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.

Like salt to slugs

Waxman is on the prowl and the greedy, bloated and gluttonous, are hit with the spotlight of doom: 'Oversight'. As in explain yourself:

It has been six long, dysfunctional years since it made an appearance in Washington, so one can be forgiven if one has forgotten what it looks like, but this thing called Congressional "oversight" over administration conduct is now returning to Washington. Henry Waxman convened a hearing today, with former Iraq proconsul Paul Bremer as the featured witness, to begin looking into war profiteering in Iraq, and specifically, how much money was squandered through corruption and cronyism on Iraq's "reconstruction".

This was just the first day, and there is nothing cataclysmic, but several excerpts from the hearing illustrate the importance and potential potency of oversight in uncovering wrongdoing by the Executive branch. The first clip entails an examination of the shoddy accounting supervision and cronyism which ensured that there was no meaningful supervision over the expenditure of funds.

Update: Waxman's Oversight and Government Reform.

All the lost money went to ACME products

Bremer being called to face Waxman?

During his time as head of the U.S. Coalition Provisional Authority, Bremer was stalked by the United States' top fraud-buster in Iraq, Stuart Bowen, Special Inspector General for Iraq Reconstruction. The two were like the cartoon Road Runner and Wile E. Coyote: Bowen -- Mr. Coyote -- would come after Bremer with ever more devastating reports of fraud, mismanagement, abuse and utter chaos within Bremer's operations; yet Bremer had a road-runner-like ability to escape every time. Indeed, he walked away with a Presidential Medal of Freedom, the Department of Defense award for Distinguished Public Service, and even the Nixon Library's "Victory of Freedom Award."

Both men have testified before Congress, but never at the same hearing, a fact confirmed for me by Bowen's press aide, Christine Belisle. That could soon change: Waxman has "invited" the two men to testify at a Feb. 6 hearing on a lingering issue from Bremer's tenure: how nearly $9 billion in reconstruction funds went missing -- or in audit-speak, was "disbursed. . . without accountability."

Bowen's spokeswoman assures me the inspector general will testify at Waxman's hearing. Mr. Bremer? Are you ready for your close-up?