The panel, which investigated operations at US military prisons in Iraq, Afghanistan and Cuba, cited leadership shortcomings among the Joint Chiefs of Staff and the military command in Iraq for failures that resulted in naked detainees being abused.
"There was sadism on the night shift at Abu Ghraib, sadism that was certainly not authorized. It was a kind of 'Animal House' on the night shift," panel head and former defense secretary James Schlesinger told reporters at a Pentagon news conference, referring to a popular US movie about out-of-control college students.
The more-than-90-page report found "no evidence of a policy of abuse promulgated by senior officials or military authorities."
However, Schlesinger said: "We believe that there is institutional and personal responsibility right up the chain of command as far as Washington is concerned."
"A lot of careers are going to be ruined over this," panel member Harold Brown, also a former defense secretary, said as the panel revealed that 300 abuse claims are under investigation.
The four-member panel, appointed by Defense Secretary Donald Rumsfeld, said leadership failures were exacerbated by inadequate training and procedures and a failure to anticipate the fierce Iraqi insurgency which saw 8,000 inmates housed at Abu Ghraib.
Schlesinger said this lack of planning led to a ratio of one US guard watching over some 75 detainees at the notorious jail which was once used as torture center by former Iraqi dictator Saddam Hussein.
Asked if Rumsfeld should resign in the light of findings which painted Abu Ghraib as an out-of-control detention center, Schlesinger replied: "His resignation would be a boon to all of America's enemies, it would be a misfortune if it were to take place."
He added that it was not within the panel's remit to make recommendations with regard to possible punishments that might be levelled against those who have not yet been charged or implicated in the abuse scandal.
The panel also criticised the former commander of US forces in Iraq, Lieutenant General Ricardo Sanchez, for not paying close enough attention to events at Abu Ghraib as they spiralled out of control.
"My observation once again and this applies to Sanchez as well as those higher up ... that their attention was focused on fighting a war, they were not focused on the detention operations. We regarded this as an error on their part," Schlesinger said.
Sanchez visited the prison outside Baghdad several times when abuses were occuring between October and December of last year, and the panel also said the jail was visited by a member of the White House's National Security Council who was not identified.
Sanchez and Central Command head General John Abizaid told a congressional hearing earlier this year that the Pentagon set policy and their job was to apply it.
Its findings come after accounts and graphic photographs emerged in April of US military guards sexually humiliating naked Iraqi detainees at Abu Ghraib and intimidating them with unmuzzled police dogs.
The hearings and trials of several MPs implicated in the abuse are continuing amid different ongoing inquiries. No military intelligence officials who worked at the jail have yet been charged.
Schlesinger added that Central Intelligence Agency interrogators worked at the prison, but that the panel did not have full access to the CIA's own probe into misconduct allegations.
The panel also said there were some mitigating circumstances which framed the abuse: a lack of manpower; a jail under "constant shelling;" corrupt Iraqi police officers who smuggled weapons to inmates and missing equipment.
However, a leading international human rights group slammed the report, saying it failed to address government policy that may have led to the mistreatment and torture of detainees.
Human Rights Watch said the report fails to examine in detail other detention facilities in Iraq and Afghanistan, even though most deaths of detainees in US custody and many reported abuses occurred outside Abu Ghraib.
"The report talks about management failures when it should be talking about policy failures," said Reed Brody, special counsel with HRW.
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