WHITE HOUSE IGNORED FLEECING OF AMERICA

If, and it is a big if, the tens of billions of dollars in US aid wasted in Iraq are ever accounted for it may turn out to be the biggest fleecing of American taxpayers in history.
And average Americans will not have been the only victims. So too will have been the millions of ordinary, law abiding Iraqis who had hoped their nation’s oil wealth would be used to rebuild the country and not to line the pockets of tribal leaders, insurgents, militias, crooked US contractors, some US soldiers and an unspecified number of very powerful figures in the Iraqi government.
At present, the sheer scale of the missing billions is unclear but consider this. Imagine for a moment that you wanted to transport 360 tons of $100 bills from the Federal Reserve Bank in New York to Baghdad. First you would need it assembled into what are called “bricks”, each one containing $100,000. Then 20 of those “bricks,” amounting to $2 million, would be sealed in a wooden box and so on. Eventually the whole 360 tons, of bills totaling $16 billion would need to be placed on three massive, US military C130 transport planes for the trip to Baghdad.
That is what the White House signed off to do in 2003 when Paul Bremer was running the CPA – Coalition Provisional Authority. It was a shadow government established by Washington after the fall of Saddam Hussein. Bremer, a former ambassador to Iraq, regarded as a security guru, was like a pro-consul of ancient Roman times but a lot less efficient. And if you think sending such a vast amount of cash into a war zone was the worst that could have happened, that was only part of an absurd and unbelievable story.
When the crisp, clean dollar bills reached Baghdad, it was like the “Wild West,” according to Frank Willis, the second-in-command in the CPA’s Transportation Ministry. Bricks containing $2 million were removed from their wooden cases and stuffed into foot lockers and filing cabinets. Rooms were piled with stacks of bills and wooden cases full of cash were placed in poorly secured vaults because the looting in Baghdad had reduced the capital to a place where nothing was safe, not even national museum artifacts.
Sometimes, members of the CPA referred to the $2 million bricks as “footballs” because they were passed from hand to hand. When money was needed for something, a few soldiers or members of the CPA staff were told to take a wheelbarrow or a sack and pick up anything from $1 million to $5 million. At CPA HQ within the Green Zone in Baghdad, there was one pile of $600 millions set aside. Of that, $200 million kept in a room to which one soldier had the key. He was reported to have kept the key in his pocket any time he went for a meal.
The CPA’s job was to use the $16 billion for reconstruction but there were no proper accounting practices in place, and before long that provided the criminally minded with a wonderful opportunity to steal what they wanted. Approximately $8 billion was channeled through Iraqi ministries that kept no records or two sets of records, one of them bogus. Large sums of money were siphoned off by billing for twice and sometimes ten times the number of actual staff they were employing. One of the most blatant examples of that kind of scam involved an Iraqi ministry that billed the CPA for over 8,000 security guards when it only employed around 600.
For Iraqi sheikhs, politicians and officials linked to the insurgency and the militias it was as though Christmas had arrived. Cash in amounts of tens of millions that were transferred to the Iraqi Central Bank and disappeared without trace. CPA money was even used in a weapons buy back program, a purpose for which it was not intended. Many of the weapons found their way back to the streets. In fact, large shipments of weapons the US transported to Iraq to arm the Iraqi army vanished and it is now believed some of them were sold by corrupt officials to militias and Hezbollah in Lebanon.
A sizeable slice of the 360 tons of cash ended up in the hands of contractors often without any competitive bids or proper contracts. It is now estimated that millions of dollars were awarded for phantom construction projects such as schools, hospitals and pipeline repair work. For example, over $3 million was paid in salaries for a non-existent pipeline repair. pipeline. CPA contract payments were understated by as much as $108 million and of 198 contract files that were later examined, 154 lacked evidence that any goods or services were ever rendered. Fourteen contracts did not even show evidence of any payment. One department within the CPA, without oversight from superiors, “signed off” on contracts worth $430 without providing paperwork. And all of that was happening when the families of soldiers were buying body armor for their sons and daughters in the field. A subsequent report on the handling of cash beyond Baghdad showed that, in one instance, over $96 million in “cash and receipts” could not be traced. That money was handed to Americans recruited by the CPA as short term “field agents.” Those agents dealt with US contractors and it was found that some agents overstated their needs by millions. They often only provided information about how much they had spend days before they flew home to the US or Europe. The CPA gave one agent a $25 million cash budget to hire contractors but only received records to cover 25% of that amount. Where the rest went remains a mystery as does the disappearance of $12 billion of the 360 tons of cash flown into Baghdad in 2003.
One of the crazy examples of how cash was handed over by the CPA related to a contract with a US security company to handle security at Baghdad airport. The company billed for the use of “bomb-sniffer” dogs at a checkpoint outside the airport. It turned out there was only one dog and it was not trained to detect bombs. It fell asleep each time it arrived at the checkpoint.
In 2004, the international accounting firm, KPMG was asked to conduct an audit of the CPA but quickly found that the CPA was not happy with the scrutiny. Also, meeting with senior Iraqi figures were cancelled without notice and KPMG could not get the information it required. The White House and the CPA had good reason not to want the American public to know about the massive fraud taking place because the CPA was about to be disbanded. Yet before Bremer left Iraq in July that same year, he signed off on over $3 billion in contracts. Even when KPMG made its report, it was unable to show the scale of the fleecing of American taxpayers and their Iraqi counterparts.
That is yet another part of the story this complex tale. The waste in respect of the 360 tons of cash is often dismissed on the basis that it was Iraqi money and its loss cost the US taxpayer nothing. Yes, it is true that most of the cash flown to Baghdad in 2003 was Iraqi cash, held over from the UN’s oil for food program during the Saddam era and from assets seized by the US. But that was not the only money sent to Iraq. To date the US has spent vastly more than that. And considering how $9 billion cannot be traced from that 2003 shipment, there is every reason to believe the fleecing of Americans and ordinary Iraqis is on an historic scale. And it is continuing. Christian Aid says that in 2004 alone Iraqi officials claimed they sold $10 billion in Iraq oil overseas, but the figure was probably closer to $14. Since oil was meant to pay for the US occupation, when there is a shortfall the financial burden for the occupation falls entirely on US taxpayers.
Bremer accepts the CPA records provide no evidence of the vanishing billions. He complains that the Iraqi banking system was in chaos and he did not have the required number of trained staff to handle such a massive amount of money. One only wonders what the Bush administration will say when we learn that the disappearance of $12 billion was a drop in the ocean compared to what was actually wasted in Iraq and also in Afghanistan.
To understand how little we know about wasteful spending, it emerged recently that there are conflicting figures for how much the Pentagon spends for having approximately 35,000 contractor personnel on the ground in Iraq and Afghanistan to boost the US military presence. The generally accepted costs for putting a US soldier in the field is around $600 a day, compared to approximately $1,300 for a military contractor. That means approximately $40 million is spent per day hiring “mercenaries.” The figure may of course be much higher. Until the Pentagon provides proper records for this aspect f the war the whole matter will remain yet another financial mystery of this presidency.