The missing billions in Iraq

It is strange that the mainstream press seems to have not followed up on this until now. This is from the Huffington Post

Larry Beinhart

At last, the missing billions in Iraq are in the news. Praise due to Harry Waxman, who should be regarded as one of America's heroes.

That being said, there are some very significant points about the story that have not come out. Also, it is a story about all that is wrong with American's media.

Every journalist I have ever spoken to, or heard from, or read, recites

the same litany. That they go with the story. If it's an exciting story they will cover it.
Here's the story, in brief.

The US voted about $21 billion dollars for the reconstruction of Iraq. Paul Bremer the Third - as head of the occupation authority, the CPA, an American run organization - had control over that money. Shortly after it was appropriated, one of the many Halliburton scandals erupted, the overcharging for gasoline from Kuwait. Congress than passed a bill requiring accounting and, for large expenditures, competitive bids.

The CPA immediately stopped spending that money.

Instead, they turned to another source of funds. Iraqi money. This was a combination of accounts frozen during Saddam's reign and Saddam's personal money, wherever they could find it. It also included the money in the Oil for Food program, which the CPA took over from the UN, and Iraq's ongoing oil revenues. All told this came to about - a best guess - nineteen billion dollars.

There were two things important about that money. First, it was not supposed to be spent by the CPA. It was supposed to be held for Iraq, whenever they got their own government. However, there were no accounting restrictions on it. Nor would there ever be anyone to answer to. The moment an Iraqi government actually came into power, the CPA would be dissolved. Indeed, when the time for transfer was accelerated, the CPA rushed to spend that money. By the time of the transfer, they had blown through all but nine hundred million of it. With barely of trace of where it went. What about the $21 billion of our money that the US had so generously - and perhaps sensibly - appropriated for the reconstruction? By the time the CPA was dissolved, Bremer had only spent half a billion of it.

That got spent later. But on what? Between the two sources there was forty billion dollars available to rebuild Iraq. Where are the hospitals, schools, power plants, water and sewer systems, the electrical grids, and the garbage collections?

The story had certain great and colorful features. The one that is now featured was that the loaded pallets of cash onto giant transport planes, benjamins wrapped up in bricks, and flew them to Iraq. There, they were then handed out in cash. Less notes is the fact that suitcases of cash were given to military personnel (it's claimed to nobody below the rank of major), who then drove off with it in their humvees to presumably spend on personal reconstruction projects. With no accounting. Not even digital cell phone pictures of, here, here's the sewer we had dug, here's the kindergarten we built. Nothing. Just a suitcase full of hundred dollars bills and have a nice day.

Here's a tidbit for you:


One chunk of the money -- $1.4 billion - was deposited into a local bank by Kurdish leaders in northern Iraq but could be tracked no further. The auditors reported that they were shown a deposit slip but could find no additional record to explain how the money was used or to prove that it remains in the bank. Bryan Bender, The Boston Globe, 10/16/2004

Please - note the date on that story. October, 2004.
This was all known at least two and half or three years ago.

The story was broken in the US, in May, 2004, by Andrew Cockburn in Salon. By 2005, a Nexis search showed only three stories in the mainstream media relating to it. The one quoted above, another in The Baltimore Sun and one on the inside pages of the New York Times. I wrote about it in Fog Facts, Searching for Truth in the Land of Spin, published in October, 2005.

Why wasn't it a big story then? And why is it now?

Because it's not about the story.

It's not about the drama of the story. It's not about the significance of the story. The significance of the story is that it explains a great deal about why Iraq never did get reconstructed. It illustrates how this administration runs just about anything. And it should post a warning sign - in flashing neon colors - when they ask for money again. For more of the same thing. Especially when they don't want to account for what happened then and can't say how they've fixed it now.

It's about the source of the story.

The source of the story determines if it gets covered and how big the coverage is. (This does not apply to politically neutral scandal stories, like Anna Nicole's death and to easily videoed, politically neutral stories like snowstorms and hurricanes.)

The story gets coverage now, because it comes from the chairman of a congressional committee. Which 'authoritative.' Also easy, because the hearings are scheduled and the press invited and press releases are handed out.

It didn't get coverage for almost three years. Anyone in the mainstream media, who covers the war, Iraq, the administration, spending, and waste in government should be asking themselves why? Why have they become simply transmitters for official handouts? Instead of journalists. These are questions, of course, for all journalists. It is a question in particular for the Washington bureau of the New York Times. Which had the story, printed one piece of it, then deliberately walked away from it.