Enron accounting, Mesopotamian version

Can't the Bush crowd do anything right?  Well, they did get Bush "re"-elected, didn't they?

This is just amazing to read: So, Mr. Bremer, where did all the money go? by Ed Harriman Guardian (UK) 07/07/05.  It's about how the Coalition Provisional Authority (CPA) under Viceroy Jerry Bremer - you know, the guy who liked to war combat boots with his business suit - managed to lose track of $8.8 billion dollars.  Yes, that's billion with a B.

Here's the summary of some of the main points from the end of the article:

· Bremer maintained one slush fund of nearly $600m in cash for which there is no paperwork: $200m of it was kept in a room in one of Saddam's former palaces

· 19 billion new Iraqi dinars, worth about £6.5m, was found on a plane in Lebanon that had been sent there by the new Iraqi interior minister

· One ministry claimed to be paying 8,206 guards, but only 602 could be found

· One American agent was given $23m to spend on restructuring; only $6m is accounted for

The article is an edited version of a longer one that is also available online: Where has all the money gone? London Review of Books 07/07/05.  The following quotes are from the longer version.

This is nice (my emphasis):

The ‘reconstruction’ of Iraq is the largest American-led occupation programme since the Marshall Plan. But there is a difference: the US government funded the Marshall Plan whereas Donald Rumsfeld and Paul Bremer have made sure that the reconstruction of Iraq is paid for by the ‘liberated’ country, by the Iraqis themselves. There was $6 billion left over from the UN Oil for Food Programme, as well as sequestered and frozen assets, and revenue from resumed oil exports (at least $10 billion in the year following the invasion). Under Security Council Resolution 1483, passed on 22 May 2003, all of these funds were transferred into a new account held at the Federal Reserve Bank in New York, called the Development Fund for Iraq (DFI), so that they might be spent by the CPA ‘in a transparent manner . . . for the benefit of the Iraqi people’. Congress, it’s true, voted to spend $18.4 billion of US taxpayers’ money on the redevelopment of Iraq. But by 28 June last year, when Bremer left Baghdad two days early to avoid possible attack on the way to the airport, his CPA had spent up to $20 billion of Iraqi money, compared to $300 million of US funds.

That's our man Rummy, all right.  Let's not forget that it was the Pentagon, Rummy's department, that was in charge of this mess.

Of course, there are Halliburton stories.  This is about Halliburton's subsidieary KBR, that had contracts for many of the support services for the Army in Iraq:

The GAO report of July 2004 found that in the first nine months of the occupation, KBR was allowed a free hand in Iraq: a free hand, for example, to bill the Pentagon without worrying about spending limits or management oversight or paperwork. Millions of dollars’ worth of new equipment disappeared. KBR charged $73 million for motor caravans to house the 101st Airborne Division, twice as much as the army said it would cost to build barracks itself; KBR charged $88 million for three million meals for US troops that were never served. The GAO calculated that the army could have saved $31 million a year simply by doing business directly with the catering firms that KBR hired. In June 2004, the GAO continued, ‘by eliminating the use of LOGCAP and making the LOGCAP subcontractor the prime contractor, the command reduced meal costs by 43 per cent without a loss of service or quality.’

So when Dark Lord Dick Cheney says that the Iraq War is a success, from the point of view of his old firm Halliburton, he's telling the plain truth.  KBR corporate culture sounds like Dark Lord Cheney would have been right at home there:

KBR’s response [to government auditors] has been to tough it out. The company wrote to the auditors saying that its position regarding the meals ‘had been misquoted as well as misinterpreted’. The auditors, the corporation said, knew full well that KBR had ‘established a Tiger Team that is actively researching and analysing the facts and circumstances surrounding each of its DFAC subcontracts’. ‘Tiger Teams’ are in-house investigative units. KBR’s Tiger Team stayed at the five-star Kuwait Kempinski Hotel, where its members ran up a bill of more than $1 million. This outraged the army, whose troops were sleeping in tents at a cost of $1.39 a day. The army asked the Tiger Team to move into tents. It refused. As to how the Tiger Team ‘actively researched and analysed the facts’, we have the sworn testimony that a KBR employee gave to Congressman Waxman’s committee: ‘The Tiger Team looked at subcontracts with no invoice and no confirmation that the products contracted for were being used. Instead of investigating further, they would recommend extending the subcontract.’

Steve Gilliard called the CPA Young Republicans Abroad.  It looks like he was right:

Pilfering was rife. Millions of dollars in cash went missing from the Iraqi Central Bank. Between $11 million and $26 million worth of Iraqi property sequestered by the CPA was unaccounted for. The payroll was padded with hundreds of ghost employees. Millions of dollars were paid to contractors for phantom work: $3,379,505 was billed, for example, for ‘personnel not in the field performing work’ and ‘other improper charges’ on a single oil pipeline repair contract. An Iraqi sports coach was paid $40,000 by the CPA. He gave it to a friend who gambled it away then wrote it off as a legitimate loss.

Isn't that exactly how you would expect a bunch of Republican frat boys to run something?

Last September was the crucial month. By then the US government had spent $60 billion on the US forces in Iraq, and $1 billion on the Iraqi security forces. The Americans knew that they were widely hated. ‘In the war of ideas or the struggle for hearts and minds . . . American efforts have not only failed, they may also have achieved the opposite of what they intended’ was the principal finding of the Pentagon’s Defense Science Board. (my emphasis)

But, but, that's not what the Republicans have been telling us?  We're winning, you know, we've been winning all along, and we'll be winning for years to come.

And you know all those Iraqi security personnel that we're "standing up" so that Americans can "stand down"?  The Government Accounting Office (GAO) has some observations on that point, as described by Harriman:

‘In response to the unwillingness of a regular army battalion to fight Iraqi insurgents in Fallujah’, the Americans created a special Iraqi Intervention Force. Then last autumn they decided to beef up the Iraqi police service from 90,000 to 135,000, to add 20 battalions to the Iraqi National Guard and double the border guard. This February, the State Department glowingly reported that almost 82,000 Iraqi police and 60,000 troops had been trained.

These figures are grossly misleading. According to the GAO’s March report to Congress ‘the reported number of Iraqi police is unreliable because the Minister of the Interior does not receive consistent and accurate reporting from the police forces around the country. The data does not exclude police absent from duty.’ As for the army, ‘Ministry of Defense reports exclude the absent military personnel from its totals. According to DOD officials, the number of absentees is probably in the tens of thousands.’ Furthermore the State Department no longer reports on whether Iraqi security forces have the required weapons, vehicles, communication equipment and body armour. Bluntly, ‘US government agencies do not report reliable data on the extent to which Iraqi security forces are trained and equipped.’ The GAO further found that the Iraqi police are being trained for ‘community policing in a permissive security environment’ rather than getting ‘paramilitary training for a high-threat hostile environment’. It’s hardly surprising that close to 2000 Iraqi police have been killed.

But why aren't they reporting the good news?

One last excerpt.  The last sentence of it is grimly intriguing (my emphasis):

Not only the Americans are guilty of a lack of accountability. In January this year, the SIGIR issued a report detailing evidence of fraud, corruption and waste by the Iraqi Interim Government when Bremer was in charge. They found that $8.8 billion – the entire Iraqi Interim Government spending from October 2003 through June 2004 – was not properly accounted for. The Iraqi Office of Budget and Management at one point had only six staff, all of them inexperienced, and few of the ministries had budget departments. Iraq’s newly appointed ministers and their senior officials were free to hand out hundreds of millions of dollars in cash as they pleased, while American ‘advisers’ looked on.‘CPA personnel did not review and compare financial, budgetary and operational performance to planned or expected results,’ the auditors explained. One ministry gave out $430 million in contracts without its CPA advisers seeing any of the paperwork. Another claimed to be paying 8206 guards, but only 602 could be accounted for. There is simply no way of knowing how much of the $8.8 billion went to pay for private militias and into private pockets.

 Or, to frame it another way, how much of that missing $8.8 billion was siphoned off by allies of the insurgency to finance their war effort against Americans?  How much of it may have trickled off to jihadists in other places, like, say, Madrid or London?

War, the Republican Party way.  Nothing quite like it.

The longer article provides these links at the beginning:

US House of Representatives Government Reform Committee Minority Office
| Link: http://www.democrats.reform.house.gov/

US General Accountability Office
| Link: http://www.gao.gov/

Defense Contract Audit Agency
| Link: http://www.dcaa.mil/

International Advisory and Monitoring Board
| Link: http://www.iamb.info/

Coalition Provisional Authority Inspector General
| Link: http://www.cpa-ig.com/

Special Inspector General for Iraq Reconstruction
| Link: http://www.sigir.mil/