Iraqi Defense Ministry

Millions embezzled at Iraqi ministry
by Ed Vulliamy and Richard Norton-Taylor

A report compiled by the Iraqi Board of Supreme Audit has concluded that at least half, and probably more, of $1.27bn (£700m) of Iraqi money spent on military procurement has disappeared into a miasma of kickbacks and vanished middlemen - or else has been spent on useless equipment.

The report, leaked to the US news organisation Knight Ridder, comes as a blow to the credibility of the Iraqi army and its ability to contain the increasingly cogent insurgency.

According to the report, led by former human rights minister Abdel Baset al-Turki, the vanished money came solely from Iraqi funds, not from foreign donations to Iraq's military or the US-funded training budget.

The report focuses on an eight-month period after the transfer of sovereignty from the US-led occupation to caretaker Iraqi authorities on June 28 2004.

[...]

Nine ministry officials, all of them appointed by the US, have been fired by the ministry, and face possible criminal charges. Among them is the ministry's procurement chief, Ziad Cattan.

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It doesn't look good that so many of the offiicals were appointed by the US. Next question: who from the US recommended the Iraqi officials to begin with? They didn't just pop up out of nowhere.

An Iraqi Company

Former employee of Halliburton subsidiary pleads guilty to accepting kickbacks

A former employee of a Halliburton Co. subsidiary pleaded guilty Friday to accepting more than $100,000 in kickbacks from an Iraqi company in exchange for securing it a U.S. military construction contract, prosecutors said.

Glenn Allen Powell, 40, of Cedar Park, Texas, will be sentenced Nov. 18 in federal court for major fraud against the United States and violating the anti-kickback act. He faces 10 years in prison on each count and up to $1.25 million in fines.

[...]

In exchange for $110,300 in kickbacks, Powell recommended the Iraqi company for a $609,000 subcontract to renovate four buildings into office and warehouse space, prosecutors say. Prosecutors declined to name the company.

Remember those seized funds?

Worries Raised on Handling of Funds in Iraq

It weighed 28 tons and took up as much room as 74 washing machines. It was $2.4 billion in $100 bills, and Baghdad needed it ASAP.

The initial request from U.S. officials in charge of Iraq required the Federal Reserve Bank of New York to decide whether it could open its vault on a Sunday, a day banks aren't usually open.

"Just when you think you've seen it all," read one e-mail from an exasperated Fed official.

"Pocket change," said another e-mail.

Then, when the shipment date changed, officials had to scramble to line up U.S. Air Force C-130 cargo planes to hold the money. They did, and the $2,401,600,000 was delivered to Baghdad on June 22, 2004.

It was the largest one-time cash transfer in the history of the New York Fed.

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Same $2.4 Billion dollars?

Report: Iraqi Board of Supreme Audit

Audit: Iraq fraud drained $1 billion
By Hannah Allam, Knight Ridder Newspapers, August 11, 2005

Iraqi investigators have uncovered widespread fraud and waste in more than $1 billion worth of weapons deals arranged by middlemen who reneged or took huge kickbacks on contracts to arm Iraq's fledgling military, according to a confidential report and interviews with U.S. and Iraqi officials.

The Iraqi Board of Supreme Audit, in a report reviewed by Knight Ridder, describes transactions suggesting that senior U.S.-appointed Iraqi officials in the Defense Ministry used three intermediary companies to hide the kickbacks they received from contracts involving unnecessary, overpriced or outdated equipment.

Knight Ridder reported last month that $300 million in defense funds had been lost. But the report indicates that the audit board uncovered a much larger scandal, with losses likely to exceed $500 million, that's roiling the ministry as it struggles to build up its armed forces.

The episode deprives Iraq's military of essential gear that could help prepare the way for U.S. forces to withdraw. It also raises questions about the new government's ability to provide an effective defense against an entrenched insurgency and win broad acceptance among Iraqis.

The audit board's investigators looked at 89 contracts of the past year and discovered a pattern of deception and sloppiness that squandered more than half the Defense Ministry's annual budget aimed at standing up a self-sufficient force, according to a copy of the 33-page report.

[...]

The Board of Supreme Audit, led by former Human Rights Minister Abdel Baset al-Turki, examined defense contracts that had been signed starting with the transfer of sovereignty June 28, 2004, through Feb. 28, 2005. The investigation's results, supported by bank statements, receipts and internal Defense Ministry memos, were delivered to al-Jaafari's office May 16.

[...]

Lt. Gen. David H. Petraeus, who oversees the U.S. military's training of Iraqi troops, conducts weekly briefings with the defense minister. Other Iraqi defense officials seldom are spotted without American civilian advisers nearby. The close relationship has raised questions as to how $500 million or more could vanish without U.S. intervention to stop the suspicious contracts that flowed for at least eight months.

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Why was Petraeus office so lax about confronting fraud issues--not his money so he didn't really care how it was spent?

One excerpt from the above article that is a bit disturbing was this one: "The sole beneficiary on 43 of the 89 contracts was a former currency-exchange operator, Nair Mohamed al-Jumaili, whose name doesn't even appear on the contracts."

PS I'm going to start highlighting some of the names and organizations to try and make it easier to keep track, my head spins a little with all of the various groups and people.

Ol' Halliburton

Army Whistleblower Draws Fire
by Deborah Hastings, AP National Writer

Bunnatine "Bunny" Greenhouse is the Principal Assistant Responsible for Contracting ("PARC" in the alphabet soup of military acronyms) in the U.S. Army Corps of Engineers. Lest the title fool, she is responsible for awarding billions upon billions in taxpayers' money to private companies hired to resurrect war-torn
Iraq and to feed, clothe, shelter and do the laundry of American troops stationed there.

She has rained a mighty storm upon herself for standing up, before members of Congress and live on C-SPAN to proclaim things are just not right in this staggeringly profitable business.

She has asked many questions: Why is Halliburton — a giant Texas firm that holds more than 50 percent of all rebuilding efforts in Iraq — getting billions in contracts without competitive bidding? Do the durations of those contracts make sense? Have there been violations of federal laws regulating how the government can spend its money?

[...]

Greenhouse has known for a long time that her days may be numbered. Her needling of contracts awarded to Halliburton subsidiary Kellogg, Brown & Root (KBR) predated the war in Iraq, beginning with costs she said were spiraling "out of control" from a 2000 Bosnia contract to service U.S. troops. From 1995 to 2000, Halliburton's CEO was
Dick Cheney, who left to run for vice president. He maintains his former company has not received preferential treatment from the government.

Since then, she had questioned both the amounts and the reasons for giving KBR tremendous contracts in the buildup to invading Iraq. At first she was ignored, she said. Then she was cut out of the decision-making process.

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Hell hath no fury like a woman scorned. Guess the Pentagon forgot that particular motto.

Extortion

Guard members from East Bay said to charge Iraqis 'rent'

California Army National Guard troops from a unit based in the East Bay charged unauthorized, off-the-books "rent" to Iraqi-owned businesses inside Baghdad's Green Zone to raise money for a "soldiers fund," military officials and sources within the troops' battalion said Friday.

The disclosure is the latest to emerge from a wide-ranging investigation into the conduct of the 1st Battalion of the 184th Infantry Regiment of the Guard.

Military officials had confirmed earlier that the battalion's commander, Lt. Col. Patrick Frey, was suspended and that one of the battalion's companies, based in Fullerton (Orange County), had been removed from patrol duties and restricted to an Army base south of Baghdad.

Earlier this year, according to military officials and members of the battalion, soldiers from the battalion's Bravo Company approached several businesses owned and operated by Iraqis. Bravo Company is based in Dublin, and the 1st Battalion has its headquarters in Modesto.

The businesses -- a dry cleaner, a convenience store and others -- catered to U.S. soldiers and were located on the fringe of the U.S. military's operating base inside the Green Zone, the fortified hub of the Iraqi government, U.S. occupation officials, foreign embassies and contractor headquarters. The businesses were asked to pay the soldiers "rent."

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They used to have a name for that: extortion.

A Grim Anniversary

Today is the 4th anniversary of the August 6, 2001 Presidential Daily Briefing that was titled Bin Laden Determined to strike in US

Nevertheless, FBI information since that time indicates patterns of suspicious activity in this country consistent with preparations for hijackings or other types of attacks...

Where is Osama bin Laden and why hasn't the US aggressively pursued him?

New York City was my home for 16 years. I am extremely angry that Osama bin Laden remains at large.

Steven Vincent

Slaying of US writer in Basra is investigated
by Thanassis Cambanis, Boston Globe, August 4, 2005

American author and freelance journalist Steven Vincent, who was kidnapped and murdered late Tuesday in Basra, was an outspoken critic of the police force in the southern city and of the rise in what he called ''Islamo-fascism." [...]

His death appeared to mark the first targeted killing of a Western journalist in Iraq since the US-led invasion in March 2003. Since then, three other American journalists have died in Iraq, including veteran Boston Globe reporter Elizabeth Neuffer, who was killed in a car accident. Police spokesman Abdulkerim Zaidi and witnesses said that a group of men in an unmarked pickup truck abducted Vincent and Khal after 6 p.m. Tuesday when they were leaving a money changer's office near the Merbid Hotel, where Vincent had been staying.

The witnesses, who spoke on condition of anonymity for fear of reprisals, said four men carried out the kidnapping. Vincent resisted, and one of his shoes remained in the street after the pair were thrown in the truck and taken away. [...]

Vincent was openly scornful of Basra's police and government; he had written about the high rate of unsolved murders, public corruption, and death squads that targeted secular Iraqis in articles for the Christian Science Monitor, National Review, Harper's, and for his Internet blog, also called ''In the Red Zone." The blog entries took the form of letters to his wife, Lisa, in New York City.

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What. A. Surprize.

Iraq Investigates Widespread Corruption
by Bassem Mroue, AP, August 2, 2005

Hundreds of millions of dollars have been wasted on unnecessary and overpriced equipment for Iraq's new army at a time when the United States and its allies are struggling to get the force in shape to battle insurgents, Iraqi officials say.

Iraqi authorities have opened inquiries into several cases of possible corruption at the Defense Ministry. The ministry official believed behind most of the questionable deals was removed from his job in June and banned from leaving the country.

"Corruption is widespread at the ministry. One of the cases alone is worth $226 million. The investigation is still going on," said legislator Kamal al-Saaidi, a member of the independent Supreme Anti-corruption Commission.

Most of the alleged unnecessary purchases were made during the term of interim Prime Minster Ayad Allawi, who took office after occupation authorities turned over sovereignty to Iraqis on June 28, 2004.

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Don't you just wonder, where has everybody been for the last year and a half?

GAO Reports

Report raises concerns about Iraqi reconstruction
by Barbara Slavin, USA TODAY, July 31, 2005

The United States risks having "little to show for billions" of dollars spent on Iraqi reconstruction because of rising security costs and mismanagement, a new report said Sunday. [...]

Bowen was appointed to monitor $18.4 billion allocated for Iraqi reconstruction in 2004. Overall, $24 billion has been approved and $9 billion spent since 2003, according to the Government Accountability Office (GAO), Congress' watchdog agency.

According to a report issued Thursday by the GAO, security costs are consuming more than a third of reconstruction funds. The report said that 330 private contractors, many of them working for security companies, had been killed.

Reports:

PDF - Rebuilding Iraq: Status of Funding and Reconstruction Efforts GAO-05-876, July 28, 2005

PDF- Rebuilding Iraq: Actions Needed To Improve Use of Private Security Providers GAO-05-737, July 28, 2005

Related:

PDF - Afghanistan Reconstruction: Despite Some Progress, Deteriorating Security and Other Obstacles Continue to Threaten Achievement of U.S. Goals GAO-05-742, July 28, 2005