That’s what the CPA did, now that its activities are finally being audited. $1.9 billion in Iraqi funds was awarded to contractors who were supposed to be paid with US funds.
On the face of it, that doesn’t sound too bad. Paul Wolfowitz and several other administration figures told us that Iraq could pay for its own reconstruction. The problem here is that the Iraqis had no voice in how the contracts were awarded, and who they were awarded to.
Consequently, 19 of 37 contracts valued at more than $5 million were awarded to American companies. Overall, 85% of 2,000 contracts went to US companies.</p
Among these contracts was a sweet, no-bid, cost-plus contract to import fuel from Kuwait that was awarded to Halliburton. Subsequent investigations revealed that Halliburton (actually, subsidiary KBR) overcharged for that fuel to the tune of $61 million.
Here’s how it worked:
That analysis and several audit reports released in recent weeks shed new light on how the occupation authority handled the Iraqi money it controlled. They show that the CPA at times violated its own rules, authorizing Iraqi money when it didn’t have a quorum or proper Iraqi representation at meetings, and kept such sloppy records that the paperwork for several major contracts could not be found. During the first half of the occupation, the CPA depended heavily on no-bid contracts that were questioned by auditors. And the occupation’s shifting of projects that were publicly announced to be financed by U.S. money to Iraqi money prompted the Iraqi finance minister to complain that the “ad hoc” process put the CPA in danger of losing the trust of the people.
Don’t think the Iraqis did not notice.
Fareed Yaseen, one of 43 ambassadors recently appointed by Iraq’s government, said he was troubled that the Iraqi money was managed almost exclusively by foreigners and that contracts went predominantly to foreign companies.
“There was practically no Iraqi voice in the disbursements of these funds,” Yaseen said in a phone interview from Baghdad, where he is awaiting his diplomatic assignment.
Mohammed Aboush, who was a director general in the oil ministry during the occupation, said he and other Iraqi officials were not consulted about expanding the KBR contract. But he said he informed his American “advisers” at the CPA that the Iraqis felt KBR’s performance had been inadequate and that he’d prefer that another company take over its work.
Aboush said that he was ignored and that he believes the decision to go with KBR was political. “I am old enough to know the Americans and their interests and they are not always the same interests as the Iraqi interests,” he said.