“The largest theft of funds in national history”

The Los Angeles Times reported that the U.S. Defense Department officials still can’t account for $6.6 billion in Iraq reconstruction funds – some of it distributed in shrink-wrapped pallets of $100 bills.  Some or all of it may have been stolen, the Pentagon says.

It wasn’t American money.   The $6.6 billion came out of Iraq oil sales, seized Iraqi assets and surplus funds from the United Nations oil-for-food program, and not from the $61 billion appropriated by Congress for Iraq reconstruction.

After the U.S.-led invasion of Iraq in March 2003, the George W. Bush administration flooded the conquered country with so much cash to pay for reconstruction and other projects in the first year that a new unit of measurement was born.

Pentagon officials determined that one giant C-130 Hercules cargo plane could carry $2.4 billion in shrink-wrapped bricks of $100 bills.  They sent an initial full planeload of cash, followed by 20 other flights to Iraq by May 2004 in a $12-billion haul that U.S. officials believe to be the biggest international cash airlift of all time.

This month, the Pentagon and the Iraqi government are finally closing the books on the program that handled all those Benjamins.  But despite years of audits and investigations, U.S. Defense officials still cannot say what happened to $6.6 billion in cash — enough to run the Los Angeles Unified School District or the Chicago Public Schools for a year, among many other things.

For the first time, federal auditors are suggesting that some or all of the cash may have been stolen, not just mislaid in an accounting error.  Stuart Bowen, special inspector general for Iraq reconstruction, an office created by Congress, said the missing $6.6 billion may be “the largest theft of funds in national history.”

via latimes.com.

The excuse for the haste was the urgency of getting reconstruction started.   The excuse might have some merit if reconstruction had actually taken place.

Rep. Henry A. Waxman of California, the senior Democrat on the House Government Reform Committee, deserves credit for his perseverance in investigating this scandal.  But I think it is safe to predict that no individual is going to be held accountable, and nobody’s career will suffer.

The London Review of Books had a excellent series of articles on the mishandling of the Iraq reconstruction funds, starting as far back as 2005, and there were follow-up reports in The American Conservative, Foreign Policy and other U.S. publications.

On 12 April 2004, the Coalition Provisional Authority in Erbil in northern Iraq handed over $1.5 billion in cash to a local courier. The money, fresh $100 bills shrink-wrapped on pallets, which filled three Blackhawk helicopters, came from oil sales under the UN’s Oil for Food Program, and had been entrusted by the UN Security Council to the Americans to be spent on behalf of the Iraqi people.  The CPA didn’t properly check out the courier before handing over the cash, and, as a result, according to an audit report by the CPA’s inspector general, ‘there was an increased risk of the loss or theft of the cash.’  Paul Bremer, the American pro-consul in Baghdad until June last year, kept a slush fund of nearly $600 million cash for which there is no paperwork: $200 million of this was kept in a room in one of Saddam’s former palaces, and the US soldier in charge used to keep the key to the room in his backpack, which he left on his desk when he popped out for lunch.  Again, this is Iraqi money, not US funds.

via LRB.

But this reporting did not generate any general sense of outrage.

Click on Iraq: Missing money may have been stolen, auditors say for the complete Los Angeles Times article.  (Hat tip to Don Montana for calling my attention to the link).

Click on The failed reconstruction of Iraq for an earlier post of mine on how the reconstruction money was wasted.  It has links to all the investigative articles in London Review of Books.

The post has links to an Iraqi-eye view of reconstruction by a young Iraqi woman who called herself Riverbend and blogged as Baghdad Burning (when last heard from, she and her family were refugees).  Riverbend described how companies such as Halliburton and Bechtel were given huge no-bid contracts, and then put out the work for bid to Iraqi companies.  So the Iraqis might get, say, $1 million for doing work the U.S. company was paid $50 million to do.  But this is not a scandal.  All that money was spent as it was intended.

[Added 6/24/11].   Click on Baghdad Burning for the archive of Riverbend’s web log.

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5 Responses to ““The largest theft of funds in national history””

  1. Cargo Planes of Cash Now Missing in Iraq. Oops! (via Phil Ebersole’s Blog) | The Deliberate Observer Says:

    [...] The American taxpayer hasn’t flinched on having to “share the pain” of budget cuts to trim the deficit. But “supporting the troops” has certainly been an expensive undertaking, eh? The Los Angeles Times reported that the U.S. Defense Department officials still can’t account for $6.6 billion in Iraq reconstruction funds – some of it distributed in shrink-wrapped pallets of $100 bills.  Some or all of it may have been stolen, the Pentagon says. It wasn’t American money.   The $6.6 billion came out of Iraq oil sales, seiz … Read More [...]

  2. sHx Says:

    The post has links to an Iraqi-eye view of reconstruction by a young Iraqi woman who called herself Riverbend and blogged as Baghdad Burning (when last heard from, she and her family were refugees).

    Or perhaps she never existed at all and she is only the figment of a fat, bearded, American’s imagination, like ‘A Gay Girl in Damascus’ was.

    4 Years have passed since the blogger and her family allegedly took refuge in Syria. If she were real, she’d speak out more from the safety of Syria, or, at least, come collect the royalties owed to her after several publishers re-issued her blog posts as book.

    She doesn’t exist, dude. She never did. All the information she allegedly provided from the streets of Baghdad were ‘dramatic re-enactment’ of Iraq news that could easily be gleaned from the media. No one has met her, no one has spoken with her and no one knows anyone who has met her or spoken with her.

    She disappeared into thin air because she was made of thin air.

  3. philebersole Says:

    When Riverbend was active, a number of right-wing warbloggers questioned the authenticity of her writings, based on no evidence whatsoever. I know of nobody who actually knows anything about Iraq and Baghdad who raised such questions.

    If Riverbend was not a young Iraqi woman living in Baghdad in the years 2003-2007, she is a Nobel-quality novelist.

    Here is the link.

    http://riverbendblog.blogspot.com/

    I invite people to read her journal and decide for themselves.
    There are many understandable reasons why a family living in Iraq or Syria would want to keep a low profile. I can’t think of any justifiable reason for you to use the cover of anonymity to attack someone’s integrity. (Are you any relation to Mr. Xyz, the anonymous commenter who attacked Prof. Juan Cole?)

  4. sHx Says:

    “I can’t think of any justifiable reason for you to use the cover of anonymity to attack someone’s integrity. (Are you any relation to Mr. Xyz, the anonymous commenter who attacked Prof. Juan Cole?)”

    I am neither Mr. Xyz nor Mrs. Abc, Just sHx, without the honorifics please.

    You know that the only reason I attack Riverbend’s integrity anonymously is because I’m afraid she’ll sue my pants off if I were to use my real name.

    You come across like a weird dude, dude. Are you for real?

  5. philebersole Says:

    From my standpoint, it seems weird to live in fear of a lawsuit from somebody you claim does not exist.

    By the way, Riverbend’s blog posts have been collected in two published books, Baghdad Burning and Baghdad Burning Two, but it’s not necessary to read the books because all her posts are still on the Internet.

    What she says about the carnival of corruption in the American occupation in Iraq is amply confirmed by congressional investigations, the Pentagon’s own audit and independent journalists. The links in my main post to the London Review of Books articles will give you access to the whole miserable story.

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