Pentagon can’t account for $8.57 billion in Iraqi funds By Jerry Mazza

By Jerry Mazza
Featured Writer
Dandelion Salad
crossposted at Online Journal
August 7, 2010

B is for billions. And b is for it’s hard to believe that they’ve done it again. The last time, even more money vanished, which I noted in my article, Following Pentagon trillions to Israel and 9-11. This was under the Zionist Dov Zakheim’s watch as Comptroller of the Pentagon from May 4, 2001, to March 10, 2004.

I wrote in that article, “At that time he was unable to explain the disappearance of $1 trillion dollars. Actually, nearly three years earlier, Donald Rumsfeld announced on September 10, 2001, that an audit discovered $2.3 trillion was also missing from the Pentagon books. That story, as I mentioned, was buried under 9-11’s rubble. The two sums disappeared on Zakheim’s watch.

“Yet on May 6, 2004, Zakheim took a lucrative position at Booz Allen Hamilton, one of the most prestigious strategy consulting firms in the world. One of its clients then was Blessed Relief, a charity said to be a front for Osama bin Laden. Booz, Allen & Hamilton then also worked closely with DARPA, the Defense Advanced Research Projects Agency, which is the research arm of the Department of Defense. So the dark card was shifted to another part of the deck.”

In a more recent article, I noted that Dov Zakheim retires from Booz Allen & Hamilton. Post BAH, Dov Zakheim has now surfaced in a blog called Shadow Government for Foreign Policy magazine. Still at it, this time he posted an article dismissing the 91,000 documents released by whistleblower Julian Assange, head of WikiLeaks, as basically “good grist for historians’ footnotes, and nothing more.”

Of course, those of us who appreciated WikiLeaks exposing Pakistan ISI and government ties, noting the abuses of US Kill Teams, fudging numbers of civilian and troop deaths, discovering a Pakistan Taliban connection, were appreciative. Every little bit of truth helps. Drop by drop you fill the pot, as the saying goes. BTW, you can read Dov’s entire dismissive epistle linked above.

Returning to the latest Pentagon story, Audit: US cannot account for $8.7B in Iraqi funds, AP reported from Baghdad, “The U.S. Defense Department is unable to properly account for over 95 percent of $9.1 billion in Iraqi oil money tapped by the U.S. for rebuilding the war ravaged nation, according to an audit released Tuesday.”

The report by the U.S. Special Inspector General for Iraq Reconstruction offers a compelling look at continued laxness in how such funds were being spent in a country where people complain basic services like electricity and clean water are sharply lacking seven years after the U.S.-led invasion that toppled Saddam Hussein.

The U.S. audit found that shoddy record keeping by the Defense Department left the Pentagon unable to fully account for $8.7 billion it withdrew between 2004 and 2007 from a special fund set up by the U.N. Security Council. Of that amount, the Pentagon “could not provide documentation to substantiate how it spent [the] remaining $2.6 billion.” Now that Dov and Rummy are gone, obviously a new legion of miscreants has taken over.

Sabah al-Saedi, chairman of the Parliamentary Integrity Committee, said that “Iraq should take legal action to get back huge amount of money,” and that the money, “should be spent for rebuilding the country and providing services for this poor nation.” A report by the Special inspector General for Iraqi Reconstruction also accused the DOD of lax oversight and week controls, stopping short at fraud, though I don’t know why they’d stop. Fraud seems to be the operative word here as back in 2001-2004.

“The breakdown in controls left the funds vulnerable to inappropriate uses and undetected loss,” the audit says. And “The Pentagon has repeatedly come under fire for apparent mismanagement of the reconstruction effort, as have Iraqi officials themselves,” fraud here, fraud there, fraud everywhere. This yields the result that seven years post the US invasion, electricity service is “spotty,” and generation of electricity is far short of demand. So fuel shortages are common, unemployment stays high, and the country can’t create new jobs or attract foreign capital. Nice going guys. And what did this cost the US: three trillion so far?

In fact, the money shenanigans popped up in 2003, at the start of the war, with soldiers not securing banks, armories and other facilities from looters. It’s been downhill from there, with accusations rising, investigations of fraud, contracts awarded without standard government bidding processes, allowing contractors to pad bills, charging off-the-charts fees with little or no oversight. Sounds like the US. We do the same things at home to ourselves, the 9/11 theft a prime example.

This time is a bad time, a critical time, too, for Iraq, only months after somewhat inconclusive elections, a government yet to be formed, and fears that insurgents will use the political havoc to whip up sectarian unrest. Yes, Martha, “insurgents,” people fighting this kind of US crap are still intent on violence. Recently, six people were killed, dozens more wounded as a female suicide bomber blew herself up not far from a checkpoint in the holy city of Karbala, said local police. Of course, they spoke in anonymity, not being authorized to speak to the media, see no evil, hear no evil, talk no evil being the prevailing policy.

This while thousands of Shiite pilgrims are gathering at the city some 50 miles south of Baghdad for a major religious holiday that honors the birth of a Shiite saint named the “Hidden Imam,” who vanished in the ninth century. Sunni extremists have also used occasions like this to attack Shiites. Add to that, Iraqi lawmakers failing to convene a session of parliament for the second time this month, leaving speculation as to when a new government will take shape, if ever.

Of course, the wolf is at the door, the International Money Fund (IMF), approving a $3.6 billion loan (at what interest or cut of oil?) to help Iraq pay its bills, which process we have massively screwed up. Not surprisingly, Iraq is projected to run a deficit through 2011 (just like the US), with some possibility of a surplus depending on oil prices (not like the US). Iraq took a big hit when 2008 oil prices dropped with the global financial meltdown (thanks to the US). Fortunately prices have come back some for Iraq. Its survival is tied to international oil markets. Petroleum revenues account for more than 90 percent of the government budget. Gee, was it this bad under Saddam?

The original $9.1 billion in question came from the Development Fund for Iraq, set up by the UN Security Council in 2003. The DFI corrals Iraq’s oil and gas export revenues, frozen Iraqi assets and surplus funds from the now defunct, somewhat infamous Saddam Hussein-era, oil-for-food program, with the smell of more fraud rising from the UN itself. Hello, Kofi Annan.

Unfortunately, Iraq gave the US authorization to tap into the fund, held in New York, for humanitarian and reconstructions efforts (good luck), withdrawing that privilege in December 2007.

Under the Coalition Provisional Authority, created to run Iraq after the invasion of 2003 until mid-2004, about $20 billion was placed into that account. Conveniently, the $9.1 billion, audited by the Iraq reconstruction inspector general, was withdrawn from that account from 2004 to 2007. Sayonara.

The report found that the DOD couldn’t “readily account for its obligations, expenditures and remaining balances associated” with the DFI. What else is that but theft and fraud? We’re talking about $8.7 billion, 95 percent of the withdrawn funds, down the rabbit hole. Another $2.6 billion has gone missing as well, about which the Pentagon has no clue, as well. I guess Secretary Gates needs to get a new calculator or two. It all seems too much for him.

Or perhaps the money is being siphoned off for DOD Intel’s special ops? I mean there’s only so much we can blame on lax financial controls and management, failure to designate an organization with oversight on spending, failure to set up and deposit funds in special accounts, all these Treasury Department regulations blown by the Pentagon. They can’t be that incompetent. Or are they?

A contrite DOD, attaching responses to the audit, agreed with the report’s recommendations for better guidelines. Big deal! Did any heads roll? Was this the first time they’ve handled huge amounts of money? Not on both counts. Can the DOD really be expected to change their ways? Good luck. And remember, they got about $700 billion of US taxpayer money this year. That’s your money they’re playing games with.

This problem bleeds too into Afghanistan where billions in reconstruction funds have been “mismanaged” (fraud), and hampered US-led efforts to “rebuild Afghanistan.” What a joke. We can’t even rebuild one of the felled twin towers at Ground Zero since 9/11/2001. The billions poured into that project are like the $60 billion poured into Afghanistan since 2001 to bring electricity, clean water, jobs, roads, and education to a crippled country. It hasn’t happened and it’s morally pathetic.

Of course, all by itself the US threw in $51 billion to this project since 2001 (money needed for our own infrastructure, clean water, jobs, roads, and education to this crippled country). And we plan to up that number to $71 billion in the coming year, more than we’ve spent on reconstruction in Iraq since 2003. What are we spending in the US for a shopping list like the above one?

The overpromises of those Afghanistan efforts, in my mind, do more harm than good. They only highlight our corruption and broken promises. The percentage of Afghans with electricity has gone up from 6 percent in 2001 to about 10 percent today, way short of the original claim for power to 65 percent of urban and 25 percent of rural households by this year’s end. America remains in the dust and ruins of its own violence and corruption, abroad and at home.

A $100 million diesel-fueled power plant was built to deliver electric power to over 500,000 residents of the Afghan capital, Kabul. Not only did the plant’s costs triple, $305 million, but construction fell behind schedule. The plant sits idle now. Believe it or not, the Afghans themselves imported cheaper power from their neighbor Uzbekistan before the US plant came online.

The real shortage here is in any kind of ethical, moral, or systemic integrity in the Pentagon and in the US financial system itself. The DOD is a house of cards and mirrors, an amusement park for a bloated, jaded military jammed with agendas for personal enrichment at US taxpayer expense. And that goes for you, too, Dov, sitting at your little blogging computer, knocking Assange. Watch out we don’t send you to jail yet for the three trillion plus.

This gives we the people even more reason to shut down the war-making in Afghanistan and Pakistan and to put the Pentagon on an austerity budget, necessary for own people’s survival.

The money tit needs to be pulled from the mouths of the defense and oil industry (the latter the Pentagon’s best customer), and pulled from the mercenary armies, general corruptive bloat, and redirected to a US Marshal Plan, the rebuilding of America. This is the only real safeguard against rot, internal, systemic rot, the likes of which brought down Rome, the Soviet Union, the British Empire, and legions of others. Time to strengthen ourselves within without our blood or money pumped through a diseased desire for world hegemony.

Jerry Mazza is a freelance writer, life-long resident of New York City. His book “State Of Shock – Poems from 9/11 on” is available at, and


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2 thoughts on “Pentagon can’t account for $8.57 billion in Iraqi funds By Jerry Mazza

  1. Pingback: Lights out in America by Bruce Gagnon « Dandelion Salad

  2. Heads need to roll. Continued war equals continued graft. An old story, but now it’s graft on steroids.

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