Investigating fraud in Iraq: better late than never?

A report on government contractors in Iraq is long overdue. Stories of literally billions of taxpayer dollars disappearing there have been around since before last year's elections. But it's been off the media radar.

Here's the thing: pre-war levels of water and electricity still haven't been restored in Iraq, and it's been almost three years. That means angry Iraqis. That means more insurgents. That means more dead Americans. War profiteering is treasonous, and there's been no oversight and no official investigation into all that disappearing cash.

Finally, 60 Minutes is going to be doing a story on this to air Sunday.

Willis remembers Custer Battles, which was formed by former Army Ranger Scott Custer and a failed congressional candidate, Mike Battles, who claimed to be active in the Republican party and have connections to the White House. "They came in with a can-do attitude, whether they could or not," he says. "They were not experienced. They didn’t know what they were doing," says Willis.

They nevertheless got contracts and their work quickly drew complaints. "They failed miserably," says Col. Richard Ballard of a $15 million contract Custer Battles got to secure the Baghdad Airport. Col. Ballard, the inspector general for the Army in Iraq at the time, says the company failed to provide the X-ray equipment required by the contract.

"These were multi-million-dollar devices for which they received a considerable cash advance so that they could procure them, and then they never procured this equipment," says Col. Ballard. On a bomb-sniffing dog and trainer Custer Battles did procure, Col. Ballard says, "I think it was a guy and his pet, to be honest with you," he tells Kroft. The Colonel noted that the dog "would refuse to sniff the vehicles."

In a memo obtained by 60 Minutes, the airport’s director of security wrote to the Coalition: "Custer Battles has shown themselves to be unresponsive, uncooperative, incompetent, deceitful, manipulative and war profiteers. Other than that, they are swell fellows."

Instead of removing Custer Battles, the Coalition praised them and continued to give them contracts. One of those contracts involved procuring trucks for moving cash around the country – some of which were inoperative and had to be delivered via tow truck. "I don’t really know [how they got away with it]," says British Col. Philip Wilkinson, to whom the trucks were delivered. "The assumption that we had was that they had to have high political top cover...," Col. Wilkinson tells Kroft.

Thanks to Lucha Libre megastar Mil Apodos for the link.