from a public HS teacher (Gov't, Religion, Soc. Issues), who is eclectic (Dem-leaning) politically and Quaker (& open) on everything else. Hope you enjoy what you find here.

Friday, July 08, 2005

Where has all the money gone? 

is the title of an incredibly powerful piece by Ed Harriman in the London Review of Books, here

Let me offer just a few snippets:

The GAO report makes clear that the Americans had given little thought as to how they might prevent looting and rebuild Iraqi society. They hadn't even planned how they were going to provision the US forces staying on in Iraq: `the Army Central Command did not develop plans to use the [KBR] contract to support its military forces in Iraq until May 2003' - a month after Saddam fell. Even then, this contract - with an estimated value of $3.894 billion - did not adequately provide for dining facilities, pest control, laundry services, morale, welfare and recreation, troop transportation or combat support services at the American bases hastily being built across Iraq. Stung by Waxman's revelations about Halliburton's petrol profiteering, and realising that KBR's costs were spiralling out of control (LOGCAP costs in Kuwait, Iraq and Afghanistan rose from a projected yearly total of $5.8 billion in September 2003 to $8.6 billion in January 2004), the army vice chief of staff `asked units to control costs and look for alternatives to the LOGCAP contract'. This was the first admission that the Pentagon could not afford the occupation on top of the war.

American profligacy with Iraqi money has been, if anything, even worse. According to the CPA's own rules, the authority `was expected to manage Iraqi funds in a transparent manner that fully met the CPA's obligations under international law including Security Council Resolution 1483'. Despite repeated efforts, however, it was only in October 2003, six months after the fall of Saddam, that an International Advisory and Monitoring Board (IAMB), with representatives from the United Nations, the World Bank, the IMF and the Arab Fund for Economic and Social Development, was established to provide independent, international financial oversight of the CPA's spending.

and the longest selection I will offer:
An Iraqi hospital administrator told me that, as he was about to sign a contract, the American army officer representing the CPA had crossed out the original price and doubled it. The Iraqi protested that the original price was enough. The American officer explained that the increase (more than $1 million) was his retirement package. Iraqis who were close to the Americans, had access to the Green Zone, or held prominent posts in the new government ministries, were also in a position to benefit enormously. Iraqi businessmen complain endlessly that they had to offer substantial bribes to Iraqi middlemen just to be allowed to bid for CPA contracts. Iraqi ministers' relatives got top jobs and fat contracts.

Hard evidence comes from a further series of audits and reports carried out by the office of the CPA's own inspector general (CPA-IG). Set up in January 2004, it reported to Congress. Its auditors, accountants and criminal investigators often found themselves sitting alone at cafeteria tables in the Green Zone, shunned by their compatriots. Their audit, published in July 2004, found that the American contracts officers in the CPA and the Iraqi ministries `did not ensure that . . . contract files contained all the required documents, a fair and reasonable price was paid for the services received, contractors were capable of meeting delivery schedules, or that contractors were paid in accordance with contract requirements'.

Pilfering was rife. Millions of dollars in cash went missing from the Iraqi Central Bank. Between $11 million and $26 million worth of Iraqi property sequestered by the CPA was unaccounted for. The payroll was padded with hundreds of ghost employees. Millions of dollars were paid to contractors for phantom work: $3,379,505 was billed, for example, for `personnel not in the field performing work' and `other improper charges' on a single oil pipeline repair contract. An Iraqi sports coach was paid $40,000 by the CPA. He gave it to a friend who gambled it away then wrote it off as a legitimate loss. `A complainant alleged that Iraqi Airlines was sold at a reduced price to an influential family with ties to the former regime. The investigation revealed that Iraqi Airlines was essentially dissolved, and there was no record of the transaction.' Most of the 69 criminal investigations the CPA-IG instigated related to alleged `theft, fraud, waste, assault and extortion'. It also investigated `a number of other cases that, because of their sensitivity, cannot be included in this report'. At around this time, 19 billion new Iraqi dinars, worth about £6.5 million, were found on a plane in Lebanon which had been sent there by the American-appointed Iraqi interior minister.

You really need to go read this piece.
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