Audit finds rampant fraud, waste in Iraq defense spending
By Associated Press
Published August 12, 2005
BAGHDAD - Iraqi investigators have uncovered widespread fraud and waste in more than $1-billion worth of weapons deals arranged by middlemen who reneged or took huge kickbacks on contracts to arm Iraq's fledgling military, according to a confidential report and interviews with U.S. and Iraqi officials.
The Iraqi Board of Supreme Audit, in a report reviewed by Knight Ridder, describes transactions suggesting that senior U.S.-appointed Iraqi officials in the Defense Ministry used three intermediary companies to hide the kickbacks they received from contracts involving unnecessary, overpriced or outdated equipment.
Knight Ridder reported last month that $300-million in defense funds had been lost. But the report indicates that the audit board uncovered a much larger scandal, with losses likely to exceed $500-million, that's roiling the ministry as it struggles to build up its armed forces.
The episode deprives Iraq's military of essential gear that could help prepare the way for U.S. forces to withdraw. It also raises questions about the new government's ability to provide an effective defense against an entrenched insurgency and win broad acceptance among Iraqis.
The audit board's investigators looked at 89 contracts of the past year and discovered a pattern of deception and sloppiness that squandered more than half the Defense Ministry's annual budget aimed at standing up a self-sufficient force, according to a copy of the 33-page report.
Its revelations offer the most comprehensive look to date at corruption that allegedly thrived for eight months or longer even with about 20 American civilian advisers working alongside Iraqi defense chiefs, including those now under investigation. The report does not suggest that U.S. advisers were involved in any corruption.
"If one dinar is misspent, I ache for it, so just imagine how it feels for such huge sums," Iraqi Prime Minister Ibrahim al-Jaafari said in an interview Wednesday. "We need it to build the country and, even if we reach the level to where we don't need it, we aren't about to give our money over to corruption."
Lawmaker calls for Shiite federal region
A leading Shiite lawmaker called Thursday for a Shiite federal region, alarming Sunni Arabs who fear they will lose out on oil revenues and complicating efforts to meet a deadline for drafting a constitution within four days.
During a speech to cheering crowds in Najaf, Abdul-Aziz al-Hakim endorsed calls for a federated Iraq, saying federalism was needed "to keep a political balance in the country" after decades of dictatorship under Saddam Hussein.
"We believe that it is necessary to form one territory that includes the south and central Iraq," al-Hakim said, referring to areas where Shiites form the majority.
The move could pave the way for a Shiite south and a Kurdish north. The Kurds have demanded federalism to maintain control over three northern provinces and also want authority over Kirkuk, from which thousands of Kurds were expelled by Saddam.
Most of Iraq's vast oil wealth is concentrated in the Kirkuk area of the north or in the Basra area of the south. Sunnis fear they could lose out on Iraq's oil riches under a loosely federated system.
Al-Hakim's maneuvering could also complicate U.S. efforts to produce a constitution that will win the backing of Sunni Arabs in the Oct. 15 referendum.
Will Hussein's first trial for massacre be his last?
Saddam Hussein could be executed after his first trial if he is convicted and sentenced to death for his alleged role in a 1982 Shiite massacre, even though he faces other charges, an official close to the proceedings said Thursday.
The first trial, which involves Hussein's alleged role in the 1982 massacre of an estimated 150 Shiites in Dujail, north of Baghdad, is expected to begin by the fall. If Hussein is sentenced to death in the Dujail case, authorities could "theoretically" carry out the sentence without waiting for the other trials to begin, the official said, whose name the Associated Press withheld for security reasons.
Iraqi authorities also are building about a dozen other cases against Hussein that they intend to try separately. Those cases include the killing of rival politicians over 30 years, the 1987-88 Anfal campaign that left tens of thousands of Kurds dead or displaced and the crushing of a 1991 uprising by Shiites after the Gulf War.
Security Council extends U.N. mission for a year
The Security Council extended the U.N. mission in Iraq for a year on Thursday, reaffirming its leading role in helping to promote a national dialogue that is crucial for the country's political stability and unity.
The 15-nation council voted unanimously to approve the U.S.-sponsored resolution, which also called on the world body to help the Iraqi people and government develop institutions for representative government.
