Monday, April 09, 2007

Where the aid to Iraq went - your tax dollars at work

In the Middle East baksheesh (bribery and corruption) is a deeply ingrained way of life.

Radi al-Radhi runs the Iraqi government's Commission on Public Integrity. He has a job with certain occupational hazards.

Yesterday, he told the AP that $8 billion in Iraqi government funds was wasted or stolen in the past three years and that he received death threats after opening an investigation into Iraqi Oil Ministry employees.

These aren't empty threats either. Al-Radhi told the Associated Press that 20 members have been murdered since the organization began its work in March 2004.

In one recent case, an estimated $2 billion disappeared from US aid earmarked to rebuild the electricity infrastructure. Former Electricity Minister Ayham al-Samaraie, who holds both U.S. and Iraqi citizenship, was convicted in that case and sentenced to a mere two years in prison....which works out to a `salary' of $1 billion per year. He escaped from an Iraqi-run jail in the Green Zone on December 17 last year, turned up in Chicago on January 15 and said that the Americans helped him escape.

Sounds like he had a powerful partner here in the US.

Al-Radhi said the commission has investigated about 2,600 corruption cases since it was established a few months before the United States returned sovereignty to Iraq, and he estimated that at least $8 billion has vanished or been `misappropriated'.

What's more, the new Iraqi constitution Dubbya is so proud of makes the theft easy. According to al-Rahdi, clause 136 B in that constitution gives Cabinet ministers the power to block his investigations, and ministers have blocked probes into the theft of an estimated $55 million in public funds.

Senior government officials and Cabinet ministers are accused of promulgating a wide variety of scams.

Back in February, for example, U.S. and Iraqi forces arrested Deputy Health Minister Hakim al-Zamili , a supporter of radical Shi'ite cleric Muqtada al-Sadr. While I reported back then on al-Zamili's use of Health Ministry records to make the kidnapping or and/or murder of anyone al-Sadr wanted out of the way a piece of cake, it appears that al-Zamili orchestrated kickback schemes on inflated contracts for equipment and services, with millions of dollars purportedly funneled to fund al-Sadr's Mahdi Army!

The Commission has issued arrest warrants for over 90 former Iraqi officials, including 15 ministers, on charges of corruption. Most have fled the country.

Another example was Iraqi legislator Mishan al-Jabouri who's been charged with siphoning off about $7 million a month intended to pay for food for three units of the pipeline protection force. No one knows where al-Jabouri is.

Then there's another name no one, least of all Radi al-Rahdi is mentioning, that of ex-Iraqi prime minister al-Jaafari, who's currently living the lifestyle of the rich and famous in an exclusive mansion in London. I wonder where all that money came from?

The recent Oil Ministry investigations involve over 180 Iraqi Oil Ministry employees in the southern province of Basra who are suspected of contract kickbacks, private oil sales and other fraud that could involve billions of dollars.

No wonder al-Rahdi is getting death threats.

Stuart Bowen is the head of the US government's Office of the Special Inspector-General for Iraq Reconstruction, the institution in charge of monitoring and tracking down corruption and theft among US contractors in Iraq.

He said Iraq government corruption could amount to $4 billion per year, over 10% of the national income.

Among other things, his office found that over 14,000 weapons destined for Iraqi government forces somehow went `missing'. Guess where they went....

Or, as Bowen said "I call it the second insurgency. This money that's stolen doesn't merely enrich criminals but frequently goes out to fund criminal militias or insurgents."

And the corruption is by no means limited to the Iraqi government.

Bowen's audit office began operations in March 2004 and has referred 25 criminal cases involving US contractors to the US Department of Justice. Only four have resulted in convictions - which means that either Bowen is totally incompetent or that the Bush Administration Justice Department has a limited interest in pursuing these cases.

I've already reported on Halliburton suddenly relocating it.s corporate headquarters and its CEO to Dubai to avoid taxes on its huge profits - and in the midst of investigations ongoing over the past three years over its overbilling the US government by millions for contracts undertaken in Iraq - an investigation, unfortunately, that was never effectively pursued by the Bush Administration and only heated up after the 2006 turnover in Congress.

There's also the interesting and little known case of Custer Battles, a contractor in Iraq who's two principals, Mike Battles and Scott Custer, overcharged occupation authorities by millions of dollars, double-billed for salaries and repainted the Iraqi Airways forklifts they found at Baghdad airport-which Custer Battles was contracted to secure-then leased them back to the U.S. government.

The Bush Administration Justice Department, to date, has made no effort to any of this stolen money back. Or to impede Halliburton fleeing the country.

One has to wonder why.

It's not pretty, ladies and gentlemen, but there it is...your tax dollars at work.

4 comments:

louielouie said...

my comment is not intended as an apologist for profiteering, however, in reading ff essay some of the information provided regarding hally is at odds with what i think i know of the background of hally.
some of this, though, is going to be just my opinion.
for starters i have always thought the criticism of halliburton has been unfair. halliburton has done none of the things that ff says that it has done in iraq.
that would be kellogg - brown & root.
yes, a wholly owned sub of hally.
just like AMR and american airlines you say.
no, it is not.
halliburton is an oilfield services company. hally acquired KBR to do the engineering services and construction that everyone is talking about.
while hally relocated it's ceo to dubai, as i write this, the company is still incorporated in the state of delaware. that would be in the USA. i don't see how this will allow hally to avoid anything. even more criticism. imo, the relocation of the headquarters from dallas to houston in 2002(?)was a much bigger event. at least OUT HERE it was. the ONLY person moving to dubai is the CEO. no other corporate officers or offices are moving from houston.
as of april 2, 2007 the following went into effect:

HOUSTON, Texas – Halliburton Company (NYSE: HAL) today announced that it has completed the final separation of KBR Inc. (NYSE: KBR). The two companies now are separate and independent of each other.

“This is a major event for Halliburton, especially its dedicated employees, loyal customers and the shareholders,” said Dave Lesar, Chairman, President and Chief Executive Officer, Halliburton. “As a pure oilfield services company, Halliburton now can focus on the global growth opportunities in its core energy services business.”

Halliburton announced its plans in January 2005 to ultimately separate the KBR subsidiary. An initial public offering of KBR common stock was completed in November 2006.

“We wish KBR and its employees well as they move forward as an independent company,” added Lesar.

All of the government services and engineering and construction businesses will remain with KBR.


this comment is not an attempt on my part to dispute the fact that bribery, corruption, & extortion are rampant in iraq. i am not disputing ff facts or sources regarding any of that. my sole purpose in this comment is to dispute ff assertion that hally is moving from the US in order to avoid some type of penalty or corporate responsibility, obligation.
i see this purely as an attempt on the part of hally to unload a political liability.
now KBR can overcharge hally, if it gets the chance.
this could all change tomorrow, but from where i sit her in the middle of oilfield country, that's how i see it.

Freedom Fighter said...

Hey Louie!

Happy Easter.

I fully agree with that the hoo hah about Halliburton that deals with the so-called `no-bid' contracts is nonsense, and I've said so.

I also have said that they have performed functions during both Iraq wars that no one else was capable of.

However, the fact remains that they have been under investigation for over billing the Federal government for at least three to four years, and those investigations unfortunately did not ramp up until after the Democrats took control of congress.

Until then, they were moribund.

It's also true that by the company's own admission, they are moving to avoid millions in tax penalties.

The sole reason KBR is for sale is because of the security restrictions involved because of KBR's core biz - building military installations.

Given the new fervor of investigation in Congress, the fact that they are moving and relocating all the major executives of the company is ummm...food for thought and an interesting coincidence, wouldn't you say?

Here's an interesting tidbit for you re: KBR. The company got huge from building the US military facilities in Vietnam - with LBJ as a silent partner. And I got that directly from the source.

louielouie said...

re: KBR. The company got huge from building the US military facilities in Vietnam -
KBR could not have done this as the company did not exist until around 2000. maybe it's predecessor brown & root. but that's how they got big was with gov't contracts inspecting ship building.

the fact that they are moving and relocating all the major executives of the company is ummm...
i can find no such fact. please provide a source. the only executive in dubai is the CEO. who still lives in houston.

if you wanted to bash hally you should have talked about their HPS group. formed/incorporated in 1975 in the cayman islands with headquarters in tehran. yes, that tehran.

Freedom Fighter said...

Louie, you're indeed correct. The company was indeed formerly known as Brown, Root when they built all those bases in Vietnam.

Mea Culpa