Audit Shows More Fraud in Iraq

From Democracy NOW: Audit Shows More Fraud in Iraq. Iraqi investigators have uncovered more cases of widespread fraud and waste. At issue are more than $1 billion worth of weapons deals arranged by middlemen who allegedly reneged or took huge kickbacks on contracts to arm Iraq's fledgling military. This according to a confidential report obtained by the Knight-Ridder news service. According to the agency, the report by the Iraqi Board of Supreme Audit describes transactions suggesting that senior U.S.-appointed Iraqi officials in the Defense Ministry used three intermediary companies to hide the kickbacks they received from contracts involving unnecessary, overpriced or outdated equipment. Last month it emerged that $300 million in defense funds had been lost. But the new report indicates that the audit board uncovered a much larger scandal, with losses likely to exceed half a million dollars. Last week, the Iraqi Defense Minister confirmed most of the audit board report's findings, saying that at least $500 million in Iraqi money essentially has disappeared. Many of the figures believed to be involved in the alleged corruption were appointed by the US occupation authority, formerly known as the Coalition Provisional Authority. Action Alert from THE NATION Has the US Misused Iraq Reconstruction Funds? Urge an investigation over whether the US abused Iraq funds. The UN Oil-for-Food scandal has been garnering headlines in newspapers and magazines around the world for months, and rightwing UN detractors have successfully used the story to promote their long-held criticisms about the institution. Meanwhile, a related scandal has been brewing under the nose of our own government, and has gone almost completely unnoticed. On May 5, the Washington Post reported that the office of the Special Inspector General for Iraq Reconstruction has opened a criminal investigation into potential fraud involving millions of dollars allocated for reconstruction in Iraq. The Post cites an internal audit which found that “there was no assurance that fraud, waste, and abuse did not occur in the management and administration” of $119.9 million in funds allocated to the Development Fund for Iraq (DFI). The audit found that of those millions, “$7.2 could not be accounted for at all, and $89.4 million in reported spending could not be backed up with sufficient documentation.” This most recent audit of the DFI made it into very few American newspapers, probably in part because many Americans don’t know what the DFI is. The DFI is a trust fund holding what Principal Deputy Assistant Secretary of Defense for Public Affairs Lawrence Di Rita recently referred to as “recaptured assets” and “Iraqi revenues.” Rep. Henry Waxman more aptly described it this week as “the successor to the Oil-for-Food Program run by the Bush Administration.” On May 16th, the California Representative called for a Congressional investigation into the mishandling of DFI funds. Waxman’s press release cites specific abuses, including the attempted laundering by US officials of $96.6 million in cash intended for local Iraqi reconstruction projects, and the US government’s failure to comply with a UN Security Council resolution that requires reconstruction funds to be used in a “transparent” manner. Please write to your senators and representatives and ask them to support Representative Waxman's call for a full investigation.