Tuesday, November 30, 2004

A Confederacy of Dunces

After the U.S. invasion of Iraq, the United States took control of all of the Iraqi government’s bank accounts, including the income from oil sales. The United Nations approved the financial takeover, and President Bush vowed to spend Iraq’s money wisely. But now critics are raising serious questions about how well the United States handled billions of dollars in Iraqi oil funds.

Now, Frank Willis, a former senior American official in Iraq, tells NBC News the United States failed to safeguard the oil money known as the Development Fund for Iraq.
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"A lot of money did get to the Iraqi people at the grass-roots level, and a lot of it got into the wrong hands," he says. In one photograph, Willis and colleagues showed off a $2 million payment to a security contractor.

"It was time for payment," he remembers. "We told them to come in and bring in a bag. It reminded me of the Wild West."
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Iraq’s U.S. administrator, Paul Bremer, pledged last year to hire a certified public accounting firm to ensure proper controls. But the United States gave the contract not to an accounting firm but to a tiny consulting company, Northstar — which NBC News found is headquartered at a private home near San Diego.

"They violated the rules. They picked a contractor who didn’t meet their requirements," says Paul Light, a government contracting expert and professor at New York University.

Northstar’s president says the Pentagon knew Northstar was not a certified public accounting firm and that four experienced employees went to Iraq and did a good job. However, one audit notes that a single Northstar employee maintained spreadsheets tracking billions of dollars.
Add this to the teenagers Bremer hired to run the reconstruction and you get a sense of why the last year and half has been such a cluster-fuck.

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