Mission Accomplished

How many more reports need to be published before Congress gets serious about investigating where the money is going in Iraq?

Investigator says millions of dollars of US money missing in Iraq

A special investigator tracking billions of dollars spent by the United States on reconstruction in Iraq said he has found millions of dollars worth of fraud by US officials and companies.

Stuart Bowen, the special inspector general for Iraq reconstruction, said the US Justice Department was looking into fraud that he had uncovered.

But giving details of his latest report, which is to be released on Saturday, Bowen told National Public Radio (NPR) that US-backed reconstruction projects in Iraq are speeding ahead.

"The reconstruction for Iraq is peaking, 1,000 projects are completed and 1,000 more are ongoing," he said.

The United States has allocated 23 billion dollars for new infratructure and Bowen's previous reports have already highlighted huge sums of missing money.

He said his latest report looks at four water projects and "the results are all over the map".

Bowen also told how seven million dollars intended for the troubled Hilla region south of Baghdad had disappeared. The money came from the Development Fund for Iraq, money from oil sales that the US-run former Coalition Provisional Authority used for development projects.

"There was no accountability, no records," Bowen said. "Unfortunately there were possible fraudulent activities occurring."

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Who?

"Who's the enemy?" distraught Iraqis wonder
by Luke Baker, Reuters, July 25, 2005

As Iraq spirals deeper by the day into violence and lawlessness, Baghdad residents say brutality and corruption are spreading among the very security forces that are supposed to be protecting them.

Some maintain that the situation has grown so bad that at times they can't distinguish the behaviour of U.S.-trained Iraqi police and soldiers from that of militants or criminals.

And since insurgents have in the past infiltrated the police and army, at times it is impossible to tell the sides apart.

"Sometimes we don't know who the enemy is," said Ismael Mahmoud, a 32-year-old businessman whose cousin was recently seized by a special police unit and later found dead.

We have a serious problem with corruption.

Donor countries tackle misuse of Iraq aid
AFP, July 18, 2005

Iraq and donor countries began two days of closed-door meetings on Monday to review the pace of reconstruction in the violence-ravaged country, at a key phase in its political transition.

Iraqi Planning Minister Barham Saleh warned that corruption was a threat undermining the reconstruction of Iraq but hoped nevertheless that donors would be forthcoming with specific projects and commitments.

"We have a serious problem with corruption. It represents a great threat," Saleh told reporters before the meetings of the International Reconstruction Fund Facility (IRFFI) and Donors Committee on the shores of the Dead Sea in Jordan.

"We will try to make reconstruction based on decentralisation, that means projects will be implemented by local councils of the governorates," said Saleh, who is co-chairing the meeting with donors committee head Canada.

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Follow the Money

Where has all the money gone? following the auditors into Iraq
by Ed Harriman, London Review of Books, Vol. 27 No. 13, July 7, 2005

The ‘reconstruction’ of Iraq is the largest American-led occupation programme since the Marshall Plan. But there is a difference: the US government funded the Marshall Plan whereas Donald Rumsfeld and Paul Bremer have made sure that the reconstruction of Iraq is paid for by the ‘liberated’ country, by the Iraqis themselves. There was $6 billion left over from the UN Oil for Food Programme, as well as sequestered and frozen assets, and revenue from resumed oil exports (at least $10 billion in the year following the invasion). Under Security Council Resolution 1483, passed on 22 May 2003, all of these funds were transferred into a new account held at the Federal Reserve Bank in New York, called the Development Fund for Iraq (DFI), so that they might be spent by the CPA ‘in a transparent manner . . . for the benefit of the Iraqi people’. Congress, it’s true, voted to spend $18.4 billion of US taxpayers’ money on the redevelopment of Iraq. But by 28 June last year, when Bremer left Baghdad two days early to avoid possible attack on the way to the airport, his CPA had spent up to $20 billion of Iraqi money, compared to $300 million of US funds.

The ‘financial irregularities’ described in audit reports carried out by agencies of the American government and auditors working for the international community collectively give a detailed insight into the mentality of the American occupation authorities and the way they operated, handing out truckloads of dollars for which neither they nor the recipients felt any need to be accountable. The auditors have so far referred more than a hundred contracts, involving billions of dollars paid to American personnel and corporations, for investigation and possible criminal prosecution. They have also discovered that $8.8 billion that passed through the new Iraqi government ministries in Baghdad while Bremer was in charge is unaccounted for, with little prospect of finding out where it went. A further $3.4 billion earmarked by Congress for Iraqi development has since been siphoned off to finance ‘security’.

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Includes the following links to various agencies and committees.

US House of Representatives
Government Reform Committee Minority Office
http://www.democrats.reform.house.gov/

US General Accountability Office
http://www.gao.gov/

Defense Contract Audit Agency
http://www.dcaa.mil/

International Advisory and Monitoring Board
http://www.iamb.info/

Coalition Provisional Authority Inspector General
http://www.cpa-ig.com/

Special Inspector General for Iraq Reconstruction
http://www.sigir.mil/

Vice Admiral John Scott Redd

Hearings are coming up on a new appointment to the National Counterterrorism Center. Redd was the deputy administrator and chief operating officer of the Coalition Provisional Authority in Baghdad. A stint with Paul Bremer's CPA doesn't inspire confidence. The CPA hasn't exactly earned a stellar reputation for management style what with missing funds, nepotism, and lack of interest in congressional oversight.

Redd Herring: one man's connection to three Iraq War scandals at Unbossed.com

On June 10, President Bush announced that he was tapping VADM Redd to serve as the director of the National Counterterrorism Center (NCTC)—which is responsible for analyzing intelligence on terrorism and for the strategic planning of counterterrorism operations. The NCTC will report partly to the President and partly to John Negroponte, the new director of National Intelligence. The announcement was made just one week before a Congressional requirement for the NCTC to be fully operational.

It will be interesting to see how the hearings go and what comes out of them in terms of testimony.

House cleaning

I'll be updating the side bar links and moving some things around. The old posts will still be here. But goodness, there's quite a bit to do.

Fighting Fraud & Corruption

To combat fraud, the Coalition Provisional Authority lists a Fraud Hotline as well as provides an on-line complaint form at their website.

The Hotline is your means to report significant instances of fraud, waste, abuse of authority, and gross mismanagement. It is government policy to combat fraud, waste, abuse and mismanagement in programs and operations funded by the Iraq relief and Reconstruction Fund. The Hotline strives to ensure that allegations are properly evaluated and examined, and that appropriate remedial, corrective, and judicial actions are taken.

Special Inspector General for Iraq Reconstruction
SIGIR Fraud, Waste and Abuse
400 Army Navy Drive
Arlington, VA 22202-4704
(866) 301-2003
(703) 602-4063
(703) 602-5993 fax
http://www.cpa-ig.com/fraud_faq.html

Fighting corruption within the Iraq government:
Iraq Commission on Public Integrity
The Commission was originally created under Paul Bremer on January 31, 2004.
Commission on Public Integrity to Combat Government Corruption

In addition to the efforts to combat fraud by the CPA, Rep. Henry Waxman (D-CA) has established a Tip Line and on-line complaint form to help alert Congress to contract fraud in Iraq.

This tip line has been established to assist the Special Investigations Division in investigating potential fraud, waste, and abuse in the awarding and execution of contracts to rebuild and rehabilitate Iraq, including actions by U.S. government agencies, prime contractors, and subcontractors. The confidentiality of any person providing information will be strictly preserved.

Rep. Henry A. Waxman
Special Investigations Division - Iraq Contracting
Committee on Government Reform Minority Staff
B350A
Rayburn House Office Building
Washington DC 20015
(202) 225-5051
http://www.house.gov/waxman/
Note: click 'Iraq Contracting' on the right hand side bar for the on-line form.

The Federal Bureau of Investigation (FBI) has a general tip line thru their website.

While the FBI continues to encourage the public to submit information regarding the September 11, 2001, terrorist attacks, this form may also be used to report any suspected criminal activity to the FBI.

Federal Bureau of Investigation
J. Edgar Hoover Building
935 Pennsylvania Avenue, NW
Washington, D.C. 20535-0001
(202) 324-3000
http://www.fbi.gov
Tip line:
https://tips.fbi.gov/

Related article on cooperation from the FBI with Iraqi counterparts to solve crimes in Iraq.

Gonzales: FBI to Aid Iraqi Investigations

The United States will help Iraq investigate the killing and kidnapping of government officials, Attorney General Alberto Gonzales says. The informal agreement was disclosed as Gonzales made an unannounced and tightly guarded, six-hour visit Sunday to Baghdad. He met with Iraq's prime minister, Ibrahim al-Jaafari, as well as police and judicial officials.

Word of the arrangement followed the abduction on Saturday night of Egypt's top envoy to Iraq. [...]

While details are still to be worked out, investigators from the FBI and other U.S. law enforcement agencies would join their Iraqi counterparts at crime scenes and in other aspects of the probes, aides to Gonzales said.

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Past Articles

Fraud and Corruption in Iraq. Rare or widespread?

In recent months, news stories on contract fraud in Iraq have been appearing in the press much more frequently. Most of the articles on fraud and corruption seem to cover mismanagement, over billing, kick backs, and missing funds.

Army Ignored Broker on Arms Deal
by Ken Silverstein and T. Christian Miller, Los Angeles Times, March 15, 2005

Soon after interim Prime Minister Iyad Allawi took office last summer, he announced plans to create a tank division for the new Iraqi army.

The $283-million project was supposed to display the power of Iraq's new government. But under the guidance of a task force overseen by one of America's top generals, it has become another chapter in a rebuilding process marked by accusations of corruption.

The U.S. contractor working on the project repeatedly warned the task force headed by Army Lt. Gen. David H. Petraeus that a Lebanese middleman involved in the deal might be routing kickbacks to Iraqi Defense Ministry officials. But senior U.S. military officials did not act on the contractor's pleas for tighter financial controls, according to documents and interviews.

"If we proceed down the road we are currently on, there will be serious legal issues that will land us all in jail," the contractor, Dale Stoffel, wrote in a Nov. 30 e-mail to a senior assistant to Petraeus.

Eight days later, Stoffel was shot dead in an ambush near Baghdad. The killing is being investigated by the FBI, according to people who have been interviewed by the bureau.

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A long article on contractor Dale Stoffel can be read in this month's Washington Monthly, The Unquiet American, by Aram Roston, June 2005.

Whistle-Blower Suit May Set Course on Iraq Fraud Cases
by Eric Eckholm, New York Times, May 22, 2005

In September 2004 the Pentagon, citing evidence of fraud and a continuing criminal investigation of Custer Battles, barred the company from receiving more federal contracts, halting what had been the company's explosive growth. The company was founded in 2001 by two veterans with more ambition than assets, and by mid-2004 it had $100 million in Iraq contracts.

The company's critics say its owners, Scott Custer and Mike Battles, benefited from the frantic awarding of contracts in 2003 and the constant turnover of monitors.

The whistle-blower suit accuses the company of defrauding the government through actions as large as the creation of shell companies to pose as suppliers and increase billable costs and as small as the repainting of Iraqi Airways forklifts, then claiming to have leased the machines for thousands of dollars per month.

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Audit of Iraq Spending Spurs Criminal Probe
by Griff Witte, Washington Post, May 5, 2005

Investigators have opened a criminal inquiry into millions of dollars missing in Iraq after auditors uncovered indications of fraud in nearly $100 million in reconstruction spending that could not be properly accounted for.

The money had been intended for rebuilding projects in south-central Iraq. But auditors with the Office of the Special Inspector General for Iraq Reconstruction found that of $119.9 million allocated, $7.2 million could not be accounted for at all, and $89.4 million in reported spending could not be backed up with sufficient documentation, according to a report released yesterday.

[…]

Criminal investigators with the office of Special Inspector General Stuart W. Bowen Jr. will be looking into whether anyone involved committed fraud, the audit says, although it does not disclose who is being investigated.

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Iraq is becoming 'free fraud' zone
by Tom Regan, Christian Science Monitor, April 7, 2005

A former senior advisor to the US-led Coalition Provisional Authority (CPA), which ran Iraq until the election of an interim Iraq government last January, says that the US government's refusal to prosecute US firms accused of corruption in Iraq is turning the country into a "free fraud zone."

Newsweek reported earlier this week that Frank Willis compared Iraq to the "wild west," and that with only $4.1 billion of the $18.7 billion that the US government set aside for the reconstruction of Iraq having been spent, the lack of action on the part of the government means "the corruption will only get worse."

[…]


The Christian Science Monitor reported on other allegations of corrpution in Iraq leveled against companies, including a "report by special inspector Stuart Bowen [which] found that $8.8 billion dollars had been disbursed from Iraqi oil revenue by US administrators to Iraqi ministries without proper accounting."

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Fraud and corruption
by George Monbiot, The Guardian, February 8, 2005

Last week a British adviser to the Iraqi Governing Council told the BBC's File on Four programme [sic] that officials in the CPA were demanding bribes of up to $300,000 in return for awarding contracts. Iraqi money seized by US forces simply disappeared. Some $800m was handed out to US commanders without being counted or even weighed. A further $1.4bn was flown from Baghdad to the Kurdish regional government in the town of Irbil, and has not been seen since.

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Corruption in Iraq

There have been far too many stories in the news on fraud and corruption in Iraq. So, here we go again.

Corruption threatens to leave Iraq with a 'ghost army'
By Patrick Cockburn in Baghdad
July 15, 2005

A tidal wave of corruption may ensure the Iraqi army and police will be too few and too poorly armed to replace American and British forces fighting anti-government insurgents. That could frustrate plans in Washington and London to reduce their forces in Iraq.

The Iraqi armed forces are full of "ghost battalions" in which officers pocket the pay of soldiers who never existed or have gone home. "I know of at least one unit which was meant to be 2,200 but the real figure was only 300 men," said a veteran Iraqi politician and member of parliament, Mahmoud Othman. "The US talks about 150,000 Iraqis in the security forces but I doubt if there are more than 40,000."

The army and police are poorly armed despite heavy expenditure. "The interim government spent $5.2bn (£2.6bn) on the ministry of defence and ministry of the interior during six months but there is little to show for it," said a senior Iraqi official who did not want his name published.

I've got a bunch of older articles that I'll post soon.

Drat. And there we were getting all comfy cozy in our retirement.