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When the controversial British Member of Parliament George
Galloway, in 2005, faced accusations from a US Senate Committee
that he had profited under the UN ‘Oil for Food Program’, he
shook stone-faced senators with these words:-
“Have a look at the real oil for food scandal. Have a look at
the 14 months you were in charge of Baghdad; the first 14 months
when US$ 8.8 billion went missing on your watch.”
 
Mr. Galloway’s indictment of the invasion may have fallen on
deaf ears but, in June a BBC Panorama investigation found his
claim to be understated. The extent of what’s been described as
the greatest heist of our time was much greater than even
Galloway imagined. It wasn’t US$ 8.8 that disappeared from Iraq
without trace but a whopping US$ 23 billion!!!
The BBC’s Jane Corbin gives us an inkling of what happened to
this massive sum, roughly equivalent to Lebanon’s entire annual
GDP.
She begins with the story of war profiteers Scott Custer and
Mike Battles, who were Republican ex-army officers. Scott is
thought to be a descendent of General Custer of ‘last stand’
fame while Battles had run for Congress and was formerly in the
employ of Fox News.
The pair decided they would make their fortune in Iraq and
founded a security company called Custer Battles. They arrived
in Iraq practically penniless; Battles had to borrow the fare
from Jordan to Baghdad. But once there, thanks to a special
permission from a White House committee, they were able to go
around knocking on ‘Green Zone’ doors as civilians. Before long,
they grabbed a lucrative US$ 100 million contract to provide
security for civilian aircraft in and out of Baghdad
International Airport.
These two were to be paid in cash at the beginning of every
month with the initial payment being US 2 million in US$ 100
notes stacked in bricks of US$ 100,000 each. But even this mega
sum wasn’t enough to satiate their greed. The BBC alleges that
they came across disused Iraqi Airways forklifts painted in the
airline green and white livery, which they repainted and leased
to the US government for US$ 20,000 per month each.
Former FBI man Bob Isakson was appointed one of their
subcontractors and before long they tried to interest him in a
scam. Isakson says they asked him to help them form shell
companies in the Cayman Islands through which their expenses
would be funnelled and doubled. Isakson refused pointing out
that such a scheme was illegal. He was soon put out of the
company at gunpoint and told to make his own way home without
his equipment or his cash investment.
This chicanery was finally exposed when Custer and Battles
forgot a briefcase in the office of CPA officials that contained
a spreadsheet detailing their fraudulent invoices. They had been
summoned there to explain why they ferried Iraq’s new currency
around in old trucks with failing brakes that they had picked up
cheap at the local market. The CPA asserted lives were put in
danger when trucks containing as much as US$ 15 million worth of
Iraq’s currency were broken down at the side of the road.
The evidence against Custer Battles was glaring but the Bush
administration refused to take the pair to court and tried to
block a lawsuit filed by whistleblowers under the pretext Custer
Battles couldn’t have defrauded the US government as the CPA was
a separate entity. Then lawsuit proceeded anyway with the duo
arguing everything they did was with the government’s
permission. In the end, a jury found them guilty of defrauding
the taxpayer.
The Custer Battles fiasco was just the tip of the iceberg.
Anti-war Democrat Alan Grayson is a lawyer who represents
whistle blowers “with hair-raising stories of fraud and
mismanagement”. However, he says the government’s lawyers have
succeeded in putting gagging orders on 70 cases involving some
of the biggest names in corporate America. Some of the
whistleblowers who instituted private cases cannot be gagged.
One of those whistleblowers was Barrington Godfrey an auditor
charged with auditing a well-known company that had a contract
to feed US troops. “I was told don’t worry about the cost or
whether it’s competitive” because in Iraq most contracts were
cost plus, meaning the more money that flows, the more money the
company makes, he said.
But when Barrington did a headcount at a military base in Mosul
and compared this with the company’s invoices, he was puzzled.
In fact, the company was charging for thousands of meals it
wasn’t actually serving to troops to the tune of US$ 10 – 15
million in just the few months that Godfrey was in country.
It was also found that the company was running empty trucks
across Iraq on the principal the more they rolled, the more
money it made. A Pentagon audit eventually discovered the
company’s parent had overcharged US$ 108 million for supplying
and trucking fuel.
The documentary also highlights the sorry saga of US
construction giant Parsons that was contracted to build 150
clinics in Iraq for the sum of US$ 186 million, and only
completed six.
And it highlights a company called Northstar set up by
Californian kitchen designers Mr. and Mrs. Thomas Howell and
registered to their private home near San Diego. Northstar was
conceived to oversee the circulation of Iraqi currency packed
onto pallets. The couple were not certified accountants as
required under the contract yet they were chosen without
competing bids and nobody knows why.
But it wasn’t only US individuals and companies that had their
hands in the cookie jar. Panorama also talks about an Iraqi
small time businessman with a house in Acton, London, who was
often on the Dole. This individual was handpicked to become
Defence Minister even without relevant experience and he wasted
no time in bringing in his cronies.
Together they used the ministry’s funds to buy aircraft,
ambulances, armoured personnel carriers and ammunition from
Poland, which was either faulty on arrival or never turned up.
For this they paid bargain basement prices while claiming for
top notch equipment. Naturally, they pocketed the difference,
said to be in the region of US$ 1.2 billion. Today, there is an
Interpol warrant out for that person’s arrest.
Until now, nobody has gone to jail for these crimes of
mismanagement, fraud and theft. Rep. Henry Waxman, who heads a
committee investigating these allegations, says:
“The Iraqi people don’t have electricity even in Baghdad most of
the time. They don’t have safe drinking water but the money that
has gone into waste, fraud and abuse of these contracts is just
so outrageous, so egregious, that it may well turn out to be the
largest war profiteering in history”.
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