Boy, if John Bolton was President this shit wouldn't happen

[mburbank]

Audit Criticizes Iraq's Handling of Oil Sales after Power Transfer
USA Today

Tuesday 24 May 2005

United Nations - The board monitoring Iraq's oil revenue said Monday that Iraqi leaders mishandled about $100 million in oil money meant for development in the six months after they took power from the U.S. government.

The International Advisory and Monitoring Board said a new audit also found the now-defunct U.S. Coalition Provisional Authority used questionable accounting practices with money from the Development Fund for Iraq. It also singled out the U.S. Army Corps of Engineers for refusing to provide files for contracts that were funded with Iraqi oil revenue.

The audit, conducted by accounting firm KPMG, covered the period from the June 28, 2004, transfer of sovereignty to the new interim government until Dec. 31.

While the audit makes no accusations of fraud or wrongdoing, it notes that Iraqi ministries and U.S. agencies awarded numerous noncompetitive contracts with development money. At one point, U.S. agencies bought armored vehicles with $988,000 that was supposed to be used for Iraq's development. In one case a $6.1 million contract "was advertised on a subscription only Web site and therefore not publicly tendered," the report found. "Only two bids were received for the contract."

Pentagon spokesman Lt. Col. Barry Venable said he hadn't seen the latest report and couldn't comment on its specifics. But he said the CPA did well in difficult circumstances in Iraq, "implementing hundreds of projects to improve the quality of life for the Iraqi people."

The audit said that during that time, Iraqis violated a U.N. Security Council resolution that was passed to make sure oil profits went to help the country recover from war. For example, the government bartered petroleum products for electricity and other oil products from Syria in transactions worth $461 million. It later deposited $97.7 million from oil sales into its own bank accounts, a direct violation.

Iraqi banks also used the fund as an intermediary to conduct wire transfers for customers, something that could have resulted in "criminals, or associates of criminals, being able to conceal the source of funds transferred and their identity."

The audit was the third to be released since the board was set up by the U.N. Security Council in 2003 to ensure the transparent operation of the fund, which receives Iraq's oil revenue and frozen assets from Saddam Hussein's ousted regime.

The fund was controlled by the United States and Britain, Iraq's occupying powers, until the June 28, 2004 transfer of sovereignty to the new interim government, when it was handed over to Iraq's new leaders.

The audit was a counterpoint to the numerous reports and investigations that have focused on U.N. and Security Council oversight of the 1996-2003 oil-for-food program.

Those reports have claimed that Saddam Hussein bilked oil-for-food of billions of dollars over the course of the program, and have led to intense criticism of the United Nations and U.N. Secretary-General Kofi Annan in particular.

U.S. officials had acknowledged in the past that sometimes contracts in Iraq were awarded without competition given the urgency of the situation.

The audit cited numerous instances where the Iraqi government and U.S. agencies kept poor or incomplete records of contracts awarded with Iraqi development money.

Iraqi ministries still maintain most of their financial records in paper notebooks, the report said. They have only "limited outdated financial software and computer equipment," though that could change by the end of the year, it said.