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The fiasco that is Iraq by Geov Parrish

The CEO and founder of Adelphi Communications has now been convicted of looting his company of hundreds of millions of dollars. Ken Lay has (finally) been indicted for his Enron dealings. What lesson may we learn?

If you really want to steal a lot of money, and get away with it, skip the private sector and go with government work.

While business corruption headlines briefly resurface, virtually no attention has been paid to a trio of reports that, combined, paints a picture of occupied Iraq as a place where staggering amounts of public money have been botched or stolen with little or no oversight.

Let us start with the White House itself, which helpfully buried, on the Friday afternoon before a July 4 weekend, its release of a White House Office of Management and Budget report that reveals that of the nearly $20 billion earmarked by Congress for reconstruction in last fall's emergency Iraq spending bill, only a tidy $366 million has actually been spent. Breaking it down further, we discover that those wealthy Americans, in the 14 months we officially occupied Iraq, have spent none of our own money on roads, nothing on hospitals and public health, nothing on clean water. The biggest chunks--about $100 million each--were spent on training Iraqi police and trying to restore constantly sabotaged electricity. What little progress has been made has come almost entirely from foreign governments, private donors and Iraq's oil money.

No wonder the Iraqi public is furious with the Americans for not honoring our word on the street. Americans should be angry, too--originally, in January, the OMB estimated that $10.3 billion of the money would be spent by now. And when that $87 billion was rammed through Congress last fall, it was with the insistent message that the money was needed immediately, if not sooner.

Never mind.

But Iraqis deserve to be even angrier about the fate of their own money. Iraqi oil exports, remember, were also supposed to be helping with both security and the reconstruction effort.

Problem is, nobody has any idea where the money's gone.

The Coalition Provisional Authority, the U.S.-run agency that put itself out of business with the June 29 handover, didn't even get around to appointing an auditor for its funds until April of this year, after the date of its dissolution was already fixed and with far too little time left to track down its spending. The British NGO Christian Aid took a crack at it, issuing a report when the handover took place that reads, in part, as follows: "The billions of dollars of oil money that has already been transferred into the U.S.-controlled Coalition Provisional Authority has effectively disappeared into a financial black hole ... the U.S.-controlled Coalition in Baghdad is handing over power to an Iraqi government without having properly accounted for what it has done with some $20 billion of Iraq's own money."

Now, that's not the $20 billion of American taxpayer money--that's a different pool, being held up due to a combination of ineptitude, security concerns, and lawsuits launched by various friends of Dick and George that didn't get the contracts they wanted.

But we spent Iraq's money--after we took it from Iraq's public treasury--and nobody knows where it's gone. Here's an educated guess: Halliburton. Here's another: Bechtel.

For others, consult Kenneth Lay's Christmas card list.

To top it all off, after Christian Aid released its report, and a day after the handover, the CPA auditor issued his own series of unfinished reports, saying, essentially, "Yep. They're right. We have no idea where all that money went."

Aside from the sheer magnitude of the theft involved here, this matters because the looting of Iraq isn't over--it's just moved to a new phase. One of the things a sovereign (albeit hand-picked) government of Iraq can do, which under international law an occupying army can't do, is sell off Iraq's public resources. That's what's now under way. The Bush administration has an ambitious plan, unprecedented among underdeveloped countries, to privatize virtually every agency ever run under the umbrella of the government of Iraq. It's a fire sale to pyromaniacs, and aside from the fact that Iraq's public resources will be sold off to mostly foreign, mostly American bidders at pennies on the dollar, the contracts that they in turn let are likely to set new standards for corruption and cost-plus accounting--particularly in a country that barely has its own police force, let alone one capable of investigating high-level wheeling and dealing of this order.

The whole thing stinks to high heaven, and the same curious set of companies keeps reappearing as stars in this little amorality play. These vast fortunes may not have been what motivated the invasion of Iraq, but it's hard to remember a time when taxpayers have paid so much--hundreds of billions of dollars already, plus all those lost lives--and the benefits have accrued to such a well-defined few.

Crime pays. You just have to know who to rob.

--Geov Parrish,


Note: Idaho Peace Coalition presents "The Fiasco That Is Iraq" with columnist and reporter Geov Parrish on Thursday, July 15, 7 p.m., at 1520 N. 12th, admission is free.