June 13, 2011. Baghdad. For years, the US Dept of Defense has claimed it could find Iraq’s missing 6.6 billion dollars if given enough time. Now, it appears Federal auditors are giving up the search. While no official announcement has been made yet, key figures are quickly making public remarks and claiming the legal high ground.
In numerous instances of profiteering and fraud involving US efforts in Iraq, a number of American officials are already serving time in prison. Those crimes were nothing compared to the 6.6 billion dollar heist. And it’s got some powerful people nervous.
The missing $6.6 billion dollars is above and beyond the $61 billion America has already spent rebuilding Iraq. But it represents a whopping ten percent of the overall 8-year Iraqi reconstruction cost. And unlike the $61 billion that came from the US taxpayers, the $6.6 billion was Iraq’s money to begin with. The money was located in a special account created by the Federal Reserve and called the Development Fund for Iraq. While Saddam Hussein’s Iraq was under devastating economic sanctions and its international funds were seized by the US, the money was held in a trust for the Iraqi people.
Money was added to the account after the sale of Saddam Hussein’s personal assets, as well as the money left over in the scandal-plagued UN Oil for Food Program. Basically a trust fund for Iraq’s state revenues, even the proceeds from the sale of Iraq’s oil were added. Arguing that the Iraqi national government couldn’t handle the responsibility of managing itself, the Coalition Provisional Authority was created to do it for them. Led by L. Paul Bremer, the US imposed national government was immediately hampered by internal conflict and mismanagement. Replaced after only one month, Lt. Gen. Jay Garner had publically stated his intention was to give the Iraqi’s full control and responsibility of their own assets, security and infrastructure as soon as possible.
Within a year, Iraq seemed to be a free-for-all. The Coalition Provisional Authority was disbanded and the US went from spending $4.6 billion on Iraqi reconstruction in 2003 to $19.5 billion in 2004. That amount is double 2007 and four-times every other year before or since. With President Bush pouring every cent he could find into Iraq, Secretary of Defense Donald Rumsfeld took possession of the Iraqi trust fund and had delivered in cash. Carried by tractor trailer from the Federal Reserve in New York to Andrews Air Force Base in Maryland, it was then flown directly to Baghdad.
Once in Baghdad, the $6.6 billion was divided up between a handful of Defense Department officials and stored at numerous secret sites, including military bases and former Presidential Palaces. Surprisingly, the funds were well organized and kept track of at this point. For along with them, the White House was sending truck loads of cash, literally.
Pentagon officials have since described the days in May 2004 when $12 billion dollars in cash was air-lifted from the US Treasury directly to Iraq. C-130 Hercules cargo planes were used on the 20-plus missions. In what became the largest international cash air-lift in history, the giant aircraft were stuffed full bags and crates full of cold hard cash. Uniformly bundled in shrink-wrapped bricks of $100 dollar bills, the money was packed into anything and everything the military could find to carry it.
Fortunately for the Iraqi’s, their $6.6 billion arrived just fine and appears to be accounted for. It was the next step in the process where the nation’s funds suddenly vanish. Insisting on maintaining control over key infrastructure and the new Iraqi interim government, Defense Department officials on the ground in Iraq were charged with funding the countries various Ministries.
Defense and US military officials appear to be on file withdrawing the money, but no records can be found of them actually handing it over to the Iraqis in charge of paying the country’s municipal employees, police, sanitation, food and other necessary services. American officials insist the money was indeed handed over to the Iraqi Ministers. The Iraqis however, charge they were never given the money and the facts show that the US has absolutely no documentation to show it was ever handed over to them.
US officials in Baghdad argue that the Iraqi Ministries were so corrupt, the money had to be lost in the vacuum of kick-backs and bribes. One example cited by the CPA was the Iraqi government’s hiring and payroll practices. In only one of the Ministries, the US was sending paychecks to 8,206 Iraqi security guards. When audited however, only 603 people were actually employed.
Certainly, the vision of thousands of Americans and Iraqis running around Baghdad and the outer reaches of Iraq with satchels full of millions of dollars in US greenbacks would explain the confusion. But the fact remains, Iraq wants their money and according to US officials, the American taxpayer is going to have to come up with it, again.
The Chicago Tribune quotes Stuart Bowen, Congress’ Inspector General for the Iraq reconstruction effort as saying the $6.6 billion may mark “the largest theft of funds in national history”. Rep. Henry Waxman (D-CA) was quoted by the Tribune being a little less understanding, “Congress is not looking forward to having to spend billions of our money to make up for billions of their money that we can’t account for and can’t seem to find”.
Only months after the money was lost, a host of US Senators sent a letter to Defense Secretary Donald Rumsfeld concerning the outrageous details describing the method of transfer. The letter read, “The CPA apparently transferred this staggering sum of money with no written rules or guidelines for ensuring adequate managerial, financial or contractual controls over the funds. Such enormous discrepancies raise very serious questions about potential fraud, waste and abuse".
On a day when US Rep. Dana Rohrabacher (R-CA) was refused entry into Iraq for publicly suggesting the people of Iraq should repay the American taxpayers for their financial loss, Iraq’s Chief Auditor announced that his government was prepared to go to court to recoup the missing $6.6 billion. “Clearly, Iraq has an interest in looking after its assets and protecting them” said Abdul Basit Turki Saeed.
Associated Press reports Iraqi lawmakers weren’t as tactful regarding Rep. Rohrabacher’s suggestion of Iraqi reparations. “We as a government reject such statements and we have informed the American embassy that these congressmen are not welcome in Iraq" said government spokesman Ali al-Dabbagh yesterday. Another lawmaker, Etab al-Douri, called the suggestion a “humiliation”. "We are the ones who should ask for compensation and not them, and we demand the occupiers to withdraw now" she finished.