Following Your Money in Iraq

From Holden:

It’s difficult when the “responsible authorities” kept two sets of books when they kept any records at all:

U.S. and Iraqi officials doled out hundreds of millions of dollars in oil proceeds and other money for Iraqi projects earlier this year, but there was little effort to monitor or justify the expenditures, according to an audit released yesterday.

Files that could explain many of the payments are missing or nonexistent, and contracting rules were ignored, according to auditors working for an agency created by the United Nations.

“We found one case where a [$2.6 million] payment was authorized by the CPA [Coalition Provisional Authority] senior adviser to the Ministry of Oil,” the report said. “We were unable to obtain an underlying contract” or even “evidence of services being rendered.”


The report was released by Rep. Henry Waxman of California, ranking Democrat on the House Government Reform Committee and a leading critic of reconstruction spending to rebuild Iraq.

“The Bush administration cannot account for how billions of dollars of Iraqi oil proceeds were spent,” Waxman said. “The mismanagement, lack of transparency and potential corruption will seriously undermine our efforts in Iraq. A thorough congressional investigation is urgently needed.”


In the CPA programs, “We found 37 cases where contracting files could not be located,” the auditors said. The cost of the contracts: $185 million. In another 52 cases, there was no record of the goods received for $87.9 million in expenditures.

In a military commanders’ program to buy back weapons, $1.4 million was spent from a fund that specifically prohibited such expenditures, auditors said.

Iraq’s Ministry of Finance maintained two sets of accounting records, one manual and one computerized. “A reconciliation between these two sets of accounting records was not prepared and the difference was significant,” the report said.

Auditors questioned why checks were made payable to a U.S. official — a senior adviser to the Iraqi ministry of health — rather than to suppliers.

Meanwhile, our government is commissioning a special audit of Halliburton’s no-bid contracts. Won’t Dick be pleased.

Washington has agreed to commission a special audit of sole-source Pentagon contracts granted to Halliburton Co. and paid for with Iraqi oil money, an international watchdog agency said on Thursday.

The U.S. government agreed to order the audit after complaints from the International Advisory and Monitoring Board about contracts the Pentagon awarded to Halliburton (Research) — headed by Vice President Dick Cheney from 1995-2000 — using Iraqi funds and without competitive bidding during the U.S.-led occupation of Iraq.