Wednesday, August 04, 2004

$8 Billing Missing in Iraq

David Hackworth reports:


n Iraq, $8.8 billion is MIA. Serious dough even for the big spenders in Washington, D.C.

A pal in Iraq slipped me a draft Coalition Provisional Authority (CPA) Inspector General (IG) report dated July 12, 2004, that blisters the CPA for giving the missing billions to Iraqi ministries without appropriate controls.

The IG report concludes: “The CPA did not provide adequate stewardship of over $8.8 billion in DFI (Development Fund for Iraq) funds provided to Iraqi Ministries through the national budget process. Specifically, the CPA did not establish and implement adequate managerial, financial, and contractual controls over the funds to ensure they were used in a transparent manner.”

Offshore bankers must be burning the midnight oil these days with all the new secret accounts pouring out of Baghdad!

And small wonder that L. Paul Bremer went to ground in June after he turned the running of Iraq over to the Iraqis, closed down the CPA and flew home for an attaboy lunch with President Bush at the White House.

I’m not suggesting that he's living high on the hog on some Cayman-type island in the Caribbean, but I am saying that he was the guy in charge in Iraq – and when it came to handling the funds in his trust, the IG report clearly states that he “did not exercise adequate fiduciary responsibility over DFI funds provided to Iraqi Ministries.”

Early in the occupation, one senior CPA adviser asked for help from Bremer’s legal eagles and was blown off with the following double talk: “There are no written guidelines delineating the senior advisers’ role, responsibilities and authorities.” The Iraqi ministers were expected to “assume responsibility for and exercise authority over all recurring, day-to-day functions of their Ministries” as Bremer & Company went about “ncreasingly empowering the interim Ministers, consistent with their capabilities.”

Their capabilities appear to be well worth investigating, since my sources have been telling me for months that Iraqi payrolls have been heavily padded with ghost soldiers and ghost guards.

According to the IG, “CPA did not implement adequate controls to ensure DFI funds were properly used for salaries of Iraqi employees.”

For example, the CPA paid 74,000 guards even though the actual number of guards couldn’t be validated. On one site alone, 8,206 guards were on the payroll, but only 603 warm bodies could be counted. Elsewhere, more than $17 million was allocated to guards and the Iraqi army without one piece of backup paper. Pals in Iraq say this has been standard drill since the birth of “a very dysfunctional” CPA.

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