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U.S. mismanaged $8.8 billion in Iraqi funds: 'Ghost employees' hired for nonexistent work
19 Aug. 2004

WASHINGTON, Aug. 19 (HalliburtonWatch.org) -- The U.S. Coalition Provisional Authority (CPA) mismanaged $8.8 billion in Iraqi funds between March 2003 and June 2004, says an internal government audit leaked to retired Col. David Hackworth. Halliburton was paid $1.5 billion from these funds.

The audit, conducted by the U.S. coalition's inspector general, says the CPA's accounting books indicate that 74,000 guards were paid for work even though the actual number could not be validated. Another 8,206 guards were listed as employees even though only 603 people could be found doing any work.

"[M]y sources have been telling me for months that Iraqi payrolls have been heavily padded with ghost soldiers and ghost guards," reports Hackworth, a highly decorated and retired Army colonel and author. He said more than $17 million was allocated to guards and the Iraqi army without providing standard accounting documents to verify its accuracy. "Pals in Iraq say this has been standard drill since the birth of 'a very dysfunctional' CPA," Hackworth said.

"A U.S. official confirmed the contents of the leaked audit cited by Hackworth (www.hackworth.com) were accurate," reported Reuters.

The $8.8 billion is part of the Development Fund for Iraq (DFI), established after Saddam Hussein was toppled from power. The DFI, which was managed by the U.S. coalition until June, contains proceeds from Iraqi oil sales, previously-frozen assets from foreign governments and the United Nations oil for food program. A United Nations audit released last month also criticized the CPA's handling of the DFI.

The inspector general's preliminary report says, "The CPA did not provide adequate stewardship of over $8.8 billion in DFI (Development Fund for Iraq) funds provided to Iraqi Ministries through the national budget process. Specifically, the CPA did not establish and implement adequate managerial, financial, and contractual controls over the funds to ensure they were used in a transparent manner."

Halliburton was paid $1.5 billion from the DFI after the U.S. coalition awarded the company three sole-source contracts. The Bush administration continues to conceal from auditors all documents pertaining to DFI monies paid to Halliburton and other contractors. The independent accounting firm, KPMG, which conducted an audit of the CPA, said it "encountered resistance from CPA staff (including the contracting unit) regarding the submission of information required to complete our procedures."

"Like the 9/11 report and the missing money in Iraq, no one will ever be held responsible," Hackworth predicted.

The inspector general's final audit report is expected to be released later this month.

More Information:

Col. David Hackworth: One of the Biggest Heists in History

Reuters: Senators Ask Where $8.8 Bln in Iraq Funds Went

HalliburtonWatch: U.S. conceals documents on $1.5 billion in Iraqi oil revenues paid to Halliburton, auditor finds oil funds prone to fraud

HalliburtonWatch: Vast sums of Iraq oil revenues have been stolen