Ken Dilanian
July 27, 2009

[efoods]The top U.S. aid agency has suspended a $644 million Iraq jobs program after two outside reviews raised concerns about misspending, including an inspector general’s audit that found evidence of phantom jobs and money siphoned to insurgents.

The Community Stabilization Program, launched in 2006, was designed to tamp down the insurgency by paying Iraqis cash to do public works projects such as trash removal and ditch digging. International Relief and Development (IRD), a Virginia-based non-profit corporation, ran the program, one of many it manages for the U.S. government.

It is rare for the U.S. Agency for International Development to suspend an ongoing aid program, particularly involving one of its major contractors. More than 80% of IRD’s $500 million annual budget comes from USAID, company tax filings show.

The stabilization program “is generally thought of as one of the most effective counterinsurgency efforts in Iraq,” Deputy Secretary of State Jacob Lew told USA TODAY.

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