Missing Money In Iraq

In my creed, waste of public money is like the sin against the Holy Ghost.
- John, Viscount Morley of Blackburn, Recollections (1917)

It puts it in a whole new light. And a better light it is. I refer to the recent news about spending in Iraq.

At a hearing before the House Committee on Oversight and Government Reform with the catchy title of Accountability Lapses in Multiple Funds, all sorts of interesting examples were offered by the representative from the Inspector General's office that made earlier disclosures as to misspent funds in Iraq seem benign. The words used to describe the hearing are technical terms for which an explanation is needed. "

Accountability" refers to the fact that the U.S. government disbursed $8.2 billion on Iraqi affairs and either forgot to get receipts or, when it got receipts, forgot to put on the receipts detailed descriptions of what the money was spent for. The reference to "multiple funds" means that it wasn't only U.S. taxpayer dollars that were the victims of "Accountability Lapses." Monies belonging to the Iraqi government known as "Seized and Vested Assets" were also victims of these lapses. The audit found that $1.8 billion in Iraqi assets over which the United States had disbursal authority was paid out in cash with no record of who the recipients were.

Mary L. Ugone (that is her last name-it is not a government name given someone looking for missing funds)m the Deputy Inspector General for Audit for the Department of Defense, explained the audit was started because a Defense Criminal Investigative Service assessment found that there were inadequate controls over disbursement of either U.S. taxpayer dollars or funds belonging to Iraq that were disbursed by U.S. authorities, disbursals the U.S. was able to make because of the very close relationship the U.S. enjoys with Iraq's money (and leaders.) Ms. Ugone told the committee that the Department of Defense had been appropriated $492 billion to support Operation Iraqi Freedom and that $2.8 billion of Seized and Vested Assets were to be returned to Iraq to "help rebuild its infrastructure and economy." Ms. Ugone said that $1.4 billion in contract and vendor payments and $6.3 billion in commercial payments lacked minimum supporting documentation and information for proper payment.

Ms. Ugone's testimony was 29 pages in length. At page 16 of her testimony she describes the payment of $320 million in cash "to an Iraqi representative for Iraqi salary payments" with no indication of to whom the funds were provided or how many people were to receive salary payments. It seems appropriate that Iraqi funds be used to pay Iraqi salaries. It would probably have been helpful to indicate who got the salaries.

An exhibit attached to the hearing showed that David Dial, of Irmo (Home of the Okra Strut), S.C. received a U.S Treasury check for an entity called IAP for $11,122,582.80 with no indication what it was for other than "Public Voucher for Purchases and Services Other Than Personal." Alderson Williams, SFC, certified that the "voucher is correct and proper for payment." A U.S. Treasury check for $5,674,075 went to Al Kasid Specialized Vehicles Trading Company c/o Federal Reserve Bank in Baghdad without a description of what it was for. Anyone wanting more examples can go to the Washington Post or the New York Times.

The difference between disclosures at the May hearing and earlier disclosures is the fact that there was less embarrassment associated with the earlier disclosures. We know from earlier reports that Parsons, a Texas construction company had a $243 million contract to build 150 health clinics in Iraq, paid itself $60 million of that amount for administration and management and, using the remainder, completed 20 of the 150 clinics. We know Parsons had a contract for $99.1 million to build the Khan Bani Saad Correctional Facility North of Baghdad that was to be completed by June 2006. When that date rolled around, Parsons said it could not complete it before September 2008 and it would cost an addition $13.5 million to complete. Pocketing what it had been paid Parsons went off to look in the classified ads or the White House for other work. The contract was cancelled.

KBR overcharged for meals served troops in Iraq and delivered unsafe drinking water to those troops. (It has just entered into a new contract enabling it to share in a $150 billion contract to provide services to American soldiers in Iraq.)

The earlier reports were uplifting since they showed that a fiscally responsible Bush administration knew exactly to whom and for what monies were disbursed. Its only failure was insuring that the work for which payment was made was satisfactorily completed. As the recent hearings show, by not tracking the purposes of the disbursements, there is no risk of embarrassing anyone because of the failure of the recipient to satisfactorily complete the work for which it was paid. As teenagers would say, if asked, "That is SO Iraq."

Christopher Brauchli
For political commentary see my web page https://humanraceandothersports.com