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U.S. Blew Billions in Iraq Spending Spree
By Staff and Wire Reports
Jun 22, 2005, 07:20
The United States wasted nearly $20 billion of Iraq's funds in a spending spree the final days before transferring power to the Iraqis nearly a year ago, a report said on Tuesday.
A report by Democratic Rep. Henry Waxman of California, said in the week before the hand-over on June 28, 2004, the U.S.-led Coalition Provisional Authority ordered the urgent delivery of more than $4 billion in Iraqi funds from the U.S. Federal Reserve in New York.
One single shipment amounted to $2.4 billion -- the largest movement of cash in the bank's history, said Waxman.
Most of these funds came from frozen and seized assets and from the Development Fund for Iraq, which succeeded the U.N.'s oil-for-food program. After the U.S. invasion, the U.N. directed this money should be used by the CPA for the benefit of the Iraqi people.
Cash was loaded onto giant pallets for shipment by plane to Iraq, and paid out to contractors who carried it away in duffel bags.
The report, released at a House of Representatives committee hearing, said despite the huge amount of money, there was little U.S. scrutiny in how these assets were managed.
"The disbursement of these funds was characterized by significant waste, fraud and abuse," said Waxman.
An audit by the U.S. Special Inspector General for Iraq Reconstruction said U.S. auditors could not account for nearly $8.8 billion in Iraqi funds and the United States had not provided adequate controls for this money.
"The CPA's management of Iraqi money was an important responsibility that, in my view, required more diligent accountability, pursuant to its assigned mandate, than we found," said chief inspector Stuart Bowen in testimony.
Auditors found problems safeguarding funds including one instance where a CPA comptroller did not have access to a field safe as the key was located in an unsecured backpack.
Bowen's office has referred three criminal cases to the U.S. Attorney's Office in the past two weeks for misuse of funds. Bowen declined to provide details at the hearing.
In one e-mail released in Waxman's report with the subject line "Pocket Change," a CPA official stressed the need to get money flowing fast before the handover.
Rep. Stephen Lynch of Massachusetts, a Democrat, questioned why so much money had to be transferred so fast.
Senior defense official Joseph Benkert said an infusion of funds was needed to address a wide variety of needs before the new Iraqi government took over.
Part of the challenge in tracking how money was spent was the cash environment and lack of electronic transfers.
Contractors were told to turn up with big duffel bags to pick up their payments and some were paid from the back of pick-up trucks.
One picture shows grinning CPA officials standing in front of a pile of cash said to be worth $2 million to be paid to a security contractor.
Rep. Christopher Shays of Connecticut, a Republican, said the photograph disturbed him. "It looks a little loose to me," he said, of the smiling officials.
"I share your concern," said Bowen.
Citing documents from the U.S. Federal Reserve Bank in New York, Waxman said the United States flew in nearly $12 billion overall in U.S. currency to Iraq from the United States between May 2003 and June 2004.
This money was used to pay for Iraqi salaries, fund Iraqi ministries and also to pay some U.S. contractors.
In total, more than 281 million individual bills, including more than 107 million $100 bills, were shipped to Iraq on giant pallets loaded onto C-130 planes, the report said.
This is gross. Also most of these contrators are not Iraqi.
There has been so much money fraud in this war including the 80billion of unaccounted money spent by our government.
Where is the outrage on this? Since we are the ones paying the bills we should demand accountability and immediate answers.
LIAC, did you read the article? It's funds that came from frozen and seized assets and from the Development Fund for Iraq, which succeeded the U.N.'s oil-for-food program. It's the Iraqi's money that we were holding from their oil sales. Why should the Iraqi's have to account to us how they spend their money?
BTW, what $80 billion of unaccounted money are you talking about?
__________________
“So I became a newspaperman. I hated to do it but I couldn’t find honest employment.” —Mark Twain
Why should the Iraqi's have to account to us how they spend their money?
BTW, what $80 billion of unaccounted money are you talking about?
Because they were not the ones who spent it. The US was the one spending the Iraqi funds. If you have no issues with it....then please send me your account numbers and passwords so I can manage your funds for you however the heck I please.
Because they were not the ones who spent it. The US was the one spending the Iraqi funds. If you have no issues with it....then please send me your account numbers and passwords so I can manage your funds for you however the heck I please.
They were giving it to the Iraqi people. What else should they do with it? At least it went to the people and not some political big wig who would have kept it all to him self.
As far as you managing my accounts--no thanks. I don't trust you.
__________________
“So I became a newspaperman. I hated to do it but I couldn’t find honest employment.” —Mark Twain
Where is the outrage on this? Since we are the ones paying the bills we should demand accountability and immediate answers.
The funds were Iraqi money being paid primarily to U.S. contractors, on that you are correct. I say primarily because the contractors are hiring double butt-loads (that's means alot) of Iraqi's to do labor. Right now I'd guess that around 15% of the Iraqi work-force are working for the U.S. in some capacity or another.
I personally don't understand why you are so quick to say "Where is the outrage?"
Outrage by who? The only ones who should be pissed are the Iraqi's.
The way I see it, we've have dumped 1,700 lives and god knows how many limbs, consciences, marriages, hardships, and an untold amount of American taxpayer money trying to rebuild their country and give them a better way of life.
So we used Sadaam's money to pay the contractors. So what?
__________________
Bob Melvin is an idiot. Period.
The way I see it, we've have dumped 1,700 lives and god knows how many limbs, consciences, marriages, hardships, and an untold amount of American taxpayer money trying to rebuild their country and give them a better way of life.
You said it. Rebuild their country. After the U S military bombed it into the stone age. See what I am getting at here. It didn't need to be rebuilt until it was blown apart...... and why was it blown apart?
" A few men got very rich during the civil war ". H.W.
__________________
In politics, nothing happens by accident. If it happens, you can bet it was planned that way.
Franklin D. Roosevelt
"Those who can make you believe absurdities can make you commit atrocities." --Voltaire
You said it. Rebuild their country. After the U S military bombed it into the stone age. See what I am getting at here. It didn't need to be rebuilt until it was blown apart...... and why was it blown apart?
" A few men got very rich during the civil war ". H.W.
Wally,
I know you detest war, and yes hind sight is 20-20. The "I told you so's" aren't necessary.
If you read the article, it says the payments began in May 2003. Two months after Baghdad fell (I'm here to tell you, it hadn't fallen quite yet).
The point is, did you, or anybody else at that point really believe there were no WMD's? Do we have to re-hash this?
BTW- This is important that you GET this part:
Sadaam made sure that 95% of the populace remained "in the stone age". They have been "in the stone age" for a very long time. Yes, we made it worse, but we are rebuilding their country to a standard higher than they have ever known.
I know that for a fact.
Some of the work we did was repairing war damage, just as much was done making things better than they have ever known.
Believe me on this one. I can prove it if you can't take my word for it. I'd honestly rather not, I hate "I told you so's".
__________________
Bob Melvin is an idiot. Period.
LIAC, did you read the article? It's funds that came from frozen and seized assets and from the Development Fund for Iraq, which succeeded the U.N.'s oil-for-food program. It's the Iraqi's money that we were holding from their oil sales. Why should the Iraqi's have to account to us how they spend their money?
BTW, what $80 billion of unaccounted money are you talking about?
Ooops, I meant to type $8 billion, but it is acutally $9 billion that is missing.
Quote:
Audit: $9 Billion Unaccounted For in Iraq
By Larry Margasak
The Associated Press
Sunday 30 January 2005
WASHINGTON - The U.S. occupation authority in Iraq was unable to keep track of nearly $9 billion it transferred to government ministries, which lacked financial controls, security, communications and adequate staff, an inspector general has found.
The U.S. officials relied on Iraqi audit agencies to account for the funds but those offices were not even functioning when the funds were transferred between October 2003 and June 2004, according to an audit by a special U.S. inspector general.
The findings were released Sunday by Stuart Bowen Jr., special inspector general for Iraq reconstruction. Bowen issued several reports on the Coalition Provisional Authority (CPA), the U.S. occupation government that ruled Iraq from June 2003 to June 2004.
The official who led the CPA, L. Paul Bremer III, submitted a blistering, written reply to the findings, saying the report had "many misconceptions and inaccuracies," and lacked professional judgment.
Bremer complained the report "assumes that Western-style budgeting and accounting procedures could be immediately and fully implemented in the midst of a war."
The inspector general said the occupying agency disbursed $8.8 billion to Iraqi ministries "without assurance the moneys were properly accounted for."
U.S. officials, the report said, "did not establish or implement sufficient managerial, financial and contractural controls." There was no way to verify that the money was used for its intended purposes of financing humanitarian needs, economic reconstruction, repair of facilities, disarmament and civil administration.
Pentagon spokesman Bryan Whitman said Sunday the authority was hamstrung by "extraordinary conditions" under which it worked throughout its mission.
"We simply disagree with the audit's conclusion that the CPA provided less than adequate controls," Whitman said.
Turning over the money "was in keeping with the CPA's responsibility to transfer these funds and administrative responsibilities to the Iraqi ministries as an essential part of restoring Iraqi governance."
The inspector general cited an International Monetary Fund assessment in October, 2003 on the poor state of Iraqi government offices. The assessment found ministries suffered from staff shortages, poor security, disruptions in communications, damage and looting of government buildings, and lack of financial policies.
Some of the transferred funds may have paid "ghost" employees, the inspector general found.
CPA staff learned that 8,206 guards were on the payroll at one ministry, but only 602 could be accounted for, the report said. At another ministry, U.S. officials found 1,417 guards on the payroll but could only confirm 642.
When staff members of the U.S. occupation government recommended that payrolls be verified before salary payments, CPA financial officials "stated the CPA would rather overpay salaries than risk not paying employees and inciting violence," the inspector general said.
Bremer attacked many of the specific findings. Among his rebuttal points:
With more than a million Iraqi families depending on government salaries, there would have been an increased security threat if civil servants had not been paid until modern pay records were developed.
U.S. policy was to build up the Iraqi force guarding government facilities, and it was better to accept an imperfect payroll system than "to stop paying armed young men" providing security.
The report was suggesting the CPA "should have placed hundreds of CPA auditors" in Iraqi ministries, contrary to United States and United Nations policy of giving Iraqi ministers responsibility for their budgets.
The CPA established a program review board, an independent judiciary and inspector generals in each agency to fight corruption.
The inspector general's report rejected Bremer's criticism. It concluded that despite the war, "We believe the CPA management of Iraq's national budget process and oversight of Iraqi funds was burdened by severe inefficiencies and poor management."
__________________ Goin' "Double Maverick!"
Last edited by LoyaltyisaCurse; June 24th, 2005 at 10:51 AM.
I know you detest war, and yes hind sight is 20-20. The "I told you so's" aren't necessary.
If you read the article, it says the payments began in May 2003. Two months after Baghdad fell (I'm here to tell you, it hadn't fallen quite yet).
The point is, did you, or anybody else at that point really believe there were no WMD's? Do we have to re-hash this?
BTW- This is important that you GET this part:
Sadaam made sure that 95% of the populace remained "in the stone age". They have been "in the stone age" for a very long time. Yes, we made it worse, but we are rebuilding their country to a standard higher than they have ever known.
I know that for a fact.
Some of the work we did was repairing war damage, just as much was done making things better than they have ever known.
Believe me on this one. I can prove it if you can't take my word for it. I'd honestly rather not, I hate "I told you so's".
Hey Harley;
Honestly , I am not doing, " told you so's". I never did believe in the WMDs from day one. Actually before Day 1 . I am fluent in the history going back to pre Desert Storm. I really don't think of it as a rehashing at all. If people continue to believe that it was necessary to bomb a civilized nation and society into oblivion , then all arguments fall on deaf ears. It is the basis for the myths that continue to confuse the current events. Iraq was not a stone age society. Pre Desert Storm, pre Iraq - Iran.war. They were the most literate, industrialized country in the region. They were not camel riding Bedouins wandering from oasis to oasis. This is a society that traces its lineage to Babylonia and Persia. The Iraq of today was hacked out of the Turkish Ottoman Empire and has been engaged in some level of fractional civil war for many years. I don't know of any Civil War that does not claim local casualties of any significant magnitude.
So, what I am unable to do , is explain away or ignore history and the invasion. Makes me want to think " evil thoughts, like agenda and war profiteering". Rebuilding , by definition, explains itself.
__________________
In politics, nothing happens by accident. If it happens, you can bet it was planned that way.
Franklin D. Roosevelt
"Those who can make you believe absurdities can make you commit atrocities." --Voltaire
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