U.S. inspector says surge in Iraq has cut violence

U.S. special inspector general for Iraq Stuart Bowen testifies before the Senate Foreign Relations Committee on Capitol Hill in Washington February 8, 2006. An increase in U.S. troops in Iraq has reduced attacks and the government must take advantage of this by pushing economic and political reform, Bowen said on Monday.

BERLIN (Reuters) - An increase in U.S. troops in Iraq has reduced attacks and the government must take advantage of this by pushing economic and political reform, the chief U.S. inspector for Iraq said on Monday.

Stuart Bowen, the Special Inspector General for Iraq Reconstruction, told Reuters at a conference organized by the Aspen Institute in Berlin that attacks on soldiers and civilians had fallen to their lowest level in two years.

"The surge has made significant progress in achieving breathing space for Iraq's government to make progress on their economic and political programs," he said, referring to the deployment of an extra 30,000 troops in and around Baghdad that was completed in June.

"It's incumbent on them to use this breathing space.

He said U.S. troops had also uncovered large stocks of high explosives, used in the roadside attacks that have killed and wounded many soldiers.

"We have uncovered twice as many caches of high explosives this year as last year," he said.

Bowen, in charge of making certain that the tens of billions of dollars in reconstruction aid for Iraq is used properly, said corruption was a problem in the country but the majority of those involved in the reconstruction effort were not corrupt.

He said there were 52 corruption cases involving reconstruction contractors in Iraq under investigation. Of those, around 30 were being prosecuted by the U.S. Department of Justice.

Bowen said to improve transparency it was important for the United States to look closely at the rules for "cost-plus contracts" -- contracts under which the contractors receive payment for work plus compensation for expenses and other costs.

He said in Iraq, where the need for extra security often doubles the cost of reconstruction projects, cost-plus contracts can be open to abuse. "We need to look at cost-plus contracts, not just in Iraq but also in the United States," Bowen said.

He also said he was auditing three of the five biggest private security contractors in Iraq, including Blackwater, which has been accused of killing numerous Iraqi civilians. He said it was too early to say what the audit would look like.

(editing by Elizabeth Piper)