Reconstruction in Iraq is being done on the cheap, with most of the money going into major infrastructure projects (electricity, water, sewage), and most of the manpower into low cost local stuff (organizing the repair of irrigation, resettling refugees, repairing schools and hospitals.) Half the reconstruction money has been going for security costs, especially if foreigners are involved. Thus the emphasis on projects involving Iraqis, and coalition troops (who can protect themselves.) There's still the danger of corruption. Foreign reconstruction workers have also noted that corruption is still a major problem if you let the wrong people get their hands on cash, or even materials. Finding people who can be trusted is difficult, especially because of the language and cultural barriers. Many Iraqi translators working for coalition troops or reconstruction projects have taken advantage of this, and steered money towards unscrupulous Iraqis (who then give a cut to the translator.) The military has their own translators, who can keep an eye (or ear) on the hired Iraqis. 

Most Iraqis are against corruption, but too many will grab the chance to indulge if they have an opportunity. This is a problem throughout the Arab world (and most countries with anemic economies.) Aid workers have come up against the corruption problem before, and U.S. Special Forces learn how to cope in their training and field work. But there aren't enough experienced people available to deal with the amount of money available for Iraq reconstruction. So expect to hear a lot of spectacular tales of corruption in Iraq over the next few years. It's nothing new, except that they will be stealing from foreigners instead of from each other.