The State Department agency in charge of $1.4 billion in reconstruction money in Iraq used an accounting shell game to hide ballooning cost overruns on its projects there and knowingly withheld information on schedule delays from Congress, a federal audit released late Friday has found.

[. . .]

In another case cited in the report, a power station project in Musayyib, the direct construction cost cited by the development agency was $6.6 million, while the overhead cost was $27.6 million.

The result is that the project’s overhead, a figure that normally runs to a maximum of 30 percent, was a stunning 418 percent.

The figures were even adjusted in the opposite direction when that helped the agency balance its books, the inspector general found. On an electricity project at the Baghdad South power station, direct construction costs were reported by the agency as $164.3 million and indirect or overhead costs as $1.4 million.

Sadly, it is increasingly clear that this collapse was not brought about by the isolated acts of rogue employees. A disaster of this magnitude requires the complicity of far more than a few bad apples. From senior managers to corporate directors, to outside counsel and accountants, almost no one who had the power to sound the alarm, correct the situation or prevent this debacle did so.

[. . .]

One final note: Like many Americans, I have tried to keep some perspective on this whole tawdry affair and to provide some perspective as well, but the truth is that this story of financial collapse and betrayal is of epic proportions. It is almost biblical in scope, so perhaps we need to look beyond all the greedy details of avarice and appetite to a larger lesson that all of us can share. In the 11th Chapter of the Book of Proverbs, the authors offer these prophetic words: “He that troubleth his own house will inherit the wind. And the fool will be a servant to the wise in heart.'’ Perhaps that is the true lesson of Enron’s failure.