Where is the Peace Dividend? Examining the Final Report to Congress of the Commission on Wartime Contracting

Chairman Issa Hearing Preview Statement

Today we welcome Congressman Christopher Shays – a former member of this committee, Mr. Michael Thibault, who co-chaired the commission’s work with Congressman Shays, and other members of the Commission on Wartime Contracting. In August, they released a final report with alarming findings about waste and abuse that occurred in Iraq and Afghanistan.

Over the course of 2 years, the Commission has conducted 25 hearings, issued 5 Special Reports and 2 Interim reports. Its Final Report presents a sobering view of waste and fraud in the War on Terror. An estimated $1.25 trillion has been spent on operations in Iraq and Afghanistan. The report estimates that since 2002, the Defense Department has spent $206 billion of this in contract obligations to support wars in Iraq and Afghanistan.

At least $31 billion, and possibly as much as $60 billion, has been lost to contract waste and fraud. It is appropriate for the commission and congress to assess these costs and the reasons so much taxpayer money has been squandered to waste and fraud.

The waste and fraud associated with these expenditures is mind numbing. With the coming transition of operations from DoD to the State Department in Iraq, as well as the continuing surge of the civilian federal workforce in Afghanistan, costs associated with contractors are set to increase. For example, the State Department will increase its manpower from about 8,000 to 17,000 — the great majority of whom will be contractors for security, medical, maintenance, aviation, and other functions.

The State Department is building a virtual private army of security contractors in Iraq. Some have estimated as many as 5,500 new private security contractors will be necessary to protect and operate the U.S. Embassy and its facilities and functions throughout Iraq.

In Afghanistan, the number of civilian employees, drawn from departments such as State, Treasury, Justice and Agriculture, has tripled since 2009 – rising from just over 300 to 1,040 as of June, 2011. Supporting and protecting this additional staff will require continued use of private contractors.

We have reached the point where we are now forced to treat contractors as the default option. This is because federal agencies can’t complete mission-critical functions nor can they manage and oversee a large contractor force of unprecedented size that at times has outnumbered troops in the field.

When President Obama took office, he pledged to eliminate waste, fraud and abuse in these areas. Instead, we are growing more and more reliant on contractors. New and increasing problems come at a time when President Obama has neglected to fill key leadership positions and to ensure effective oversight continues unbroken. He has failed to implement essential measures to combat this waste and fraud.

This record will continue unless this Administration takes concrete actions to protect precious taxpayer dollars. The United States has not achieved the peace dividend that this Administration promised by doubling down in Afghanistan.

Today, we will examine these difficult challenges and explore the conclusions and recommendations offered by the Commission on Wartime Contracting. But before we do that, I must make one thing clear. Operations in Iraq and Afghanistan have levied a heavy human toll—7,520 American and Coalition soldiers have been lost. Our brave men and women serving on the frontlines continue to do an outstanding job fighting our enemies and securing freedom for those terrorized.

Nothing in this hearing or the recommendations of the Wartime Contracting commission is intended to question their efforts or the commitment of this Congress to ensure that they are supplied and equipped for the dangers they face while in harm’s way.