The Blogiston Post

Politics, money, and war.

Friday, April 25

game show gifts

So which lucky contestant gets the parting gift of $2.5 billion dollars? That's the question on everyone's lips today at bpost. Andrew Natsios at the USAID insists the $2.5 billion dollars being used for reconstruction in Iraq is not a loan.
It's a gift
But that's not quite what President Bush said when he issued an executive order on March 20 confiscating and vesting the assets of the Iraq government in US banks.
I, GEORGE W. BUSH, President of the United States of America, hereby determine that the United States and Iraq are engaged in armed hostilities, that it is in the interest of the United States to confiscate certain property of the Government of Iraq and its agencies, instrumentalities, or controlled entities, and that all right, title, and interest in any property so confiscated should vest in the Department of the Treasury.

I intend that such vested property should be used to assist the Iraqi people and to assist in the reconstruction of Iraq, and determine that such use would be in the interest of and for the benefit of the United States.
For the year ending December 31, 2002, according to the Annual Report to the Congress, Terrorist Assets Report available in pdf, Iraq had $2.43 billion dollars in assets blocked in the US.

The money included assets frozen (blocked) in 1990, belonging to the Iraqi government that has been sitting in accounts at U.S. banks and their foreign branches. The institutions include Citigroup, Bank of America and Wachovia. The March 20, 2003 executive order allows these assets to be transferred to an account at the Federal Reserve Bank of New York.

During a press briefing session, Andrew Natsios explained where the $2.5 billion reserved for reconstruction for post war Iraq was coming from. Two very similar numbers but apparently very different sources.
The funds that are frozen are frozen in the Treasury Department. They have a separate account. They are not in the U.S. Treasury. The money, the $2.5 billion to be used for Iraq's reconstruction from my budget -- for the AID money is from U.S. taxpayer funds, not from Oil-for-Food, and not from frozen assets.

The Oil-for-Food revenues are in a UN trust fund. I think there are two or three of them, and they are controlled by the United Nations. And the only way to access this money is through a Security Council resolution because the UN controls the fund.
But over at the Treasury Department, there seems to be a bit of confusion. Treasury Secretary John Snow doesn't specify where the money is going to go.
The President today issued an Executive Order confiscating non-diplomatic Iraqi government assets in the United States. The Order authorizes Treasury to marshal the assets, and to use the funds for the benefit and welfare of the Iraqi people.
But the Treasury Department's general counsel, David Aufhauser, does.
'That is money that can no longer be directed to promote terror,' said. "It is money, in fact, that has every promise of being repatriated to the people of a free Iraq.'
Except, Aufhauser couches it as a promise of being given back. That's not quite the same as actually giving it back.

So where is it going to go? Who gets the $2.50 billion dollars? Turns out there is one more glitch in finding out who the lucky winner is. The glitch is the Oil for Food program that runs out on June 1, 2003. Its a small detail but one that is, to put it mildly, in need of greater clarification.
Natsios: The money we're spending now is not using Iraqi money. If the Oil-for-Food program is extended beyond the 45 days, then UN agencies will be able to use some of that money. But so far there has been no agreement to go past the 45 days -- and the Oil-for-Food program that has currently been extended for 45 days is only for old contracts that had been approved before the war started. That's the Security Council resolution that exists now.

Question: What happens after 45 days?

Natsios: It's stopped.
Who feeds the people after 45 days and who pays for it? The US as the occupying nation is obligated to care for the well being of the people of Iraq. If the Iraq oil industry is up and running, they could purchase their own food supplies. Assuming the US allows them access to the revenue, of course.

But even if they do or don't get money from oil sales everyone still wants to know.

Who gets the $2.5 billion dollars?


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