Friday, September 23, 2005

Taken for a ride

PV Vivekanand

IF the American invasion and occupation of Iraq carried out through a web of lies and deception has led to a total mess-up, taking the country to the point of disintegration along sectarian lines, much worse is the Washington-guided financial management of both American and Iraqi funds. Evidence is mounting that the commercial interests of a few American corporate giants played an equal role in whatever other considerations that the administration of President George W Bush had in charting and implementing the grand design to seek absolute control of oil-rich Iraq. Today, having spent — at least on paper — billions of dollars for reconstructing Iraq, the US or the people of Iraq have little to show in terms of improved living conditions. But then, bettering the life of Iraqis through spending American money was never a consideration in Washington and the prime objective, it would definitely seem, was to reap billions for friends of the neoconservative camp in the corridors of American power, writes PV Vivekanand.
APART FROM the US quest to turn Iraq into a key pillar of its empire of bases and remove a potential threat to Israel's domination of the Middle East, the invasion and occupation of Iraq had another dimension: Allowing hand-picked American corporates to earn billion of dollars, whether through supply of weapons and military equipment as well as fuel and food to the US military, or through control of the oil resources of Iraq. True, no American oil company has been able to serve its long-term interests in Iraq so far, if only because of the intensity of the insurgeny there. However, US firms, most of them linked to the Republican Party and leading members of the neoconservative camp in Washington, have been reaping a rich harvest from the tens of billions of dollars of US money being spent in Iraq. Indeed, it is the business of the American people and government to decide who should get what from American taxpayers' money, but not so when it comes to the natural resources that belong to the people of Iraq.
As allegations fly that someone, somewhere siphoned off $1 billion that were supposed to have been spent on building Iraq's security forces, the reality is also emerging that someone, someone had also channelled away billions of dollars of Iraqi oil money that should have been spent on rebuilding the shattered country.
As looting erupted in Baghdad and cities and towns elsewhere in the country following the collapse of the Saddam Hussein regime in April 2003, the favourite  term used to describe the looters was "Ali Baba," the Arabian tales character who stole from the loot of a gang of thieves. Few gave a second thought that the name was perhaps misused since Ali Baba could not be described as a thief in a broader sense.
Indeed, that is so symptomatic of Iraq. Few, least of all the Americans, took the trouble of understanding the country and its people. The US-led coalition went to Iraq with an agenda that had little do with democracy and human rights or the welfare of the people of that country, and more to do with American/Israeli strategic interests, and, in the bargain, nudging aside billions of dollars in the way of corporates like Halliburton and Bechtel.
Again, that money was mostly American. And today, US officials have confirmed that key rebuilding projects in Iraq are grinding to a halt because American money is running out and security has diverted funds intended for electricity, water and sanitation.
As a result, according to James Jeffrey, a senior state department adviser on Iraq, projects to rebuild the country's infrastructure have been downsized, postponed or abandoned because the $24 billion budget approved by Congress has been dwarfed by the scale of the task.
"We have scaled back our projects in many areas," Jeffrey told a congressional committee in Washington this month. "We do not have the money."
The net sum of conclusions emerging from various auditing reports, official and unofficial, about the American funds spent, both for continuing the war and to rebuild Iraq, is that there had been a systematic pattern of spending that benefited none other than private American companies which are given no-bid contracts.
It was reported as far back as October 2003 that basic reconstruction in Iraq would cost less than half the amount requested by the Bush administration from the US Congress.
A joint report prepared by the United Nations and World Bank estimated that $9 billion were needed for reconstruction in Iraq in 2004 where as the amount that the US government had sought from Congress was $18.6 billion.
In every sector, the US estimate was double that of the UN estimate, clearly indicating that figures were purposely inflated to benefit the corporates.
. For example, while the Bush administration sought $5.7 billion for rebuilding the country’s electricity system, the UN-World Bank report put the price tag at $2.38 billion. Similarly, for rebuilding the water and sanitation infrastructure, the administration hd asked for $3.77 billion, while the joint report estimates that less than $1.9 billion is needed.
Beyond that, the Bush administration had estimated that $55 billion will be needed for Iraqi reconstruction between 2004 and 2007. While there was no comparable UN/World Bank estimate, independent think-tanks estimated the requirement at less than half that amount.
Where did the money disappear?
Today, very few people actually seem to know how much was actually spent in reconstructing Iraq although there is little sign of any reconstruction. Iraqis continue to suffer from water and power shortages and there is little in the way of employment opportunities except perhaps in the high-risk security forces.
The pattern of mismanagement of funds was established in the audit reports of the accounts of the Coalition Provisional Authority (CPA) that was disbanded on June 28, 2004.
But that was not American money. It was Iraqi money, and no one seems to be bothered anymore to hold to account those who misappropriated it.
Paul Bremer, who headed the CPA, left behind what turned out to be a gross misuse of proceeds of Iraqi oil exports to benefit American contractors, with the major beneficiary being Halliburton.
There were three sources of funding for the war and occupation of Iraq. The first was $65 billion directly allocated as military spending by the US Congress and administered by the US Defence Department. It was American taxpayer's money.
The second was $18.4 billion, also approved by the US Congress, but administered by the CPA. Again, it was American taxpayer's money and supposed to be spent on reconstruction of Iraq along with $16 billion or so pledged by other countries.
The third was the Development Fund for Iraq, which represented proceeds from Iraq's oil exports and leftover money from the oil-for-food programme that the UN ran in co-ordination with the Saddam Hussein regime. The fund handled about $20 billion by the time the CPA was disbanded when the US handed over "sovereignty" to the interim government in June 2004.
The first war chest was further replished by another $87 billion, but the bulk of it was earmarked for direct military spending.
From the $18.4 billion allocation for reconstructing Iraq, the CPA spent only two per cent since allocating American funds for reconstruction projects in Iraq had many riders and it was easier to dipping into the Development of Iraq Fund — which was strictly Iraqi money.
The Pentagon has not yet explain just how Halliburton gained possession of Iraqi funds when neither the US Congress nor the Iraqi government authorised their transfer to Halliburton in the first place. But no one is asking for an explanation either.

Saddam's 'billions'

Iyad Allawi, the first post-Saddam Iraqi prime minister, and several other Iraqi officials and politicians said shortly after Saddam was captured in late 2003 that British and American intelligence had located up to $40 billion in secret funds stashed away from the toppled president.
The clues to the "secret funds," they said at that time, were provided by none other than Saddam, who revealed details of secret accounts in international banks during questioning.
The assertion immediately drew scepticism. It was elementary that it was
impossible to hide that kind of money for anyone, let alone Saddam, who was under the tightest-ever monitoring since 1990.
Let us, for argument's sake, agree that Saddam had stashed away such money and had given clues to where it was, then the US should have definitely located it. What happened to that money then?
We have heard scant little about the "Saddam billions"in the last 20 months.
Or was it that the same people or at least some of them who were behind the massive cash scam in Iraq did recover the money and then decided "finders keepers?"