Blogs > Cliopatria > Thee who taketh...

Apr 21, 2006 8:20 pm

Thee who taketh...

When the final page is written on America’s catastrophic imperial venture, one word will dominate the explanation of U.S. failure—corruption. Large-scale and pervasive corruption meant that available resources could not be used to stabilize and secure Iraq in the early days of the Coalition Provisional Authority (CPA), when it was still possible to do so…

The American-dominated Coalition Provisional Authority could well prove to be the most corrupt administration in history, almost certainly surpassing the widespread fraud of the much-maligned UN Oil for Food Program. At least $20 billion that belonged to the Iraqi people has been wasted, together with hundreds of millions of U.S. taxpayer dollars. Exactly how many billions of additional dollars were squandered, stolen, given away, or simply lost will never be known because the deliberate decision by the CPA not to meter oil exports means that no one will ever know how much revenue was generated during 2003 and 2004.

So, a left wing lunatic right? An unpatriotic flag burning liberal? Try the American Conservative in October 2005. In their rush to only report the bad news in Iraq, the left wing MSM must have overlooked one of the biggest corruption cases in history. One that also had massive strategic implications.

Where to start. First, much of the money was transfered from UN control to the CPA in the fallout of oil for food and to much of the international community’s (proven justified) concern. Where did this money go? For one, the Iraqi’s got the privilege of hiring hundreds of budding ideologues, recruited straight off the Heritage Foundation website and paid six figure salaries out of Iraqi funds on 90 day rotations, no qualifications.

So how much are we talking about? A few million are bound to be lost in such a large scale endeavor? Try tens of billions of dollars. Much of it in cash.

The 15-month proconsulship of the CPA disbursed nearly $20 billion, two-thirds of it in cash, most of which came from the Development Fund for Iraq that had replaced the UN Oil for Food Program and from frozen and seized Iraqi assets. Most of the money was flown into Iraq on C-130s in huge plastic shrink-wrapped pallets holding 40 “cashpaks,” each cashpak having $1.6 million in $100 bills. Twelve billion dollars moved that way between May 2003 and June 2004, drawn from accounts administered by the New York Federal Reserve Bank. The $100 bills weighed an estimated 363 tons.

Almost all of this was off the books. With as much as 4 billion coming from illegal oil exports.

Before anyone comments that this was all necessary for reconstruction, much of the work wasn’t even done. One could cancel the work without penalty for “security reasons”. Meaning literally countless corporations literally took the money and ran.

The distribution tactics were also somewhat unconventional.

Money also disappeared in truckloads and by helicopter. The CPA reportedly distributed funds to contractors in bags off the back of a truck. In one notorious incident in April 2004, $1.5 billion in cash that had just been delivered by three Blackhawk helicopters was handed over to a courier in Erbil, in the Kurdish region, never to be seen again. Afterwards, no one was able to recall the courier’s name or provide a good description of him.

Paul Bremer, meanwhile, had a slush fund in cash of more than $600 million in his office for which there was no paperwork. One U.S. contractor received $2 million in a duffel bag.
Three-quarters of a million dollars was stolen from an office safe, and a U.S. official was given $7 million in cash in the waning days of the CPA and told to spend it “before the Iraqis take over.” Nearly $5 billion was shipped from New York in the last month of the CPA. Sources suggest that a deliberate attempt was being made to run down the balance and spend the money while the CPA still had authority and before an Iraqi government could be formed.

So who was overseeing the financial transactions?

The only certified public-accounting firm used by the CPA to monitor its spending was a company called North Star Consultants, located in San Diego, which was so small that it operated out of a private home. It was subsequently determined that North Star did not, in fact, perform any review of the CPA’s internal spending controls.

And the cleptocracy did not die with Bremer’s departure (taking a Blackhawk to the airport as he had failed to secure the road).

The undocumented cash flow continued long after the CPA folded. Over $1.5 billion was disbursed to interim Iraqi ministries without any accounting, and more than $1 billion designated for provincial treasuries never made it out of Baghdad. More than $430 million in contracts issued by the Petroleum Ministry were unsupported by any documentation, and $8 billion were given to government ministries that had no financial controls in place. Nearly all of it disappeared, spent on “payroll,” wages for “ghost employees” in the Ministries of the Interior and Defense. In one case, an Army brigade receiving money to support 2,200 men was found to have fewer than 300 effectives. 602 actual guards at the Ministry of the Interior were billed as more than 8,200 for payroll purposes.

Ok, so one question. Where are all of the neocons who were screaming bloody murder over the UN oil for food. Bad as it was, it is nothing compared to this heist. Massive amounts of money, stolen by American corporations from the Iraqis and the US taxpayers with no oversight from the CPA. This must be incorporated into our understanding of the already long list of extensive and preventable mistakes made post invasion. We are sure to see some brutal assessments in the coming weeks as more information surfaces as it finally seems to be. Needless to say, if the Democrats take the House, this will be one hell of an investigation.

Read the whole article. It is truly astonishing.

Cross posted on

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More Comments:

Taylor Owen - 4/21/2006

It's more. at least 20 billion - 2/3rds in cash!

Taylor Owen - 4/21/2006

point taken, biblical references are not my strong point...

Ben W. Brumfield - 4/21/2006

You really mean "thou who takest".

Manan Ahmed - 4/21/2006

"$1.5 billion in cash"
Wait, how many duffel bags is that?
More seriously, Is that a typo? Really? One and a half billion in Cash!?