It might be stolen! US continues searching for Iraq’s $7 billion oil money


Around $ 7 billion of Iraq oil money channeled to rebuild the country may have been stolen.

“It may have been stolen. It was vulnerable to fraud and waste and abuse,” the Financial Times quoted Stuart Bowen, the US special inspector general for Iraq reconstruction, as saying.

Mr. Bowen’s office was established by Congress to oversee the $61 billion of US money spent rebuilding the country. “If it were stolen, it would be one of the most significant financial crimes in history.”

According to the paper there is reluctance by the Iraqi government to cooperate with the undergoing probe.
After the US-led invasion of Iraq in 2003, Iraq’s oil and gas revenues and former regime’s seized assets were used to fund the interim government, as well as reconstruction programs run by the Coalition Provisional Authority.

Prior the toppling of Saddam Hussein’s regime, Iraq had Bank al-Rafiddain as its main bank; it was directly under the control of Saddam but like many institutions in Iraq, it was subject to looting after the invasion. That was one reason why the US chose to place the money in an account at the Federal Reserve in New York for the Development Fund for Iraq; the money was flown into Baghdad as needed.

In the first months after Saddam’s toppling, around $12 billion in cash – or more than 360 tons of $100 bills – was airlifted to Iraq, the paper said, adding that the money was stored at US military bases and in the basement of one of Saddam’s former palaces and then disbursed to Iraqi ministries and government contractors. But almost half of it, $6.6 billion, disappeared.

The missing funds which relate to a period between 2004 and 2005 were thought to be missing due to sloppy accounting; or “archived spending records” were to blame, and that retrieving the money might just need significant archival efforts.

Mr. Bowen’s announcement therefore heightened the danger of the situation unlike before.

“We have initiated a review to get to the bottom-line answer of where the money is,” Mr. Bowen said.

“The Iraqis need to provide us with information about disbursements from the New York Federal Reserve,” he said.

However, Iraqi officials have not authorized the Fed to release account information to the US auditors, despite requests over several months. During the same time, the funds in question were administered by the US Department of Defense between 2004 and 2007, and were designated for reconstruction projects.

“We will only get to the bottom of this if we get co-operation from the Iraqi government,” Mr. Bowen said.

Asked about Iraq’s cooperation on the issue, Mr. Bowen simply said he remained “optimistic” that they would provide the information.

He hopes to complete the audit by the end of the summer, as his office begins its final year of operation.

According to a 2010 report, the Special Inspector General for Iraq Reconstruction said that the US Department of Defense is unable to account properly for 96 percent of the money, and that the funds missing were placed at $ 8.7 billion by the US federal watchdog.

This is not the first time that allegations of missing billions have surfaced in relation to the US-led invasion of Iraq and its aftermath.

Hussein al-Uzri, the former president and chairman of state-owned Trade Bank of Iraq, fled Iraq for Lebanon after charges over alleged irregularities, had made his case the latest in a corruption series plaguing the country.

(Dina Al-Shibeeb, a senior editor at Al Arabiya English, can be reached at: [email protected])