The gutting of the US Treasury

We've known about this for years. And it's just now coming to the attention of the media? Just look for fatcat defense contractors and check their bank balances. We want our money back. And notice, not a peep from the Republicans about this horrific fraud, but look now at how they whine about Obama's stimulus package.

Beginning in April 2003, one month after the invasion of Iraq, and continuing for little more than a year, the United States Federal Reserve shipped $12 billion in US currency to Iraq. The US military delivered the bank notes to the Coalition Provisional Authority, to be dispensed for Iraqi reconstruction. At least $9 billion is unaccounted for due to a complete lack of oversight.

The initial $20 million came exclusively from Iraqi assets that had been frozen in US banks since the first Gulf War in 1990. Subsequent airlifts of cash included billions from Iraqi oil revenues formerly controlled by the United Nations. After the creation of the Development Fund for Iraq—a kind of holding pit of money to be spent for “purposes benefiting the people of Iraq”—the UN turned over control of Iraq’s billions of dollars from oil revenue to the United States.

When the US military delivered the cash to Baghdad, the money passed into the hands of an entirely new set of players—the Coalition Provisional Authority (CPA). The CPA had been hastily created by the Pentagon to serve as the interim government in Iraq. On May 9, 2003, President Bush appointed L. Paul Bremer III as CPA administrator. Over the next year, a compliant Congress gave $1.6 billion to Bremer to administer the CPA. This was over and above the $12 billion in cash that the CPA had been given to disburse from Iraqi oil revenues and unfrozen Iraqi assets.

Few in Congress had any idea about the true nature of the CPA as an institution. Lawmakers had never discussed the establishment of the CPA, much less authorized it—odd, given that the agency would be receiving taxpayer dollars. Confused members of Congress believed that the CPA was a US government agency, which it was not, or that at the very least it had been authorized by the United Nations, which it had not.

The Authority was in effect established by edict outside the traditional framework of American government. Because it was a rogue operation, no one was responsible for what happened to that money. Accountable to no one, its finances “off the books” for US government purposes, the CPA provided an unprecedented opportunity for fraud, waste, and corruption involving American government officials, American contractors, renegade Iraqis, and many others. In its short life more than $23 billion would pass through its hands. And that didn’t include potentially billions of dollars more in oil shipments the CPA neglected to meter.

Incidents of flagrant abuse were rampant. Of 8,206 “guards” drawing CPA paychecks, only 602 actually existed; the other 7,604 were ghost employees. Halliburton charged the CPA for 42,000 meals for soldiers while in fact serving only 14,000. Contractors played football with bricks of $100,000 shrink-wrapped $100 bills.

Blackwater might drop the protection of diplomats but consider warring with drug cartels

Either way, it's a megabillion dollar industry that's NOT going away:

WASHINGTON — Troubled military contractor Blackwater USA is likely to be eased out of its role of guarding U.S. diplomats in Iraq in the aftermath of a shooting last month that left 17 Iraqi civilians dead, U.S. officials said Friday.

While no decisions have been finalized, Blackwater's role in Baghdad is likely to be taken over by one of two other contractors who provide security for the State Department in Iraq, the officials said. They are Triple Canopy and DynCorp International.

"There will be some sort of disengagement process, but it won't be that they're shown the door," said a State Department official. "As one builds down, another builds up."

He and other U.S. officials spoke on condition of anonymity because Secretary of State Condoleezza Rice hadn't received an oral report from a four-person team led by Patrick Kennedy, the department's director of management policy. The team reviewed State Department security operations in Iraq.

[snip]

In a related development Friday, Rep. Henry Waxman, D-Calif., who's been investigating State Department operations in Iraq, said in a letter that Blackwater attempted to transport two Iraqi military aircraft out of Iraq without official permission.

In the letter to Blackwater founder Erik Prince, Waxman said that an unnamed military official told his House Oversight Committee that "the Iraqi ministry of defense attempted to reclaim the aircraft, but that Blackwater would not comply."

Waxman also alleged that Prince had misled the committee in testimony earlier this month. Prince had said that the company's early contracts with the Coalition Provisional Authority in Iraq and the State Department were competitively bid, when in fact they were sole-source contracts.

Waxman demanded that Prince turn over a wealth of company information to the committee, including contract documents, Blackwater's profit data and information about Prince's compensation.

In the letter, and in a separate one to Rice, he asked for details about payments that the company has given to the families of Iraqis Blackwater killed.

Will this hurt Blackwater's business? No:

The U.S. Defense Department has invited five contractors to bid on elements of a new multibillion-dollar effort to combat the global flow of illegal drugs allegedly used to finance terrorism.

Awarded by the Pentagon’s Counter-Narcoterrorism Technology Program Office (CNTPO), Dahlgren, Va., the contract vehicle has a potential value of $15 billion over five years. One participant is ARINC, a Maryland-based provider of airline communications systems.

“This gives us the opportunity to bid on this work,” said Linda Hartwig, an ARINC spokeswoman. “We don’t have a lot of details yet, but we do know that this is an expansion of what [the United States] is already doing to fight drug trafficking, and that 80 percent of the work will be overseas.”

Hartwig said the other participating vendors are defense giants Lockheed Martin, Northrop Grumman and Raytheon, and security contractor Blackwater USA. Blackwater confirmed its participation, but the other three vendors did not respond to inquiries.

The vendors will compete for a series of task orders covering a wide range of products and services. These could include anti-drug technologies and equipment, special vehicles and aircraft, communications, security training, pilot training, geographic information systems and in-field support.

According to ARINC, training elements could include instruction for border police, the construction of shooting ranges and the integration of aircraft-mounted drug-detection systems.

ARINC has assisted U.S. drug interdiction efforts since 2002, when it joined the State Department’s Air Bridge Denial program.

Within the Pentagon, the CNTPO is the lead agency for developing new technologies to “disrupt, deter and deny” narcoterrorism. Much of this work relates to prototyping new communications and sensor systems.

8 billion... 9 billion, what's the difference?

It's only hard-earned taxpayers' money after all:

What happened to billions in Iraqi funds that were overseen by the Coalition Provisional Authority? That's not "important," according to David Oliver, the former Director of Management and Budget of the agency.