Today’s Must Read

Ambassador Patrick Kennedy has finally delivered his assessment of the State Department’s relationship with security contractors in Iraq to Condoleezza Rice. Behind closed doors yesterday, the ambassador, who was tasked with making a comprehensive review of State’s contractors following the Nisour Square shooting, told the secretary of state that there were serious problems “with virtually every aspect of the department’s security practices, especially in and around Baghdad, where Blackwater has responsibility,” reports The New York Times.

Combined with today’s report from Stuart Bowen, the special inspector general for Iraq reconstruction, that finds an “environment” conducive to waste and fraud in the oversight of DynCorp’s $1.2 billion Iraq contract, it’s easy to see why one State Department official told the paper that the department’s contracting process is caught in “a perfect storm of bad events.”

Among Kennedy’s recommendations is to create a “special coordination center” with the U.S. military to ensure that contractor movements within a military commander’s area of operations don’t conflict with the commander’s orders. It’s unclear whether that means the military would actually control contractor operations, as Defense Secretary Bob Gates is reportedly considering, but it would move Blackwater, DynCorp and Triple Canopy contractors out of the exclusive control of the State Department for the first time. When Gates returns from his European trip, he and Rice will discuss the future of State contractors in Iraq.

In a great understatement, Kennedy also recommends closer coordination with the Iraqi ministries:

“They don’t have the right communications, they don’t have the right procedures in place, and you’ve got people operating on their own,” said one official who has been briefed on the report but who spoke on the condition of anonymity because it has not been released yet. “This is not up to the degree it should be.”

And, needless to say, they’re also vulnerable to being murdered by drunken Blackwater contractors during rip-roaring Green Zone Christmas parties.

If that’s not bad enough, inspector-general Bowen found that until earlier this year, the State Department tasked only two officials in Iraq to oversee 700 DynCorp contractors working on a billion-plus dollar contract to train the Iraqi police. Bookkeeping — criticized by Henry Waxman yesterday — is so poor Bowen had to temporarily shut down his investigation of the State Department’s bureau responsible for the contract. He called the training program “the weakest-staffed, most poorly overseen large-scale program in Iraq.”

That’s right — worse than the corruption-plagued electricity grid rebuilding, or the equipping program that saw hundreds of thousands of guns simply disappear. Nice going, Bureau of International Narcotics and Law Enforcement Affairs.

Thomas A. Schweich, the acting director of the law enforcement bureau, said it had increased staffing in October 2006 and had thoroughly checked all DynCorp invoices since then. He said a detailed review of all DynCorp spending was under way. “We put more people in place,” he said, referring to three additional staff members sent to Iraq to oversee DynCorp. “We have put together a team of 11 people to review historical invoices.”

A review of DynCorp’s spending over the past year identified $29 million in overcharges by DynCorp, including $108,000 in business travel, according to a State Department letter in response to Mr. Bowen’s auditors. A separate review by the Defense Contracting Audit Agency found that DynCorp had billed for $162,869 of labor hours “for which it did not pay its workers.”

Schweich’s staff say it will take “three to five years” to identify all the DynCorp overcharges that occurred between February 2004, when the contract began, and early 2006. He’s going to have an awesome time explaining that when he testifies to Waxman’s House oversight committee.

Update: This post has been corrected.