the
United States tackles planning and executing these kinds of operations.
Mr. CARNAHAN. It is not only a hard lesson, but a colossally expensive lesson.
Mr. BOWEN. Yes.
Mr. CARNAHAN. The problem with throwing so much money at a
problem and to so many entities that are now gone
Mr. BOWEN. Yes.
Mr. CARNAHAN [continuing]. Seems to me very difficult, and we
may never figure out where some of that money went.
Mr. BOWEN. That is exactly right.
Mr. CARNAHAN. I guess my next question has to do with really
quantitative and qualitative metrics that can be used in determining today progress in Iraq.
I mean, obviously there is the look back in terms of what went
wrong with some of the money and lack of systems and coordination. But going forward, what are some of the measurements that
we can use in terms of number of civilians trained, police trained,
election reforms, economic development statistics? Where are we in
terms of that snapshot to measure progress?
Mr. BOWEN. Great question, and we are going to provide snapshots of that to you over the next year. I have established an Evaluations Branch, an element of oversight that is critical to answering exactly the question you are raising.
What are the results? Ultimately that is the core question of any
stabilization and reconstruction operation. What did you achieve?
What difference did you make? And that, I assure you, we will provide you over the next 1218 months. We are going to produce our
first report later this spring that assesses the various evaluative
reports that have already been accomplished.
So what do we know now? I think that is the first question, and
then we are going to get into some evaluative studies of infrastructure projects. What were the outcomes, the results of all that

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money spent on hard infrastructure? You know, I have told you the
bad news, but what potential good news is there from it?
We know from our quarterly reports that electricity is and has
been now for 112 years above pre-war levels, so there is outcome
evidence of progress there, but I need to tell you how did our investment achieve that? That is the question you are asking.
And then the next report after that will be looking at ministry
capacity development, an important matter that has been focused
on heavily the last 3 years under the State Departments aegis, and
it is certainly a laudable goal. What results have we achieved?
That is what we will be getting to. I think it is time now to make
these evaluations and to provide the Congress with concrete evidence of what was accomplished.
Mr. CARNAHAN. Thank you. I am now going to turn it over to the
ranking member, Mr. Rohrabacher.
Mr. ROHRABACHER. Thank you very much, Mr. Chairman, and
thank you again, Mr. Bowen, for your long and very dedicated service to our country.
Mr. BOWEN. Thank you.
Mr. ROHRABACHER. The things we are talking about are of great
significance to so many people. I mean, we have to realize that
thousands of lives have been lost, American lives have been lost,
and there are people who will never have a father in their lives because their father is dead in Iraq now and wives who will never
have a husband for the rest of their lives.
I grew up in a military family and I know about those sacrifices,
so it is our job to make sure that at the very least we try to be
as effective as we can if we are going to be involved in these kind
of operations, and I would suggest the very first reform that needs
to take place is for us to be aware that we are making these decisions and how significant it is to the thousands of our fellow citizens that we will not go into situations.
I dont think there are many of us who supported the call that
we were called upon by President Bush to support this invasion of
Iraq. I dont think there are many of us who would in retrospect
have gone along with that had we known the price that was being
paid for what we have gotten out of it and what the world has gotten out of this.
Let me just note that World War II, if I rememberwhat was
that book? Catch-22. When you look at World War II and you take
a look at what really happened if you look down at that level, there
was an enormous amount of corruption. An enormous amount of
corruption.
And in VietnamI just have to say I spent a little time in Vietnam in 1967 when I was 19, and while I was not a soldier I was
out with the Montagnards and various places in Vietnam, but I
was totally dismayed after I left knowing that the level of corruption that I thought indicated to me that we would never be able
to win and all the lives and all the gore that was going on was
going to be for nothing, and that is how it turned out, of course.
So here we are now again, and Vietnam had a horrible impact
on our country economically, as well as every other way. Let us
hope that what is happening now in Iraq and Afghanistan do not
leave America in that same retreatist mindset that plagued us

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after Vietnam. That did not do well for our country and I think
brought on some of the problems we face today.
But World War II and Vietnam were noble causes, even though
the corruption level in both of those were things that led us to perhaps not succeed as we should have succeeded, or in the case of
World War II we lost 300,000 people there and it was a very costly
war and perhaps we could have had some idea of how to prevent
it from the beginning by standing up to Hitler. Who knows.
Let us get back to some of the basic points you are making. I like
that ad hocracy. That was an excellent way to put it because what
you are saying is we just werent prepared for how to handle this
part of the conflict. In order to be successful, that part had to be
handled and it wasnt.
Is it true that billions of dollars were handed out from the Central Bank of Iraq? Once we captured Iraq that there were billions
of dollars there that American military personnel then utilized
right off the bat to make sure that things didnt totally collapse
and it was just basically handed out? That wasnt our money. That
was Saddam Husseins stash.
Mr. BOWEN. You are right. Those were called seized funds, and
that is how the Commanders Emergency Response Program begin,
speaking of ad hoc developments.
You put your finger exactly on one of the most significant things
that, ironically, has turned into a new institutionalized program
within DoD that has accomplished thousands and thousands of
projects funded at $3.5 billion now in Iraq by the Congress.
Mr. ROHRABACHER. This is fascinating. This might even be a little bit higher than micro loans you might say directly to the people
there.
Mr. BOWEN. Well, and you put your finger on another important
point that the program expanded beyond its regulatory limits and
has had to be reined in by the Congress and that it was supposed
to be for small projects, $50,000 to $500,000 at the top.
Mr. ROHRABACHER. Right.
Mr. BOWEN. And now in order for a $1 million project to go forward the Secretary of Defense has to sign off.
Mr. ROHRABACHER. The Office of Contingency Operations that
you are suggesting. Would this help in problems like that?
Mr. BOWEN. Yes, because it would provide clarity where there is
only ambiguity now. It would provide coherence where there is only
diffusion now. It would provide organization where we have disorganization.
Mr. ROHRABACHER. Okay. Let me challenge this for you here. So
you are making that as a suggestion. You have told us, for example, that you have a Civilian Response Corps, which is in place.
Mr. BOWEN. Yes.
Mr. ROHRABACHER. What is the budget again for that?
Mr. BOWEN. They have received about $130 million
Mr. ROHRABACHER. Okay.
Mr. BOWEN [continuing]. To date with more coming.
Mr. ROHRABACHER. Okay. Civilian Response Corps, $130 million,
yet we only have 16 people in Afghanistan and three in Haiti.
Mr. BOWEN. Yes.

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Mr. ROHRABACHER. And $130 million doesnt sound like a very
effective use of money. If our highest priorities are Haiti and Afghanistan, would what you are suggesting, would that make this
operation more efficient?
Mr. BOWEN. Yes. USOCO would coordinate or integrate this operation with everything else that is going on in government. Indeed, the Civilian Response Corps you are referring to itself is bifurcated between the U.S. Agency for International Development
and the Department of State so that the program itself is suffering
from a lack of integration.
Mr. ROHRABACHER. And the $2.5 billion in police training that
we are talking about. Now, are you telling us today that that $2.5
billion expenditure for police training in Iraq has been a failure?
Mr. BOWEN. No. We are carrying out an audit of the executing
of the contract. Our review was of the management of the contract;
in other words, contract oversight.
Were invoices getting reviewed? No, they werent. Does that create a huge weakness and vulnerability to fraud and waste? Yes.
And those are the findings of our audit and also the audit of Afghanistan.
This is another example of the lack of unity of command. It was
DoD money going through a state contract then back to DoD to
execute. That sort of division of duties would be solved by USOCO.
Mr. ROHRABACHER. When I was 19 years old I was trying to find
out the dynamics of how we were going to win the war in Vietnam
politically at that level, and I was taken by some people about a
hundred miles north of Saigon, some doctors, American doctors
who were trying to win the hearts and souls of the people there
that was our idea, hearts and mindsby setting up clinics and
helping them.
When we went to these clinics it was a horrible mess. It is unbelievable the stench and the fact that everything had been looted
frankly. It had been looted, and these doctors were justhere they
were dealing with young Americans, people from my area who I remember this surfer who was shot and it was really horrible.
They were crying. They were just crying to me. What are we
going to do? This is a $1 million investment here and look at it.
It is nothing. The problem was, of course, we were sending aid into
that area via the Vietnamese, who were our allies, and they were
stealing everything.
Now, where do we do this? This board that you are talking about.
Is it going to be responsible? Are you suggesting as you are overviewing what we have done in Iraq and in the past, should we be
channeling it directly in to local people or should we have direct
control over every expenditure?
If we have direct control over every expenditure, do we then not
leave ourselves in a situation that we are assuming work that we
would like the people on the ground to be doing for themselves?
Mr. BOWEN. Well, it shouldnt be exclusively either approach. It
is conditions-based, and that is essential for effective oversight.
You have to have controls in place that ensure that there is sufficient oversight of the money that is going forward, but again it is
conditions-based. If you know that those with whom you are dealing are rife with corruption then that is a signal for more controls.

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Mr. ROHRABACHER. Okay. Let me give you specifically in Iraq a
case I know about. They wanted to build schools for the kids of
Iraq. They needed school desks. There was a company that happens to be in my districtI know about this; that is one of the reasons I know about this specificallythat builds school desks and
wanted to send these desks over, okay? They want to do that now
for Haiti. Their school desks are superior. They will last forever. No
matter what happens, they last for 20 years.
They couldnt get the contract, Mr. Chairman, to provide the
school desks because they wanted to make sure that the local people had the contract to build the school desks, but all the school
desks that were being built there in IraqI saw examples of it
fell apart after a few weeks. It looked good for about a week and
then they all fell apart, so a wasted expenditure.
What do we do? Are we going to give the money to some company here to build the school desks and send it there or does our
aid program focus on building enterprise in the country?
Mr. BOWEN. Well, I think both aspects have to figure in to a stabilization and reconstruction operation. It should be neither one
nor the other exclusively.
I think that certainly there have been and we have documented
many, many failures by Iraqi contractors. At the same time they
have improved, partly because we have gradually empowered them.
The Joint Contracting Command Iraq implemented about 312 years
ago, something called Iraqi First, and that is where I think this is
coming from. In other words, preference to Iraqi contractors on continuing projects.
That was difficult at first for reasons you are alluding to, but I
think that the contractors have improved over time, so building capacity through contracting has certainly been part of our mission.
Mr. ROHRABACHER. Just one last thought, and that is if we are
to succeed we must have Americans who take this job very seriously, as we need to take our job of oversight seriously. You, sir,
have taken your job seriously.
There is not just an easy answer to any of the questions that I
asked, but the real answer is making sure that we have people
with good hearts who are diligent and responsible trying to make
sure these programs succeed with the best judgment they can put
forth. So thank you very much, and thank you, Mr. Chairman, for
holding this hearing.
Mr. CARNAHAN. Next I am going to recognize Judge Poe from
Texas.
Mr. POE. Thank you, Mr. Chairman. I appreciate you being here.
Setting up a new agency, Office for Contingency Operations. How
much is that going to cost? How much is it going to cost to set up
this agency?
Mr. BOWEN. That would be determined by the scope of it, but it
would take the existing money that is out there now, and there is
significant money for stabilization and reconstruction operations
that is spread at S/CRS costing $140 million, at DoD hundreds of
millions being spent on stabilization operations there, as well as
money at AID and other agencies.
And so as a practical matter, while there is an incremental cost,
this would be a cost saver over time because right now, as I point-

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ed out, these responsibilities are not clearly allocated. They are diffused among the agencies, and there is not a clear point of accountability, which is about saving money, or clear point of responsibility, which is about effective execution, in the current system.
Instead it is stovepiped, to use the term of art, within the agencies and that leads to waste. Frankly, the waste that occurred in
Iraq, billions of dollars in waste, was symptomatic of not having an
established structure. Indeed, the leadership that I interviewed for
Hard Lessons, our report on what happened in Iraq, reiterated this
point over and over again. They were shocked that there wasnt a
structure.
Mr. POE. Excuse me. Excuse me, Mr. Bowen.
Mr. BOWEN. Sure.
Mr. POE. Do you see this agency being permanent?
Mr. BOWEN. Yes.
Mr. POE. Eventually in our lifetime we will leave Iraq probably.
Mr. BOWEN. Yes.
Mr. POE. But do you see this agency staying around for other
type situations like this?
Mr. BOWEN. Yes. Yes, sir, because this is not about Iraq only,
and certainly I think its effect would be well beyond Iraq. It could
help Afghanistan, but it is about preparing for stabilization and reconstruction operations in the future.
This is a relatively new kind of operation. In the last 30 years
we have had about 15. The two largest are Afghanistan and Iraq,
but we had several in the 1990s. Indeed, President Clinton issued
Presidential Directive 56 to try and get some control of the kind
we are talking about today around these kinds of operations.
It didnt succeed, and as a result over the last 8 years in Iraq
and Afghanistan through Presidential directives and other directives we have had to create more temporary agencies to try and
tackle the problem. That resulted in waste.
Those temporary agencies are gone. There is no accountability.
Creating an entity that plans for these before they begin, that
takes a look at the 10 reforms we talk about in the report like ensuring there is a policy. As a matter of fact, the Interagency Management System, the policy that is in place 3 years now, is a dead
letter. It has never been implemented, and that is just another element of weak integration. We have to go beyond coordination to integration, beyond temporary execution to permanent accountability
to avoid waste.
Mr. POE. You say that $4 billion approximately, 10 percentI believe that is 10 percentof our funding of Iraq has been unaccounted for, wasted. Do we know where that $8 billion went?
Mr. BOWEN. The $4 billion?
Mr. POE. Excuse me. I am sorry.
Mr. BOWEN. Yes.
Mr. POE. The 10 percent.
Mr. BOWEN. Yes.
Mr. POE. The $4 billion that you mentioned. I am sorry.
Mr. BOWEN. We do. We have done 300 audits and inspections,
and we have looked at the causes of it. There are macro causes and
there are micro examples. As I alluded to earlier, the reality is this
was a situation in 2003 that expected to spend $2 billion.

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March 10 the decision was made for a very narrow program. The
first Iraq Relief Reconstruction Fund was about $2 billion, a very
limited infrastructure program. It is now $52 billion, and that is
because in May and June of that year it went to $18.5 billion additional, as well as
Mr. POE. Excuse me, Mr. Bowen. My time is limited. Cut to the
chase.
Mr. BOWEN. Yes.
Mr. POE. Did the bad guys get any of this money? Did al-Qaeda
get some of this money? Is it possible? Do we know?
Mr. BOWEN. It is possible. It is possible. Indeed, we did an audit
in 2006, to cut to the chase on this point about lack of accountability over weapons. As a matter of fact, it was the first review.
I think you remember that one. It was 14,000 missing Glocks.
But more importantly, that audit pointed out that the Multi-National Security Transition Command wasnt doing serial number
tracking of weapons it was distributing. It began after that audit
came out, but what happened before? We found part of the issue,
but the troubling points you are making is evident and supported
by that.
Mr. POE. All right. Thank you very much. Well timed.
Mr. BOWEN. Thank you.
Mr. POE. Thank you, Mr. Chairman.
Mr. BOWEN. Thank you, Judge Poe.
Mr. CARNAHAN. Thank you, Judge. Mr. Bowen, I wanted to get
back and ask a few other questions here and in particular talk
about your reference to Secretary Gates and that he observed earlier contracting in Iraq was done willy-nilly.
Mr. BOWEN. Yes.
Mr. CARNAHAN. What can be done to institutionalize these contracting procedures in this ad hocracy that just seems to have no
standards whatsoever? Later, I want to get to the whole matter of
the police contracts that you have talked about, but talk to me
about the sort of overall system going forward.
Mr. BOWEN. It is a critical area for needed reform right now.
Some steps have been taken by the Department of Defense, significant steps, since the issuance of the Gansler Commission report
which identified huge weaknesses in Army contracting capacity.
But still we dont have a coherent system of agreed upon approaches, contracting approaches, principles, regulations for stabilization and reconstruction operations. We first identified this 4
years ago in our contracting lessons learned report that there
needs to be some coherence and simplification of the approach to
contracting. We reiterated it in Hard Lessons a year ago, and we
reiterated it again in Applying Hard Lessons this week. What it
means is achieving efficiencies in how the United States goes about
contracting.
Right now there are several versions of the Federal Acquisition
Regulation, the regulation covering contracting in Iraq and Afghanistan operatives on the ground, and they each have their own permutations and they make complex in a conflict situation what must
be simple, so as to ensure that policies that happen at a much faster pace are effectively executed.

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As a matter of fact, at the Wartime Contracting Commission
hearing on Monday it was mentioned that a contract protest under
existing regulations was potentially impeding critical military
progress for 6 to 9 months. That is exactly the kind of legal reform
that should be addressed by meaningful contracting improvements
that are there to be executed, in my opinion, for stabilization and
reconstruction operations.
Mr. CARNAHAN. I want to move on to talk about the issue of the
police training. When I traveled to Iraq back in early 2005. I had
a tour of a police training facility and there was much fanfare
about this as one of the highest priorities for success in the country
and substantial funding had been provided to it, and there were
glowing numbers about how quickly they were going to get the
numbers of police trained up to where they needed to be. You
know, even today, as you mentioned, General McChrystal is saying
that one of the number one priorities is to get our police trained.
You know, between 2005 and now we havent seen anywhere
near the progress that we need to have seen, and I guess with the
planned withdrawal of United States troops from Iraq by December
31, 2011, what challenges do you foresee? I guess my first question,
what challenges in terms of the transition and responsibility from
the military to State, and do you believe State will be able to successfully take over that training program in October 2011?
Mr. BOWEN. First of all, a great question, because I think it is
the critical issue to ensure improved security in Iraq going forward.
We are going to go down to 50,000 troops in 4 months, so that is
going to obviously mean that the Iraqis have to shoulder the complete security burden moving forward.
We have trained hundreds of thousand of police and equipped
them over the last 5 years, and we are doing an audit now to provide you the particulars of how the military executed the police
training contract. That will be out later this year.
But the transition issue I think that is paramount is the fact
that the contract and the management of the contract that we criticized in this most recent audit, the DynCorp contract, is up for bid
right now in Iraq. No surprise, DynCorp is one of the bidders for
that, and I think it is a contract that has to be managed by the
State Department.
The core of our criticism was the lack of in-country oversight, the
failure to review invoices, the questions raised about the vulnerability to fraud and waste regarding billions of taxpayer dollars.
Those weaknesses have not been remedied yet.
Now, Deputy Secretary Lew, when I met with him on this a
month ago, assured me that he is going to take a personal interest
and ensure that there is adequate oversight, but that promise
needs to be fulfilled and thus here is the issue, the number one
issue: Ensuring contract management of this continuingly very expensive oversight package for Iraq.
Mr. CARNAHAN. So the question of this transition. How do you
see that happening?
Mr. BOWEN. Well, I have visited with the State Department individual in charge of management. It is going to be radical reform
I think of the approach simply because of the limited assets the
State Department has vis-a`-vis the Department of Defense and so

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it is going to move, as he described it, up to 30,000 feet from 5,000
feet.
It is going to be about macro improvements to ministry capacity,
and there will be a reduction in staffing. There will not be the individual police training at the level that is going on now.
Mr. CARNAHAN. And to the specific contract, you indicated we
have put $2.5 billion into police training? That is correct?
Mr. BOWEN. Yes, sir.
Mr. CARNAHAN. And that this is the largest single contract
Mr. BOWEN. Yes.
Mr. CARNAHAN [continuing]. In all of the Iraq reconstruction?
Mr. BOWEN. In the State Department.
Mr. CARNAHAN. In State.
Mr. BOWEN. The State Department has ever managed.
Mr. CARNAHAN. In State Department history?
Mr. BOWEN. Yes.
Mr. CARNAHAN. And how many U.S. Government officials were
overseeing this contract?
Mr. BOWEN. In-country officer representatives? Three. This is the
tough story here, Chairman Carnahan. We looked at this 4 years
ago, and the problem we identified 4 years ago was lack of contract
management raised in our first audit issued in the first month of
2007.
Then we got into the whole contract and found that it was
inauditable and so we issued a review in October saying the State
Department asked for 35 years to get their records in order because it was a mess. Then we went in in 2008 to see if there were
remedial measures, and there were, but then we go in last summer
and find the same problem: Three people in-country overseeing a
contract that is spending hundreds of millions of taxpayer dollars.
And more disturbing, the lack of clarity about who was supposed
to do what. The in-country contracting officer representatives my
officers interviewed said well, invoice accountability is being done
back in Washington. We went back to Washington and asked them.
They said it is being done in Iraq. A huge vulnerability.
Mr. CARNAHAN. And with regard to the contractor, DynCorp, describe how that contract was initially awarded.
Mr. BOWEN. It was an existing contract that was held by the
State Department that was usedI dont have the specific facts of
the bidding process, but it was in existence in 2004 and used to
apply to this program at the level of $2.5 billion.
Again, as I said, it was DoD money that went into it so I think
DoD was looking for a vehicle that it could use to spend this money
and it did so. I think there are some questions about that process,
but it certainly shows how bifurcated or disjointed both the source
of the money, the contract management of the money and then the
execution of the contract, all different places. It shows I think just
the lack of clarity in stabilization and reconstruction contracting.
Mr. CARNAHAN. And in your reviews, to what extent can you account for how that money has been spent?
Mr. BOWEN. As I said, we are looking at the execution of it now.
My auditors in Iraq are today reviewing that matter and the outcomes, which are an important question for you, we will answer
later this year.

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Mr. CARNAHAN. And you expect that report out when?
Mr. BOWEN. By July. No later than July.
Mr. CARNAHAN. I am going to yield to Judge Poe.
Mr. POE. Thank you, Mr. Chairman. I have just one question.
Which of our Government agencies in your opinion was the most
irresponsible about money? DoD? State Department? USAID?
Mr. BOWEN. I think that the State Department did not carry out
its contract oversight responsibilities sufficiently enough, and this
particular contract we are discussing is the most egregious example
of that. The disturbing point is it hasnt remediated that weakness
sufficiently today.
Mr. POE. Thank you. Thank you, Mr. Chairman.
Mr. CARNAHAN. Thank you, Judge Poe. Yes. I dont know anything about police training, but if I had a $2.5 billion contract, I
think I could figure out a way to train police. I mean, that is outrageous.
Mr. BOWEN. Yes, sir.
Mr. CARNAHAN. I guess continuing on with some of my questions
about the oversight role, can you address the quality of oversight
and effectiveness of Inspector Generals connected with international organizations such as U.N. or NATO? That is my first
question, and then the other is, what oversight role has the Iraqi
Government itself has played in these reviews?
Mr. BOWEN. I cant address to what extent the U.N. or international organizations are doing oversight, but I havent seen any
evidence in Iraq of any such oversight. I have engaged very regularly since the beginning of my work in-country in February 2004
with the oversight entities in Iraq. That includes the Inspector
Generalsthat we created, by the way.
The Coalition Provisional Authority issued an order and established that system, and also the Commission on Integrity, formerly
the Commission on Public Integrity, that we created in Iraq, somewhat parallel to the FBI and finally there is the existing Board of
Supreme Audit, which has been in Iraq for many, many decades.
I think the Board of Supreme Audit is the most reliable of those
three and has issued some important audits, and we have in fact
done some work with them in carrying out oversight of certain
projects. Dr. Abdul Basit, its head, I meet with every trip. I will
see him soon, in the next couple of weeks. I have confidence that
he is a man of integrity and that he has done his best in a situation that he acknowledges to me is rife with corruption.
Indeed, that is not really a point very much in dispute any more
when I meet with Iraqi officials. The Minister of Finance, Bayan
Jabr, who I met with two trips ago or last trip, said it is outrageous
corruption. It is everywhere present, and he doesnt know what to
do about it except privatize was his suggestion.
Others have saidAli Baban, the Minister of Planning saysit
is worse than ever. The Chief Justice of their Supreme Court says
it is an out of control problem. Obviously those statements indicate
to me that the progress or success of the oversight entities in Iraq,
in the Iraqi Government, is very limited.
Mr. CARNAHAN. Next. This is an unusual way to ask a question,
but I tweeted the news about todays hearing yesterday and asked
anyone interested to send some questions. We got several, but I

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picked out one that I thought was particularly good from a Michael
Grady.
His question was, Is there any accounting for private contractors effectiveness in nation building in Iraq? Are we getting our
moneys worth? Mr. Bowen, how would you answer this question
for Michael?
Mr. BOWEN. That is a great question and a huge question because a study a couple years ago found that there were over
180,000 private contractors in Iraq carrying out virtually every conceivable kind of task in-country and so it is difficult I think to
make, A, a judgment about the success of any particular area or,
B, to get our arms around the scope of expense and the return, so
to speak, on that investment.
What is clear is that the Iraqi and Afghanistan stabilization and
reconstruction operations have used private contractors in an unprecedented fashion and the cost has been at historic highs. Have
we managed them well? I think the answer is generally no.
Why? Because there wasnt adequate preparation, planning,
structure, oversight in place before these operations began to ensure that there were clear regulatory limits and oversight of an
army of contractors bigger than our Army in-country, and that is
something that USOCO would squarely address.
Mr. CARNAHAN. And really, I guess it was a function of our lack
of civil capacity that we basically had to go buy it and threw a lot
of money at it
Mr. BOWEN. Yes.
Mr. CARNAHAN [continuing]. And did not have the structure in
place to create it or to properly oversee it and have accountability.
Mr. BOWEN. That is correct. That is correct, and the security
problem aggravated every aspect of that. I think an example is you
say it is presence. They have a relatively small footprint of government employees, about 35, and then they have thousands of contractors that are carrying out their programs.
Mr. CARNAHAN. And of those 100,000 contractors in Iraq, can you
describeare those mostly U.S. contractors? Local contractors? Describe sort of the variety of things that they are doing.
Mr. BOWEN. I think they are predominantly non-U.S. contractors
as far as nationality goes, and they are carrying out everything
from supporting food, fuel, and billeting to the troops in the field
under the LOGCAP contract, to helping build local capacity in provincial governments, to building schools and health clinics.
Mr. CARNAHAN. One of the things that you have very, I think,
eloquently described is this problem with the silos of effort out
there, and your proposal for the U.S. Office of Contingency Operations I think is a great way to begin this conversation, how to
really break down those walls, but also to prevent overlap: Waste
that is created by people being stuck in those silos and not coordinating that effort so we can get a better bang for our buck here.
Mr. BOWEN. Yes.
Mr. CARNAHAN. And I guess I really wanted to get you to talk
about how you see those elements from Defense, State, and USAID
coming together in a more functional way; in a practical way on the
ground for delivering what we are trying to achieve.

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Mr. BOWEN. The functional execution is the key. Right now the
responsibilities are diffused with limited coordination, frankly, and
that is what I am told. Even today in Iraq when I talk to embassy
personnel, USFI personnel, there is good coordination at the senior, very senior levels, but in executing programs it is much more
limited.
That is not a new problem, and it is not a problem of lack of resources and it is not a problem of lack of leadership. It is a problem
of institutional structure or inadequate structure in place.
And so what USOCO would do would be before you even begin
a stabilization and reconstruction outreachthis isnt an issue that
should be taken on in-country. This ought to be worked out ahead
of timethe staffing, the contracting, the funding, the oversight,
the information systems.
These are matters that touch all of these agencies, but they
ought not to be independently managed when it is a single mission
and therefore this proposal would integrate. I think the word is integration versus coordination. We need to move beyond coordination to integration to execution, of planning and execution of stabilization and reconstruction operations.
Mr. CARNAHAN. I guess beyond your proposal I would like you to
talk about other alternative ideas that get to this issue. Talk to me
about some of those alternative ideas that are out there and why
you think your proposal is the best way to address these issues.
Mr. BOWEN. Well, we proposed some alternatives, the targeted
reforms in our report; in other words, ensuring that the NSC executes and implements a set of stabilization and reconstruction operation policies and procedures. It doesnt appear that the Interagency Management System is the one since it is not being used,
so reconvene and redevelop and implement.
There would be ways to develop and independent Inspector General oversight that could be standing and ensure that there is, from
the start of an SRO, oversight. I think one of the challenges in Iraq
is my office was developed 8 months, 9 months after the operation
began and we didnt get on the ground until 3 months before the
CPA went out of business, so a lot of financial water under the
bridge, waste under the bridge by that point. It ought to be there
from the start.
Mr. CARNAHAN. Actually, if you could yield, that gets to another
point I had that your operation, being there pretty much from the
beginning, has saved millions of dollars by identifying these issues.
Many people have been held accountable for mismanagement and
fraud, but by contrast no IG was created for Afghanistan until
early 2008. How do we be sure that those kinds of things are again
part of the structure of ongoing operations?
Mr. BOWEN. Well, USOCO would do that. I mean, creating
USOCO would. Obviously because it impinges upon this existing
turf it draws natural resistance. Absent creating an integrated office that plans, resources and executes and is held accountable
I think that is the other thing. The job here, after an SRO you
would have the USOCO Director sitting here and you would be
holding him or her accountable for the outcomes.
Who do you call now? Is State in charge? No. Is AID in charge?
No. Is DoD in charge? No. I mean, you have to fill this table up

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and try and discern what is missing between the various gaps and
do gap filling.
Mr. CARNAHAN. They are all in charge, and nobody is in charge.
Mr. BOWEN. If everyone is in charge, no one is in charge. You are
exactly right. And so that is the core issue.
We talk about it in our report, Applying Hard Lessons, the lead
agency dilemma. We quote an NSC official saying exactly that.
When you have a lead agency you only have one agency because
it imbues upon the process its own culture, structure and biases.
USOCO would be free from those particular institutional biases
while drawing significantly upon the capacities of those respective
agencies. NSC gives the policy. DoD has capacity. State, AID and
the other agencies have expertise. What is filling the middle? Nothing right now. It is still diffused in the stovepipes. USOCO would
fill that vacant space.
Mr. CARNAHAN. I guess I want to wrap up with maybe a historical perspective that I wanted to ask you about because you have
identifiedyou actually have a table in your February report that
lists the U.S. assistance for stability and reconstruction operations
from Iraq, Germany, Afghanistan, Japan, Bosnia, Kosovo, Dominican Republic, Panama, Haiti, Lebanon, Somalia, Grenada, Cambodia.
Are there common themes in all these operations that you have
identified to help you make the conclusions that you have?
Mr. BOWEN. I think the most common theme from these operations is we havent applied our lessons from them to the next operation. Each one is sui generis. Each one evolves on its own without a sufficient structure in place because there is no structure in
place to carry it out. They begin. They are carried out. They are
over. They are forgotten. Their lessons arent applied.
There were lessons I believe from Bosnia and Kosovo, certainly
those who have lived them. General Nash, who worked with us on
our lessons learned report, said hey, I did the lessons learned report and you are repeating a lot of what I have found in Bosnia.
That is one of the reasons we pursued this entire lessons learned
initiative to help apply lessons learned. A lesson learned that is not
applied is a lesson lost, and that certainly is the commonality of
the previous stabilization and reconstruction operations.
Mr. CARNAHAN. It seems to be lessons learned reports that we
are not learning from.
Mr. BOWEN. Not sufficiently. That is clear.
Mr. CARNAHAN. I am going to yield to my colleague, Mr.
Delahunt from Massachusetts. I am so glad that he could join us,
particularly for this first hearing that I have had with the subcommittee.
Mr. DELAHUNT. Well, thank you, Mr. Chairman. You were an
outstanding vice chairman, and you will I am sure more than adequately fill the shoes of the individual who preceded you in that capacity.
And I want to say this. I think this is such an appropriate topic
for the first hearing under your leadership because what is being
discussed here really is the core responsibility of the Congress,
which is to oversee the effectiveness of the Executive Branch, and
to take that information that we glean and put forth recommenda-

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tions and proposals that make sense, that enhance the security of
the country, that avoid waste and at some point in time are acknowledged for their value and for their worth.
There has been in my judgment far too long where that role has
been abdicated by Congress, and I want to say this: Mr. Rohrabacher, who continues to serve as ranking member, during my
tenure in the chair was a terrific ally, and I know he will do well
working with you to make oversight a truly bipartisan effort.
We hear a lot about partisanship and bipartisanship and the lack
thereof, but this committeeand I know at times it was difficult
really took a hard look at what went wrong in Iraq and what has
gone wrong, but Dana Rohrabacher was there despite the fact that
during much of that time or really during all that time it was a
Republican administration.
I really want to acknowledge the great work of Stuart Bowen,
who I understand is also a member of the Republican Party, but
nobody in government could ask for anyone to better handle this
particularly sensitive role in such a nonpartisan fashion. He just
simply called them as he saw them. It was tough. I mean, what a
colossal waste.
I can remember reading the reports in the newspapers. Nine billion dollars was somehow lost. Nine billion. We forget about that
now. Nine billions that was lost by the CPA, Coalition Provisional
Authority, was in fact I think some five times as much as Saddam
Hussein stole from the Oil-for-Food Program that was administered
by the United Nations.
In any event, I want to say to Mr. Bowen and to his outstanding
team that these lessons that were so painfully learned in Iraq as
far as future contingency planning are so important. You know, I
am very impressed with your proposal to create a new Office for
Contingency Operations. I hear the criticism that this is another
layer of bureaucracy.
I dont believe it is, but if this question hasnt been addressed,
Stu, I would like you to take it because I am absolutely confident
that if this function that this office has created, that the savings
simply the costto the American taxpayer are going to be phenomenal. Put aside the fact that the United States will be fully
prepared for crises that continue to plague the globe. Mr. Bowen?
Mr. BOWEN. Thank you, Mr. Delahunt. A question very applicable to whether to create USOCO is, is it a new agency that simply
adds to what exists or is it a meaningful reform that improves the
efficiencies of how we approach stabilization and reconstruction operations? The answer is it is the latter.
The United States has shown a remarkable willingness, a proper
disposition to address challenges in the National Security arena
within the structure of government, challenges of weak integration
by implementing reforms. Creating the Department of Homeland
Security is one example. Creating the Director of National Intelligence is another, both in reaction to the challenges experienced
over the last decade regarding these important issues.
This is another one. This is a unique one, though. This isnt defense. This isnt development. This isnt diplomacy, which is why
it shouldnt be assigned to DoD or State or AID exclusively, but it

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needs to find one place because if you assign it to all of them, as
we were talking about, no one is in charge.
So there has to be a place where we can bring all of these elements together that will ensure that we dont repeat the ad
hocracy, that we dont improve with temporary agencies whose
acronyms we have forgotten, that we dont answer into significant
stabilization and reconstruction operations and have to figure out
what the contracting regs are. What is the IT system? Who should
staff it? What is the oversight? All matters that were picked up on
the fly in Iraq and Afghanistan.
The lesson learned, the hardest lesson from Iraq and certainly I
think AfghanistanRichard Holbrooke said in December $39 billion; we are starting from scratch because it was uncoordinated
is that no structure was in place to carry this out. There were no
plans in place to execute it. There were no systems ready to deploy
that could ensure that taxpayer dollar are protected. Billions were
lost as a result.
Three hundred audits and inspections later dont paint a pretty
picture. Some successes, sure, developed over time as we learned
our lesson, but why do we have to learn the hard way when we can
learn now the hardest lesson from Iraq and I think Afghanistan,
and that is the need to concentrate, integrate planning, preparation, resources, capacity in one place where you have that accountability.
You know who to call. You dont have to call five or six agencies
and say well, what was your role in this breakdown. You have one
person to call and to find out, A, whether you are preparedI
guess that is the most important questionfor the next one, but
then, B, explain the outcomes.
So it is not only not a layering of bureaucracy. It is an efficiency
that perfectly fits within how the United States Government has
responded to crises in national security areas, reforming government to strengthen our capacity to protect our interests. That is
very squarely what this is, but it also has a huge fiscal component.
It will save money.
Mr. DELAHUNT. Thank you, Mr. Bowen. Mr. Chairman, I have to
excuse myself. The Russians are coming. They have arrived. Since
I now chair the Subcommittee on Europe I have to meet with our
colleagues from the Russian Duma, but thank you again for your
service.
Mr. BOWEN. Thank you, Mr. Delahunt.
Mr. DELAHUNT. Thank you, Mr. Chairman.
Mr. CARNAHAN. Thank you, Mr. Delahunt, and again congratulations on your new chairmanship of the Europe Subcommittee and
for your continued service on this subcommittee.
You know, I was pleased that Mr. Delahunt mentioned this committee working together in a bipartisan way and the spirit in
which Mr. Rohrabacher has been engaged here and really look forward to that continuing. These issues are ones that should bring
people together in a very focused way.
You know, I often think about the history of our favorite son,
Harry Truman, when he chaired that famous Truman Commission
during his time in the Senate. He described it as one of the most
bipartisan and patriotic committees in the Congress at that time.

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It was a democratically controlled Congress and a Democratic administration, but they were going after waste, fraud and abuse in
a way that respected the taxpayers dollars, but also was focused
on the mission supporting the troops, and results, and holding
those contractors that were gaming the system accountable.
So there are some great parallels in history here, but we do have
to learn. We just cant keep doing reports about how we should
learn. We actually need to learn. So this is very helpful, and I
think there are opportunities to have less waste, more savings, better results and for people in this Congress to really work together.
I dont know if you have invented the term of ad hocracy, but if
you did I think it is a great invention and it is a great way to describe this problem. But you have also laid out some ways to really
move forward better, stronger, and smarter, for us to get where we
need to go in these stability and reconstruction operations.
So thank you for your service. We look forward to continuing to
work with you, and I think you have provided some very valuable
tools for policymakers to take up going forward, so thank you.
Mr. BOWEN. Thank you, Mr. Chairman.
Mr. CARNAHAN. All right.
[Whereupon, at 11:07 a.m., the subcommittee was adjourned.]

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APPENDIX

MATERIAL SUBMITTED

FOR THE

HEARING RECORD

(33)

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