[Mb-civic] FW: Iraq reconstruction funds missing

[Golsorkhi]

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From: Samii Shahla <shahla at thesamiis.com>
Date: Mon, 31 Jan 2005 01:07:42 -0500
Subject: Iraq reconstruction funds missing

BBC News
01/30/05

  Iraq reconstruction funds missing

  Almost $9bn (£4.7bn) of Iraqi oil revenue is missing from a fund set
up to reconstruct the country.

  The BBC's File On 4 programme has learnt that out of over $20bn raised
in oil revenues during US-led rule, the use of $8.8bn is unaccounted
for.

  US government auditors criticise the Coalition Provisional Authority
for failing to manage the money properly.

  In one case, auditors say the key to a safe holding millions of
dollars was kept in an open backpack in an office.

  "There was insufficient internal control to assure that money was
spent for the benefit of the Iraqis, as the UN Security Council
resolution mandated," said chief auditor Ms Ginger Cruz.

  'Bribes demanded'

  "We contend that since the CPA was in control and did have a
responsibility to be an effective steward of those monies, that it was
to be expected that there was more supervision of what happened to that
money," she said.

  Even allowing for the chaos in the aftermath of war, the auditors
still believe the management of the money should have been a great deal
tighter.

  An earlier auditors' report from last year revealed evidence of
wholesale carelessness with large amounts of cash.

  On one occasion, $1.4bn had to be transported to a bank in three
helicopters, as it weighed 14 tons, but no deposit slip was obtained
when it was paid in.

  The CPA has also come under attack for failing to prevent widespread
fraud.

  One US company is accused of massively inflating its profits by
setting up sham companies to send fake invoices which the coalition
paid.

  Others are alleged to have demanded dubious commissions which then
came out of Iraqi funds.

  Even some Coalition officials are said to have openly demanded bribes
of up to $300,000 in cash.

  File On 4 reporter Gerry Northam explained: "Many Iraqis are angry at
the way the Coalition handled funds, particularly the money from their
own oil, and especially where inexplicable amounts ended up in the
hands of foreign businesses."

  Context 'misunderstood'

  Claude Hankes-Drielsma, a former British advisor to the Iraqi
Governing Council, which worked alongside the Coalition, said the lack
of control of funds was a further blow to the United States.

  "It is most unfortunate, given that the liberation of Iraq was a great
achievement. It was recognised as such by the Iraqi people, but the
subsequent handling of events was a disaster.

  "It was such a key moment and a great opportunity was lost by the way
it was handled."

  In response to the report, the former head of the coalition,
Ambassador Paul Bremer, said the auditors had failed to understand the
context in which the Authority was operating.

  Western accounting standards could not be applied in the midst of a
war, he said.

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  Story from BBC NEWS:
http://news.bbc.co.uk/2/hi/programmes/file_on_4/4216853.stm


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