US can't account for Iraq money
2005-05-05 09:17
Washington - US civilian authorities in Iraq cannot properly account for nearly $100m that was supposed to have been spent on reconstruction projects in south-central Iraq, government investigators said.
There are indications of fraud in the use of the $96.6m, according to a report released on Wednesday by the Special Inspector General for Iraq Reconstruction. A separate investigation of possible wrongdoing continues.
More than $7m of the total is unaccounted for, the report said. An additional $89.4m in payments do not have the required supporting documents.
The report accused civilian contract managers of "simply washing accounts" to try to make the books balance. Staffing shortages and the quick turnover of those responsible for the cash contributed to the problems, the report said.
Colonel Thomas Stefanko, the official now in charge of the programme, wrote the investigators that he agreed with their conclusions. Stefanko said his office had corrected or was in the process of fixing or investigating the problems identified in the report.
A congressional critic of US reconstruction spending in Iraq said on Wednesday the findings showed "disorganised, sloppy management".
'Culture of corruption'
"The US risks fostering a culture of corruption in Iraq," said Senator Russ Feingold, a Wisconsin Democrat.
The money at issue is from proceeds from Iraqi oil sales and seizures from the former government of Saddam Hussein. Distribution of the money was handled first by the Coalition Provisional Authority, the US-run occupation government in Iraq from 2003 to June 28 2004.
After that, the money was overseen by the Joint Area Support Group-Central, which is managed from the US Embassy in Baghdad, the Iraqi capital.
Managers gave the cash to "division-level agents" responsible for distributing the money for reconstruction programmes in a certain area. Those agents - the report did not specify their nationalities - were supposed to keep detailed, signed receipts and other documentation for the money they spent but usually did not, the report said.
Part of the problem was a last-minute push to spend millions on reconstruction projects before the interim Iraqi government took over, the report said. One agent got $6.75m in cash a week before the handover, with the expectation that the money would be spent before the Iraqis took power, the report said.
Several of these agents "were under the impression that it was more important to quickly distribute the money to the region than to obtain all necessary documentation," the report said.
"Securing the required documentation should not have been overlooked by those officials specifically charged with safeguarding Iraqi funds," investigators said.
- AP