US loses $8.7bn of Iraq re-building money
THE US defence department is unable to account for almost $9bn(€6.9bn) taken from Iraqi oil revenues for use in reconstruction, according to an official audit released yesterday.
The report by the US Special Investigator for Iraq Reconstruction says $8.7bn(€6.69bn) out of $9.1bn(€7bn) withdrawn between 2004 and 2007 from a special account set up by the UN Security Council is unaccounted for. This is separate from $53bn(€40bn) set aside by Congress for Iraqi reconstruction.
The revelation is a new headache for an already beleaguered President Obama.
Though the special investigator found that some of the money was spent properly, Iraqis continually complain that they see little sign of their infrastructure being rebuilt after 30 years of war and sanctions.
Electricity, clean water and sewage disposal remain wholly inadequate and seven years after the overthrow of Saddam Hussein there are few signs of rebuilding. A total of 95pc of the country's federal budget comes from oil revenue.
The scale of the sums unaccounted for are particularly striking given they cover periods well after serious fraud and corruption had been widely publicised in Iraq and abroad.
The audit says that no organisation in the defence department was set up to oversee how money from the Development Fund for Iraq was spent. It adds that "the breakdown in controls left the funds vulnerable to inappropriate uses and undetected loss". Many of the organisations at the Pentagon that received funds failed to establish the accounts required to track the funds.
The report cited poor record-keeping and said most of the organisations that received funds failed to use required treasury department accounts.
And while most of the money was partially tracked, the military failed to produce any records whatsoever for $2.6bn (€2bn).
Corruption in Iraq became all pervasive at the height of the violence in 2006-7 because of the difficulty in monitoring what was going on.
Money was dissipated by main contractors sub-contracting work which was sub-contracted in turn with each company taking a profit.
In a separate development, the General Electric Company has agreed to pay $23.4m to settle bribery charges relating to Iraq.
GE settled without admitting the charges which relate to a $3.6m kickback scheme to win contracts to supply medical and water purification equipment. (© Independent News Service)