24 June 2008 | Paul Snell
The chairman of the US Committee on Oversight and Government Reform has demanded an inquiry into the extent of fraud involving US spending in Iraq.
In a letter sent to the defence department's inspector general Claude Kicklighter, congressman and committee chair Henry Waxman said there were "potentially thousands" of criminal cases involving fraudulent contracts.
Last month, Mary Ugone, deputy inspector general, told the committee the defence department "did not maintain adequate internal controls over commercial payments to ensure they were properly supported".
And now the committee wants recommendations from the inspector general on how the department will identify, investigate and prosecute fraud.
A study by the inspector general's office found in a sample of 702 transactions only 40, worth $6.9 million (£3.5 million), complied with regulations, whereas 662, worth $1.3 billion (£662 million), did not. Of these, 28 involved a total of $35 million (£17.9 million) of taxpayers' money.
Waxman said during the Iraq war the defence department had "failed to take reports of waste, fraud and abuse seriously". He estimated that of the 180,000 deals done in Iraq, 7,000 were potentially fraudulent - - an "astounding amount" - involving $190 million (£96.7 million) of public funds.