Money for Nothing
Billions of dollars have disappeared, gone to bribe Iraqis and line contractors’ pockets.
by Philip Giraldi
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Defense Contract Audit Agency auditors have questioned Halliburton’s charges on a $1.6 billion fuel contract, claiming that the overcharges on the contract exceed $200 million. In one instance, the company charged the Army more than $27 million to transport $82,000 worth of fuel from Kuwait to Iraq. Halliburton has also been accused of billing the Army for 42,000 daily meals for soldiers, though it was only actually serving 14,000. In another operation, KBR purchased fleets of Mercedes trucks at $85,000 each to re-supply U.S. troops. The trucks carried no spare parts or even extra tires for the grueling high-speed run across the Kuwaiti and Iraqi deserts. When the trucks broke down on the highway, they were abandoned and destroyed rather than repaired.
Responding to complaints, Halliburton refused to permit independent auditing and inspected itself using so-called “Tiger Teams.” One such team stayed at the five-star Kuwait Kempinski Hotel while it was doing its audit, running up a bill of more than $1 million that was passed on to U.S. taxpayers.
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The undocumented cash flow continued long after the CPA folded. Over $1.5 billion was disbursed to interim Iraqi ministries without any accounting, and more than $1 billion designated for provincial treasuries never made it out of Baghdad. More than $430 million in contracts issued by the Petroleum Ministry were unsupported by any documentation, and $8 billion were given to government ministries that had no financial controls in place. Nearly all of it disappeared, spent on “payroll,” wages for “ghost employees” in the Ministries of the Interior and Defense. In one case, an Army brigade receiving money to support 2,200 men was found to have fewer than 300 effectives. 602 actual guards at the Ministry of the Interior were billed as more than 8,200 for payroll purposes.
Iraqi Airways carried 2,400 employees even though it had not operated for over a year and had no planes. The airline itself was sold to an unidentified buyer without any paperwork to show for how much it was sold and what assets were included. It has been alleged that the buyer might well have been Pentagon favorite Ahmad Chalabi.
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Even the “coalition of the willing” partners have been quick to cash in. Polish helicopters purchased as part of a $300 million deal with arms maker Bumar Ltd. were found to be obsolete, largely unflyable, and were actually rejected by the Iraqis. Bullets purchased from Poland by the Defense Ministry cost three times the normal international price. Five Polish peacekeepers have been arrested for demanding $90,000 in bribes. Both British and American soldiers have also demanded bribes from shopkeepers and travelers.
In yet another instance of take-it-while-you-can, a senior Interior Ministry official flew to Beirut in a helicopter accompanied by $10 million in newly printed Iraqi dinars. He has yet to return. Interim Iraqi President Iyad Allawi’s Defense Minister Hazem Shaalan transferred $500 million to a bank account in Lebanon, allegedly to buy weapons, in a case that continues to be murky. Shaalan is reportedly vacationing abroad and has not returned to Iraq. A Bremer favorite at the Defense Ministry, Ziad Tareq Cattan, was responsible for a number of shady arms-procurement deals. A warrant has been issued for his arrest, an unusual occurrence, and he is avoiding detention by staying with family in Erbil in Kurdistan.
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Countless billions will never be accounted for, and the full cost of corruption has yet to be tallied. Sources report that much of the money that was designated for the development of a national army and police force is actually going to units that are exclusively Kurd or Shi’ite in expectation of a day of reckoning over the country’s oil supplies. The Kurds have made no secret of their desire to continue their autonomy-bordering-on-independence and have stated that they regard Kirkuk as their own. The Shi’ites have possession of the oil-producing region to the south and are using their control of the Interior Ministry to fill police ranks with their own pro-Iranian Badr Brigade members as well as militiamen drawn from radical cleric Moqtada al-Sadr’s Mehdi Army. The Sunnis are the odd men out, virtually guaranteeing that, far from becoming the model democracy the U.S. set out to build, Iraq will descend deeper into chaos—aided in no small part by the culture of corruption we helped to fortify.
http://amconmag.com/2005/2005_10_24/cover.html
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