Funds for Iraq stolen, misspent
By Rowan Scarborough
Washington Times
January 20, 2006
Finding out what happened to Iraq's $37 billion in oil-financed reconstruction funds -- its stacks of plastic-wrapped hundred-dollar bills popping up all over the country like play money -- has taken investigators down many paths, including one to the Defense Ministry office of Ziyad al Qattan.
Questions about what happened to the fund, once held by the United Nations and turned over to the Bush administration, are part of a broader story of how the United States has spent billions in American and Iraqi money after Saddam Hussein was ousted in April 2003.
So far, the United States has spent $226 billion to wage war in Iraq, and the reconstruction costs have proven to be another expensive challenge.
Along with the $37 billion fund, another $24 billion from U.S. taxpayers has been ordered for Iraqi reconstruction. Together with $4 billion pledged by other countries, more than $60 billion is pegged for reconstruction costs alone. The problem is U.S. and Iraqi officials aren't sure just how much money has been stolen or misspent.
The situation is crucial for Iraq: The World Bank has estimated the country needs another $40 billion in reconstruction money and Iraq can ill afford massive corruption which would jeopardize future funding.
A confidential report by Iraq's Supreme Board of Audit provides a peek at accounting problems, which date back to May 2003, when the Bush administration created the Coalition Provisional Authority (CPA) and made L. Paul Bremer Iraq's first post-Saddam leader. Mr. Bremer's office received a huge infusion of funds at that time and began spending it on rebuilding efforts at a furious pace -- in cash.
The Iraqi audit dug into Mr. al Qattan's defense ministry office to find evidence of front companies, out-of-country banks and cash payments to arms dealers before anything was delivered. Sometimes, nothing was.
Today, Iraq's Commission on Public Integrity is trying to determine how much of the CPA-distributed cash was stolen or misspent, and how much went for legitimate projects. Mr. al Qattan could probably answer some of those questions, but he's now thought to be hiding in Warsaw.
Ali Shabot, the commission's spokesman, said investigators estimate at this point that corrupt officials took multimillions of dollars. "They are still investigating the cases," Mr. Shabot said through an interpreter. "They don't have a final number yet."
Mr. Shabot and American officials say they think most of the money in question was stolen in 2003, when the CPA exercised few safeguards, and in 2004, when Interim Prime Minister Iyad Allawi ruled Iraq without the benefit of financial oversight laws that later became part of the new constitution in 2005.
Defense dollars wasted
It was Mr. al Qattan who negotiated contracts totaling hundreds of millions of dollars, according to the 32-page, English-translated report, a copy of which was obtained by The Washington Times.
The Iraqi audit of 2004-05 also said the Defense Ministry paid too much for a "rest house" for an army commander, complete with 24-karat gold-plated chandeliers. It said commanders signed for their men's salaries and pocketed the cash. The ministry paid a middle man more than $1 million as a down payment for 20 armored BMWs and Land Cruisers. Auditors could not determine whether the cars were ever delivered.
The ministry would pay cash up front, then sign a contract and wait for the military equipment to arrive, if it ever did. Cash went to arms dealers in Poland, Ukraine, Jordan, Pakistan and elsewhere.
"We would like to state that taking out of cash money related to acquisition of materials abroad represents a flagrant violation of the state monetary policy," the Supreme Board of Audit concluded. It told of "poor and organizational wording of the ministry's contracts in which it was seen that the interests of the supplier were taken into account while the contracting rights of the ministry were not."
U.N.'s pot of gold
In the spring of 2003, Iraq was descending into chaos as American troops began to feel the sting of an insurgency that would only grow in sophistication.
Arriving in Baghdad was Mr. Bremer, a protege of Henry Kissinger and the Pentagon's pick to get Iraq moving toward democracy. He badly needed money — huge sums — to prop up ministries, pay civil servants, an army and a police force, and to start rebuilding power plants, schools, hospitals, homes and water treatment centers.
At first there was relatively little U.S. money for such an undertaking. The Pentagon diverted millions from its operational budget to what are called Commander's Emergency Response Programs (CERP) to start public works projects. The administration raided other accounts to start other projects, such as resurrecting Iraq's wrecked power grid. But the flow of money only trickled in: Iraq needed a flood.
However, there was a pot of gold, and all Mr. Bremer need do was look west.
The United Nations had amassed a fortune in Iraq oil proceeds and seized bank accounts to the tune of $37 billion, most of it stashed in a Federal Reserve bank in New York.
The Bush administration asked the U.N. for custody of the money and, with the approval of resolution 1483 in October, the Development Fund for Iraq (DFI) was created and placed under the control of the CPA.
Spreading the wealth
Soon loads of cash started arriving in Baghdad on giant C-17 cargo planes. Pallets packed with crisp, enumerated $100 bills were unloaded, trucked to the capital and then dispatched by convoy around Iraq to pay the bills.
In all, $12 billion in U.S. currency was flown into Iraq before a banking system was set up to handle wire transfers of the fund. The country more resembled the Wild West than a functioning state. Given the situation, Mr. Bremer decided to deal in cash — paying for construction projects and salaries out of pocket even when the tab reached millions of dollars.
"We were handing out $100 bills in contracts like candy," Rep. Dennis J. Kucinich, Ohio Democrat, later commented.
Rep. Henry A. Waxman, California Democrat, directed his staff to look into the frequent flying of money into Iraq. He reported that the $12 billion was dispatched from the DFI account in "cashpaks" at the Federal Reserve in shipments totaling 363 tons. Each cashpak contained $1.6 million worth of $100 bills, Mr. Waxman said.
On Dec. 12, 2003, the Fed recorded a first. The reserve bank released $1.5 billion for a single flight to Iraq, making it the largest single Fed payout of U.S. currency in history, according to Mr. Waxman's staff.
Once in Iraq, much of the loot sat in a huge safe inside the Republican Palace, making one of Saddam's lavish residences Iraq's richest bank.
Where's the watchdog?
Something else besides functioning banks was missing: government oversight. "CPA officials used virtually no financial controls to account for these enormous cash withdrawals once they arrived in Iraq," Mr. Waxman's staff said in a June 2005 report.
The Pentagon oversaw the CPA, yet its inspector general balked at sending any staffers to an increasingly violent country to probe reports of theft.
Mr. Bremer and military commanders decided the money was so urgently needed, especially for essential fuel from Kuwait, that there wasn't time to set up contracting offices and thus comply with U.S. regulations.
Oversight finally arrived just months before the CPA was going out of business in June 2004 and Mr. Bremer was winging his way out of Baghdad.
Enter the examiners
Congress created the post of a special investigator in late 2003 to monitor how the $37 billion was being spent. Stuart W. Bowen Jr., appointed in January 2004 as the Special Inspector General for Iraq Reconstruction (SIGIR), sent in teams of auditors that spring to start trailing the money.
In January 2005, he broke the bad news to Congress, saying the CPA could not verify that $8.8 billion it turned over to Iraqi ministries was properly spent.
"After many months of careful interviews ... my auditors concluded that there were not adequate systems in place to ensure that the CPA knew what happened to the DFI funds after they were disbursed to the Iraqi ministries," Mr. Bowen wrote in his January 2005 report.
The Iraqi Commission on Public Integrity is continuing to investigate the cash flow, as is the country's Central Criminal Court. The U.S. is also advising each Iraqi ministry in the establishment of an inspector general system modeled after Washington's, complete with hot lines.
Still, Iraq's Supreme Board of Audit, and Mr. Bowen's gumshoes, have been able to establish that millions of dollars were likely misspent.
Mr. Bowen's staff focused on the DFI's first year, a time when packs of cash left the palace vault at a dizzying pace. "Inevitably, in such an environment, with so much cash and such an enormous task ... there were inefficiencies and we found them," Mr. Bowen later told Congress.
One of the SIGIR's first discoveries was that Mr. Bremer lacked the personnel he needed to run financial transactions.
"Relatively few agencies responded positively to the call for volunteers for CPA," said a SIGIR report. "Interagency coordination of human resource management was generally weak."
At the top, the SIGIR concluded, Mr. Bremer's CPA "did not implement adequate managerial controls over DFI funds. ... We believe the CPA management of Iraq's national budget process and oversight of Iraqi funds was burdened by severe inefficiencies and poor management."
Tales of squander
Mr. Bowen's sleuths, and other auditors, found graft and incompetence, on both a small and large scale:
•The CPA gave one ministry enough to pay 8,026 guards, but only 602 actually existed. Another agency received payroll money for 1,471 guards, but only 642 stood duty.
•A CPA comptroller outside of Baghdad maintained a disbursement safe, but kept the key in an unsecured backpack and the disbursement officer often left the premises, leaving the safe open.
•Halliburton, the giant oil services firm, received $1.6 billion in DFI money for fuel and oil field repairs. Pentagon auditors say it overcharged the government by $218 million.
Perhaps the biggest DFI scandal unfolded in the CPA's South-Central Region headquarters in the city of Hillah. A cast of suspected thieves included U.S. military officers, a CPA field agent and a flamboyant American businessman, Philip H. Bloom, who owns businesses in Romania and lives in New Jersey.
Rounding up suspects
Mr. Bowen's team found a series of suspicious transactions. Agents submitted project receipts for more than $300,000 for contracts that had already been canceled; Mr. Bloom was paid twice for the same contract; and account managers did not verify all needed documents before paying out money.
Before long, the U.S. Justice Department launched a full-bore investigation.
By November 2005, the department filed its first criminal charges. It accused Mr. Bloom and an accomplice, Robert J. Stein Jr. of Fayetteville, N.C., of fraud and money laundering. Mr. Stein served as the CPA comptroller in Hillah, controlling millions of dollars in cash shipped from the palace safe. The Justice Department says Mr. Bloom paid Mr. Stein more than $600,000 in bribes in return for more than $13 million in contracts. Weeks later, the department accused two Army officers of accepting cash and gifts from Mr. Bloom.
The Justice Department said Army Reserve Lt. Col. Debra Harrison of Trenton, N.J., received a $50,000 Cadillac Escalade and $6,000 in airlines tickets. She is also accused of dipping into the DFI fund in Hillah, stealing up to $100,000. She purportedly used the money for home improvements. A second officer, Army Reserve Lt. Col. Michael Wheeler of Amherst Junction, Wis., is also accused of stealing up to $100,000.
A breakthrough, of sorts
The contract amounts from the Hillah debacle are relatively small given Mr. Bowen's investigators have concluded that more than $8.8 billion was improperly controlled. But his office sees the Hillah case as a breakthrough.
"It sent a message that we are going to go after people who did this, people who committed crimes," said Jim Mitchell, Mr. Bowen's spokesman.
As for Mr. al Qattan, he is one of 23 Defense Ministry and other Iraqi officials who face arrest warrants issued by the Central Criminal Court of Iraq. The Iraqi Commission on Public Integrity estimates that more than $1 billion in DFI money was misappropriated and those facing warrants include the former defense minister, Hazem Shaalan, who is in London and has denied any wrongdoing.
Mr. al Qattan is thought to be in Poland, where he had traveled in early 2005 to negotiate arms deals. An Iraqi court issued an arrest warrant for him because of "financial, administrative and legal issues." A spokesman at Poland's embassy in Washington said he had no information that Mr. al Qattan is in Poland.
Bremer defends methods
In all, Mr. Waxman's staff estimates that of the $37 billion fund, the CPA controlled $23 billion during its brief life span, spending nearly $20 billion.
Mr. Bremer, who is now hawking his book about his year as CPA administrator, has bristled at Mr. Bowen's criticism. Not long after the special investigator's first draft audit appeared in July 2004, Mr. Bremer fired off a letter.
"In my view this draft report does not meet the standards Americans have come to expect of the inspector general," Mr. Bremer wrote. "The report assumes that Western-style budgeting and accounting procedures could be immediately and fully implemented in the midst of a war. ... The IG auditors presume that the coalition could achieve a standard of budgetary transparency and execution, which even peaceful Western nations would have trouble meeting within a year, especially in the midst of a war."
Mr. Bremer said the Iraq economy was "dead in the water." His only rational option, he said, was to begin paying Iraqi civil servants in cash to get the government restarted.
Mr. Bremer continued his counterattack Sunday on NBC's "Meet the Press." He said Mr. Bowen wanted him "to impose an army of American auditors into all of these ministries to follow every dinar down to the very last dinar. This would have been a recipe for a real mess, and I just think he's wrong."
Mr. Mitchell said Mr. Bowen stands by his findings and never advocated a huge number of auditors, just a system to verify that the money went to actual employees.
Noting that Mr. Bremer said Iraq had no functioning payroll system and suffered through corrupt Ba'athist rulers, Mr. Mitchell said, "In the view of the inspector general, any one of these conditions should have sent strong signals to CPA financial managers that weaknesses were widespread, posed unacceptable risks and called for forceful action. Instead, Ambassador Bremer authorized the distribution of billions of dollars to these ministries, and he cannot say he knows that the funds went to the intended recipients."
Washington Times
January 20, 2006
Finding out what happened to Iraq's $37 billion in oil-financed reconstruction funds -- its stacks of plastic-wrapped hundred-dollar bills popping up all over the country like play money -- has taken investigators down many paths, including one to the Defense Ministry office of Ziyad al Qattan.
Questions about what happened to the fund, once held by the United Nations and turned over to the Bush administration, are part of a broader story of how the United States has spent billions in American and Iraqi money after Saddam Hussein was ousted in April 2003.
So far, the United States has spent $226 billion to wage war in Iraq, and the reconstruction costs have proven to be another expensive challenge.
Along with the $37 billion fund, another $24 billion from U.S. taxpayers has been ordered for Iraqi reconstruction. Together with $4 billion pledged by other countries, more than $60 billion is pegged for reconstruction costs alone. The problem is U.S. and Iraqi officials aren't sure just how much money has been stolen or misspent.
The situation is crucial for Iraq: The World Bank has estimated the country needs another $40 billion in reconstruction money and Iraq can ill afford massive corruption which would jeopardize future funding.
A confidential report by Iraq's Supreme Board of Audit provides a peek at accounting problems, which date back to May 2003, when the Bush administration created the Coalition Provisional Authority (CPA) and made L. Paul Bremer Iraq's first post-Saddam leader. Mr. Bremer's office received a huge infusion of funds at that time and began spending it on rebuilding efforts at a furious pace -- in cash.
The Iraqi audit dug into Mr. al Qattan's defense ministry office to find evidence of front companies, out-of-country banks and cash payments to arms dealers before anything was delivered. Sometimes, nothing was.
Today, Iraq's Commission on Public Integrity is trying to determine how much of the CPA-distributed cash was stolen or misspent, and how much went for legitimate projects. Mr. al Qattan could probably answer some of those questions, but he's now thought to be hiding in Warsaw.
Ali Shabot, the commission's spokesman, said investigators estimate at this point that corrupt officials took multimillions of dollars. "They are still investigating the cases," Mr. Shabot said through an interpreter. "They don't have a final number yet."
Mr. Shabot and American officials say they think most of the money in question was stolen in 2003, when the CPA exercised few safeguards, and in 2004, when Interim Prime Minister Iyad Allawi ruled Iraq without the benefit of financial oversight laws that later became part of the new constitution in 2005.
Defense dollars wasted
It was Mr. al Qattan who negotiated contracts totaling hundreds of millions of dollars, according to the 32-page, English-translated report, a copy of which was obtained by The Washington Times.
The Iraqi audit of 2004-05 also said the Defense Ministry paid too much for a "rest house" for an army commander, complete with 24-karat gold-plated chandeliers. It said commanders signed for their men's salaries and pocketed the cash. The ministry paid a middle man more than $1 million as a down payment for 20 armored BMWs and Land Cruisers. Auditors could not determine whether the cars were ever delivered.
The ministry would pay cash up front, then sign a contract and wait for the military equipment to arrive, if it ever did. Cash went to arms dealers in Poland, Ukraine, Jordan, Pakistan and elsewhere.
"We would like to state that taking out of cash money related to acquisition of materials abroad represents a flagrant violation of the state monetary policy," the Supreme Board of Audit concluded. It told of "poor and organizational wording of the ministry's contracts in which it was seen that the interests of the supplier were taken into account while the contracting rights of the ministry were not."
U.N.'s pot of gold
In the spring of 2003, Iraq was descending into chaos as American troops began to feel the sting of an insurgency that would only grow in sophistication.
Arriving in Baghdad was Mr. Bremer, a protege of Henry Kissinger and the Pentagon's pick to get Iraq moving toward democracy. He badly needed money — huge sums — to prop up ministries, pay civil servants, an army and a police force, and to start rebuilding power plants, schools, hospitals, homes and water treatment centers.
At first there was relatively little U.S. money for such an undertaking. The Pentagon diverted millions from its operational budget to what are called Commander's Emergency Response Programs (CERP) to start public works projects. The administration raided other accounts to start other projects, such as resurrecting Iraq's wrecked power grid. But the flow of money only trickled in: Iraq needed a flood.
However, there was a pot of gold, and all Mr. Bremer need do was look west.
The United Nations had amassed a fortune in Iraq oil proceeds and seized bank accounts to the tune of $37 billion, most of it stashed in a Federal Reserve bank in New York.
The Bush administration asked the U.N. for custody of the money and, with the approval of resolution 1483 in October, the Development Fund for Iraq (DFI) was created and placed under the control of the CPA.
Spreading the wealth
Soon loads of cash started arriving in Baghdad on giant C-17 cargo planes. Pallets packed with crisp, enumerated $100 bills were unloaded, trucked to the capital and then dispatched by convoy around Iraq to pay the bills.
In all, $12 billion in U.S. currency was flown into Iraq before a banking system was set up to handle wire transfers of the fund. The country more resembled the Wild West than a functioning state. Given the situation, Mr. Bremer decided to deal in cash — paying for construction projects and salaries out of pocket even when the tab reached millions of dollars.
"We were handing out $100 bills in contracts like candy," Rep. Dennis J. Kucinich, Ohio Democrat, later commented.
Rep. Henry A. Waxman, California Democrat, directed his staff to look into the frequent flying of money into Iraq. He reported that the $12 billion was dispatched from the DFI account in "cashpaks" at the Federal Reserve in shipments totaling 363 tons. Each cashpak contained $1.6 million worth of $100 bills, Mr. Waxman said.
On Dec. 12, 2003, the Fed recorded a first. The reserve bank released $1.5 billion for a single flight to Iraq, making it the largest single Fed payout of U.S. currency in history, according to Mr. Waxman's staff.
Once in Iraq, much of the loot sat in a huge safe inside the Republican Palace, making one of Saddam's lavish residences Iraq's richest bank.
Where's the watchdog?
Something else besides functioning banks was missing: government oversight. "CPA officials used virtually no financial controls to account for these enormous cash withdrawals once they arrived in Iraq," Mr. Waxman's staff said in a June 2005 report.
The Pentagon oversaw the CPA, yet its inspector general balked at sending any staffers to an increasingly violent country to probe reports of theft.
Mr. Bremer and military commanders decided the money was so urgently needed, especially for essential fuel from Kuwait, that there wasn't time to set up contracting offices and thus comply with U.S. regulations.
Oversight finally arrived just months before the CPA was going out of business in June 2004 and Mr. Bremer was winging his way out of Baghdad.
Enter the examiners
Congress created the post of a special investigator in late 2003 to monitor how the $37 billion was being spent. Stuart W. Bowen Jr., appointed in January 2004 as the Special Inspector General for Iraq Reconstruction (SIGIR), sent in teams of auditors that spring to start trailing the money.
In January 2005, he broke the bad news to Congress, saying the CPA could not verify that $8.8 billion it turned over to Iraqi ministries was properly spent.
"After many months of careful interviews ... my auditors concluded that there were not adequate systems in place to ensure that the CPA knew what happened to the DFI funds after they were disbursed to the Iraqi ministries," Mr. Bowen wrote in his January 2005 report.
The Iraqi Commission on Public Integrity is continuing to investigate the cash flow, as is the country's Central Criminal Court. The U.S. is also advising each Iraqi ministry in the establishment of an inspector general system modeled after Washington's, complete with hot lines.
Still, Iraq's Supreme Board of Audit, and Mr. Bowen's gumshoes, have been able to establish that millions of dollars were likely misspent.
Mr. Bowen's staff focused on the DFI's first year, a time when packs of cash left the palace vault at a dizzying pace. "Inevitably, in such an environment, with so much cash and such an enormous task ... there were inefficiencies and we found them," Mr. Bowen later told Congress.
One of the SIGIR's first discoveries was that Mr. Bremer lacked the personnel he needed to run financial transactions.
"Relatively few agencies responded positively to the call for volunteers for CPA," said a SIGIR report. "Interagency coordination of human resource management was generally weak."
At the top, the SIGIR concluded, Mr. Bremer's CPA "did not implement adequate managerial controls over DFI funds. ... We believe the CPA management of Iraq's national budget process and oversight of Iraqi funds was burdened by severe inefficiencies and poor management."
Tales of squander
Mr. Bowen's sleuths, and other auditors, found graft and incompetence, on both a small and large scale:
•The CPA gave one ministry enough to pay 8,026 guards, but only 602 actually existed. Another agency received payroll money for 1,471 guards, but only 642 stood duty.
•A CPA comptroller outside of Baghdad maintained a disbursement safe, but kept the key in an unsecured backpack and the disbursement officer often left the premises, leaving the safe open.
•Halliburton, the giant oil services firm, received $1.6 billion in DFI money for fuel and oil field repairs. Pentagon auditors say it overcharged the government by $218 million.
Perhaps the biggest DFI scandal unfolded in the CPA's South-Central Region headquarters in the city of Hillah. A cast of suspected thieves included U.S. military officers, a CPA field agent and a flamboyant American businessman, Philip H. Bloom, who owns businesses in Romania and lives in New Jersey.
Rounding up suspects
Mr. Bowen's team found a series of suspicious transactions. Agents submitted project receipts for more than $300,000 for contracts that had already been canceled; Mr. Bloom was paid twice for the same contract; and account managers did not verify all needed documents before paying out money.
Before long, the U.S. Justice Department launched a full-bore investigation.
By November 2005, the department filed its first criminal charges. It accused Mr. Bloom and an accomplice, Robert J. Stein Jr. of Fayetteville, N.C., of fraud and money laundering. Mr. Stein served as the CPA comptroller in Hillah, controlling millions of dollars in cash shipped from the palace safe. The Justice Department says Mr. Bloom paid Mr. Stein more than $600,000 in bribes in return for more than $13 million in contracts. Weeks later, the department accused two Army officers of accepting cash and gifts from Mr. Bloom.
The Justice Department said Army Reserve Lt. Col. Debra Harrison of Trenton, N.J., received a $50,000 Cadillac Escalade and $6,000 in airlines tickets. She is also accused of dipping into the DFI fund in Hillah, stealing up to $100,000. She purportedly used the money for home improvements. A second officer, Army Reserve Lt. Col. Michael Wheeler of Amherst Junction, Wis., is also accused of stealing up to $100,000.
A breakthrough, of sorts
The contract amounts from the Hillah debacle are relatively small given Mr. Bowen's investigators have concluded that more than $8.8 billion was improperly controlled. But his office sees the Hillah case as a breakthrough.
"It sent a message that we are going to go after people who did this, people who committed crimes," said Jim Mitchell, Mr. Bowen's spokesman.
As for Mr. al Qattan, he is one of 23 Defense Ministry and other Iraqi officials who face arrest warrants issued by the Central Criminal Court of Iraq. The Iraqi Commission on Public Integrity estimates that more than $1 billion in DFI money was misappropriated and those facing warrants include the former defense minister, Hazem Shaalan, who is in London and has denied any wrongdoing.
Mr. al Qattan is thought to be in Poland, where he had traveled in early 2005 to negotiate arms deals. An Iraqi court issued an arrest warrant for him because of "financial, administrative and legal issues." A spokesman at Poland's embassy in Washington said he had no information that Mr. al Qattan is in Poland.
Bremer defends methods
In all, Mr. Waxman's staff estimates that of the $37 billion fund, the CPA controlled $23 billion during its brief life span, spending nearly $20 billion.
Mr. Bremer, who is now hawking his book about his year as CPA administrator, has bristled at Mr. Bowen's criticism. Not long after the special investigator's first draft audit appeared in July 2004, Mr. Bremer fired off a letter.
"In my view this draft report does not meet the standards Americans have come to expect of the inspector general," Mr. Bremer wrote. "The report assumes that Western-style budgeting and accounting procedures could be immediately and fully implemented in the midst of a war. ... The IG auditors presume that the coalition could achieve a standard of budgetary transparency and execution, which even peaceful Western nations would have trouble meeting within a year, especially in the midst of a war."
Mr. Bremer said the Iraq economy was "dead in the water." His only rational option, he said, was to begin paying Iraqi civil servants in cash to get the government restarted.
Mr. Bremer continued his counterattack Sunday on NBC's "Meet the Press." He said Mr. Bowen wanted him "to impose an army of American auditors into all of these ministries to follow every dinar down to the very last dinar. This would have been a recipe for a real mess, and I just think he's wrong."
Mr. Mitchell said Mr. Bowen stands by his findings and never advocated a huge number of auditors, just a system to verify that the money went to actual employees.
Noting that Mr. Bremer said Iraq had no functioning payroll system and suffered through corrupt Ba'athist rulers, Mr. Mitchell said, "In the view of the inspector general, any one of these conditions should have sent strong signals to CPA financial managers that weaknesses were widespread, posed unacceptable risks and called for forceful action. Instead, Ambassador Bremer authorized the distribution of billions of dollars to these ministries, and he cannot say he knows that the funds went to the intended recipients."
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