June 07, 2006

"Iraq was Awash in Cash"

...but little of it was to benefit the Iraqis.

Morning Edition had a report Tuesday about the investigations that have been opened by the Special Inspector General for Iraqi Reconstruction where they are looking into the billions of dollars that have just disappeared when handled by Bremer's Coalition Provisional Authority (CPA). The story covered how Bremer, who was put in place by the Pentagon, was completely unprepared to manage the post-invasion rebuilding effort and about how many people signed up to volunteer to help but were totally out of their depths as they didn't have the experience needed for this type of reconstruction work. Many only came over for three months or so, worked long hours and then were replace by someone else equally out of their depth. (And, of course, who can forget one of the key "volunteers" for this noble task: Simone Ledeen, the daughter of Michael "Americans Love War" Ledeen, as she and a few of her Heritage Foundation friends struggled to manage the $13 billion dollar budget?)

Within this constantly shifting set of personnel, Bremer had written regulations that were extremely flexible which as we now know were devised to help transform Iraq from a somewhat socialist society to the brave new world of Ayn Rand: the free market unfettered by regulation which would show how the free market creates the best human society.

Now, Ginger Cruz, the deputy inspector general, believes that the reason that things were so out of control was because Iraq had a cash economy and we were moving mountains of cash into the country as bricks of $100 bills with little regulation or control. Today, some people are questioning whether this level of corruption and chaos was inevitable. Obviously, the answer is no. It takes a special knack to create this level of chaos. But never fear, the Pentagon and the Bush administration have shown that they are masters at taking an bad situation and making it immeasurably worse.

Finally, a mainstreet American news service has reported on the massive corruption that was part and parcel of the Bush post-conquest planning. Of course, much of the story was laid out by the foreign press back in March. Gee, I'm glad NPR finally caught up on this story.

But, it seems that there is another twist on this story that wasn't covered in the NPR report. Namely, it appears that one of the reasons the Special Inspector General had only uncovered a mere billion dollars lost in corruption (after all, this office was created to investigate the problems of "waste, fraud and abuse" in 2004 which already was known to be in the tens of billions of dollars) was because the law was given special handling by Bush with one of his signing statements. From Charlie Savage's report on Bush's proclivity in signing statements:

The new law also created the position of inspector general for Iraq. But Bush wrote in his signing statement that the inspector ''shall refrain" from investigating any intelligence or national security matter, or any crime the Pentagon says it prefers to investigate for itself.

Bush had placed similar limits on an inspector general position created by Congress in November 2003 for the initial stage of the US occupation of Iraq. The earlier law also empowered the inspector to notify Congress if a US official refused to cooperate. Bush said the inspector could not give any information to Congress without permission from the administration.

Isn't that interesting? The office was explicitly told, you can't investigate any contracts that deal with national security or the Pentagon. Dave Lindorff noticed this little point and then found that when the Pentagon was asked why they hadn't investigated problems with their contracts, they responded that the Special Investigator General was already investigating the matter.

My bet for the place that needs the most following is the more than $9 billion that has gone missing without a trace in Iraq--as well as $12 billion in cash that the Pentagon flew into Iraq straight from Federal Reserve vaults via military transports, and for which there has been little or no accounting.

When word of the missing money first surfaced in 2004, Congress passed legislation creating an office of Special Inspector General, assuming that this new agency would root out the problem and figure why all that taxpayer money had disappeared, and why only minimal reconstruction was going on in destroyed Iraq, instead of a massive rebuilding program as intended.

The new inspector general, an affable attorney named Stuart Bowen, went to work and came up with a report in early 2006 that sounded scathing enough. Bowen found cases of double billing by contractors, of payments for work that was never done, and other scandals. But he never came up with more than $1 billion or so worth of problems.

Now we know why.

It turns out that Bowen was never really looking very hard.

When the Boston Globe, this past April, broke the story that President Bush has been quietly setting aside over 750 acts passed by Congress, claiming he has the authority as "unitary executive" and as commander in chief to ignore such laws, it turned out that one of the laws the president chose to ignore was the one establishing the special inspector general post for Iraq. What the president did was write a so-called "signing statement on the side (unpublicized of course), saying that the new inspector general would have no authority to investigate any contracts or corruption issues involving the Pentagon.

...The deception was far-reaching. When Thomas Gimble, the acting inspector general of the Pentagon, was asked in 2005 during a congressional hearing by Christopher Shays (R-CT), chair of the House government reform subcommittee, why the Pentagon had no audit team in Iraq to look for fraud, the facile Gimble replied that such a team was "not needed" because Congress had set up the special inspector general unit to do that. He conveniently didn't mention that the president had barred the special inspector general from investigating Pentagon scandals.

So here we are, years later, finally realizing that the billions, that's billions with a capital "B", have been ripped off from the American tax payers and the Iraqi people (as their assets were handed over to the CPA) while contributing enormously to the hell that was created in Iraq all because some of Bush's cronies needed to funnel some more ill-gotten gains into their grubby hands.

What makes this story even more ironic is that now that the SIGIR has opened some 78 investigations, the office is scheduled to shutdown and all its investigations turned over to the State Department Inspector General in September 2007, a much less well funded department. Ginger Cruz says she hopes that the State Department IG will be given an infusion of funds and resources so they can continue tracking down what happened to all that money. What is your bet that it will actually be up for a cut?

Posted by Mary at June 7, 2006 06:03 AM | Corruption & Graft | Technorati links |

That's not even a sucker bet while the corrupt are in office. At the begining of Iraq Congress passed legislation stating essentially that there would be no oversight in Iraq -- and it's been the biggest, bestest trough ever since then.

Posted by: Scorpio at June 7, 2006 10:51 AM