Tuesday, July 20, 2004


Everybody talks about graft, fraud, and corruption, but nobody actually does anything about it. With the obvious noble exception of Rep. Henry Waxman (D-CA):
In particular, Mr Waxman is curious about "the [Bush] administration's last-minute 'draw-down' of billions of dollars from the DFI [Development Fund for Iraq] for unspecified expenses" prior to last month's transfer of sovereignty. "For example, $1bn [about £550m] was withdrawn from the DFI during the last month of the CPA's existence for unspecified 'security' purposes."

The administration provided no information about how these funds would be spent, Mr Waxman says, and has yet to do so.

He is concerned about apparent attempts by the then CPA chief, Paul Bremer, to mandate and direct the spending of a further $4.6bn in Iraqi oil funds after the handover.

He is also exercised by the results of a belated audit of the DFI's accounts that concluded they were "open to fraudulent acts" and lacked "transparency". In all, the CPA earmarked more than $6bn of Iraqi funds in the last two months of its existence.

He wants to know whether CPA officials obstructed the auditors, KPMG, who were employed by the UN-created International Advisory and Monitoring Board (IAMB).

And he also asks why the White House has "failed to comply with numerous IAMB requests [for information about] payments of approximately $1.5bn in DFI funds to Halliburton" - the Texas-based oil services company formerly headed by the vice-president, Dick Cheney . . . .

Nearly all of the $20bn in the DFI was spent or allocated by June 28 - but only 2% of the $18.4bn promised by the US for reconstruction was actually spent. According to White House figures, for example, and despite all the rhetoric about building a new Iraq, not a cent of America's own money had been spent on construction, healthcare, sanitation and water projects as of last month.

Last month, Iraq Revenue Watch, part of the Soros Foundations network, accused the CPA of "committing billions of dollars to ill-conceived projects" using Iraqi rather than US funds, effectively pre-empting budgetary decisions that should have been left to the interim Iraqi authority.

This is a charge also voiced by senior Iraqi officials in Baghdad, quoted anonymously this month by the Washington Post; and, intriguingly, by British government aid officials who reportedly blocked spending projects proposed by Mr Bremer in the dying days of the CPA. But at Westminster, only the Liberal Democrats have formally called for an investigation.
In case you're wondering, the single biggest recipient of Iraqi oil funds during the occupation was a company starting with "H."

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