12 billion dollars vaporizes in iraq

[roachboy]

an amazing little story....

How the US sent $12bn in cash to Iraq. And watched it vanish


Special flights brought in tonnes of banknotes which disappeared into the war zone

David Pallister
Thursday February 8, 2007
The Guardian

The US flew nearly $12bn in shrink-wrapped $100 bills into Iraq, then distributed the cash with no proper control over who was receiving it and how it was being spent.

The staggering scale of the biggest transfer of cash in the history of the Federal Reserve has been graphically laid bare by a US congressional committee.

In the year after the invasion of Iraq in 2003 nearly 281 million notes, weighing 363 tonnes, were sent from New York to Baghdad for disbursement to Iraqi ministries and US contractors. Using C-130 planes, the deliveries took place once or twice a month with the biggest of $2,401,600,000 on June 22 2004, six days before the handover.

Details of the shipments have emerged in a memorandum prepared for the meeting of the House committee on oversight and government reform which is examining Iraqi reconstruction. Its chairman, Henry Waxman, a fierce critic of the war, said the way the cash had been handled was mind-boggling. "The numbers are so large that it doesn't seem possible that they're true. Who in their right mind would send 363 tonnes of cash into a war zone?"

The memorandum details the casual manner in which the US-led Coalition Provisional Authority disbursed the money, which came from Iraqi oil sales, surplus funds from the UN oil-for-food programme and seized Iraqi assets.

"One CPA official described an environment awash in $100 bills," the memorandum says. "One contractor received a $2m payment in a duffel bag stuffed with shrink-wrapped bundles of currency. Auditors discovered that the key to a vault was kept in an unsecured backpack.

"They also found that $774,300 in cash had been stolen from one division's vault. Cash payments were made from the back of a pickup truck, and cash was stored in unguarded sacks in Iraqi ministry offices. One official was given $6.75m in cash, and was ordered to spend it in one week before the interim Iraqi government took control of Iraqi funds."

The minutes from a May 2004 CPA meeting reveal "a single disbursement of $500m in security funding labelled merely 'TBD', meaning 'to be determined'."

The memorandum concludes: "Many of the funds appear to have been lost to corruption and waste ... thousands of 'ghost employees' were receiving pay cheques from Iraqi ministries under the CPA's control. Some of the funds could have enriched both criminals and insurgents fighting the United States."

According to Stuart Bowen, the special inspector general for Iraq reconstruction, the $8.8bn funds to Iraqi ministries were disbursed "without assurance the monies were properly used or accounted for". But, according to the memorandum, "he now believes that the lack of accountability and transparency extended to the entire $20bn expended by the CPA".

To oversee the expenditure the CPA was supposed to appoint an independent certified public accounting firm. "Instead the CPA hired an obscure consulting firm called North Star Consultants Inc. The firm was so small that it reportedly operates out of a private home in San Diego." Mr Bowen found that the company "did not perform a review of internal controls as required by the contract".

However, evidence before the committee suggests that senior American officials were unconcerned about the situation because the billions were not US taxpayers' money. Paul Bremer, the head of the CPA, reminded the committee that "the subject of today's hearing is the CPA's use and accounting for funds belonging to the Iraqi people held in the so-called Development Fund for Iraq. These are not appropriated American funds. They are Iraqi funds. I believe the CPA discharged its responsibilities to manage these Iraqi funds on behalf of the Iraqi people."

Bremer's financial adviser, retired Admiral David Oliver, is even more direct. The memorandum quotes an interview with the BBC World Service. Asked what had happened to the $8.8bn he replied: "I have no idea. I can't tell you whether or not the money went to the right things or didn't - nor do I actually think it's important."

Q: "But the fact is billions of dollars have disappeared without trace."

Oliver: "Of their money. Billions of dollars of their money, yeah I understand. I'm saying what difference does it make?"

Mr Bremer, whose disbanding of the Iraqi armed forces and de-Ba'athification programme have been blamed as contributing to the present chaos, told the committee: "I acknowledge that I made mistakes and that with the benefit of hindsight, I would have made some decisions differently. Our top priority was to get the economy moving again. The first step was to get money into the hands of the Iraqi people as quickly as possible."

Millions of civil service families had not received salaries or pensions for months and there was no effective banking system. "It was not a perfect solution," he said. "Delay might well have exacerbated the nascent insurgency and thereby increased the danger to Americans."

source: http://www.guardian.co.uk/Iraq/Story/0,,2008189,00.html

i am not sure quite how to react to this story.
i have read through it quite a few times and it still makes almost no sense to me: i mean i understand the sentences, but not what they refer to. so it appears that the americans printed all this money, sent it to iraq to pay contractors and others, hired someone working out of their basement in san diego to oversee ths disbursement (who did nothing), and then apparently allowed the money to vanish.
and the reaction to this from officials--who cares?

one problem this raises concerns the total lack of accountability to anyone in the context of the privatization of state functions under the bush regime. this plays to an interpretation of privatization that i have long harbored: that it is not about efficiency, but rather about reducing political risk for the state in a period of uncertainty/accelerated change.


another is...well...12 billion dollars appears to have vaporized. that's a whole lot of cash. it seems like this should be worrisome.

a third is that this appears like a little allegory for much of how the iraq debacle has unfolded. do you see it in these terms? why or why not?

[dc_dux]

What we have needed is another Truman Committee.

While serving in the Senate, Harry Truman chaired an oversight committee from 1941 through the course of WW II to investigate waste, war profiteering, etc....while the war was raging on.:

The Truman Committee is both the most famous and the most successful (oversight committee); having held hundreds of hearings and conducted exhaustive investigative missions that laid bare the machinations of America's military industrial complex and saved taxpayers billions of dollars. The savings generated are staggering compared to the cost of setting up and running the committee: the Truman Committee was launched with just $15,000, but may have saved in excess of $15 billion.
http://www.taxpayer.net/TCS/wastebas...9-17truman.htm

What we had instead was a Republican congress unwilling to ask questions or hold the Administration accountable for expenditures in Iraq.

Every attempt by the Dem minority in both houses of Congress to hold serious overisght hearing and conduct in-depth investigations were rebuffed.

One example?
Republicans Block Legislation to Restore Congressional Oversight Over War Contracts (link)

The Special Inspector General for Iraq Reconstruction (SIGIR) has been submitting quarterly reports and special audits for 3+ years. Many of these reports and audit raised serious concerns, yet Congress held few meaningful hearings.

In fact, one of the last acts of the Repub majority in the House was to add an amendment to the DoD appropriations bill to cease funding for the SIGIR. Fortunately, the Senate killed the amendment.

With Waxman now chairing the House Govt Ops Committee
....."the times, they are a changin"

[host]

This will be a "quiet" thread, just as the "Plame Leak" topic, and the "Wilkes Foggo indictments" topic, and the topic of replacing close to a dozen US attorneys, including Carol Lam, heading the Cunningham, Wilkes, Wade, Foggo investiagtion, are "quiet" topics....but, be that as it may, here is more on the topic of this thread's OP:

http://www.washingtonpost.com/wp-dyn...501325_pf.html

Back on Capitol Hill, Bremer Is Facing a Cooler Reception
Republicans to Join Democrats in Criticizing Decisions in Iraq

By Rajiv Chandrasekaran
Washington Post Staff Writer
Tuesday, February 6, 2007; A09

The last time L. Paul Bremer testified before Congress, he was lauded as an American hero. Rep. Ander Crenshaw (R-Fla.) congratulated Bremer, who was leading the U.S. occupation authority in Iraq, for a "tremendous success." Sen. Joseph R. Biden Jr. (D-Del.) commended his "energy and focus." Sen. Pete V. Domenici (R-N.M.) praised his "brilliant analysis."

When Bremer returns to Capitol Hill today to appear before the House Oversight and Government Reform Committee, he will receive a far less effusive reception than he did in September 2003. The now-ruling Democrats plan to pounce on him for disbanding Iraq's army, firing many members of the Baath Party, hiring GOP loyalists and not fully accounting for the spending of billions of dollars in Iraqi oil revenue.

Fellow Republicans have pointed questions for the first time in public as well.

"Had Bremer made better decisions, we would be in a very different place today," said Rep. Christopher Shays (Conn.).

"Some of the key mistakes in Iraq occurred on his watch," said Rep. Darrell Issa (Calif.). "I think there will be a tendency among Republicans to look very carefully and say, 'Who is this man . . . who made decisions that we're still paying for today?' "

Two and a half years after he left Baghdad, the steel-haired viceroy who wore combat boots with his navy-blue suits has emerged as an embodiment of reconstruction policy gone awry. The Senate began debate yesterday on a resolution condemning President Bush's troop buildup, and House members will have their sights on Bremer this week as they seek to assign blame for U.S. mistakes in rebuilding Iraq.

While deep divisions remain about Bush's decision to send more troops to Iraq, there is near-unanimity among Democrats and Republicans that the United States needs to roll back key political and economic decisions that Bremer's Coalition Provisional Authority made.....

<h4>........For Democrats, Bremer is a particularly juicy target because he, along with retired Gen. Tommy R. Franks and former CIA director George J. Tenet, received the Presidential Medal of Freedom from Bush, who would shower Bremer with praise on his visits to Washington.</h4>

For many Republicans, who believe they must acknowledge mistakes if they want to increase public support for continued U.S. military involvement in Iraq, defending Bremer may be too much to ask. Even senior Bush administration officials who were once effusive in their descriptions of Bremer privately point to some of his decisions as key errors.........

http://www.cnn.com/2007/POLITICS/02/...eut/index.html
Lawmaker: U.S. sent giant pallets of cash into Iraq
POSTED: 12:52 a.m. EST, February 7, 2007

WASHINGTON (Reuters) -- The Federal Reserve sent record payouts of more than $4 billion in cash to Baghdad on giant pallets aboard military planes shortly before the United States gave control back to Iraqis, lawmakers said Tuesday.

The money, which had been held by the United States, came from Iraqi oil exports, surplus dollars from the U.N.-run oil-for-food program and frozen assets belonging to the ousted Saddam Hussein regime.

Bills weighing a total of 363 tons were loaded onto military aircraft in the largest cash shipments ever made by the Federal Reserve, said Rep. Henry Waxman, chairman of the House Committee on Oversight and Government Reform. (Watch Democrats put the former top U.S. official in Iraq on the spot Video)

<b>"Who in their right mind would send 363 tons of cash into a war zone? But that's exactly what our government did,"</b> the California Democrat said during a hearing reviewing possible waste, fraud and abuse of funds in Iraq.

On December 12, 2003, $1.5 billion was shipped to Iraq, initially "the largest pay out of U.S. currency in Fed history," according to an e-mail cited by committee members.

It was followed by more than $2.4 billion on June 22, 2004, and $1.6 billion three days later. The CPA turned over sovereignty on June 30.
Bremer: Cash requested by Iraqis

L. Paul Bremer, who as the administrator of the Coalition Provisional Authority ran Iraq after initial combat operations ended, said the enormous shipments were done at the request of the Iraqi minister of finance.

"He said, 'I am concerned that I will not have the money to support the Iraqi government expenses for the first couple of months after we are sovereign. We won't have the mechanisms in place, I won't know how to get the money here,"' Bremer said.

"So these shipments were made at the explicit request of the Iraqi minister of finance to forward fund government expenses, a perfectly, seems to me, legitimate use of his money," Bremer told lawmakers.

Democrats led by Waxman also questioned whether the lack of oversight of $12 billion in Iraqi money that was disbursed by Bremer and the CPA somehow enabled insurgents to get their hands on the funds, possibly through falsifying names on the government payroll.

"I have no knowledge of monies being diverted. I would certainly be concerned if I thought they were," Bremer said. He pointed out that the problem of fake names on the payroll existed before the U.S.-led invasion. (Watch Waxman outline questions and Bremer respond Video)

The special inspector general for Iraqi reconstruction, Stuart Bowen, said in a January 2005 report that $8.8 billion was unaccounted for after being given to the Iraqi ministries.

<b>"We were in the middle of a war, working in very difficult conditions, and we had to move quickly to get this Iraqi money working for the Iraqi people," Bremer told lawmakers.</b> He said there was no banking system and it would have been impossible to apply modern accounting standards in the midst of a war.

Republicans argued that Bremer and the CPA staff did the best they could under the circumstances and accused Democrats of trying to score political points over the increasingly unpopular Iraq war.

<b>"We are in a war against terrorists, to have a blame meeting isn't, in my opinion, constructive," said Rep. Dan Burton</b>, an Indiana Republican......

[pan6467]

Great so we just funded the next Osama Bin Laden

[host]

<center><img src="http://upload.wikimedia.org/wikipedia/en/thumb/c/c4/GeorgeWBush_LPaulBremer_Dec_14_2004.jpg/275px-GeorgeWBush_LPaulBremer_Dec_14_2004.jpg"></center>

Reading this resume, it is clear that Bremer is the epitome of what Bush (and any republican president in the near future, if he draws from the "talent pool" of "credentialed" trusted hacks, who have served in republican administrations sin the '70's...)<b> has to offer...</b>
Bremer went to high school, college, and grad school, at exactly the three schools that Bush himself attended. Bremer worked for Kissinger, then Reagan, and finally for Bush:
http://en.wikipedia.org/wiki/Paul_Bremer#Biography

[powerclown]

Seems to me what we have here is yet another example of trying to do the right thing and screwing up. It seems what we have here is money intended to finance fledgling governmental operations has gone missing/was stolen/who the fuck knows.

Will this determine the outcome of the war? No.
Does this justify a swift and total withdrawal? No.
Will it get even more people pissed off? Yes.
Will it add fuel to the fire? Yes.
Does it help our fighting men? No.
Is this the left's financial Abu Ghraib? Why not.
Should stories like this be reported? Yes.
Did I receive any of the money? No.

Maybe Iran stole it. Maybe Syria stole it. Maybe al-Qaeda stole it. Maybe Dubai stole it. Maybe Bahrain stole it. Maybe Australia stole it. Maybe Greenland stole it. Maybe Willie Nelson stole it. Maybe it fell into the Persian Gulf.

[aceventura3]

Originally Posted by roachboy

one problem this raises concerns the total lack of accountability to anyone in the context of the privatization of state functions under the bush regime. this plays to an interpretation of privatization that i have long harbored: that it is not about efficiency, but rather about reducing political risk for the state in a period of uncertainty/accelerated change.

Private sector or not - heads should roll for this if the facts show that there were no controls or inadequate controls. I also felt that way about the oil for food program scandal.

[pai mei]

Nobody cares because the Federal Reserve - which is a private corporation, can always print money out of nothing, backed by nothing. They make people think that papers have value then people work for real to pay back the money they take from banks

[Willravel]

Still, the money can be spent. While we didn't lose anything of value, some very dishonest people gained something of great value.

[aceventura3]

Originally Posted by pai mei

Nobody cares because the Federal Reserve - which is a private corporation, can always print money out of nothing, backed by nothing. They make people think that papers have value then people work for real to pay back the money they take from banks

Isn't it a beautiful thing when you think about it?

You can get a 30 year mortgage with no money down at 6%, deduct the interest - making the after tax rate about 3% (depending on the state). Inflation runs about 3%, so your real cost of money is 0%. Then you have control of an asset going up in value. So by the time you sell, you have lived in a house for free, effectively paid no interest, have enough money for a bigger more expensive house, still have money left over, and pay no capital gains tax on any profit less than $500,000.

Sorry, for the hijack but - I love our "backed by nothing" system and could not let an opportunity to express my love pass (especially so close to Valintines Day).

[dc_dux]

Originally Posted by powerclown

Seems to me what we have here is yet another example of trying to do the right thing and screwing up. It seems what we have here is money intended to finance fledgling governmental operations has gone missing/was stolen/who the fuck knows.

Will this determine the outcome of the war? No.
Does this justify a swift and total withdrawal? No.
Will it get even more people pissed off? Yes.
Will it add fuel to the fire? Yes.
Does it help our fighting men? No.
Is this the left's financial Abu Ghraib? Why not.
Should stories like this be reported? Yes.
Did I receive any of the money? No.

It seems to me you are missing the bigger issue or just unwilling to hold anyone accountable. The fact is there has been virtually no oversight of this war by Congress for nearly 4 years.

Just as another SIGIR audit found that 14,000 weapons sent to Iraq are missing:

Nearly one of every 25 weapons the military bought for Iraqi security forces is missing, a government audit said Sunday. Many others cannot be repaired because parts or technical manuals are lacking.
...

The Pentagon cannot account for 14,030 weapons _ almost 4 percent of the semiautomatic pistols, assault rifles, machine guns, rocket-propelled grenade launchers and other weapons it began supplying to Iraq since the end of 2003, according to a report from the office of the special inspector general for Iraq reconstruction.

The missing weapons will not be tracked easily: The Defense Department registered the serial numbers of only about 10,000 of the 370,251 weapons it provided _ less than 3 percent.

The Pentagon spent $133 million on the weapons, and "the capacity of the Iraqi government to provide national security and public order is partly contingent on arming the Iraqi security forces, under the ministries of defense and interior," the report notes. Military officials insisted the weapons either had to be new or never issued to a previous soldier.

By December, the U.S. military had planned to put those weapons in the hands of 325,500 personnel.

Missing from the Defense Department's inventory books were 13,180 semiautomatic pistols, 751 assault rifles and 99 machine guns, according to an audit requested by Sen. John Warner, R-Va., chairman of the Senate Armed Services Committee.

The audit does not make clear at what point the weapons were lost. But it notes that "there could have been undetected losses" before weapons were ever issued to Iraqi security forces _ who also lack many needed spare parts, technical repair manuals and arms maintenance personnel.

full article: http://www.washingtonpost.com/wp-dyn...ness/special/5

Will these and other fuck-ups determine the outcome of the war....it could certainly cost more American lives if those funds and weapons found their way into the hands of al Sadr's Mahdi Army or the Badr Brigade or any of the other dozens of sectarian militias.

Maybe Iran stole it. Maybe Syria stole it. Maybe al-Qaeda stole it. Maybe Dubai stole it. Maybe Bahrain stole it. Maybe Australia stole it. Maybe Greenland stole it. Maybe Willie Nelson stole it. Maybe it fell into the Persian Gulf.

I think it is unfortunate that you find such an unconscionable abrigation of responsiblity by the Republican Congress so amusing as to offer such a lighthearted reaction.

[serlindsipity]

weapons missing?!? money missing?!? yep, we just gave away the means for another group to start a war or an new militant group that inevitably we will feel the need to go put a stop to them.

Does this circle of violence ever end?

[Charlatan]

Originally Posted by serlindsipity

Does this circle of violence ever end?

I really don't think it ever will.

[Rekna]

only when we choose to stop the cycle.

[cadre]

It must be hidden with all of those wmds!

[scout]

Both the money and the guns are probably sitting in some warehouse over there buried behind the many tons of other supplies that have been sent over.

Both the guns and the money will probably surface after the next presidential election.

It's just another "issue" to keep the electorate fired up about something that really means very little in the grand scope of things.

[Charlatan]

I smell a sequel to Three Kings.

[roachboy]

scout: i really do not see how you arrive at that conclusion.