Massive fraud, theft, corruption in Iraq rebuilding

January 30, 2006 11:32 AM

Massive fraud, theft, corruption in Iraq rebuilding ...Iraqi money gambled away in the Philippines...spent on a swimming pool that was never used...US$700,000 in cash in an unlocked footlocker...millions to companies that never submitted required competitive bids or that were paid for unfinished work...paid US$14,000 on four separate occasions for the same job...US$1.3 million wasted on overpriced or duplicate construction or equipment not delivered..."needlessly disbursed more than US$1.8 million" of the estimated US$2.3 million spent for renovating the library...from new auditor reports from the Special Inspector General for Iraq Reconstruction.
posted by Kickstart70 (48 comments total)

Of US$7.3 million spent on a police academy near Hillah, auditors could account for just US$4 million. They said US$1.3 million was wasted on overpriced or duplicate construction or equipment not delivered. More than US$2 million was missing.

Who among us has not misplaced $2 million from time to time? Why, just this morning I found at least $1 million in my couch.
posted by you just lost the game at 11:40 AM on January 30, 2006

It's just a few bad apples... I mean millions.
posted by three blind mice at 11:43 AM on January 30, 2006

With (current) Republicans running the show, you really do get the best of both worlds.

They don't really give a rat's ass about good governance, as they believe government is essentially inept and evil.

But, you still get all of the graft, greed, and corruption, too! Win Win!

You get an expanded government under current Republicans -- but you get tax cuts so you're not paying for it! (yet).

Ah, great.
posted by teece at 11:47 AM on January 30, 2006

How the fuck do I get in on some of this action?

Every time my little fledgling software company gets a modest development or design contract, we have to bust our asses to make sure that we track to budget and schedule and eat the costs when when we don't. Not that I'm complaining (the work keeps me young!), but shouldn't people working on massive government contracts funded by taxpayer dollars be subject to the same rigors of the capitalist system that I am?
posted by psmealey at 11:47 AM on January 30, 2006

Not millions, BILLIONS.

Time to dole out some more medals.
posted by almostcool at 11:48 AM on January 30, 2006

"Those deficiencies were so significant that we were precluded from accomplishing our stated objectives," the auditors said of US officials in Hillah being unable to account for US$97 million of the US$120 million in Iraqi oil revenues earmarked for rebuilding projects.

Unreal
posted by Mr_Zero at 11:48 AM on January 30, 2006

This story started about 11 months ago, and the figures bandied around then were in the 8 to 11 billion dollar mark. I have tried to follow through from the original postings in the Brit press, (Guardian), but they dropped it all.
The sums are huge but the amount of money needed was huge, and everything had to be in cash. It was open season for the cowboys but I think that maybe the vast majority of cash was accounted for and spent as well as the constraints allowed...as always I think anything that happened was cockup more than conspiracy.
This is not to excuse either criminal acts or incompetence, rather to try and get a hold of the scale of it, why it happened, and the seriousness of it: a global perspective.
posted by mayl at 11:55 AM on January 30, 2006

Fast-and-loose with the money makes good sense for small amounts. Giving the local commanders some money without constraints on how it's spent would probably be very useful.... a lot like petty cash, but more of it. The sheer magnitude of this, though, is overwhelming.

The Army is just not meant to be a civil reconstruction service, and forcing them into that role is what gave us these results. The Army breaks things and kills people. It is not good at police work, and it's particularly bad at fighting terrorism. (it's great at killing terrorists... not so good at figuring out who the terrorists actually are.)

It's worth pointing out that most of the Army was doing a good job with the money. If you'll notice: that $700,000, while in an unlocked footlocker, was still there. That has to have been one hell of a temptation, and the fact that it was still there to find speaks very highly of the men and women entrusted with its care. There don't appear to have been that many actively corrupt military people, just incompetent ones.

They're soldiers, not bloody accountants. They're not trained in how to handle money. Even single-entry bookkeeping is likely to make their eyes glaze over.

Incompetence of this magnitude comes from above. It doesn't just mysteriously pop up on the ground. See also: Katrina relief.
posted by Malor at 11:57 AM on January 30, 2006

I'm trying to find which report this was on the Special Inspector General for Iraq Reconstruction's list of audit reports, but can't pinpoint it.
posted by mediareport at 12:01 PM on January 30, 2006

True tales of sacks stuffed full of hundred dollar bills being carried out of the palace.
No receipts necessary, offer void nowhere.
The largest shipment of cash ever by the Federal Reserve to Baghdad, all in hundred dollar bills, requiring several military transport planes.
Corruption, what corruption?
posted by nofundy at 12:13 PM on January 30, 2006

To all the MeFi republican shills (all three of you that are still around): get to work defending this crap! hurry!
posted by wakko at 12:14 PM on January 30, 2006

The buck apparently stops everywhere.
posted by tittergrrl at 12:20 PM on January 30, 2006

Ho hum, just another day in Iraq. I'm looking forward to the day that someone can FPP about something new and different in Iraq, especially one concerning our oh-so-predictable military/government in Iraq. I'll not hold my breath, however.
posted by codeofconduct at 12:21 PM on January 30, 2006

wakko - Why would they want to? They didn't have anything to do with it did they? Should they do so so that you can shout abuse at them?
posted by longbaugh at 12:23 PM on January 30, 2006

Trying really hard to find something good in this mess... where does that corrupted money get spent? If Uncle Bob wins the lottery and blows it on booze and whores, isn't that good for the red light district?
posted by hodyoaten at 12:23 PM on January 30, 2006

The gov't and gov't employees are typically incompetent when it comes to accounting for the money the spend (on the gov't's behalf).

I sell stuff to folks in the military and other gov't branches all the time and they never care about price. Once a guy bought so much stuff from us that he qualified for a 40% discount. 40%!! This is thousands of dollars!! The guy specifically told me not to give him the discount because it's on Uncle Sam's dime.
posted by b_thinky at 12:24 PM on January 30, 2006

Is there any other news source than the given Philippine news group?

I am not surprised as this was mumbled in hushed tones a year ago, but is anyone keeping the drumbeat up on this besides our friends in the Philippines?
posted by fluffycreature at 12:25 PM on January 30, 2006

longbaugh:

Because I love watching them twist in the wind.
posted by wakko at 12:26 PM on January 30, 2006

*GASP* Corrupt politicians... who would have thunk it?
posted by DrDoberman at 12:27 PM on January 30, 2006

"We are dealing with a country that can really finance its own reconstruction and relatively soon." -- Paul Wolfowitz
posted by Slothrup at 12:28 PM on January 30, 2006

Um... oil for food! oil for food!
posted by Artw at 12:31 PM on January 30, 2006

Lose some, borrow some.
posted by mania at 12:38 PM on January 30, 2006

I smell a promotion! And a medal! And a widening chasm between the morons in charge and the rest of the country.

Who wouldn't want some oversight?
posted by fenriq at 12:41 PM on January 30, 2006

This was posted a while ago, and is a very thorough and depressing account of some of this stuff, more so than the article in this post (although a little older.)

London Review of Books: Where has all the money gone?
posted by BlackLeotardFront at 12:43 PM on January 30, 2006

A friend just spent a year running the logistics for a major NGO using USAID funds to support election work. According to him, the first thing you need in Iraq is a money counting machine, because, you know, you can't count 2.4 million in $100 bills by hand. The man has experienced carrying 4.5 million in cash around Iraq. Not something I'd like to do.
posted by Ironmouth at 12:44 PM on January 30, 2006

Isn't this type of thing what the Presidential Medal of Incompetence Freedom is for?

Americans, don't forget to pay your taxes so you can help make up the loss!
posted by kirkaracha at 12:45 PM on January 30, 2006

It looks like this story was first published in the NY Times last week.

Audit Describes Misuse of Funds in Iraq Projects
posted by neurodoc at 12:46 PM on January 30, 2006

The Special Inspector General for Iraq Reconstruction doesn't care about democracy.
posted by scody at 12:52 PM on January 30, 2006

Is there any other news source than the given Philippine news group?

Phillipine News Group isn't the source. It's an AP story and appears in lots of other publications.
posted by 327.ca at 12:55 PM on January 30, 2006

I wouldn't have believed this was possible five years ago.
posted by bardic at 1:00 PM on January 30, 2006

In the unholy mess Iraq's accounting must be, no wonder millions and millions will be wasted, appropriate by corrupted individuals. No matter how stringent the accounting and honest the accountants (and I'm not talking about Arthur Andersen accountants) the work can always be done in a poor way like paying $1000 for a cement wall that contains 70% sand...it stands, but it's going to fail soon.

What I wonder is..the ones left out by this big pasture must be pretty fucking angry. A lot pretty fucking angry.
posted by elpapacito at 1:00 PM on January 30, 2006

They're soldiers, not bloody accountants. They're not trained in how to handle money. Even single-entry bookkeeping is likely to make their eyes glaze over.

Exactly.
It wasn't the soliders doing this large scale hand out.
They were newly minted acolytes fresh from the Heritage Foundation resume pool.
It pays to be a young Republican with connections, it pays very well.
posted by nofundy at 1:01 PM on January 30, 2006

Also, I'm a little unclear on where this money comes from. Is this money from US taxpayers or from Iraq? In the NY Times article, it says:

The money, most from Iraqi oil proceeds and cash seized from Saddam Hussein's government...

Obviously, it's a terrible situation, no matter where the money started.
posted by neurodoc at 1:01 PM on January 30, 2006

I’d like someone’s gonads in my ashtray for this.
I think it would send the right message.

Defrauding the government during a time of war (or in this case “war” - but either way, while troops are in danger and in need of resources) should be a treasonous offense.
posted by Smedleyman at 1:22 PM on January 30, 2006

Dear Kansas, Alabama, and Ohio,

The GOP has looted the Treasury. Look, there they go, running away. Maybe one day one of the Senators who made this possible, one that you voted for, maybe one day his son, or his grandson, can just keep the ball rolling! What a nice thing to consider! Jesus, how he blesses.

By the way, how is your infrastructure, your farms, your state budgets?

Sincerely,
The Jesse Helms
posted by The Jesse Helms at 1:23 PM on January 30, 2006

True of every reconstruction, whether for the war you wanted or the one you didn't want.

Wanting or not-wanting won't make a rat's ass difference.
posted by HTuttle at 1:41 PM on January 30, 2006

One of KBR’s contracts was for transporting supplies between American bases. Fleets of new Mercedes Benz trucks, costing $85,000 each, travelled up and down Iraq’s central highways every day, accompanied by armed US military escorts. If there were no goods to transport, KBR dispatched empty lorries anyway, and billed accordingly. The lorries didn’t carry replacement air and oil filters, essential when driving in the desert. They didn’t even carry spare tyres. If one broke down, it was abandoned and destroyed so no one else could use it, and left burning by the roadside. For fear of ambush, KBR drivers were told not to slow down. ‘The truck in front of the one I was riding ran a car with an Iraqi family of four off the road,’ a KBR employee told Waxman’s committee. ‘My driver said that was normal.’ [...]

An Iraqi hospital administrator told me that, as he was about to sign a contract, the American army officer representing the CPA had crossed out the original price and doubled it. The Iraqi protested that the original price was enough. The American officer explained that the increase (more than $1 million) was his retirement package. [...]

Both Saddam and the US profited handsomely during his reign. He controlled Iraq’s wealth while most of Iraq’s oil went to Californian refineries to provide cheap petrol for American voters. US corporations, like those who enjoyed Saddam’s favour, grew rich. Today the system is much the same: the oil goes to California, and the new Iraqi government spends the country’s money with impunity.

Speechless, but not surprised.
posted by jokeefe at 1:43 PM on January 30, 2006

Htuttle: Wanting or not-wanting won't make a rat's ass difference.

It does ALL the difference and that's the problem.
posted by elpapacito at 1:45 PM on January 30, 2006

Kind of makes Canada's Sponsorship Scandal look like small potatoes.
posted by McBain at 1:50 PM on January 30, 2006

McBain, everything the Bush administration is invovled in makes the Sponsorship Scandal look like small potatoes.
posted by chunking express at 2:04 PM on January 30, 2006

oh...what it must be like to be a govt. contractor...
posted by pwedza at 5:02 PM on January 30, 2006

Well, it's not like it's taxpayers' money or anything like that, right? Because a Republican administration wouldn't waste taxpayers' money, would it?
posted by NewBornHippy at 5:10 PM on January 30, 2006

Can this be considered "confirmed" news? (AP's made mistakes before, just sayin')
posted by creeptick at 6:08 PM on January 30, 2006

the jesse helms, your letter probably should also have been addressed to the state where i was born: lovely, progressive, enlightened, wonderful florida.
posted by lord_wolf at 6:23 PM on January 30, 2006

It's very confirmed creeptick.

It's been in dozens of stories. We've known for a year or more that the reconstruction money was basically a slush fund for crooks -- this is not even remotely like breaking news if you pay attention.

One of the big news rags (don't remember which one) ran a story on one facet of this: the largest ever cash transfer from the Fed. It went to Iraq in multiple cargo planes. All that cash (as in American greebacks), millions and millions, disappeared without the slightest bit of auditing. It seems to have just gone wherever. If you wanted a duffel bag full of money, it was yours for the taking. That story was sourced by many people, including eyewitnesses.

The CBO has also come out with information that the money being spent in Iraq is not being accounted for at all. We've also had a couple of patsy small fish get brought up on criminal charges for defrauding taxpayers in Iraq.

The Pentagon has also admitted that they can't account for billions off dollars in military spending. BILLIONS. And they intend to do nothing about that.

It's very much reality. The sad thing is, it's just not a big story. The occasional story pops up in the media, but no one latches onto to it.

Which baffles me, because we're seeing outright theft of US taxpayer money on a scale I doubt has ever been equaled.
posted by teece at 8:03 PM on January 30, 2006

So does all this missing money devalue the American dollar in any way, or is it all just pretend accounting?
posted by five fresh fish at 9:56 PM on January 30, 2006

We Three Kings be stealin' the gold ...
posted by moonbiter at 10:59 PM on January 30, 2006

Wars lead to lawlessness, corruption, graft and suffering. It kills the brave and rewards cowardice and greed. Film at 11.
posted by spazzm at 9:42 AM on January 31, 2006