by David Phinney
Wednesday July 24th 2024



Squandering Iraqi Money

U.S. armed civilian poses with millions of dollars taken from frozen Iraqi bank accounts released by the New York Federal Reserve. Under management of the CPA, much of this would soon disappear and be unaccounted for.

Feb. 6, 2007 — Almost $12 billion in Iraqi assets disappeared while under control of the US-led Coalition Provisional Authority — much of it arrived in $100 bills on pallets straight from the Federal Reserve in New York.

In the past, government auditors said the Coalition Provisional Authority lost track of $8.8 billion in seized and frozen Iraqi assets largely known as the Development Fund for Iraq. We’re talking about no record of where that money went. Zip, nada, nothing.

This doesn’t include the money that the CPA misspent or lost to contract fraud and incompetence. Interested readers might want to review this story I drafted a few years ago: “Spending Iraqi Money.”

The subject of missing billions is today’s subject for Henry Waxman’s House Committee on Oversight and Government. Waxman believes the missing sum is around $12 billion. Others tell me the amount of Iraqi assets that went missing — if you include oil smuggling and theft in Iraq — may be in the neighborhood of $22 billion.

Paul Wolfowitz, a leading Defense Department planner of the U.S. invasion of Iraq, once assured Congress that Iraqi money would pay for the war and the reconstruction of Iraq:

“There’s a lot of money to pay for this that doesn’t have to be U.S. taxpayer money, and it starts with the assets of the Iraqi people…and on a rough recollection, the oil revenues of that country could bring between $50 (billion) and $100 billion over the course of the next two or three years….. We’re dealing with a country that can really finance its own reconstruction, and relatively soon.” [Source: House Committee on Appropriations Hearing on a Supplemental War Regulation, 3/27/03]

Paul Wolfowitz now heads the World Bank and his March 2003 statement to Congress does give some people the jitters about his new five-year position. Some Wolfowiz foes `hope he is hauled before Congress to explain his role in the Iraq war — an embarrassment that feasibly could lead to his resigning from the Bank.

I crafted “Spending Iraqi Money” two years ago after a Senate staffer had asked me to suggest witnesses on Iraq fraud. The staffer was totally unaware of the Development Fund for Iraq or the billions in missing Iraqi assets. I can’t blame him. It’s a confusing story made only more confusing by the handling and management of the funds.

I then pitched the story to an an editor who wasn’t interested, but I think the draft stands up pretty well.

For more on Iraqi assets, see: “Contract Quagmire in Iraq.”


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