Where Has All the Money Gone?--re Iraq and now, NOLA?

[Gloria]

Heard this interview with Ed Harriman on Radio Australia this morning (12:30 UTC). It was about 20 minutes long and described in detail how much money is missing from Iraq...Halliburton came up, of course. And, reports last week say we are now OUT OF MONEY for reconstruction of electrical and water facilities....

This is the original article by Harriman from the London Review of Books. He said he hadn't seen the "rewritten" version in the Wall Street Journal....Harriman is a very good interviewee...too bad we don't get to see or hear much of him (if anything) here....

Anyway, you can bet there will be lots of $$ missing from NOLA as the months go by....


http://www.lrb.co.uk/v27/n13/harr04_.html



LRB | Vol. 27 No. 13 dated 7 July 2005 | Ed Harriman


Where has all the money gone?
Ed Harriman follows the auditors into Iraq

US House of Representatives Government Reform Committee Minority Office
| Link: http://www.democrats.reform.house.gov/

US General Accountability Office
| Link: http://www.gao.gov/

Defense Contract Audit Agency
| Link: http://www.dcaa.mil/

International Advisory and Monitoring Board
| Link: http://www.iamb.info/

Coalition Provisional Authority Inspector General
| Link: http://www.cpa-ig.com/

Special Inspector General for Iraq Reconstruction
| Link: http://www.sigir.mil/

On 12 April 2004, the Coalition Provisional Authority in Erbil in northern Iraq handed over $1.5 billion in cash to a local courier. The money, fresh $100 bills shrink-wrapped on pallets, which filled three Blackhawk helicopters, came from oil sales under the UN’s Oil for Food Programme, and had been entrusted by the UN Security Council to the Americans to be spent on behalf of the Iraqi people. The CPA didn’t properly check out the courier before handing over the cash, and, as a result, according to an audit report by the CPA’s inspector general, ‘there was an increased risk of the loss or theft of the cash.’ Paul Bremer, the American pro-consul in Baghdad until June last year, kept a slush fund of nearly $600 million cash for which there is no paperwork: $200 million of this was kept in a room in one of Saddam’s former palaces, and the US soldier in charge used to keep the key to the room in his backpack, which he left on his desk when he popped out for lunch. Again, this is Iraqi money, not US funds.

The ‘reconstruction’ of Iraq is the largest American-led occupation programme since the Marshall Plan. But there is a difference: the US government funded the Marshall Plan whereas Donald Rumsfeld and Paul Bremer have made sure that the reconstruction of Iraq is paid for by the ‘liberated’ country, by the Iraqis themselves. There was $6 billion left over from the UN Oil for Food Programme, as well as sequestered and frozen assets, and revenue from resumed oil exports (at least $10 billion in the year following the invasion). Under Security Council Resolution 1483, passed on 22 May 2003, all of these funds were transferred into a new account held at the Federal Reserve Bank in New York, called the Development Fund for Iraq (DFI), so that they might be spent by the CPA ‘in a transparent manner . . . for the benefit of the Iraqi people’. Congress, it’s true, voted to spend $18.4 billion of US taxpayers’ money on the redevelopment of Iraq. But by 28 June last year, when Bremer left Baghdad two days early to avoid possible attack on the way to the airport, his CPA had spent up to $20 billion of Iraqi money, compared to $300 million of US funds.

The ‘financial irregularities’ described in audit reports carried out by agencies of the American government and auditors working for the international community collectively give a detailed insight into the mentality of the American occupation authorities and the way they operated, handing out truckloads of dollars for which neither they nor the recipients felt any need to be accountable. The auditors have so far referred more than a hundred contracts, involving billions of dollars paid to American personnel and corporations, for investigation and possible criminal prosecution. They have also discovered that $8.8 billion that passed through the new Iraqi government ministries in Baghdad while Bremer was in charge is unaccounted for, with little prospect of finding out where it went. A further $3.4 billion earmarked by Congress for Iraqi development has since been siphoned off to finance ‘security’.

SNIP

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 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.

At the same time, the Pentagon’s own auditors, the Defense Contracts Audit Agency, went to Houston to have a look at KBR’s books. They were not happy with what they found:

MUCH MORE