So this is how the US government does business!
Cash from the New York Federal Reserve is loaded on to C-130s and shipped to Bagdad — to the tune of $12 billion since the start of the US occupation of Iraq in March 2003.
The money originally came from Iraqi oil sales under Saddam and was held in trust under the rules of the UN oil sales program. Now it is handed out to Iraqi and US government contractors in the form of cash. Or “candy,” as Rep. Dennis Kucinich (D-OH) puts it.
In the end, $8.8 billion can no longer be accounted for. And the Pentagon acknowledges Halliburton “requested that information in the audits be withheld” from the Congressional subpoena, “including allegations that the firm had spent too much money in purchasing fuel.”
“By law, contractors can request that the government withhold any proprietary information from release.”
Interesting law, when corporations can decide information about their public contracts is proprietary.
But anyway, it’s all just “pocket change,” says an e-mail circulating at the Fed.
(See article: “Worries Raised on Handling of Funds in Iraq,” Los Angeles Times, June 22, 2005.)
And who can argue with that?
* * *
Recall Donald Rumsfeld chose the date of September 10, 2001 to announce that a Pentagon audit, ordered by Undersecretary Dov Zakheim and conducted by a Halliburton subsidiary, had discovered that the Defense Department can no longer account for $2.3 trillion in past transactions. (Note: You are not hallucinating: two point three trillion dollars, or the equivalent of six annual Pentagon budgets.)
This matter was presented by CBS as a question of waste and incompetence, as though it were possible to lose $2.3 trillion under a couch somewhere. (It had earlier been covered on PBS in February 2001. Interestingly, the Bush Administration did not seek to place any blame on the Clinton administration for the missing assets, which should prompt questions about how much of the shortfall was invented in the course of the audit itself.)
One day after Rumsfeld’s admission of Sept. 10, this mother-of-all-scandals in the making disappeared from the corporate media’s vision. For good.
The comptroller who arrived at the figure, Dov Zakheim, was a primary author of the infamous Project for a New American Century manifesto of September 2000, “Rebuilding America’s Defenses.” This detailed a manic plan for US military domination of the world and re-ordering of the Middle East, observing that this process might require a “new Pearl Harbor” before Americans were willing to pay the costs.
And what was Zakheim’s explanation for the missing 2.3 trillion? His testimony to the House Budget Committee (July 11, 2002) begins as follows:
MR. ZAKHEIM: First of all, I should say that very often, although the numbers seem large, it’s not because we really don’t know what happened with the transactions. The problem has tended to be that we just didn’t record them properly…
Right. Money never disappears off the face of the earth. It always ends up somewhere. It’s just the destinations sometimes are not recorded properly.
The pattern of sweetheart deals and dubious accounting is depressingly familiar, but it is now pushing the entire system to bankruptcy and achieving a scale that would be impossible to hide, were it not for the distraction of permanent crisis. This scale of plunder also cannot function unless the key political front men get their cut.
Moving back down to a more retail level, this 2004 piece reveals how yet another lesser-known member of the Bush clan reaped profits from the “War on Terror” and the lies about “weapons of mass destruction.”
Meet William Bush, uncle to George Jr.
The following was published March 5, 2004 by counterpunch.org.
How the WMD Scam Put Money in the Bush Family’s Pockets
By CHRIS FLOYD
(Original at http://www.counterpunch.org/floyd03052004.html. Archived here under fair use provisions, see below.)
Why did George W. Bush insist–with such fanatical certainty, despite the well-established, clearly-stated doubts of his own intelligence services–that Saddam Hussein was hoarding a vast arsenal of weapons of mass destruction? Why the insistence on this pathological disassociation from reality, which led directly to the death of thousands of innocent people? Why did he tell such lies, such cynical lies, such horrible lies, lies dripping blood, lies breeding more lies like rats on a plague ship?
That’s easy–because his family was making money from it.
We’re not talking here of the family’s well-known association with the Carlyle Group, the world-bestriding “private equity” firm whose massive war-machine holdings have been so greatly engorged by Bush’s sack of Baghdad. True, Carlyle has long been a profitable Bushist perch: Papa George was an eager bagman for the firm, cruising the globe with his plutocratic partners–like the bin Ladens–for insider contracts, secret buyouts and lucrative “privatizations” of public services. Even the L’il Pretzel himself was parked on the board of one of Carlyle’s companies when he was at loose ends between scamming the shareholders of Harken and bamboozling the voters of Texas.
But last year, Papa retired from the firm, heading off into the sunset to wallow in the government swag that Junior had pumped Carlyle’s way–$2.1 billion in 2003 alone. While he doubtless still has “interests” in a number of Carlyle’s shady deals, the old man is through with the higher hustlerdom. No, today we’re dealing with Pop’s brother, William, uncle of the current president.
William Bush is a director of Engineered Support Systems Inc. (ESSI), a supplier of high-tech military goods to–well, to the highest bidder. Just last year they sold $13 million worth of advanced radar gear to upgrade Communist China’s fleet of fighter jets–you know, the kind that force down U.S. spy planes with such aplomb. This is just par for the family course, however; William’s brother, Prescott Jr., is head of the America-China Chamber of Commerce, while Pretzel’s brother Neil is in bed with the son of former Communist chieftain Jiang Zemin.
But helping arm a dictatorial regime that tyrannizes its own people, invades its neighbors and actually possesses large stockpiles of WMD is just a sideline for Uncle Bill. (Although, again, it’s a family tradition–after all, it’s what Papa George did for years with his special little friend, Saddam.) Mostly, Bill’s ESSI does boffo box office with nephew Georgie’s Pentagon and that new family investment opportunity, the Department of Homeland Security. And this is where those phantom Iraqi WMDs–so maniacally hyped by Junior–come in, investigator Margie Burns reports in the Prince George’s Journal.
Among its many wares for the “warfighter” (the firm follows current Pentagon usage in replacing the ancient and honorable name of “soldier” with this nerdy adolescent jargon), ESSI markets a “Chemical Biological Protected Shelter System” unit–a mobile shed that can provide a non-contaminated area for command centers or field hospitals during a WMD attack. In the very first week of George’s war, with the TV generals warning every hour of impending bioterror doom hurtling toward the troops, Uncle Bill’s boys raked in $19 million for a shipment of CBP units, an ESSI press release reports. This was on top of $44 million worth of the anti-WMD units ordered during Pretzel’s panic-mongering before the war.
Now what would have happened to Uncle Bill’s bottom line if George had told the truth?
ESSI is also profiting from panic-mongering on the home front. Last summer, while Georgie bounced the “threat level” up and down, ESSI bagged a fat Homeland Security contract to begin developing a fleet of mobile emergency communication centers for use in the event of a biochemical terrorist attack by the CIA’s old Afghan jihad employees–now better known as al Qaeda. As long as George keeps those colored lights going–and the ex-CIA gang do their duty with the occasional bit of ooga-booga here and there — Uncle Bill will keep gulping that “threat level” gravy.
Overall, ESSI slurped up an estimated $380 million from the Pentagon alone last year, not counting the China deal and an extra $26 million dollop from Saudi Arabia–that other famous bastion of freedom and democracy–to service its Royal Air Force.
And so it goes, on and on, the great wheel of grease. Bush’s bellicose policies–obviously based on the Scriptures: “There shall be war, and rumors of war”–foment a never-ending cycle of blowback and revenge, of fear, instability and global militarization. (Indeed, cosmic militarization: a whole armada of new “space weapons” programs are now in preparation, Wired reports.) But this is the kind of moral chaos the Bush-Walker clan has always profited from, as Kevin Phillips shows in his devastating new history, American Dynasty.
In revolutionary Russia, the Bush-Walkers did business with Reds and Whites; then they helped arm the Nazis and the Allies. His descendants arm China and threaten it–as always, making money both ways. The nature of the customer doesn’t matter: king, communist, nazi, sheikh, warlord, poobah, it all comes down to this: are they open for business?
So did George Walker Bush attack Iraq just so his uncle could shift a little product? No. But for generations, he and his family and their silky ilk–the higher hustlers, in search of easy money–have used bloodshed, hatred and deceit to turn public policy, and public treasuries, into engines of private gain. War profiteering is inevitable, inescapable–even laudable–in the waking nightmare of corruption and death they’ve helped foist upon the world.
Chris Floyd is a columnist for the Moscow Times and a regular contributor to CounterPunch. His CounterPunch piece on Rumsfeld’s plan to provoke terrorist attacks came in at Number 4 on Project Censored’s final tally of the Most Censored stories of 2002. He can be reached at: firstname.lastname@example.org
© Copyright 2004 Chris Floyd / Counterpunch.org
The following was published on Wednesday, June 22, 2005 by the Los Angeles Times.
Worries Raised on Handling of Funds in Iraq
A hearing details the transfer of $2.4 billion in $100 bills to Baghdad in 2004 and the billions more sent before. U.S. oversight is questioned.
by T. Christian Miller
(Original at http://www.latimes.com/news/printedition/asection/la-na-cash22jun22,1,1759535,print.story?coll=la-news-a_section. Archived here under fair use provisions, see below.)
WASHINGTON ? It weighed 28 tons and took up as much room as 74 washing machines. It was $2.4 billion in $100 bills, and Baghdad needed it ASAP.
The initial request from U.S. officials in charge of Iraq required the Federal Reserve Bank of New York to decide whether it could open its vault on a Sunday, a day banks aren’t usually open.
“Just when you think you’ve seen it all,” read one e-mail from an exasperated Fed official.
“Pocket change,” said another e-mail.
Then, when the shipment date changed, officials had to scramble to line up U.S. Air Force C-130 cargo planes to hold the money. They did, and the $2,401,600,000 was delivered to Baghdad on June 22, 2004.
It was the largest one-time cash transfer in the history of the New York Fed.
Disclosure of the frantic transfer in the final days of U.S. control over Iraq came during a daylong hearing Tuesday that indicated growing worry from Congress over U.S. oversight of spending in Iraq.
Both Republicans and Democrats appeared taken aback by the volume of cash sent to Iraq: nearly $12 billion over the course of the U.S. occupation from March 2003 to June 2004, said a report by Rep. Henry A. Waxman (D-Los Angeles), who had reviewed e-mails and documents subpoenaed from the bank.
The cash ? a total of 363 tons, generated mostly from oil revenues ? was Iraqi funds that had been held in trust by the Federal Reserve under the terms of a United Nations resolution.
The June 2004 money transfer was needed to run the country as the interim Iraqi government took over from the U.S.-led Coalition Provisional Authority, officials said.
Rep. Christopher Shays ( R-Conn.), chairman of the House national security subcommittee, criticized the Pentagon’s handling of the money known as the Development Fund for Iraq.
“It’s very clear that ? we didn’t have systems in place to account” for the funds, he said.
“It doesn’t mean they weren’t spent well, but, given my sense of human temptation, I suspect some of it was, frankly, taken,” Shays said.?
“I can’t believe that all this cash just floating around all went perfectly to the right place.”
Those concerns were echoed by Democrats on the panel, who criticized Halliburton Co., the oil services firm once run by Vice President Dick Cheney.?
Democrats repeatedly have questioned the use of the Iraqi funds to pay Halliburton, pointing to Pentagon audits that found the company might have overcharged as much as $200 million for fuel and other purchases.
And lawmakers from both parties criticized the Pentagon for failing to turn over complete copies of the audits to a U.N. board that monitored the Iraqi funds.
There was “hardly any accountability,” Rep. Dennis J. Kucinich (D-Ohio) said.?
“In effect, we were handing out $100 bills on contracts like candy.”
Defense Department officials at the hearing acknowledged weaknesses in the system but said that much of the money had been handed over to Iraqi officials, who then spent it on governmental expenses, such as worker salaries.?
Prior audits by Stuart W. Bowen Jr., the special inspector general for Iraq reconstruction, found that more than $8.8 billion in such funds could not be properly accounted for.
“There were observable results of what that money was spent on,” said Joseph Benkert, deputy director for the Pentagon’s Iraq reconstruction office.?
“Salaries for hundreds of thousands of government employees were paid. We know for a fact that the government workers were paid. Government ministries operated. We know that they operated. Various projects were done on behalf of those ministers, and we know what those projects are.”
Defense officials defended their deletion of information from audits related to Halliburton’s performance that had been turned over to the International Advisory and Monitoring Board, appointed by the U.N. to oversee the spending of Iraqi funds.
They acknowledged that Halliburton had requested that information in the audits be withheld, including allegations that the firm had spent too much money in purchasing fuel. By law, contractors can request that the government withhold any proprietary information from release.
Halliburton said that KBR, a subsidiary firm, had requested the removal of information considered sensitive, but that final approval for the redactions rested with the government.
“Any attempt to criticize KBR for its role in this perfectly normal and legal part of the contracting process is unfounded,” Cathy Mann, a Halliburton spokeswoman, said in an e-mail. “Our requests for redaction were just that ? requests. These redactions were ultimately reviewed and evaluated by [the government], and some were accepted and some were overruled.”
Bowen, who testified at the hearing, said investigations were continuing into the spending of Iraqi funds.
He said that at least three cases of possible fraud involving the funds were recently referred for criminal prosecution to the Justice Department. The cases stemmed from spending by U.S. officials at an outpost in Hillah, Iraq, south of Baghdad.?
“This was an enormously challenging situation,” Bowen said.?
“Inevitably in such an environment, with so much cash, and such an enormous task and limited resources ? there were inefficiencies, and we found them.”?
(c) Copyright 2005 Los Angeles Times?
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