by Emad Mekay
U.S. Treasury Department says hundreds of millions of dollars in seized Iraqi assets previously unaccounted for by the U.S.-led occupying force in Iraq were used to pay the country's civil servants, hire a police force and buy security equipment.
But critics say the U.S. authority should have publicized how it is spending the money long before various groups raised questions of transparency, and they charge that Washington is still using the seized assets for the benefit of U.S. corporations without first consulting the Iraqis.
Officials from Treasury, the U.S. agency pushing Iraq to privatize its economy and for confiscating billions of dollars in Iraqi assets worldwide, was responding to accusations that the Coalition Provisional Authority (CPA), the U.S. agency that rules Iraq, had not accounted for four billion dollars of seized money.
British charity Christian Aid last week accused the CPA of lacking transparency, saying it did not publicly account for the four billion dollars that came from seized Iraqi assets in the United States and from oil revenues generated since May.
Some United Nations Security Council diplomats had previously criticized the CPA for cloaking in secrecy the Development Fund for Iraq (DFI) -- authorized by Security Council resolution 1483 last May to safeguard the oil revenues and other money earmarked for reconstruction.
The CPA was also faulted for trying to make a bookkeeper of an international advisory and monitoring board designated by the Security Council to monitor the proceeds of Iraq's oil sales.
The charges prompted the authority on Monday to publish a skeleton budget for the DFI on its website in which it said it had received only three billion dollars for the fund.
Of that money, one billion dollars was left over from the UN's oil-for-food program, $1.4 billion came from oil revenues since May, $300 million from Iraqi assets overseas and, most controversially, only $200 million from a U.S. Treasury "special account," said the CPA.
The special account is where Treasury had placed some $1.7 billion in Iraqi assets it had seized in the United States last year. The money was held in U.S. banks after Saddam Hussein's invasion of neighboring oil-rich Kuwait in 1990.
Accounting for only $200 million from the special account leaves $1.5 billion in a financial black hole, Christian Aid complained on Tuesday.
"There's less things on that published DFI budget than there are on my bank statements," said Dominic Nutt of Christian Aid in a phone interview from London.
"We are pleased that they've acknowledged there's a need to publish the figures ... But this doesn't fulfil the need by any stretch of the imagination. I think that the Treasury special fund is where there are no accounts at all ... There's 1.5 billion dollars worth of that fund alone which is not accounted for at all," he said.
The group again called on the department and the CPA to come out in the open with clear figures.
"You kind of wonder 'what's the problem guys? You are mandated by the UN to spend this money and account for it ... so why are you afraid to sort of publish the figures'?"
But a Treasury official told IPS that, with the exception of a little more than 100 million dollars that was used to pay out judgments against the former Iraqi regime under U.S. law, all of the $1.5 billion in question were actually returned to Iraq after the war ended in April.
The money, he said, is now part of the overall CPA budget and remains outside of the DFI.
"The money is not missing at all," said Taylor Griffin of Treasury's public affairs office.
"It was being used before the DFI even existed so it never went into the DFI. The money is in Iraqi hands and is pretty much spent."
"You can watch it on television if you want to know what happened to that money... It's been in the hands of civil servants and pensioners and in the hands of police forces in the form of radios and communication equipment and in the coffers of the Iraqi ministries."
Griffin said that more than one billion dollars in Iraqi funds placed overseas remained there because those countries are yet to decide how and when they want to return the money.
"Security Council resolutions require them to return the money to the DFI. But a lot of countries haven't returned it. Maybe the critics think that we have that money, but we do not. The U.S. seized money, I think, that's been pretty clear," Griffin added.
Christian Aid said the Bush administration should provide more detailed accounts of how it is spending Iraqi money as it continues to administer the country's revenues.
"If now under pressure from a number of sources, including ourselves, the accounts are becoming more transparent and they are now starting to tell us where this money's gone, that's good," said John Davison of Christian Aid on Wednesday. "That was the idea."
Groups critical of the lack of transparency in the CPA's spending have been particularly angry that the authority is using Iraqi money to pay for questionable contracts -- some awarded without a public bidding process -- with U.S. companies.
Davison said the online CPA budgets do not detail where exactly the money was spent, on which contracts or with which companies.
Washington has mostly restricted the main lucrative reconstruction contracts in Iraq to gigantic U.S. companies close to Bush and Vice President Cheney look ready to lock in profitable contracts, fuelling accusations that the Bush administration was seeking to benefit a select few U.S. companies rather than find the best, and possibly the cheapest, options to help the Iraqi people rebuild.
"The issue is that there's no transparency or limited transparency for the use of Iraqi funds, predominantly oil revenue but also for Iraqi seized assets," said Davison. "This situation will continue as more and more oil revenues are generated."
October 30, 2003 (http://www.albionmonitor.net) All Rights Reserved. Contact email@example.com for permission to use in any format.
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