www.amconmag.com/2005/2005_10_24/cover.html
October 24, 2005 Issue Copyright 2005 The American Conservative Money for Nothing Billions of dollars have disappeared, gone to bribe Iraqis and line contr actors pockets. by Philip Giraldi The United States invaded Iraq with a high-minded mission: destroy danger ous weapons, bring democracy, and trigger a wave of reform across the Mi ddle East. When the final page is written on Americas catastrophic imperial venture , one word will dominate the explanation of US failurecorruption. Lar ge-scale and pervasive corruption meant that available resources could n ot be used to stabilize and secure Iraq in the early days of the Coaliti on Provisional Authority (CPA), when it was still possible to do so. Con tinuing corruption meant that the reconstruction of infrastructure never got underway, giving the Iraqi people little incentive to co-operate wi th the occupation. Ongoing corruption in arms procurement and defense sp ending means that Baghdad will never control a viable army while the Shi ite and Kurdish militias will grow stronger and produce a divided Iraq in which constitutional guarantees will be irrelevant. The American-dominated Coalition Provisional Authority could well prove t o be the most corrupt administration in history, almost certainly surpas sing the widespread fraud of the much-maligned UN Oil for Food Program. At least $20 billion that belonged to the Iraqi people has been wasted, together with hundreds of millions of US taxpayer dollars. Exactly how many billions of additional dollars were squandered, stolen, given away , or simply lost will never be known because the deliberate decision by the CPA not to meter oil exports means that no one will ever know how mu ch revenue was generated during 2003 and 2004. Some of the corruption grew out of the misguided neoconservative agenda f or Iraq, which meant that a serious reconstruction effort came second to doling out the spoils to the wars most fervent supporters. The CPA bro ught in scores of bright, young true believers who were nearly universal ly unqualified. Many were recruited through the Heritage Foundation webs ite, where they had posted their rsums. They were paid six-figure sala ries out of Iraqi funds, and most served in 90-day rotations before retu rning home with their war stories. One such volunteer was Simone Ledeen, daughter of leading neoconservative Michael Ledeen. Unable to communica te in Arabic and with no relevant experience or appropriate educational training, she nevertheless became a senior advisor for northern Iraq at the Ministry of Finance in Baghdad. Another was former White House Press Secretary Ari Fleischers older brother Michael who, though utterly unq ualified, was named director of private-sector development for all of Ir aq. The 15-month proconsulship of the CPA disbursed nearly $20 billion, two-t hirds of it in cash, most of which came from the Development Fund for Ir aq that had replaced the UN Oil for Food Program and from frozen and sei zed Iraqi assets. Twelve billion dollars moved that way be tween May 2003 and June 2004, drawn from accounts administered by the Ne w York Federal Reserve Bank. The $100 bills weighed an estimated 363 ton s Once in Iraq, there was virtually no accountability over how the money wa s spent. There was also considerable money off the books, including as much as $4 billion from illegal oil exports. The CPA and the Iraqi Stat e Oil Marketing Board, which it controlled, made a deliberate decision n ot to record or meter oil exports, an invitation to wholesale fraud an d black marketeering. British sources report that the CPA contracts that were not handed out to cronies were sold to the highest bidder, with bribes as high as $300,000 being demanded for particularly lucrative reconstruction contracts. The contracts were especially attractive because no work or results were necessarily expected in return. It became popular to cancel contracts wi thout penalty, claiming that security costs were making it too difficult to do the work. A $500 million power-plant contract was reportedly awar ded to a bidder based on a proposal one page long. After a joint commiss ion rejected the proposal, its members were replaced by the minister, an d approval was duly obtained. Where contracts are actually performed, their nominal cost is inflated su fficiently to provide handsome bribes for everyone involved in the proce ss. Bribes paid to government ministers reportedly exceed $10 million. The CPA reportedl y distributed funds to contractors in bags off the back of a truck. Afterwards, no one was able to recall the couriers name or provide a good descripti on of him. Paul Bremer, meanwhile, had a slush fund in cash of more than $600 millio n in his office for which there was no paperwork. Three-quarters of a million dollars w as stolen from an office safe, and a US official was given $7 million in cash in the waning days of the CPA and told to spend it before the I raqis take over. Nearly $5 billion was shipped from New York in the las t month of the CPA. Sources suggest that a deliberate attempt was being made to run down the balance and spend the money while the CPA still had authority and before an Iraqi government could be formed. The only certified public-accounting firm used by the CPA to monitor its spending was a company called North Star Consultants, located in San Die go, which was so small that it operated out of a private home. It was su bsequently determined that North Star did not, in fact, perform any revi ew of the CPAs internal spending controls. Today, no one can account fo r billions of those dollars or even suggest how the money was spent. And as the CPA no longer exists, there is also little interest in re-examin ing its transparency or accountability. Bremer escaped Baghdad by helicopter two days before his proconsulship ex pired to avoid a possible ambush on the road leading to the airport, whi ch he had been unable to secure. He has recently been awarded the Presid ential Medal of Freedom, an honor he shares with ex-CIA Director George Slam-dunk Tenet. Considerable fraud has been alleged regarding American companies, much of which can never be addressed because the Bush administration does not r egard contracts with the CPA as pertaining to the US government, even though US taxpayer dollars were involved in some transactions. Many of the contracts for work in Iraq were awarded on a cost-plus basis, in which an agreed-upon percentage of profit would be added to the actu al costs of performing the contract. Such contracts are an invitation to fraud, and unscrupulous companies will make every effort to increase th eir costs so that the profits will also increase proportionally. Halliburton, Vice President Dick Cheneys former company, has a no-bid mo nopoly contract with the Army Corps of Engineers that is now estimated t o be worth $10 billion. In June 2005, Pentagon contracting officer Bunny Greenhouse told a congressional committee that the agreement was the m ost blatant and improper contracting abuse that she had ever witnessed, a frank assessment that subsequently earned her a demotion. Halliburton has frequently been questioned over its poor record keeping, and critics claim that it has a history of overcharging for its services . In May 1967, a company called RMK/BRJ could not account for $120 milli on in materiel sent to Vietnam and was investigated several times for ov ercharging on fuel. RMK/BRJ is now known as KBR or Kellogg, Brown and Ro ot, the Halliburton subsidiary that has been the focus of congressional, Department of Defense, and General Accountability Office investigations . In one instance, the company charged the Army more than $27 million to transport $82,000 worth of fuel from K uwait to Iraq. Halliburton has also been accused of billing the Army for 42,000 daily meals for soldiers, though it was only actually serving 14 ,000. In another operation, KBR purchased fleets of Mercedes trucks at $ 85,000 each to re-supply US troops. The trucks carried no spare parts or even extra tires for the grueling high-speed run across the Kuwaiti a nd Iraqi deserts. When the trucks broke down on th...
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