The CPA Reconstruction Scandal

I’ve been catching up on my Blogrolls today, and came across this post from CItizen of Mozul.

It’s from August 4th… but given the seriousness of the charge, and the lack of any reaction (or at least any that I’ve heard) in the US… it’s worth repeating.

Read the entire thing… it has nuggets of information from top to bottom. When you’re done think of this:

The UNSCAM is currently looking into approximately a half dozen different people who profited on the backs of poor and helpless Iraqis… including the son of UN Secretary General, Kofi Annan.

This CPA scandal is implicating dozens of people throughout the Iraqi government, plus Paul Bremer and dozens more contractors, administrators and “agents” who chose not to follow the rules or be forcoming.

UNSCAM has created calls for Kofi Annan to resign because, rightly so, the buck stops in his office. Where did the Buck Stop for the Coalition Provisional Authority? Paul Bremer? Donald Rumsfeld? George W. Bush?

He posts an article from the Guardian of August 7, 2005.

When Paul Bremer, the American pro consul in Baghdad until June [2004], arrived in Iraq soon after the official end of hostilities, there was $6bn left over from the UN Oil for Food Programme, as well as sequestered and frozen assets, and at least $10bn from resumed Iraqi oil exports. Under Security Council Resolution 1483, passed on May 22 2003, all these funds were transferred into a new account held at the Federal Reserve Bank in New York, called the Development Fund for Iraq (DFI), and intended to be spent by the Coalition Provisional Authority (CPA) “in a transparent manner … for the benefit of the Iraqi people”.

They have also discovered that $8.8bn that passed through the new Iraqi government ministries…. is unaccounted for…. A further $3.4bn appropriated by Congress for Iraqi development has since been siphoned off to finance “security”.

….

The CPA maintained one fund of nearly $600m cash for which there is no paperwork: $200m of it was kept in a room in one of Saddam’s former palaces. The US soldier in charge used to keep the key to the room in his backpack
….

The [International Advisory and Monitoring Board] first spent months trying to find auditors acceptable to the US. The Bahrain office of KPMG was finally appointed in April 2004.

“KPMG has encountered resistance from CPA staff regarding the submission of information required to complete our procedures,” they wrote in an interim report. “Staff have indicated … that cooperation with KPMG’s undertakings is given a low priority.” KPMG had one meeting at the Iraqi Ministry of Finance; meetings at all the other ministries were repeatedly postponed. The auditors even had trouble getting passes to enter the Green Zone.”

….

An Iraqi hospital administrator told me that when he came to sign a contract, the American army officer representing the CPA had crossed out the original price and doubled it. The Iraqi protested that the original price was enough. The American officer explained that the increase (more than $1m) was his retirement package.

Millions of dollars in cash went missing from the Iraqi Central Bank. Between $11m and $26m worth of Iraqi property sequestered by the CPA was unaccounted for. The payroll was padded with hundreds of ghost employees. Millions of dollars were paid to contractors for phantom work. Some $3,379,505 was billed, for example, for “personnel not in the field performing work” and “other improper charges” on just one oil pipeline repair contract.

….

Officially, Iraq exported $10bn worth of oil in the first year of the American occupation. Christian Aid has estimated that up to $4bn more may have been exported and is unaccounted for. If so, this would have created an off-the-books fund that both the Americans and their Iraqi allies could use with impunity to cover expenditures they would rather keep secret…

“Our review showed that financial records … understated payments made by $108,255,875” and “overstated unpaid obligations by $119,361,286”. The auditors also reviewed the paperwork of a further 300 contracts worth $332.9m: “Of 198 contract files reviewed, 154 did not contain evidence that goods and services were received, 169 did not contain invoices, and 14 did not contain evidence of payment.”

Many of the American agents submitted their paperwork only hours before they headed to the airport. Two left Iraq without accounting for $750,000 each, which has never been found. CPA head office cleared several agents’ balances of between $250,000 and $12m without any receipts. One agent who did submit receipts, on being told that he still owed $1,878,870, turned up three days later with exactly that amount. The auditors thought that “this suggests that the agent had a reserve of cash“, pointing out that if his original figures had been correct, he would have accounted to the CPA for approximately $3.8m more than he had been given in the first place, which “suggests that the receipt documents provided to the DFI account manager were unreliable”.

“19 billion new Iraqi dinars, worth about £6.5m, was found on a plane in Lebanon that had been sent there by the new Iraqi interior minister”

“One ministry claimed to be paying 8,206 guards, but only 602 could be found”

“One American agent was given $23m to spend on restructuring; only $6m is accounted for”

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