July 7, 2005
London Review of Books

Iraq: Where Has All The Money Gone?

by Ed Harriman

The 'reconstruction' of Iraq is the largest American-led occupation programme since the Marshall Plan. But there is a difference: the US government funded the Marshall Plan whereas Donald Rumsfeld and Paul Bremer have made sure that the reconstruction of Iraq is paid for by the 'liberated' country, by the Iraqis themselves. There was $6 billion left over from the UN Oil for Food Programme, as well as sequestered and frozen assets, and revenue from resumed oil exports (at least $10 billion in the year following the invasion). Under Security Council Resolution 1483, passed on 22 May 2003, all of these funds were transferred into a new account held at the Federal Reserve Bank in New York, called the Development Fund for Iraq (DFI), so that they might be spent by the CPA 'in a transparent manner . . . for the benefit of the Iraqi people'. Congress, it's true, voted to spend $18.4 billion of US taxpayers' money on the redevelopment of Iraq. But by 28 June last year, when Bremer left Baghdad two days early to avoid possible attack on the way to the airport, his CPA had spent up to $20 billion of Iraqi money, compared to $300 million of US funds.

The 'financial irregularities' described in audit reports carried out by agencies of the American government and auditors working for the international community collectively give a detailed insight into the mentality of the American occupation authorities and the way they operated, handing out truckloads of dollars for which neither they nor the recipients felt any need to be accountable. The auditors have so far referred more than a hundred contracts, involving billions of dollars paid to American personnel and corporations, for investigation and possible criminal prosecution. They have also discovered that $8.8 billion that passed through the new Iraqi government ministries in Baghdad while Bremer was in charge is unaccounted for, with little prospect of finding out where it went. A further $3.4 billion earmarked by Congress for Iraqi development has since been siphoned off to finance 'security'.

That audit reports were commissioned at all owes a lot to Henry Waxman, a Democrat and ranking minority member of the House of Representatives Committee on Government Reform. Waxman voted in favour of the invasion of Iraq. But since the war he's been demanding that the Bush administration account for its cost. Within six months of the invasion, Waxman's committee had evidence that the Texas-based Halliburton corporation was being grossly overpaid by the American occupation authorities for the petrol it was importing into Iraq from Kuwait, at a profit of more than $150 million. Waxman and his assistants found that Halliburton was charging $2.64 a gallon for petrol for Iraqi civilians, while American forces were importing the same fuel for $1.57 a gallon. . . .

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.

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Enver Masud, "A Clash Between Justice and Greed, Not Islam and the West," The Wisdom Fund, September 2, 2002

Enver Masud, "An Open Letter to the People of Iraq," The Wisdom Fund, April 23, 2003

"Fuelling Suspicion: The Coalition and Iraq's Oil Billions," Christian Aid, June 28, 2004

[The condition was that Saudi Arabia would use its petrodollars to purchase U.S. government securities; in turn, the interest earned by these securities would be spent by the U.S. Department of the Treasury in ways that enabled Saudi Arabia to emerge from a medieval society into the modern, industrialized world. In other words, the interest compounding on billions of dollars of the kingdom's oil income would be used to fulfill the vision (I and presumably some of my competitors) had come up with, to convert Saudi Arabia into a modern industrial power.--John Perkins, "Confessions of an Economic Hit Man: How the U.S. Uses Globalization to Cheat Poor Countries Out of Trillions," Berrett-Koehler Publishers (November 9, 2004), p. 90]

[The assessment would precede a World Bank plan to manage foreign donations for Sudan from two trust funds - one for the north and one for the south-- Lesley Wroughton, "World Bank returns to Sudan as donors plan comeback," Sudan Tribune, January 18, 2005]

Ellen Knickmeyer, "U.S. Has End in Sight on Iraq Rebuilding: Documents Show Much of the Funding Diverted to Security, Justice System and Hussein Inquiry," Washington Post, January 2, 2006

[Along with the $37 billion fund, another $24 billion from U.S. taxpayers has been ordered for Iraqi reconstruction. Together with $4 billion pledged by other countries, more than $60 billion is pegged for reconstruction costs alone. The problem is U.S. and Iraqi officials aren't sure just how much money has been stolen or misspent.--Rowan Scarborough, "In search of rebuilding billions," Washington Times, January 20, 2006]

James Glanz, "Iraq Rebuilding Badly Hobbled, U.S. Report Finds," New York Times, January 24, 2006

[Stuart Bowen, special inspector general for Iraq reconstruction, says $8.8 billion is unaccounted for because oversight on the part of the Coalition Provisional Authority, the entity governing Iraq after the war, "was relatively nonexistent."--Jennifer MacDonald and Ira Rosen, "Billions Wasted In Iraq?," CBS Broadcasting, February 9, 2006]

[Many of the corporate players - Chevron, Bechtel, Lockheed Martin and Halliburton - have corporate leaders who went into and out of government over the years, influencing the direction of U.S. policy and then ensuring that their corporations profited mightily from the policies they put in place. Juhasz points to Dick Cheney, Donald Rumsfeld, L. Paul Bremer, Scooter Libby, Robert Zoellick, Paul Wolfowitz, Zalmay Khalilzad and George Shultz, as key players in the long term quest to takeover of Iraq's economy.--Kevin Zeese, "The Corporate Takeover of Iraq's Economy," counterpunch.org, May 10, 2006]

T. Christian Miller, "Blood Money: Wasted Billions, Lost Lives, and Corporate Greed in Iraq," Little, Brown and Company, 2006

[The exact sum missing may never be clear, but a report by the US Special Inspector General for Iraq Reconstruction (SIGIR) suggests it may exceed $50bn, . . .

Despite the vast sums expended on rebuilding by the US since 2003, there have been no cranes visible on the Baghdad skyline except those at work building a new US embassy and others rusting beside a half-built giant mosque that Saddam was constructing when he was overthrown.--Patrick Cockburn, "A 'fraud' bigger than Madoff," Independent, February 16, 2009]

[The report by the US Special Investigator for Iraq Reconstruction says $8.7bn (£5.6bn) out of $9.1bn withdrawn between 2004 and 2007 from a special account set up by the UN Security Council is unaccounted for. This is separate from $53bn set aside by Congress for Iraqi reconstruction.

. . . Iraqis continually complain that they see little sign of their infrastructure being rebuilt after 30 years of war and sanctions.--Patrick Cockburn, "US unable to account for billions of Iraq oil money," Independent, July 28, 2010]

Why America's Oil Problem is WORSE Than You Think, Two Bit da Vinci, April 11, 2026