$12 BILLION IN IRAQ AID MISSING
Bush Administration OK’d Biggest Theft of Taxpayer Money in History
By Richard Walker
If—and it is a big if—the tens of billions of dollars in U.S. taxpayer dollars wasted in Iraq are ever accounted for, it may turn out to be the biggest fleecing of Americans in the history of the United States. And average Americans will not have been the only victims.
Millions of ordinary, law-abiding Iraqis had hoped their nation’s oil wealth would be used to rebuild their country after President Bush ordered the attack on their country. Instead it was used to line the pockets of tribal leaders, insurgents, militias, crooked U.S. contractors, some U.S. soldiers and an unspecified number of powerful elites in the Iraqi government.
At present, the sheer scale of the missing billions is unclear. But consider this: Imagine for a moment that you wanted to transport 360 tons of $100 bills from the Federal Reserve Bank in New York to Baghdad. First you would need it assembled into what are called “bricks,” each one containing $100,000. Then 20 of those “bricks,” amounting to $2 million, would be sealed in a wooden box. That wooden box would be loaded onto pallets. Eventually the whole 360 tons of bills totaling $16 billion would need to be placed on three massive, U.S. military C-130 transport planes for the trip to Baghdad.
That is what the White House signed off on in 2003 when Paul Bremer was running the Coalition Provisional Authority (CPA). It was a shadow government established by Washington after the fall of Saddam Hussein. Bremer, a former ambassador to Iraq, regarded as a security guru, was like a pro-consul of ancient Roman times but a lot less efficient.
And if you think sending such a vast amount of cash into a war zone was the worst that could have happened, that is only part of an absurd and unbelievable story.
When the crisp, clean $100 bills reached Baghdad, it was like the “Wild West,” according to Frank Willis, the second-in-command in the CPA’s Transportation Ministry.
Currency “bricks” totaling $2 million each were removed from their wooden cases and stuffed into foot lockers and filing cabinets. Rooms were piled with stacks of bills and wooden cases full of cash were placed in poorly secured vaults because the looting in Baghdad had reduced the capital to a place where nothing was safe, not even national museum artifacts.
Sometimes, members of the CPA referred to these bricks of cash as “footballs,” because they were passed from hand to hand. When money was needed for something, a few soldiers or members of the CPA staff were told to take a wheelbarrow or a sack and pick up anything from $1 million to $5 million. At CPA headquarters within the Green Zone in Baghdad, there was one pile of $600 million set aside. Of that, $200 million was kept in a room to which one soldier had the key. He was reported to have kept the key in his pocket everywhere he went, whether it was to dinner or to the showers.
The CPA’s job was to spend $16 billion of U.S. taxpayer’s money
for reconstruction, but the problem was there were never any accounting practices in place, and that provided the criminally minded with a wonderful opportunity to steal what they wanted.
Approximately $8 billion was channeled through Iraqi ministries that kept either no records or two sets of records, one of which was bogus. Large sums of money were siphoned off by billing twice or by fabricating staff on the payroll. One of the most blatant examples of that kind of scam involved an Iraqi ministry that billed the CPA for over 8,000 security guards when it actually employed less than one-tenth that many.
For Iraqi sheikhs, politicians and officials linked to the insurgency and the militias, it was as though Christmas had arrived. Cash in amounts of tens of millions that was transferred to the Iraqi Central Bank disappeared without trace.
CPA money was even used in a weapons buy back program, a purpose for which it was not intended. Many of the weapons found their way back to the streets. In fact, large shipments of weapons the United States transported to Iraq to arm the Iraqi army vanished, and it is now believed some of them were sold by corrupt officials to militias and even Hezbollah in Lebanon.
A sizeable slice of the 360 tons of cash ended up in the hands of mercenaries often without proper contracts. It is now estimated that millions of dollars were awarded for phantom construction projects such as schools, hospitals and pipeline repair work. CPA contract payments were understated by as much as $108 million, and, of 198 contract files that were later examined, 154 lacked evidence that any goods or services were even rendered.
Fourteen contracts did not even show evidence of any payment. One department within the CPA, without oversight from superiors, “signed off” on contracts worth $430 million without providing paperwork.
Keep in mind that all of this was happening while the families of soldiers were being forced to buying body armor for their sons and daughters in the field.
One of the crazy examples of how cash was handed over by the CPA related to a contract with a U.S. mercenary company to handle security at Baghdad airport. The company billed the CPA for the use of “bomb-sniffer” dogs at a checkpoint outside the airport. It was later discovered that there was only one dog—and it was not even trained to detect bombs.
It fell asleep each time it arrived at the checkpoint. Bremer accepts the CPA records provide no evidence of the vanishing billions. He complains that the Iraqi banking system was in chaos and he did not have the required number of trained staff to handle such a massive amount of money. One only wonders how the Bush administration will explain the disappearance of $12 billion was a drop in the ocean compared to what was actually wasted in Iraq and also in Afghanistan.
To understand how little we know about wasteful spending, it emerged recently that there are conflicting figures for how much the Pentagon spends for having approximately 35,000 so-called “contractor personnel” in Iraq and Afghanistan to boost the U.S. military presence.
The generally accepted costs for putting a U.S. soldier in the field is around $600 a day, compared to approximately $1,300 for a military contractor. That means approximately $40 million is spent per day hiring “mercenaries.” The figure may of course be much higher. Until the Pentagon provides proper records for this aspect of the war the whole matter will remain yet another financial mystery of this presidency.
(Issue #9, February 17, 2006)