Iraq War's 'Missing' 6.6 Billion Is Discovered in Central Bank
Wednesday, October 26, 2011
Iraq War's 'Missing' $6.6 Billion Is Discovered in
Central Bank
By: Tony Capaccio and David Lerman, Bloomberg
A new Pentagon audit resolves a lingering Iraq-war mystery,
concluding that $6.6 billion of U.S.-controlled reconstruction
money was transferred to the Central Bank of Iraq, not lost or
stolen.
The Coalition Provisional Authority, created by the U.S. to run
Iraq after the invasion, controlled more than $20.7 billion during
its 14-month life, including $6.6 billion held when it was
dissolved on June 28, 2004.
"That money is not missing," said Inspector General Stuart Bowen
in a telephone interview.
A 2010 Bowen audit couldn't account for the money. Today's
report says "sufficient evidence exists showing almost all" the
$6.6 billion was transferred to the central bank.
The inability to account for the money led to suspicion in Iraq
that the funds had been stolen. The Iraqi parliament's Integrity
Committee wrote the United Nations in June that "all indications
are that the institutions of the United States of America committed
financial corruption by stealing money."
"That's not true," Bowen said. "This report answers the question
about the $6.6 billion. We conclude it properly was accounted for
by the Federal Reserve Board Bank of New York and Central Bank of
Iraq."
Any doubts about how the money was handled after it left U.S.
control is an Iraqi -- not U.S. government -- question, Bowen
said.
The Los Angeles Times in June fueled concern about the money
when it quoted Bowen as calling the then-unaccounted-for $6.6
billion "the largest theft of funds in national history," a phrase
Bowen later said was taken out of context.
U.S. Controls Questioned
Still, the audit raised questions about the CPA's financial
management. It identified three instances when about $4.3 billion
of U.S. currency was deposited in the Iraqi bank "in a manner that
varied" from that interim government's written policies and
procedures.
The inspector general was unable to locate all required
documents needed to show how and when the money was transferred --
a problem that Bowen found to be "of concern, given the massive
amounts of money involved," the report said.
Bowen's report also questions what authority the U.S. Defense
Department had when it took control over $217.7 million stashed at
a presidential palace vault.
A pending audit scheduled for release in January will account
for that money and about $2.8 billion used by Defense Department
agencies, including the U.S. Army Corps of Engineers, for
reconstruction projects.
Pentagon Comptroller Robert Hale accepted Bowen's report while
raising several technical questions.
"I am hopeful that the results of this independent validation
will support a more productive dialogue that will preclude any
misunderstandings by the government of Iraq related to the control"
of reconstruction money, Hale wrote in an Oct. 21 letter to
Bowen.