Doug Lorimer
The October 16 Boston Globe reported that about half of the US$5 billion in Iraq reconstruction funds disbursed by the US occupation authority in the first half of this year cannot be accounted for, according to an audit commissioned by the United Nations.
The Globe reported that the "auditors could not track more than $1 billion in funds doled out by US authorities for hundreds of large and small reconstruction projects". They said that another $1.4 billion was deposited into a local bank by Kurdish leaders in northern Iraq and could be tracked no further. The auditors reported that they were shown a deposit slip but could find no additional records to explain how the money was used or to prove that it remains in the bank.
The audit, released October 15, covered the disbursement of money from the Development Fund for Iraq (DFI) — a pool of funds drawn from Iraq's oil export revenues and international aid — between January 1 and June 28, during the period when the US-led Coalition Provisional Authority (CPA) ran the country. The DFI is separate from the $18.4 billion in reconstruction funds allocated by the US Congress last year to rebuild the country, of which only $1 billion has been spent.
With the dissolution of the CPA on June 28, the DIF was to be formally transferred to the US-appointed Interim Government of Iraq. However, before this the CPA rushed to commit nearly all the savings that had accumulated in the DFI. Under the "handover" arrangement, contracts made by the CPA that are to paid for out of the DFI are to be overseen by the US embassy in Baghdad.
The Center for Strategic and International Studies, a Washington-based think tank, estimates that of the funds allocated for Iraqi reconstruction, less than 30% of the money spent has actually reached Iraqis. Another 30% appears to have gone to "private security guards" (i.e., mercenaries), about 10% to US government administrative "overheads", 6% to contractor profits, and 12% on insurance and foreign, mostly US, workers' salaries. The rest, perhaps 15%, appears to have been embezzled.
From 91×ÔÅÄÂÛ̳ Weekly, October 27, 2004.
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