US says $7bn of Iraqi cash may have been stolen

Billions of dollars of funds earmarked for rebuilding war-torn country missing in what may be record theft
US says $7bn of Iraqi cash may have been stolen
Stuart Bowen, the US special inspector-general for Iraq reconstruction
By Joanne Bladd
Thu 16 Jun 2011 11:28 AM

Almost $7bn of Iraqi oil funds earmarked for the war-torn country’s reconstruction may have been stolen, according to a US official investigation fraud in country.

The missing cash may be “the largest theft of funds in national history”, Stuart Bowen, the US special inspector-general for Iraq reconstruction, told the Los Angeles Times.

The cash, generated from Iraqi oil revenues and assets seized during the 2003 US-led invasion, was part of a development fund set up by the Federal Bank of New York in the absence of an Iraqi banking system.

Some $6.6bn of funds were airlifted aboard C-130 military cargo planes by the Bush administration in 2003-2004 in shrink-wrapped bricks, as part of a $20bn reconstruction package.

According to the Financial Times, the money was stored at US military bases and in the basement of one of Saddam’s former palaces, and used to fund the interim government.

But almost half of the total funds - $6.6bn – disappeared.

Bowen said poor regulation of the system was to blame for the missing money.

"The system was too loose and unregulated in 2003 and 2004," he said.

 The investigation and the Pentagon had previously thought the discrepancy was the result of sloppy accounting, but now allow the money may have been stolen.

The Los Angeles Times reported that some officials in Baghdad have threatened to take the US government to court to reclaim the missing cash, which primarily came from Iraqi oil sales.

Mr Bowen did not speculate on who he believed may have made off with the loot.

"But this money was delivered to Iraqi control, and we have in the past had a number of cases reported to us about interim ministers who did steal," he said.

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