Democratic Policy Committee:
Iraq audit can't find billions /$8.8 Billion
Tue Feb 15, 2005 22:22
64.140.158.14
Iraq audit can't find billions /$8.8 Billion in Iraqi Funds Missing
Did Americans loot millions, take kickbacks, receive bribes to give away $billions of Iraq's oil revenues, construction and U.S. Taxpayers' dollars in care of the U.S., to the Iraqi Coalition Provisional Authority?
R. S
_______________________________________________
Congress to hold hearings today Re: Iraq audit can't find billions /$8.8 Billion in Iraqi Funds Missing
http://democrats.senate.gov/dpc/ Democratic Policy Committee:
U.S. Said to Pay Iraq Contractors in Cash
U.S. Paid Iraq Contractors With Cash, Some >From Gunnysacks and Pickup Trucks, Ex-Official Says
By LARRY MARGASAK
The Associated Press
Feb. 13, 2005 - U.S. officials in postwar Iraq paid a contractor by stuffing $2 million worth of crisp bills into his gunnysack and routinely made cash payments around Baghdad from a pickup truck, a former official with the U.S. occupation government says.
Because the country lacked a functioning banking system, contractors and Iraqi ministry officials were paid with bills taken from a basement vault in one of Saddam Hussein's palaces that served as headquarters for the Coalition Provisional Authority, former CPA official Frank Willis said.
Officials from the CPA, which ruled Iraq from June 2003 to June 2004, would count the money when it left the vault, but nobody kept track of the cash after that, Willis said.
"In sum: inexperienced officials, fear of decision-making, lack of communications, minimal security, no banks, and lots of money to spread around. This chaos I have referred to as a 'Wild West,'" Willis said in testimony he prepared to give Monday before a panel of Democratic senators who want to spotlight the waste of U.S. funds in Iraq.
A senior official in the 1980s at the State and Transportation departments under then-President Ronald Reagan, Willis provided The Associated Press with a copy of his testimony and answered questions in an interview.
James Mitchell, spokesman for the special inspector general for Iraq reconstruction, told the AP that cash payments in Iraq were a problem when the occupation authority ran the country and they continue during the massive U.S.-funded reconstruction.
"There are no capabilities to electronically transfer funds," Mitchell said. "This complicates the financial management of reconstruction projects and complicates our ability to follow the money."
The Pentagon, which had oversight of the CPA, did not immediately comment in response to requests Friday and over the weekend. But the administrator of the former U.S. occupation agency, L. Paul Bremer III, in response to a recent federal audit criticizing the CPA, strongly defended the agency's financial practices.
Bremer said auditors mistakenly assumed that "Western-style budgeting and accounting procedures could be immediately and fully implemented in the midst of a war."
When the authority took over the country in 2003, Bremer said, there was no functioning Iraqi government and services were primitive or nonexistent. He said the U.S. strategy was "to transfer to the Iraqis as much responsibility as possible as quickly as possible, including responsibility for the Iraqi budget."
Iraq's economy was "dead in the water" and the priority "was to get the economy going," Bremer said.
Also in response to that audit, Pentagon spokesman Bryan Whitman had said, "We simply disagree with the audit's conclusion that the CPA provided less than adequate controls."
Willis served as a senior adviser on aviation and communications matters for the CPA during the last half of 2003 and said he was responsible for the operation of Baghdad's airport.
Describing the transfer of $2 million to one contractor's gunnysack, Willis said: "It was time for payment. We told them to come in and bring a bag." He said the money went to Custer Battles of Middletown, R.I., for providing airport security in Baghdad for civilian passengers.
Willis said a coalition driver would go around the Iraqi capital and disburse money from the a pickup truck formerly belonging to the grounded Iraqi Airways airline. The reason is because officials "wanted to meld into the environment," he said.
Willis' allegations follow by two weeks an inspector general's report that concluded the occupying authority transferred nearly $9 billion to Iraqi government ministries without any financial controls.
The money was designated for financing humanitarian needs, economic reconstruction, repair of facilities, disarmament and civil administration, but the authority had no way to verify that it went for those purposes, the audit said.
Sen. Byron Dorgan, head of the Democratic group that is holding Monday's hearing, said he arranged for Willis' testimony because majority Republicans have declined to investigate the suspected misuse of funds in Iraq.
"This isn't penny ante. Millions, perhaps billions of dollars have been wasted and pilfered," Dorgan, D-N.D., said in an interview ahead of the Senate Democratic Policy Committee's session.
Willis concluded that "decisions were made that shouldn't have been, contracts were made that were mistakes, and were poorly, if at all, supervised, money was spent that could have been saved, if we simply had the right numbers of people. ... I believe the 500 or so at CPA headquarters should have been 5,000."
On the Net:
The Democratic Policy Committee (DPC) is the policy and research arm of Senate Democrats. Established by an Act of Congress in 1947, the DPC serves as a centralized source of information for all Senate Democratic offices and helps promote Democratic policies through hearings, special events, publications, and graphics services.
The DPC is chaired by Senator Byron L. Dorgan (D-ND).
http://democrats.senate.gov/dpc/
Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Copyright © 2005 ABC News Internet Ventures
==============================================
An Oversight Hearing on Waste, Fraud and Abuse in U.S. Government Contracting in Iraq (2/14/05)
http://democrats.senate.gov/dpc/dpchearing.cfm?A=19
SENATOR DORGEN HOME PAGE:
http://dorgan.senate.gov/
washingtonpost.com
Lawmakers Told About Contract Abuse in Iraq
By Griff Witte
Washington Post Staff Writer
Tuesday, February 15, 2005; Page A03
http://www.washingtonpost.com/wp-dyn/articles/A24468-2005Feb14.html?nav%3Dhcmodule&sub=AR
A government contractor defrauded the Coalition Provisional Authority of tens of millions of dollars in Iraq reconstruction funds and the Bush administration has done little to try to recover the money, an attorney for two whistle-blowers told Democratic lawmakers yesterday.
The lawyer, Alan Grayson, represents two former employees who charged in a federal lawsuit that the security firm Custer Battles LLC of Fairfax was paid approximately $15 million to provide security for civilian flights at Baghdad International Airport, even though no planes flew during the contract term. Grayson said the firm received $100 million in contracts in 2003 and 2004, despite a thin track record and evidence the government was not getting its money's worth.
A former Coalition Provisional Authority official who briefly oversaw the airport security contract also spoke, depicting a temporary governing body awash with cash but lacking in the necessary controls to ensure that money generated from the sale of Iraqi oil actually went to rebuilding the country.
"I wish I could tell you that the Bush administration has done everything it could to detect and punish fraud in Iraq," Grayson said. "If I said that to you, though, I would be lying."
The Pentagon has suspended Custer Battles from receiving new contracts, but Grayson said the Justice Department declined last fall to help pursue the case, now pending in federal court in Alexandria.
Lawyers representing Custer Battles have denied the charges and have argued that the case should be dismissed because the money that was allegedly stolen belonged to Iraqis, not to Americans. Grayson said that argument has the potential to turn Iraq during the authority's administration of the country into "a fraud-free zone," with contractors not subject to Iraqi or American law.
Yesterday's appearances were organized by the Democratic Policy Committee. Its chairman, Sen. Byron L. Dorgan (D-N.D.), said the witnesses were called in response to a recent report by the inspector general for Iraqi reconstruction that concluded that the governing authority had inadequate controls over $8.8 billion in Iraqi funds it was supposed to oversee. Former administrator L. Paul Bremer has denied those allegations. Dorgan said Democrats had attempted to get Republican colleagues to hold hearings on the issue but were unsuccessful.
"There is a massive amount of waste, fraud and abuse going on here, and nobody seems to care very much," Dorgan said.
Rep. Thomas M. Davis III (R-Va.), chairman of the House Government Reform Committee, said in an interview that he found some of yesterday's allegations "disturbing." He said his committee has already held hearings on the use of reconstruction funds in Iraq and plans to hold more. "If there's something wrong, we will go after it vigorously," he said.
The former authority official, Franklin Willis, who advised Iraqi ministries on aviation issues, said it soon became clear Custer Battles was not carrying out its obligations. But Willis said the body's contracting officials were stretched far too thin.
On at least two occasions, Willis said, the firm was paid $2 million from a vault in the authority's basement, served up in $100,000 plastic-wrapped bricks of cash.
"We called in Mike Battles and said, 'Bring a bag,' " Willis said.
Michael Battles and Scott K. Custer, both former U.S. Special Operations soldiers, founded the company in 2002. Battles ran unsuccessfully as the Republican candidate for Congress in Rhode Island that year.
After an interview with Custer in January 2004, agents from the Pentagon inspector general's office wrote, "Battles is very active in the Republican Party and speaks to individuals he knows at the White House almost daily, according to Custer." A White House spokesman had no immediate comment.
© 2005 The Washington Post Company
Did Americans loot millions, take kickbacks, receive bribes to give away $billions of Iraq's oil revenues, construction and U.S. Taxpayers' dollars in care of the U.S., to the Iraqi Coalition Provisional Authority?
R. S
_______________________________________________
Congress to hold hearings today Re: Iraq audit can't find billions /$8.8 Billion in Iraqi Funds Missing
http://democrats.senate.gov/dpc/ Democratic Policy Committee:
U.S. Said to Pay Iraq Contractors in Cash
U.S. Paid Iraq Contractors With Cash, Some >From Gunnysacks and Pickup Trucks, Ex-Official Says
By LARRY MARGASAK
The Associated Press
Feb. 13, 2005 - U.S. officials in postwar Iraq paid a contractor by stuffing $2 million worth of crisp bills into his gunnysack and routinely made cash payments around Baghdad from a pickup truck, a former official with the U.S. occupation government says.
Because the country lacked a functioning banking system, contractors and Iraqi ministry officials were paid with bills taken from a basement vault in one of Saddam Hussein's palaces that served as headquarters for the Coalition Provisional Authority, former CPA official Frank Willis said.
Officials from the CPA, which ruled Iraq from June 2003 to June 2004, would count the money when it left the vault, but nobody kept track of the cash after that, Willis said.
"In sum: inexperienced officials, fear of decision-making, lack of communications, minimal security, no banks, and lots of money to spread around. This chaos I have referred to as a 'Wild West,'" Willis said in testimony he prepared to give Monday before a panel of Democratic senators who want to spotlight the waste of U.S. funds in Iraq.
A senior official in the 1980s at the State and Transportation departments under then-President Ronald Reagan, Willis provided The Associated Press with a copy of his testimony and answered questions in an interview.
James Mitchell, spokesman for the special inspector general for Iraq reconstruction, told the AP that cash payments in Iraq were a problem when the occupation authority ran the country and they continue during the massive U.S.-funded reconstruction.
"There are no capabilities to electronically transfer funds," Mitchell said. "This complicates the financial management of reconstruction projects and complicates our ability to follow the money."
The Pentagon, which had oversight of the CPA, did not immediately comment in response to requests Friday and over the weekend. But the administrator of the former U.S. occupation agency, L. Paul Bremer III, in response to a recent federal audit criticizing the CPA, strongly defended the agency's financial practices.
Bremer said auditors mistakenly assumed that "Western-style budgeting and accounting procedures could be immediately and fully implemented in the midst of a war."
When the authority took over the country in 2003, Bremer said, there was no functioning Iraqi government and services were primitive or nonexistent. He said the U.S. strategy was "to transfer to the Iraqis as much responsibility as possible as quickly as possible, including responsibility for the Iraqi budget."
Iraq's economy was "dead in the water" and the priority "was to get the economy going," Bremer said.
Also in response to that audit, Pentagon spokesman Bryan Whitman had said, "We simply disagree with the audit's conclusion that the CPA provided less than adequate controls."
Willis served as a senior adviser on aviation and communications matters for the CPA during the last half of 2003 and said he was responsible for the operation of Baghdad's airport.
Describing the transfer of $2 million to one contractor's gunnysack, Willis said: "It was time for payment. We told them to come in and bring a bag." He said the money went to Custer Battles of Middletown, R.I., for providing airport security in Baghdad for civilian passengers.
Willis said a coalition driver would go around the Iraqi capital and disburse money from the a pickup truck formerly belonging to the grounded Iraqi Airways airline. The reason is because officials "wanted to meld into the environment," he said.
Willis' allegations follow by two weeks an inspector general's report that concluded the occupying authority transferred nearly $9 billion to Iraqi government ministries without any financial controls.
The money was designated for financing humanitarian needs, economic reconstruction, repair of facilities, disarmament and civil administration, but the authority had no way to verify that it went for those purposes, the audit said.
Sen. Byron Dorgan, head of the Democratic group that is holding Monday's hearing, said he arranged for Willis' testimony because majority Republicans have declined to investigate the suspected misuse of funds in Iraq.
"This isn't penny ante. Millions, perhaps billions of dollars have been wasted and pilfered," Dorgan, D-N.D., said in an interview ahead of the Senate Democratic Policy Committee's session.
Willis concluded that "decisions were made that shouldn't have been, contracts were made that were mistakes, and were poorly, if at all, supervised, money was spent that could have been saved, if we simply had the right numbers of people. ... I believe the 500 or so at CPA headquarters should have been 5,000."
On the Net:
The Democratic Policy Committee (DPC) is the policy and research arm of Senate Democrats. Established by an Act of Congress in 1947, the DPC serves as a centralized source of information for all Senate Democratic offices and helps promote Democratic policies through hearings, special events, publications, and graphics services.
The DPC is chaired by Senator Byron L. Dorgan (D-ND).
http://democrats.senate.gov/dpc/
Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Copyright © 2005 ABC News Internet Ventures
==============================================
An Oversight Hearing on Waste, Fraud and Abuse in U.S. Government Contracting in Iraq (2/14/05)
http://democrats.senate.gov/dpc/dpchearing.cfm?A=19
SENATOR DORGEN HOME PAGE:
http://dorgan.senate.gov/
washingtonpost.com
Lawmakers Told About Contract Abuse in Iraq
By Griff Witte
Washington Post Staff Writer
Tuesday, February 15, 2005; Page A03
http://www.washingtonpost.com/wp-dyn/articles/A24468-2005Feb14.html?nav%3Dhcmodule&sub=AR
A government contractor defrauded the Coalition Provisional Authority of tens of millions of dollars in Iraq reconstruction funds and the Bush administration has done little to try to recover the money, an attorney for two whistle-blowers told Democratic lawmakers yesterday.
The lawyer, Alan Grayson, represents two former employees who charged in a federal lawsuit that the security firm Custer Battles LLC of Fairfax was paid approximately $15 million to provide security for civilian flights at Baghdad International Airport, even though no planes flew during the contract term. Grayson said the firm received $100 million in contracts in 2003 and 2004, despite a thin track record and evidence the government was not getting its money's worth.
A former Coalition Provisional Authority official who briefly oversaw the airport security contract also spoke, depicting a temporary governing body awash with cash but lacking in the necessary controls to ensure that money generated from the sale of Iraqi oil actually went to rebuilding the country.
"I wish I could tell you that the Bush administration has done everything it could to detect and punish fraud in Iraq," Grayson said. "If I said that to you, though, I would be lying."
The Pentagon has suspended Custer Battles from receiving new contracts, but Grayson said the Justice Department declined last fall to help pursue the case, now pending in federal court in Alexandria.
Lawyers representing Custer Battles have denied the charges and have argued that the case should be dismissed because the money that was allegedly stolen belonged to Iraqis, not to Americans. Grayson said that argument has the potential to turn Iraq during the authority's administration of the country into "a fraud-free zone," with contractors not subject to Iraqi or American law.
Yesterday's appearances were organized by the Democratic Policy Committee. Its chairman, Sen. Byron L. Dorgan (D-N.D.), said the witnesses were called in response to a recent report by the inspector general for Iraqi reconstruction that concluded that the governing authority had inadequate controls over $8.8 billion in Iraqi funds it was supposed to oversee. Former administrator L. Paul Bremer has denied those allegations. Dorgan said Democrats had attempted to get Republican colleagues to hold hearings on the issue but were unsuccessful.
"There is a massive amount of waste, fraud and abuse going on here, and nobody seems to care very much," Dorgan said.
Rep. Thomas M. Davis III (R-Va.), chairman of the House Government Reform Committee, said in an interview that he found some of yesterday's allegations "disturbing." He said his committee has already held hearings on the use of reconstruction funds in Iraq and plans to hold more. "If there's something wrong, we will go after it vigorously," he said.
The former authority official, Franklin Willis, who advised Iraqi ministries on aviation issues, said it soon became clear Custer Battles was not carrying out its obligations. But Willis said the body's contracting officials were stretched far too thin.
On at least two occasions, Willis said, the firm was paid $2 million from a vault in the authority's basement, served up in $100,000 plastic-wrapped bricks of cash.
"We called in Mike Battles and said, 'Bring a bag,' " Willis said.
Michael Battles and Scott K. Custer, both former U.S. Special Operations soldiers, founded the company in 2002. Battles ran unsuccessfully as the Republican candidate for Congress in Rhode Island that year.
After an interview with Custer in January 2004, agents from the Pentagon inspector general's office wrote, "Battles is very active in the Republican Party and speaks to individuals he knows at the White House almost daily, according to Custer." A White House spokesman had no immediate comment.
© 2005 The Washington Post Company
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