Staggering sum missing from Iraq funds

Defense Secretary Donald Rumsfeld is being asked to explain how $8.8 billion in the custody of the Coalition Provisional Authority (CPA) earlier this year has disappeared from Iraq.

Three senators, Ron Wyden of Oregon, Byron Dorgan of North Dakota, and Tom Harkin of Iowa—all Democrats—have sent Rumsfeld a letter demanding a “full, written account” of the funds given to Iraqi ministries and authorities by the CPA, which nominally governed the country until June 30 when the interim government took over.

The shortage was uncovered by an audit conducted by the CPA’s inspector general, but it has not been publicly released. The story broke on a Web site operated by retired Army Col. David Hackworth.

Washington dissolved the CPA at the end of July to clear the decks for the interim government. The interim body itself is to be replaced with an elected government next year.

The letter to Rumsfeld said: “We are requesting a full, written account of the $8.8 billion transferred earlier this year from the CPA to the Iraqi ministries, including the amount each ministry received and the way in which the ministry spent the money.”

The senators also asked the Pentagon to fix a date when it will install adequate oversight and financial and contractual controls over expenditures in Iraq.

The CPA stands accused of transferring the “staggering sum of money” without written rules or guidelines to assure sufficient control of it.

Their letter pointed to “disturbing findings” from the inspector general’s report that payrolls of some Iraqi ministries were padded with many thousands of ghost employees. In one example, the CPA paid the salaries of 74,000 security guards while the actual number of guards could not be determined.

The report said, in one case, 8,000 guards were listed on a payroll, but only 603 real people could be accounted for. “Such enormous discrepancies raise very serious questions about potential fraud, waste and abuse,” it stated.

In June, British charity Christian Aid reported at least $20 billion in oil revenues and other Iraqi funds meant for reconstruction of the country vanished from banks administered by the CPA.

Halliburton, the huge defense-related contractor formerly headed by Vice President Richard Cheney, was awarded $8.2 billion in contracts from the Defense Department for support services such as meals, shelter, laundry and Internet connections for U.S. soldiers in Iraq. Halliburton has been cited for allegedly overcharging for these services.

The senators’ letter concluded: “Continued failures to account for funds, such as the $8.8 billion of concern here, and the refusal, so far, of the Pentagon to take corrective action, are a disservice to the American taxpayer, the Iraqi people, and to our men and women in uniform.”

Source: Inter Press Service

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