The Center for Public Integrity

WASHINGTON (AP) — After years of following the paper trail of $51 billion in U.S. taxpayer dollars provided to rebuild a broken Iraq, the U.S. government can say with certainty that too much was wasted. But it can't say how much.

In what it called its final audit report, the Office of the Special Inspector General for Iraq Reconstruction Funds on Friday spelled out a range of accounting weaknesses that put "billions of American taxpayer dollars at risk of waste and misappropriation" in the largest reconstruction project of its kind in U.S. history.

"The precise amount lost to fraud and waste can never be known," the report said.

The auditors found huge problems accounting for the huge sums, but one small example of failure stood out: A contractor got away with charging $80 for a pipe fitting that its competitor was selling for $1.41. Why? The company's billing documents were reviewed sloppily by U.S. contracting officers or were not reviewed at all.

With dry understatement, the inspector general said that while he couldn't pinpoint the amount wasted, it "could be substantial."

Asked why the exact amount squandered can never be determined, the inspector general's office referred The Associated Press to a report it did in February 2009 titled "Hard Lessons," in which it said the auditors — much like the reconstruction managers themselves — faced personnel shortages and other hazards.

"Given the vicissitudes of the reconstruction effort — which was dogged from the start by persistent violence, shifting goals, constantly changing contracting practices and undermined by a lack of unity of effort — a complete accounting of all reconstruction expenditures is impossible to achieve," the report concluded.

WASHINGTON (AP) — Wells Fargo Bank will pay at least $175 million to settle accusations that it discriminated against African-American and Hispanic borrowers in violation of fair-lending laws, the Justice Department announced Thursday.

Wells Fargo, the nation's largest residential home mortgage originator, allegedly engaged in a pattern or practice of discrimination against qualified African-American and Hispanic borrowers from 2004 through 2009.

At a news conference, Deputy Attorney General James Cole said the bank's discriminatory lending practices resulted in more than 34,000 African-American and Hispanic borrowers in 36 states and the District of Columbia paying higher rates for loans solely because of the color of their skin.

Cole said that with the settlement, the second largest of its kind in history, the government will ensure that borrowers hit hard by the housing crisis will have an opportunity to access homeownership.

The bank will pay $125 million in compensation for borrowers who were steered into subprime mortgages or who paid higher fees and rates than white borrowers because of their race or national origin rather than because of differences in credit-worthiness.

Wells Fargo also will pay $50 million in direct down payment assistance to borrowers in areas of the country where the Justice Department identified large number of discrimination victims. Those areas are Washington, D.C., Chicago, Philadelphia, Oakland and San Francisco, New York City, Cleveland, Riverside, Calif., and Baltimore.

"The department's action makes clear that we will hold financial institutions accountable, including some of the nation's largest, for lending discrimination," Cole said.

WASHINGTON (AP) — The number of people seeking U.S. unemployment benefits plunged last week. But a big reason is that automakers have skipped some of their usual summer shutdowns to keep up with demand, causing fewer temporary auto layoffs.

Economists expect the number of Americans seeking unemployment aid to go back up in coming weeks.

The auto industry's recovery has helped support the struggling U.S. economy. U.S. auto sales in the first half of the year jumped 15 percent over the same period a year ago. Sales of new vehicles surged in June. Automakers also began Independence Day promotions early, lifting sales at the end of the month.

The Labor Department adjusts the number of applications for unemployment aid to account for seasonal factors. But it didn't anticipate fewer temporary shutdowns of auto plants this summer — and fewer auto layoffs. That distorted the seasonally adjusted data it released Thursday.

And that may largely explain why applications for unemployment aid tumbled 26,000 last week to a seasonally adjusted 350,000 — the fewest since March 2008.

"Take July with a grain of salt," Jill Brown, an economist at Credit Suisse, said in a note to clients. The auto shutdowns "often cause extreme volatility."

Automakers traditionally close their plants in the first two weeks in July to prepare them to build new models, and their employees often file for unemployment benefits. But Ford Motor Co. said in May that it would reduce its usual two-week closing to just one week. And Chrysler canceled the normal two-week shutdowns at three factories.

WASHINGTON (AP) — Government auditors Wednesday questioned the legality of a costly Medicare bonus program, escalating a running skirmish in the broader battle over President Barack Obama's health care law and its consequences for seniors.

In a letter to the administration, Government Accountability Office General Counsel Lynn Gibson wrote that the nonpartisan agency remains concerned about Medicare's legal authority to undertake the $8.3 billion Medicare Advantage quality bonus program.

Launched well after the overhaul passed, the bonus program effectively restored some of the cuts that the legislation made to popular private insurance plans within the giant health care program for seniors and disabled people.

The sheer size of the bonuses immediately raised eyebrows, as did the fact that most of the money was going to plans rated about average. Sen. Orrin Hatch, R-Utah, called it a wasteful political ploy.

Medicare's assertion that the program is fully legal "does not resolve our concerns," the GAO's Gibson wrote to Health and Human Services Secretary Kathleen Sebelius. The letter coincided with a partisan House vote to repeal the health care law. The GAO, however, is a nonpartisan agency that serves as the investigative arm of Congress.

In a statement, Medicare spokesman Brian Cook said there is "longstanding precedent" for such programs "with Republican and Democratic administrations using this authority in this way."

A spokeswoman for Hatch said the senator is weighing his options in light of new legal questions about the bonuses.

If Republicans try to take away the money, it could backfire politically. That happened before with Democrats on the receiving end of seniors' disapproval.

WASHINGTON (AP) — President Barack Obama is calling on Congress to increase the amount of investments small businesses can expense next year.

The White House says Obama wants lawmakers to let small businesses write off up to $250,000 in expenses. Officials say the initiative is included in Obama's proposal earlier this week for Congress to end tax cuts for families making more than $250,000 a year.

Republicans says ending the tax cuts would lead to a tax hike on small businesses owners. A spokesman for House Speaker John Boehner says the president's announcement Wednesday would be "no solace" for small businesses facing a tax increase.

Obama also signed executive orders that the White House says accelerate federal payments, reduce paperwork, and make it easier for small businesses to access loans and tax credits.

WASHINGTON (AP) — President Barack Obama will meet behind closed doors with Democratic congressional leaders at the White House Wednesday.

The gathering will focus on the president's plan to extend Bush-era tax cuts for the middle class, as well as job-creating initiatives.

The meeting comes as Obama hits the campaign trail with a renewed call to retain decade-old tax rates for households earning less than $250,000 a year while letting taxes rise for households earning more. The tax cuts expire at year's end.

The White House says Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi will be among those in attendance.

WASHINGTON (AP) — The Obama administration gave permission Wednesday for American companies to invest in Myanmar and work with its state oil and gas enterprise, a go-ahead that marks the most significant easing of U.S. sanctions against the former pariah nation.

At the same time, the administration expanded U.S. Treasury authority to punish those who undermine the nascent political reforms and sanctioned a Myanmar military industry involved in a deal for ballistic missile technology from North Korea.

The new restrictions, imposed even as the 15-year-old ban on investment and export of financial services was eased, underscored how far the country also known as Burma has to go before it truly cleans shop after five decades of military rule.

"Today, the United States is easing restrictions to allow U.S. companies to responsibly do business in Burma," President Barack Obama said in a statement that credited reformist President Thein Sein and democracy leader Aung San Suu Kyi for continued progress toward democracy but also voiced deep concern over the murky investment environment.

The announcement came hours after Derek Mitchell, the first U.S. ambassador to Myanmar in 22 years, presented his credentials in the Asian nation's remote capital. Washington has normalized diplomatic relations, the culmination of a three-year push to help Myanmar out of international isolation and lessen its reliance on its chief but distrusted ally, China.

But human rights groups and business advocates are increasingly at odds over how Washington should respond to the changes in Myanmar, and Wednesday's announcement exposed a rare difference between the administration and Suu Kyi, long a guiding force on U.S. policies toward the country.