Carl Levin: Paying for Reconstruction in Iraq

March 14, 2008 -- During the five years of war in Iraq, the United States government has spent approximately half a trillion dollars. That funding includes billions of dollars devoted to reconstruction of Iraq’s infrastructure, training Iraqi security forces and rebuilding Iraq’s economy.

But while American taxpayers have been funding Iraq’s recovery, reports indicate that the Iraqi government has accrued billions of dollars of assets that sit in bank accounts around the world.

At the outset of the Iraq War in March 2003, Deputy Secretary of Defense Paul Wolfowitz was asked whom he expected would pay for the rebuilding of Iraq. He answered that “there’s a lot of money to pay for this. It doesn’t have to be U.S. taxpayer money. And it starts with the assets of the Iraqi people …the oil revenues of that county could bring between 50 and 100 billion dollars over the course of the next two or three years…. We are dealing with a country that can really finance its own reconstruction and relatively soon.”

This assessment was correct in part: the U.S. State Department estimates that Iraq oil sales garnered revenues of $41 billion in 2007. With oil prices on the rise, it looks possible that they will collect $60 billion in 2008. But despite billions of dollars in revenues, these funds have not been spent on Iraqi reconstruction as hoped.

Recently I was joined by my colleague on the Senate Armed Services Committee, Republican Senator John Warner of Virginia, in a request for an inquiry into Iraqi oil revenues and the funding of reconstruction in Iraq.

Our conversations with both Iraqis and Americans during visits to Iraq, as well as official U.S. government and unofficial media reports, have convinced us that the Iraqi Government is not doing nearly enough to provide essential services and improve the quality of life of its citizens.

In fact, we believe that it has been overwhelmingly U.S. taxpayer money that has funded Iraq reconstruction over the last five years, despite Iraq raking in billions of dollars in oil revenue over that time period. Much of that revenue appears to be deposited in non-Iraqi banks.

We asked the U.S. Comptroller General, who as head of the Government Accountability Office is charged with investigating how the federal government spends taxpayer dollars, to report back to us on how much oil revenue Iraq has collected since the start of the war, how much Iraq and the U.S. have spent on Iraqi reconstruction, including developing Iraqi security forces and spurring economic development, and how much money the Iraqi government currently has deposited in banks.

Finally, we want to know why the Iraqi Government has not spent more of its oil revenue on providing essential services for the Iraqi people.

It does not make sense for taxpayers in Michigan and across America to pour money into Iraq, accruing billions of dollars of additional debt that must be paid by our children and grandchildren, while the Iraqi government refuses to spend its own money to protect and improve the life of its own citizens.

Every taxpayer dollar should be spent wisely, as should every dollar of Iraqi oil revenue. We oppose an arrangement that spends American funds on Iraqi reconstruction and allows the Iraqi government to avoid committing its own financial resources to build a future for the Iraqi people.

Source: Senator Carl Levin

Bookmark/Search this post with:

 •    •    •    •    •    •    •    •    •    •    •    •