A new audit of American financial practices in Iraq has uncovered irregularities including millions of reconstruction dollars stuffed casually into footlockers and filing cabinets, an American soldier in the Philippines who gambled away cash belonging to Iraq, and three Iraqis who plunged to their deaths in a rebuilt hospital elevator that had been improperly certified as safe.
The audit, released Tuesday by the office of the Special Inspector General for Iraq Reconstruction, expands on its previous findings of fraud, incompetence and confusion as the U.S. occupation poured money into training and rebuilding programs in 2003 and 2004.
The audit uncovers problems in an area that includes half the landmass in Iraq, with new findings in the southern and central provinces of Anbar, Karbala, Najaf, Wasit, Babil and Qadisiya.
The special inspector reports to the secretary of defense and the secretary of state.
Agents from the inspector general’s office found that the living and working quarters of American occupation officials were awash in shrink-wrapped stacks of $100 bills, colloquially known as “bricks.”
One official kept $2 million in a bathroom safe, another more than a half-million dollars in an unlocked footlocker. One contractor received more than $100,000 to completely refurbish an Olympic pool but only polished the pumps; even so, local American officials certified the work as completed.
More than 2,000 contracts, ranging in value from a few thousand dollars to more than a half-million – some $88 million in all – were examined by agents from the inspector general’s office. The report says that in some cases the agents found clear indications of potential fraud and that investigations into those cases are continuing.
Some of those cases are expected to intersect with the investigations of four Americans who have been arrested on bribery, theft, weapons and conspiracy charges for what federal prosecutors say was a scheme to steer reconstruction projects to an American contractor working out of the southern city of Hillah.
But much of the material in the latest audit is new, and the portrait it paints – of abandoned rebuilding projects, nonexistent paperwork and cash routinely taken from the main vault in Hillah without even a log to keep track of the transactions – is likely to raise major new questions about how the provisional authority did its business and accounted for huge expenditures of Iraqi and American money.