US Sent $4 - Or Was It 12? - Billion In Cash To Iraq
How in the world could anyone keep track of this much cash? The answer: they can't.
In early 2005, the special inspector general for Iraqi reconstruction reported that $8.8 billion of the $12 billion given to Iraq ministries was unaccounted for.
The latest report of this record transfer of cash came to light at a hearing called by Rep. Henry Waxman (D-CA-30), chairman of the House Committee on Oversight and Government Reform.
Paul Bremer, the head of CPA, said that "the cash shipments were made at the explicit request of the Iraqi minister of finance to forward fund government expenses, a perfectly, seems to me, legitimate use of his money."
Iraqi Money
ABC reports that the US had been holding the money, which "came from Iraqi oil exports, surplus dollars from the U.N.-run oil-for-food program and frozen assets belonging to the ousted Saddam Hussein regime." From The Guardian:
At the start of the Iraq war, around $23bn-worth of Iraqi money was placed in the trusteeship of the US-led coalition by the UN. The money, known as the Development Fund for Iraq and consisting of the proceeds of oil sales, frozen Iraqi bank accounts and seized Iraqi assets, was to be used in a "transparent manner", specified the UN, for "purposes benefiting the people of Iraq".
And how did the CPA handle the money?
[T]he accounting firm hired by Bremer was one called NorthStar Consultants. NorthStar received a contract worth $1.4 million but "were not certified public accountants and did not perform a review of internal controls as required by the contract. Consequently, internal controls over DFI (Development Fund for Iraq) disbursements to and from Iraqi ministries were not evaluated."
More, from The Guardian last year:
Frank Willis, a former senior official with the governing Coalition Provisional Authority. "We played football with some of the bricks of $100 bills before delivery. It was a wild-west crazy atmosphere, the likes of which none of us had ever experienced."...
"American law was suspended, Iraqi law was suspended, and Iraq basically became a free fraud zone," says Alan Grayson, a Florida-based attorney who represents whistleblowers now trying to expose the corruption. "In a free fire zone you can shoot at anybody you want. In a free fraud zone you can steal anything you like. And that was what they did."...
Perhaps most puzzling of all is what happened as the day approached for the handover of power (and the remaining funds) to the incoming Iraqi interim government. Instead of carefully conserving the Iraqi money for the new government, the Coalition Provisional Authority went on an extraordinary spending spree. Some $5bn was committed or spent in the last month alone, very little of it adequately accounted for.
Back At The Waxman Hearing
Demcrats asked if the massive amount of cash could have made its way into the hands of "insurgents" through false payroll data.
Bremer said he knew "that the problem of fake names on the payroll existed before the U.S.-led invasion." He continued, "I acknowledge that I made mistakes and that, with the benefit of hindsight, I would have made some decisions differently."
Cough-cough. Mistakes seem to have little fallout in this Administration.
On December 14, 2004, President Bush gave Bremer the Presidential Medal of Freedom, America's highest civil award for "especially meritorious contributions to the security or national interests of the United States, to world peace, or to cultural or other significant public or private endeavors."
He published a book about his experiences, My Year In Iraq: The Struggle to Build a Future of Hope, in January 2006.