Missing Iraqi Billions 'Probably Stolen'

Published on
by
The Sydney Morning Herald (Australia)

Missing Iraqi Billions 'Probably Stolen'

U.S. Defense officials still cannot say what happened to $6.6 billion

by
Paul Richter

Oops. One Hercules C-130 could carry as much as $US2.4 billion in shrink-wrapped bricks of $US100 bills. (Photo: Supplied)

WASHINGTON - This month, the Pentagon and the Iraqi government are finally closing the books on the program that handled funding for reconstruction in postwar Iraq.

But despite years of investigations, US defense officials still cannot say what happened to $US6.6 billion ($6.3 billion/Australian) of the cash. Federal auditors are now suggesting that some or all of the cash may have been stolen, not just mislaid in an accounting error.

After the US-led invasion in March 2003, the Bush administration flooded Iraq with so much cash that a new unit of measurement was born.

Pentagon officials determined that one giant C-130 Hercules cargo plane could carry $US2.4 billion in shrink-wrapped bricks of $US100 bills. They sent an initial full planeload of cash followed by 20 other flights by May 2004 in a $US12 billion haul that US officials believe to be the biggest ever international cash airlift.

Stuart Bowen, special inspector-general for Iraq reconstruction, said the missing $US6.6 billion might be ''the largest theft of funds in national history''.

Iraqi officials are threatening to go to court to reclaim the money, which came from Iraqi oil sales, seized Iraqi assets and surplus funds from the United Nations' oil-for-food program.

The US Congress, which has already shelled out $US61 billion for similar reconstruction and development projects in Iraq, is none too thrilled either.

''Congress is not looking forward to having to spend billions of our money to make up for billions of their money that we can't account for, and can't seem to find,'' said Democrat congressman Henry Waxman, who presided over hearings on waste, fraud and abuse in Iraq six years ago when he headed the House government reform committee.

The cash airlift was a desperation measure, organised when the Bush administration was eager to restore government services and a shattered economy to give Iraqis confidence that the new order would be a drastic improvement on Saddam Hussein's rule.

The White House decided to use the money in the so-called Development Fund for Iraq, which was created by the Federal Reserve Bank of New York to hold money amassed during the years when Hussein's regime was under crippling economic and trade sanctions.

But US officials often didn't have time or staff to keep strict financial controls.

Millions of dollars were stuffed in gunny sacks and hauled on utility trucks to Iraqi agencies or contractors, officials have testified.

Pentagon officials have contended for the past six years that they could account for the money if given enough time to track down the records. But repeated attempts to find the documentation, or better yet the cash, were fruitless.

Iraqi officials argue the US government was supposed to safeguard the stash under a 2004 legal agreement. Abdul Basit Turki Saeed, Iraq's chief auditor and president of the Iraqi Board of Supreme Audit, has warned that his government will go to court if necessary to recoup the missing money.

''Clearly Iraq has an interest in looking after its assets and protecting them,'' Samir Sumaidaie, Iraq's ambassador to the US, said.

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