Sunday, July 04, 2004


The gall of it all

U.S. officials in charge of the Development Fund for Iraq drained all but $900 million from the $20 billion fund by late last month in what a watchdog group has called an "11th-hour splurge." [Baltimore Sun]

The Development Fund was set up by the U.N. Security Council at the start of the U.S. occupation. The U.N. kick-started the fund with the residue of the money from its Oil for Food program. The money was to be used for the rebuilding of Iraq.

So what was $19.1 billion dollars spent on? No one is quite sure. Along with the fund, the Security Council also set up an oversight board, perhaps sensing that Bush & Co. should not be left with their hands entirely alone in the till. Well, the board noticed in February that a number of noncompetitive contracts had been approved. Contracts with companies like, say—oh, come on, guess!

The next month, the board was told that Halliburton won some of the contracts without competitive bidding. The provisional authority "indicated that as a general rule, effective January 2004 contracts were no longer awarded without competitive bidding," according to the board's minutes.

So the board then asked for audits of the contracts by the time of its June meeting. It has so far received nada. So now the board is trying to find out just how many sole-sourced contracts there are. Good luck, guys!

Now why would Bush & Co. do such a thing, now that they’ve brought accountability and integrity to the White House? To avoid oversight?

Some critics have suggested that American authorities tapped the Iraqi money to avoid the stricter controls Congress demanded on the spending of U.S. tax dollars, after reports last year of overcharges by Pentagon contractors.

"Perhaps they prefer to have the flexibility to give away contracts to whichever companies they want on whatever terms they want," said Svetlana Tsalik, director of the George Soros-funded Revenue Watch, part of the Open Society Institute.

What the U.S. has revealed so far is that they’ve spent $10 billion on the Iraqi ministries of the Interim Governing Council (IGC). That’s quite a nice chunk of change for a non-governing temporary group that was best known for not showing up for meetings.

The rest went to relief and reconstruction projects; out of that money, about $350 million was put at the discretion of U.S. military commanders for projects intended to improve relations with Iraqis.

So far the Iraqis have certainly not received relief, and the U.S. military, for its expenditure of over a third of a billion, has demonstrated that public relations efforts sometimes require more than money. I hope Bush & Co. has noticed this as it looks toward November.

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