Tuesday, February 17, 2009

Your tax dollars in Iraq: wads of cash stuffed in pizza boxes

Last week I reported on the 221,000 weapons "unaccounted for" in Afghanistan.

Now, the latest estimate is that $125 Billion (enough to buy me a strong government interest in two or three major banks) sent to Iraq for rebuilding has just sort of ... disappeared.

From The Raw Story:

The US Special Inspector General for Iraq Reconstruction (SIGIR), the Army's criminal Investigation Command and the Justice Department are investigating US soldiers and officials in the alleged misuse of a portion of the $125 billion initially sent to Iraq for reconstruction shortly after the fall of Saddam....

"In one case, auditors working for SIGIR discovered that $57.8m was sent in 'pallet upon pallet of hundred-dollar bills' to the US comptroller for south-central Iraq, Robert J Stein Jr, who had himself photographed standing with the mound of money," wrote Cockburn. "He is among the few US officials who were in Iraq to be convicted of fraud and money-laundering.

"Despite the vast sums expended on rebuilding by the US since 2003, there have been no cranes visible on the Baghdad skyline except those at work building a new US embassy and others rusting beside a half-built giant mosque that Saddam was constructing when he was overthrown."

The SIGIR auditor's report, entitled "Hard Lessons," was published in early February.

"'Hard Lessons,' a draft of which was leaked to the news media in December, concludes that the U.S. reconstruction effort in Iraq was a failure, largely because there was no overall strategy behind it," reported the Washington Post. "Goals shifted from 'liberation' and an early military exit to massive, ill-conceived and expensive building projects under the Coalition Provisional Authority of 2003 and 2004. Many of those projects -- over budget, poorly executed or, often, barely begun -- were abandoned as security worsened.

"In a preface to the 456-page book, Bowen writes that he knew the reconstruction was in trouble when he first visited Iraq in January 2004 and saw duffel bags full of cash being carried out of the Republican Palace, which housed the U.S. occupation government."

"As part of the inquiry, the authorities are taking a fresh look at information given to them by Dale Stoffel, an American arms dealer and contractor who was killed in Iraq in late 2004," reported the International Herald Tribune on Sunday.

"Before he was shot on a road north of Baghdad, Stoffel drew a portrait worthy of a pulp crime novel: tens of thousands of dollars stuffed into pizza boxes and delivered surreptitiously to the American contracting offices in Baghdad, and payoffs made in paper bags that were scattered in 'dead drops' around the Green Zone, the nerve center of the United States government's presence in Iraq, two senior federal officials said."

There are several reasons beyond the immediate, knee-herk reaction about those thieving GOPers to be outraged about this story, but the main one is a purely libertarian point:

The overwhelming mass of government employees and policies will not change under a new administration--it never does. The bureaucracy continues, virtually unabated, pretty much regardless of who is in office. And those people have established a track record of dealing with the public's money and exercising regulatory oversight in just as abyssmal a fashion as the supposedly unregulated financial markets.

The behavior of large, bureaucratic organizations like the Federal government or multinational corporations is far more similar than different.

Which raises the question: while the Feds are supposedly going to take a larger and larger role in regulating the market, who is regulating the Feds?


Tyler Nixon said...

Thanks for saving me having to write about this, Steve. I was still wading through the details over the weekend.

The moral of the story is that when you combine human nature with unaccountable bureaucratic black holes, and throw in billions of dollars created out of thin air, no one should be surprised when that is exactly what these billions disappear into.

a most peculiar nature said...

I find it frustrating that people tend to automatically blame the inane growth of government over the past 8 years to Bush. Yes, he was in charge and he should have stopped it.

But I continued to maintain, similar to what Tyler says, that bureaucracies take on a life of their own no matter who the party in power is. Entrenched government bureacracy has more power than the President, the Congress, and definitely the average voter (have you dealt with a government agency lately?).

Until we apply sound management principles to government (which I don't believe will ever happen), I think we are doomed.

Just wait 'till the porkulus starts trickling down. Then, we'll see some real sh-t.