Corruption In Iraq & World

Iraq to File Lawsuits to Recover Oil for Food Embezzled funds

Iraq only recently joined the UN Convention on Corruption. "Signing up" means it is easier to track down, and prosecute corrupt officials in another country (if they also have signed the Convention).

Now, it seems Iraq is starting to move after all the folks who paid bribes or didn't provide what they agreed to for payments made from Saddam via the Oil for Food program.

We will watch this since the Volcker report named over 2,000 people or firms who paid bribes to Saddams people for Oil for Food sanctioned items. A famous one is the bad wheat that Australia's Wheat Board sent to Iraq after paying bribes.

Of course, the most interesting thing is to see what happens to recovered funds - will they just go into someone else's pocket? It is very possible, knowing the poor quality of Iraq's accounting systems and the unwillingness of the Finance Ministry to even use a new automated budget system installed by USAID contractors.
vj

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from the Los Angeles Times

Iraq to file oil-for-food lawsuit in U.S. courts

The legal action will target alleged fraud in the U.N. program under the Hussein regime.

By Doug Smith, Los Angeles Times Staff Writer
10:23 AM PDT, June 29, 2008

BAGHDAD -- The Iraqi government announced today that it intends to file suit in United States courts to recover funds allegedly embezzled from the United Nations oil-for-food program during Saddam Hussein's rule.

A statement by government spokesman Ali Dabbagh said the lawsuits would target companies and individuals that conspired to corrupt the U.N. program.

Dabbagh did not name any companies or say how much the government hoped to gain by going to court, but his statement cited the findings of a 2005 U.N. inquiry into the program.

That investigation, headed by former Federal Reserve Chairman Paul A. Volcker, concluded that 2,400 companies and individuals participated in fraud that included $1.8 billion in kickbacks to Hussein.

After the inquiry several of those named were prosecuted in the U.S. and Europe, resulting in prison sentences for two Texas oilmen and restitution from several companies totaling 10 of millions of dollars.

But little has been done to recover larger sums from those named in the Volcker report in countries including Russia, China, Yemen, Egypt, Vietnam, Malaysia and the United Arab Emirates.

The oil-for-food program was intended to allow humanitarian goods to reach Iraq while the country was under international sanctions following its invasion of Kuwait, which precipitated the 1991 Persian Gulf War.

From 1996 through the U.S.-led invasion in 2003, the Iraqi government was allowed to sell oil in exchange for food, medical supplies and essential mechanical equipment.

The Volcker report found that Hussein insisted that kickbacks be paid to secure oil contracts.

Wall St. Journal Update on Iraq Anti-Corruption Agency CPI

I will comment later - gotta go somewhere...

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from THIS WSJ page

Iraq's Anticorruption Efforts Hit Some Roadblocks
Conflicting Edicts, Poorly Trained Staff Hinder Key Agency
By GINA CHON
June 28, 2008; Page A5

BAGHDAD -- Iraq's anticorruption agency -- responsible for investigating allegations of stealing public funds and other malfeasance by government officials -- is continuing to stumble despite efforts to revive it.

Fighting corruption is key to rebuilding Iraq, both U.S. and Iraqi officials said, as the country turns its focus from security to providing basic services and promoting economic development. But the agency in charge of those efforts has been stymied, because of conflicting government directives, inadequately trained workers and other hurdles.

[Photo]
Associated Press
Former Defense Minister Hazem Shalaan (second from left) faced charges, but fled Iraq.

Last year, the agency lost its boss, Judge Rahdi Hamza al-Rahdi, who defected to the U.S., and work ground to a halt. Then came a 20% drop in the commission's active caseload, as many staff members became afraid and demoralized after losing Mr. Rahdi, whom they saw as their protector and advocate.

Other roadblocks arose. Prime Minister Nouri al-Maliki had issued a directive allowing ministries to interfere with the work of the anticorruption agency, undermining its independence and authority. This led to a number of cases getting frozen and staff becoming more demoralized.

During its most active period, from 2004, when the organization was created by the Coalition Provisional Authority, to 2007, the commission had launched 3,000 investigations. About 100 cases went to court and resulted in convictions; the rest couldn't be fully processed because of lack of evidence.

Some of the cases included one involving former Defense Minister Hazem Shalaan, who was accused of embezzling $1 billion in military funds that had been allocated for buying weapons and other equipment. He has fled the country, and the case was dropped.

There have been some encouraging signs, such as Mr. Maliki's 18-point plan to fight corruption announced in January. A U.S. official in Baghdad said it remains to be seen whether the plan is implemented, but the government's move to create a program is a step forward compared with the past, when security concerns trumped anticorruption efforts.

"If the commission didn't exist, there would be even more corruption, and government officials would be stealing even more money than they already do," Mr. Rahdi said in a recent interview from his home in Virginia.

Iraq has ratified the United Nations Convention Against Corruption, and Mr. Maliki highlighted the importance of fighting corruption during a meeting of donor countries and the U.N. in May. A government spokesman reiterates that tackling corruption is a priority.

But U.S. officials and members of the commission said that isn't enough. Last year, the commission's work became hamstrung by several government directives. One order allows ministers to block the prosecution of officials in their relevant ministry. Mr. Maliki's office also issued a letter last year saying the agency, the Commission on Public Integrity, needed to get his consent before it forwarded any cases to the courts that involved the president, prime minister, and past or current ministers.

U.S. officials tried to persuade the Iraqi government to cancel the directives but were unsuccessful, the U.S. official said.

The commission's work has been criticized by many top government officials, who accuse the agency of being overzealous. If the agency were successful, it would be able to openly hold government officials accountable for corruption, but this hasn't been the case. The former head of the agency, Mr. Rahdi, received numerous threats because he criticized Mr. Maliki's government for rampant corruption. Eventually, along with the commission's head of security and chief investigator, he fled to the U.S. seeking asylum.

The commission also has had quick turnover of chiefs within six months. Currently, Judge Rahim al-Ugaili has been appointed as interim chief. Some commission staff members said he has good intentions but isn't strong enough to withstand the pressure.

"We are already risking our lives by working on these cases, but no one seems to want to help us," said one commission employee, who has received death threats and didn't want to be named.

Mr. Ugaili said the commission is trying to rebuild itself, but a problem is the lack of qualified staff. Of the commission's 1,285 employees, most have an elementary- or high-school education. He said they are receiving fewer tips than before, a sign the public has lost faith in the agency's ability to fight corruption.

Commission staff also said government obstruction continues to hinder progress on certain cases. An investigation into whether Defense Ministry officials received a bribe for a $114 million contract to buy batons and riot shields has stalled. The Defense Ministry said it won't provide any documents related to weapons purchases or other contracts, according to a document the ministry sent to the anticorruption commission.

A ministry spokesman recently defended the contract, saying the Iraqi military needs all kinds of equipment and it has the right to keep contracts to itself because it is sensitive information.

Meanwhile, commission members and others working on anticorruption efforts continue to face threats. In the past month, two deputy inspector generals have been slain and an auditor at the Ministry of Trade has been attacked. A total of 35 commission staff members have been killed, and that doesn't count staff who have been kidnapped or family members who have been killed.

"The U.S. and the Iraqi government are spending billions of dollars to rebuild Iraq, but where is that money going?" a commission employee said. "We want to tell people what is really going on, but it's useless now."

Write to Gina Chon at gina.chon@wsj.com

Wall St. Journal Columnist on Evils of Outsourcing in Iraq and Elsewhere

This opinion article provides an interesting perspective.

However, the "contractors" I saw in Iraq were hard working "subject matter experts" and they stayed 12 or more months. In contrast, Air Force officers and enlisted were there only 3 months, and Navy for 6-months, which really reduced efficiencies. And, most contractors had higher level technical skills than some career Federal employees. Outsourcing isn't bad if you have GOOD program managers to provide oversight.

The columnist mentions that Blackwater is doing the work of the Marines. The Marines I saw were all about 18-20 years old, and the Blackwater people were from Delta Force, etc. and probably had 10-20 years of experience. Even now, the State Dept. still uses Blackwater because they are effective and use the cream of the crop. Later, however, State renegotiated some other security contracts, and younger, less experienced "security" people were used and they made me nervous.

PS: The journal had lots of comments in a forum about this article, and most disagreed, and gave examples of government inefficiency compared to work done by contractors.
vj

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from THIS Wall St. Journal source

THE TILTING YARD
By THOMAS FRANK

Conservatives and Their Carnival of Fraud
June 25, 2008; Page A13

I wonder if, back in the rosy-fingered dawn of our conservative era, all those Adam Smith-tied evangelists of "limited government" had any idea that they were greasing the skids for a character like 22-year-old arms dealer Efraim Diveroli?

Mr. Diveroli, whose tousled, slightly confused visage recalls the perpetually stoned Jeff Spicoli from the 1982 film "Fast Times at Ridgemont High," was the improbable recipient of a 2007 government contract to supply ammunition to our allies in Afghanistan.

The trouble was the munitions he sold were, like, seriously bogus. Old and partially defective, the stuff apparently originated in China, which is a Pentagon no-no. Mr. Diveroli was indicted by a federal grand jury in Florida on Friday on numerous counts, including allegedly attempting to defraud the government.

How could a kid barely able to buy beer secure a nearly $300 million defense contract? It will be interesting to find out. Maybe Mr. Diveroli's story will be the one that finally fixes public attention on the carnival of fraud, waste and profiteering that characterizes our system of government-by-contractor. Maybe it will finally persuade us to ask our politicians why it is that they hire Blackwater to do the job of the Marines and pay Kellogg Brown and Root to arrange the logistics for the Army wherever it goes.

And maybe it will finally call into question one of the greatest shibboleths of conservative governance. Although contracting-out has been celebrated by big thinkers from both parties and although it has been practiced in some form or other since the earliest days of the republic, an ideological commitment to outsourcing is one of the signatures of conservative rule.

The ostensible justifications for it, in the early days, were thrift and efficiency. The 1984 "Grace Commission," in which a battalion of corporate executives ransacked the government looking for waste, recommended privatizing federal operations as a way to save money. With the government plunged deep into deficit, government needed to hire out its duties to business in order to save itself.

The ideological assumption was only barely concealed: Whatever "big government" could do, the private sector could do better, cheaper and faster.

There was another unspoken ideological angle: Every federal job privatized was a job pried from the grip of the hated Washington bureaucracy. Every dollar contracted out meant that much less for bureaucrat unions and that much more for friendly companies, well-connected lobbyists and corporate political action committees.

In the Bush era, the idea was pushed to a sort of extreme, with each of our great national initiatives – the Iraq occupation, Katrina reconstruction and the Department of Homeland Security – largely entrusted to private contractors. We now often read about federal employees quitting to work for private contractors to do the same job as before for twice the pay.

We also read about efforts to shut down or outsource the agencies charged with scrutinizing outsourcing. Last week, the New York Times reported on the travails endured by one of the Army's chief contracting officials who says he became suspicious of huge, sketchy expenses being run up by KBR in Iraq. When he threatened to withhold future payments from the company – harsh toke, dude! – he quickly found himself out of the loop; the Army contracted out his job to a company that accepted KBR's numbers.

One fact about government outsourcing is settled: It sure doesn't save money. A Washington Post reporter who scrutinized Katrina reconstruction contracts in 2006 found that "the difference between the job's actual price and the fee charged to taxpayers ranged from 40 percent to as high as 1,700 percent." To cover damaged roofs with tarps, certain contractors billed the government $1.50 per square foot of roof covered; some of the people who actually did the work got under 10 cents per square foot. Guess who kept the difference.

Privatization also constitutes a fundamental change in the constituency to which government answers. Journalist Tim Weiner estimates that, by 2006, about half of the people working for the CIA in Iraq and the National Counterterrorism Center were contractors, former CIA personnel accountable not to the American public but to their employers. "The spectacle of jumping ship in the middle of a war to make a killing was unremarkable in twenty-first century Washington," he writes in his book, "Legacy of Ashes." Among the CIA's new hires, he reported, the saying is, "Get in, get out, get paid."

The days when conservatives railed against red tape and shrieked for efficiency in Washington now seem like a lifetime ago. When they finally got the opportunity to put their theory into practice, conservatives contrived instead one of the most wasteful systems ever seen.

It is time for a new Grace Commission, this one examining the sordid history of privatization in all its details. President Barack Obama should launch it on day one.

Write to Thomas@wsj.com

Largest Bribery Case in Iraq Reconstruction Disclosed - $9-million

The article below is pretty specific, so read it.

When I was in Iraq, a number of the contracts were missing any paragraph specifying that any requests for bribes were to be disclosed to a hotline, so I am guessing that the bribe payers didn't have to sign the normal contract wording I saw later that contained a clause prohibiting bribes, and what to do about it.

The article isn't clear where the bribe taking Major worked from, but I am guessing he was in the military procurement center in Kuwait (since some of the bribe receipts were stored there), which has been the focus of many investigations. I believe the Kuwait procurement office focused on Iraq military contracts (not reconstruction which was done through a center in Baghdad's Green Zone.)

We have previously written about all the missing controls in the Baghdad reconstruction procurement process, and Kuwait seems to have had the same problem.
vj

Favorite Quote:

The case kicked off a widespread investigation into how the Pentagon procures goods and services in the Iraq war. An Army oversight commission found there were poor checks and balances in place and a need to hire more skilled contracting officers.

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From THIS Washington Post page

2 Plead Guilty to Army Bribery Scheme

By Dana Hedgpeth
Washington Post Staff Writer
Wednesday, June 25, 2008; A09

An Army contracting officer has pleaded guilty to involvement in a $9 million procurement scandal in which his wife was accused of carrying shopping bags full of cash to banks in the Middle East. Investigators say it is the largest bribery case out of the war in Iraq.

Maj. John Cockerham, 43, of San Antonio, pleaded guilty to bribery, conspiracy and money laundering. Cockerham's wife, Melissa Cockerham, 41, also pleaded guilty to money laundering. His sister Carolyn Blake, 45, of Sunnyvale, Tex., who was also allegedly involved in the scheme, is scheduled for trial in October on charges of money-laundering and conspiracy.

The Cockerham case reads in part like a spy novel, with $300,000 in cash delivered in a Kuwait parking lot. Handwritten ledgers, using such code names as "Mr. & Mrs. Pastry," recorded who had paid money. The case kicked off a widespread investigation into how the Pentagon procures goods and services in the Iraq war. An Army oversight commission found there were poor checks and balances in place and a need to hire more skilled contracting officers.

John Cockerham told prosecutors that starting in 2004, he was involved in a complex bribery and money-laundering scheme while being deployed to Kuwait. In exchange for awarding illegal contracts for such supplies as bottled water, he received more than $9 million in bribes. Investigators have said he expected to get $5.4 million more.

Once he agreed to take the money, Cockerham told the contractors to pay his wife, his sister and others. His wife admitted that she accepted more than $1 million in bribe payments on her husband's behalf. She allegedly carried the cash in shopping bags and deposited the money in safe-deposit boxes at banks in Dubai and Kuwait.

The couple lived modestly in a house on an Army base in San Antonio and were described as being involved with their three children and their church.

John Cockerham faces up to 40 years in prison; his wife could face as much as 20 years, plus fines.

Cockerham and his wife made the plea agreements in January, but the deals were kept under seal until yesterday because the couple is cooperating with investigators, who are continuing to investigate others who might be involved in the scheme.

The Army has said it is pursuing more than 90 criminal probes involving contract fraud and abuse in Iraq, Afghanistan and Kuwait.

Good Grief Charley Brown! - US Military halts foreign aid to Iraq town due to Corruption!!

I have been preaching since 2005 that the US needs to stop giving foreign aid to Iraq or other countries unless they clean up corruption. Why throw money at a corrupt organization that siphons some or all away?

So, now the AP reports that the US Military (not the State Dept. or USAID) halted reconstruction spending in an Iraqi town, Hit, due to the corrupt officials there. I am guessing the US military was using funds from the CERP program, and not funds through USAID since the Military, not State or USAID was quoted.

Hallelujah!!

Maybe State and USAID can learn from this??

Updated June 22, 2008 - We found the longer, original AP article and added it below the first article.vj
vj

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Click here for the Kansas City Star source.

Posted on Fri, Jun. 20, 2008
Iraq reconstruction projects on hold for corruption investigation
By CHELSEA J. CARTER
The Associated Press

FALLUJAH, Iraq | U.S.-funded reconstruction in a one-time Sunni insurgent stronghold has been suspended because of a corruption probe.

The probe includes allegations that the mayor and the police chief were involved in a multimillion-dollar oil smuggling ring.

The problems in Hit, a dusty, ramshackle western town, provide a glimpse of the challenges in rebuilding a country where years of war and misrule have destroyed the social fabric.

Reconstruction is a key part of the U.S. military strategy against both Sunni and Shiite extremists. Once U.S. and Iraqi troops subdue militants in a town or district, the next step is to begin programs to improve the quality of life to undermine support for the militants among the civilian population.

But many projects have long been dogged by mismanagement and allegations of corruption.

The U.S. government suspended its efforts in Hit this month after the police chief, Col. Salah Rasheed al-Gaoud, was fired for his alleged role in diverting oil intended for storage tankers and then selling the fuel on the black market, U.S. and Iraqi officials familiar with the investigation said.

Officials also confirmed that the mayor, Hikmat Jubair al-Gaoud, was under investigation.

Among the reconstruction projects that have been suspended are repairs to the town’s dilapidated infrastructure, including street repairs, sewage upgrade and school construction.

U.S. military officials said reconstruction projects in Hit would remain on hold during the investigation, which Iraqis said was being conducted by the Ministry of Interior.
© 2007 Kansas City Star and wire service sources. All Rights Reserved. http://www.kansascity.com

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from THIS AP page

AP Exclusive: Probe halts rebuilding of Iraqi city

By CHELSEA J. CARTER – 1 day ago

FALLUJAH, Iraq (AP) — U.S.-funded reconstruction in a one-time Sunni insurgent stronghold has been suspended because of a corruption probe, including allegations that the mayor and police chief were involved in a multimillion-dollar oil smuggling ring, The Associated Press has learned.

The problems in Hit, a dusty, ramshackle western town along the Euphrates River, provide a glimpse of the challenges in rebuilding a country where years of war and misrule have destroyed the social fabric.

Reconstruction is a key part of the U.S. military strategy against both Sunni and Shiite extremists, but many projects have long been dogged by mismanagement and allegations of corruption.

The U.S. government suspended its efforts in Hit this month after the police chief, Col. Salah Rasheed al-Gaoud, was fired for his alleged role in the scheme, U.S. and Iraqi officials familiar with the investigation told the AP.

Officials also confirmed that the mayor, Hikmat Jubair al-Gaoud, was under investigation. Marine Lt. Col. Chris Hughes, a spokesman for U.S. forces in Anbar province, said the mayor's current whereabouts were unknown and that it was unclear whether he fled the country.

But a man identifying himself as the mayor told the AP when contacted on al-Gaoud's mobile phone that he was still in Hit and "still in my job as the mayor."

"There is a committee that it is investigating the case of stealing oil and its work has not finished yet," he said Thursday.

Among the reconstruction projects that have been suspended are repairs to the town's dilapidated infrastructure, including street repairs, sewerage upgrade and school construction.

U.S. military officials said reconstruction projects in Hit would remain on hold during the investigation, which Iraqis said was being conducted by the Ministry of Interior.

"Since the mayor and the chief of police are under investigation for corruption, we have stopped all reconstruction efforts in Hit until the investigation is resolved," said Mike Isho, the Arabic public affairs officer for Multi-National Forces-West.

"Since there is nobody to lead the city, it doesn't make a whole lot of sense to continue these projects," Isho said. Caught in the middle are the 120,000 residents of Hit, located in Anbar province 85 miles west of Baghdad.

Although the U.S. has been trying to pursue reconstruction projects in Iraq since the early months of the war, the effort has taken on greater urgency since Gen. David Petraeus assumed command of the U.S. mission in late 2006.

Once U.S. and Iraqi troops subdue militants in a town or district, the next step is to begin programs to improve the quality of life to undermine support for the militants among the civilian population.

Last month, however, Democratic Sens. Bryon Dorgan of North Dakota and Sheldon Whitehouse of Rhode Island asked the Treasury Department to investigate whether Iraqi officials have embezzled or misspent billions of U.S. tax dollars intended for the country's reconstruction. Both senators called the scope of corruption within the Iraqi government staggering.

Such allegations have not been limited to the Iraqis. The Pentagon's inspector general reported last month that an internal audit of about $8 billion paid to U.S. and Iraqi contractors found that nearly every transaction failed to comply with U.S. laws or regulations aimed at preventing fraud.

Those findings provide fresh fodder for anti-war Democrats, who say the Bush administration has turned a blind eye to the problem of corruption and fraud by relying too heavily on contractors to manage the war.

The investigation in Hit began this year after allegations that al-Gaoud, the police chief, was involved in a scheme to divert oil illegally from a storage area at Kubaisa, about six miles southwest of the town.

Officials familiar with the probe said the police chief allegedly provided false papers authorizing tanker drivers to load fuel at Kubaisa. The fuel was then sold on the black market.

In April, al-Gaoud was forced out of his job. Officers from the Marine Corps' Regimental Combat Team 5, which helps train Iraqi security forces throughout Anbar, witnessed his resignation. Iraqi officials confirmed the account but spoke on condition of anonymity because the investigation is continuing.

Al-Gaoud's predecessor in the post, Col. Hamid Ibrahim al-Jazaa, was arrested by U.S. forces last year for allegedly freeing prisoners from the local jail in return for money. He is currently held at the U.S.-run Bucca prison in southern Iraq.

Most recently, the Anbar provincial council ordered the dismissal of the provincial police chief, Maj. Gen. Tariq Youssef Mohammed, for alleged misconduct. It was Mohammed who had ordered al-Gaoud to resign.

But Mohammed refused to give up his post because he was appointed by the Ministry of Interior in Baghdad, arguing that the council had no right to replace him.

Hughes said that although U.S. officials were not involved in the investigation of the mayor and police chief, they were keeping an eye on developments in the case.

"We're eager to plug back in though. Hopefully, this matter will soon be resolved," Hughes said.

The suspension of the reconstruction effort is the latest obstacle for U.S. forces in Hit.

The city was once believed to be a way station for weapons and insurgent fighters entering the country from Syria, 110 miles of rough road to the west.

In early 2004, the Marines took over responsibility for western Anbar but had to shift forces eastward when violence flared in the provincial capital of Ramadi and in Fallujah. With the remaining Marines overstretched, Hit fell back under the control of Sunni insurgents.

In February 2007, Iraqi police backed by U.S. troops swept through the city, arresting suspected insurgents, establishing new police stations in the downtown area and reasserting the government's authority.

Since then, corruption has not been Hit's only problem. Last month, a suicide bomber blew himself up at a police checkpoint. Only a police colonel was killed, but the attack was a reminder that stability remains uncertain.

AP correspondents Sameer N. Yacoub and Bushra Juhi in Baghdad contributed to this report.

Former Iraqi Minister of Electricity to be Imprisoned for Corruption if He Returns to Iraq

Apparently, a former Iraqi Electricity Minister who is apparently connected to Barack Obama has been sentenced by Iraqi courts to prison for corruption if he ever returns to Iraq. I would think they could use the UN Convention on Corruption to get him extradited from the US if they tried, since both Iraq and the US have now signed the Convention agreement.

This blog was written by a middle eastern man with apparent news connections to Iraq.

The second blog article refers to the first, but makes the point that one reason why Barack Obama might be hesitant to go to Iraq is that they know this stuff about his accused friend, and might make more problems.

So, the learning lesson for political candidates is not to become friends with those who commit corruption and get caught. Who knows, maybe some of the funds skimmed by corruption were used to support Obama.
vj

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from a blogger at:
http://talismangate.blogspot.com/2008/06/story-update-iraqi-judge-alsammarae.html

Thursday, June 19, 2008
Story Update: IRAQI JUDGE: Alsammarae Will Go to Prison if He Steps Onto Iraqi Soil

In a fascinating update to my story of a few days ago regarding Aiham Alsammarae, the slimy pro-Obama Iraqi-American ex-convict who called for more insurgent attacks on American soldiers, the Iraqi Higher Judicial Council has declared today that Alsammarae will face prison time and more charges should he return to Iraq.

The official spokesman of the Higher Judicial Council, Judge Abdul Satar al-Bairaqdar told Aswat Al-Iraq News Agency today (Arabic link) that there are several verdicts concerning Alsammarae that are still in effect and that carry varying prison sentences. These verdicts were rendered by Iraqi courts against Alsammarae on charges of corruption, such as misuse of public funds and receiving kickbacks, during his tenure as Minister of Electricity in the Bremer and Allawi cabinets (2003-2005).

Alsammarae’s financial crimes are widely perceived by the Iraqi public as the reason behind the government’s continuing failure to provide enough electrical power to Iraq’s population. Another widely-held perception is that Alsammarae embezzled hundreds of millions of dollars during his tenure.

Judge al-Bairaqdar clarified that some verdicts and charges against Alsammarae fall under the newly-passed Amnesty Law, but that there are still others that were not covered under the amnesty and hence are still in effect. He added that the documents that Alsammarae had presented at the press conference he held four days ago in Amman are not enough to exonerate him from a legal standpoint.

Alsammarae had indicated that he shall be returning next July to resume his role in Iraqi politics.

Y'know, given how close Alsammarae was to Antoin Rezko, and how close Rezko was to Barack Obama, I'm certain that Alsammarae and Obama are intimately connected, and that at least some of Obama's worldview of Iraq was inferred by a slime-bucket such as Alsammarae, who now wants insurgents to kill more Americans and says so at the top of his voice. Yet even though in the past Alsammarae's story has been extensively covered by CBS, CNN, the New York Times and many others, his current shenanigans are being studiously ignored, presumably lest they reflect badly on the media's preferred presidential candidate: Mr. Obama, the anti-Iraq War candidate.

Part of why America went wrong in Iraq was its reliance on the likes of Alsammarae. His prosecution and conviction are part of the remedy; the likes of Alsammarae should never again be allowed to sabotage the Iraqi economy, and then get a free pass from U.S. officials. Does Obama agree? Is there a journalist out that cares to ask him about that? And it's not as if Obama is being asked about some obscure angle of foreign policy; the course to be taken in Iraq will be one of the most important issues, if not the most important issue, of this election. Alsammarae and Obama's relationship to him are two storylines that are consequently, and definitely, relevant to the latter's candidacy.

But it's real hard to bring-up the Alsammarae affair within the format of a fluffy, soft-ball question, ain't it?
#
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from:
http://baarswestside.blogspot.com/2008/06/iraqi-judge-alsammarae-will-go-to.html

This article included quotes from the above blog, so I removed them. vj

Thursday, June 19, 2008
IRAQI JUDGE: Alsammarae Will Go to Prison if He Steps Onto Iraqi Soil
I'm betting the Obama smear site ignores this.

No wonder Obama is reluctant to go to Iraq. An Iraqi judge, not to mention the Iraqi public, understand how Rezko's friend Alsammarae helped loot the Iraqi people.

Talisman Gate who deserves a medal from the USG for translating these articles for us.

The link, and some key quotes about how the Iraqi public views Alsammare... Congressman Waxman, whatever happened to those hearings on corruption during reconstruction? Oh how so many Democrats have so cravenly caved here.

But it's real hard to bring-up the Alsammarae affair within the format of a fluffy, soft-ball question, ain't it?

And man how MSM has failed America and Iraq with their silence on Alsammarae.

Jim Glanz... you of all people should understand Chicago. Why aren't you reporting this? You didn't overlook Alsammare before the connection to Rezko and Obama.

Congressman Henry Waxman Asks Investigation of 7,000 Iraq Contracts

Congressman Waxman holds the periodic House Oversight Committee hearings on Fraud in Iraq contracting. Recently, they heard testimony from the DoD IG about billions of dollars paid for Iraq programs that were not properly documented. We covered that IG report in an earlier post, and mentioned that the IG whitewashed a major reason for the poor documentation, which was a waiver of requiring receiving documentation before paying suppliers. They did that, in my opinion, in order to comply with the Prompt Pay act which requires Federal payments be made within 30 days of receiving an invoice or the government must pay interest. The IG report concealed the issue by not describing the effects, only saying that the DoD needed to clarify problems with the Prompt Pay act.

Wel, now Waxman has demanded investigation of 7,000 possible cases of invoice payments made without documentation. His press release below indicates they still don't understand the main cause may be the prompt pay issue, and maybe not intentional fraud. Normally, any sane business or entity would require a signed receiving document properly filled out from the customer who ordered the materials before issuing any payment. But, it might be that the Federal Finance people waived that rule in order to meet the Prompt Pay act and prevent having to pay late fees or interest. That is what needs investigation. I submitted an email on Waxman's committee website about 2 weeks ago about that issue, but haven't heard anything.

However, any bad guys who learned that payments would be made without first getting receiving documents could use that knowledge to ship stuff to buddies (which was done in Vietnam), or just set up a fake vendor to submit false invoices for payment and not ship anything.
vj

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from http://federaltimes.com/index.php?S=3581879

Rep. Waxman estimates 7,000 contractor fraud cases linked to Iraq war
By ELISE CASTELLI
June 16, 2008
A top house Democrat wants the Defense Department inspector general to investigate more than 7,000 cases of fraud the lawmaker believes have occurred on contracts to support the Iraq war.
Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee, said that number is an estimate by his staff and that those cases involve more than $190 million in federal spending.

“It is difficult to have confidence that the department will take adequate steps to address the full magnitude of the potential criminal fraud,” Waxman wrote to IG Claude Kicklighter in a June 16 letter. “I therefore request that your office assess the extent of potential criminal fraud in the expenditure of U.S. funds in Iraq. “
Waxman’s staff came up with the projection based on a report issued by the Defense IG’s office in May. That report sampled 702 transactions worth $1.5 billion and found 28 of them worth $35 million appeared to involve criminal misuse of funds.

The 28 cases represent roughly 4 percent of the total surveyed for the report examining transactions by seven Army contingency contracting officers in Iraq. Waxman’s staff applied that 4 percent rating across the pool of 180,000 transactions worth $10.7 billion that those seven offices awarded — and came up with a figure of potential fraud.

Waxman said the IG’s staff confirmed the projected number and value of criminal cases and stated that the issue merited further investigation. Kicklighter’s staff also told Waxman that the Defense Criminal Investigative Service launched a new effort to review additional transactions for fraud.

Iraq Procurement Official fired after Refusing to Approve $1-billion in Questionable Payments

Now another whistleblower has come out about KBR spending in Iraq and lack of documentation.

The Army procurement officer involved from the beginning with the big KBR contract in Iraq waited until recent retirement to explain some inside information. He apparently tried to hold up paying KRB due to questionable records, but was over-ruled by higher officials to keep the operations running.

Now, I doubt that KBR people intentionally tried to file false records. Instead, like everything else in Iraq, there weren't enough accountants or auditors to provide controls. The military goes to conflict areas to win fights, not to file documentation in a conflict area. But, knowing this, some people could have used the system to steal stuff.

To reduce these types of "missing documentation" programs, the military will need to mandate certain systems (hey guys, how about electronic record keeping???) to be included in any unit in a conflict zone to process, approve, store and handle them. For instance, in the Green Zone, if we wanted to cash a check at the Army cashier office, we had to fill out about four manual forms. Why, in this 21st century, isn't such a process automated, which could check the customer's id electronically, print logs, etc and do it all electronically. Instead, there were three people in the office providing "separation of duties" in a war zone to enable military and civilians to cash checks to get cash to use in the PX, etc.

Lesson Learned:
One sure way to improve contractor documentation for spending is to include a provision in ALL contracts that refers to a documentation requirements amendment, and says that not meeting the requirements automatically implements a "poor documentation" clause which allows a discount of 20%. That would get the contractor's attention, and their invoicing documentation would improve greatly.
vj

This was a NY Times article but they charge $ to read them, so I got it from the source below when they syndicated it. vj
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from - http://seattlepi.nwsource.com/national/367310_contractor17.html

Army official gives glimpse of contractor controversy in Iraq

Rejected $1 billion in dubious KBR payments, lost job

Tuesday, June 17, 2008
Last updated 11:33 a.m. PT

By JAMES RISEN
THE NEW YORK TIMES

WASHINGTON -- The Army official who managed the Pentagon's largest contract in Iraq says he was ousted from his job when he refused to approve more than $1 billion in questionable payments to KBR, the Houston-based company that has provided food, housing and other services to U.S. troops.

The official, Charles M. Smith, was the senior civilian overseeing the multibillion-dollar contract with KBR during the first two years of the war. Speaking out for the first time, Smith said that he was forced from his position in 2004 after informing KBR officials that the Army would impose escalating financial penalties if they failed to improve their chaotic Iraqi operations.

Army auditors had determined that KBR lacked credible data or records for more than $1 billion in spending, so Smith refused to sign off on the payments to the company.

"They had a gigantic amount of costs they couldn't justify," he said in an interview. "Ultimately, the money that was going to KBR was money being taken away from the troops, and I wasn't going to do that."

But he was suddenly replaced, he said, and his successors -- after taking the unusual step of hiring an outside contractor to consider KBR's claims -- approved most of the payments he had tried to block.

Army officials denied that Smith had been removed because of the dispute, but confirmed that they had reversed his decision, arguing that blocking the payments to KBR would have eroded basic services to troops. They said that KBR had warned that if it was not paid, it would reduce payments to subcontractors, which in turn would cut back on services.

"You have to understand the circumstances at the time," said Jeffrey Parsons, executive director of the Army Contracting Command. "We could not let operational support suffer because of some other things."

Smith's account fills in important gaps about the Pentagon's handling of the KBR contract, which has cost more than $20 billion so far and has come under criticism from lawmakers.

While it was previously reported that the Army had held up large payments to the company and then switched course, Smith has provided a glimpse of what happened inside the Army during the biggest showdown between the government and KBR. He is giving his account just as the Pentagon has awarded KBR part of a 10-year, $150 billion contract in Iraq.

Heather Browne, a spokeswoman for KBR, said in a statement that the company "conducts its operations in a manner that is compliant with the terms of the contract." She added that it has not engaged in any improper behavior.

Ever since KBR emerged as the dominant contractor in Iraq, critics have questioned whether the company has benefited from its political connections to the Bush administration.

Until last year, KBR was known as Kellogg, Brown and Root and was a subsidiary of Halliburton, the Texas oil services giant, where Vice President Dick Cheney had previously served as chief executive.

Smith, a civilian employee of the Army for 31 years, spent his entire career at the Rock Island Arsenal, the Army's headquarters for much of its contracting work, near Davenport, Iowa.

He said he had waited to speak out until after he retired in February. As chief of the Field Support Contracting Division of the Army Field Support Command, he was in charge of the KBR contract from the start.

© 1998-2008 Seattle Post-Intelligencer

UN Says financial Controls over Development Fund for Iraq (DFI) are Deficient

UN official says financial controls on Iraqi oil proceeds ‘deficient’

We have earlier said one of the biggest Coalition mistakes in Iraq was not to straighten out the internal accounting and business systems of the Iraq government before we gave the country back to the Iraqi Parliament. The US is also partly involved in the management of DFI, including about $7+ billion captured from Saddam when we invaded. The DFI is the Development Fund for Iraq, which now contains over $100-billion in Iraqi oil revenne.

To an accountant or auditor, all this is nasty stuff, and again shows that the State Dept. isn't capable of understanding the importance of political dialog and sanctions related to mundane accounting controls as requirement to give or spend money for a foreign country. Why are we giving Iraq ANY foreign assistance funds when they refuse to improve their internal fiscal systems to meet UN and International Accounting standards?

The International Advisory and Monitoring Board (IAMB) is an audit oversight body for the Development Fund for Iraq (DFI). You can find the IAMB and the audit reports HERE.
vj

“The results of the audits in 2007 indicate that, while many efforts are being made, sometimes at great personal sacrifice, the overall financial system of controls in place in the [Iraqi] spending ministries, the US agencies handling of outstanding commitments using DFI resources and the Iraqi administration of DFI resources remain deficient and financial management reforms need to be pursued further,” Mr. Sach said in his report.

He said that audit reports on DFI have highlighted weaknesses in internal financial controls, including incomplete record keeping at the Iraqi Ministry of Finance, lack of a comprehensive oil metering system, sale of oil and oil products outside of the DFI, incomplete contract information associated with US agencies’ contracts and bartering.

The UN comptroller also reported that fewer than 15 per cent of previous recommendations to Iraqi spending ministries had been implemented. While noting that some progress had been made, “further measures to strengthen the internal control framework are necessary,” Mr. Sach added.

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from the website of the UN Mission Assistance for Iraq
http://www.uniraq.org/newsroom/getarticle.asp?ArticleID=709

UN News Centre
13 June 2008 – The United Nations representative on the international body monitoring the handling of more than $100 billion in proceeds from sales of Iraqi oil says financial controls are “deficient” although progress has been made in some areas.

Warren Sach, the Secretary-General’s representative on the International Advisory and Monitoring Board (IAMB) for Iraq, reported to the Security Council today on independent audits that were carried out on the Development Fund for Iraq (DFI) in 2007.

Under Security Council Resolution 1483, $106 billion was deposited with DFI from petroleum sales between 2003 and 2007. A further $10.4 billion from the balance of the UN oil-for-food programme was deposited with DFI as well as $1.5 billion from Iraq’s frozen assets.

“The results of the audits in 2007 indicate that, while many efforts are being made, sometimes at great personal sacrifice, the overall financial system of controls in place in the [Iraqi] spending ministries, the US agencies handling of outstanding commitments using DFI resources and the Iraqi administration of DFI resources remain deficient and financial management reforms need to be pursued further,” Mr. Sach said in his report.

Mr. Sach said that the IAMB aims to ensure that the IDF is used in a transparent manner for the benefit of the Iraqi people and that export sales of petroleum were consistent with international market best practices.

He said that audit reports on DFI have highlighted weaknesses in internal financial controls, including incomplete record keeping at the Iraqi Ministry of Finance, lack of a comprehensive oil metering system, sale of oil and oil products outside of the DFI, incomplete contract information associated with US agencies’ contracts and bartering.

The UN comptroller also reported that fewer than 15 per cent of previous recommendations to Iraqi spending ministries had been implemented. While noting that some progress had been made, “further measures to strengthen the internal control framework are necessary,” Mr. Sach added.

On oil metering, Mr. Sach said it was a key factor to achieve financial transparency and accountability and was in accordance with standard oil industry practices, but he noted that while some metering had been installed at oil terminals, there continued to be no metering in oil fields.

“The IAMB continues to view this matter as urgent, especially in light of the auditor’s report that showed unreconciled differences related to production, export sales and internal consumption,” he said.

Mr. Sach added that the Iraqi State Oil Marketing Organization continued to use barter transactions, which made it difficult to establish whether fair value had been received for the country’s oil exports, although a barter arrangement with a neighbouring country ceased as of 31 December 2007.

In a related development, the Security Council released a press statement noting “continued political, security and humanitarian challenges facing Iraq,” but also recognizing “the important efforts made by the Iraqi Government to improve security, national reconciliation, budget execution, reconstruction, and economic progress, as well as combat terrorism and sectarian violence across Iraq.”

Also today, the UN Special Adviser on Iraq, Ibrahim Gambari, in a briefing to the Council, said “there is indeed new hope that the people and Government of Iraq have started to overcome daunting challenges and to work together at rebuilding their country.”

Mr. Gambari noted that there had been security improvements in many parts of the country and that there had been steady progress in improving the capacity of Iraqi security forces, as well as the curbing of militias and other armed groups.

“The situation still remains fragile,” Mr. Gambari reported. “Ordinary Iraqis continue to face the threat of violence in the form of terrorist attacks, sectarianism or criminal acts and violations of human rights continue to occur.”

However, the Special Adviser said that there had been indications of progress on political dialogue in the country. He cited reports that talks on the return of the leading Sunni bloc, Tawafuq, to the Government were apparently progressing well, and added that Turkoman representatives had ended their 18-month boycott of the Kirkuk Provincial Council.

JOEL BRINKLEY: Iraq nears title as world's most corrupt

Click on the link below to see the full opinion article from the Anchorage, Alaska Daily News that is a good overview of the corruption climate in Iraq. There really isn't anything new in the opinion article, but it recaps many issues we have covered. This was distributed by the McClatchy News Service, a small news service.

Favorite quote - I like the bit about the State Department's "client-itis" which I agree with - I was there, and the Staters didn't want to bother Iraq's leaders with messy demands to clean up corruption. Just this month SIGIR issued a follow up report on TWO prior audit reports listing State's 12 point anti-corruption plan and that only two of the items have been accomplished in two years.

The State Department, particularly, has seemed eager to obfuscate and cover up the thievery - afraid, it seems, of tarnishing the Iraqi government's reputation. Last summer, embassy officials in Baghdad researched a 70-page internal but unclassified report that detailed the plundering of the nation's wealth. The pillage was so widespread, the report said, that it threatened the Iraqi government's very survival.

A few months later, when Congress requested a copy of the report, the State Department retroactively classified it and demanded that any officials called to testify would do so in a closed, classified session. All this for corruption in a foreign government. Since when is that a state secret?

State Department officials have long suffered from what detractors call "client-itis" - too close identification with the nations they serve.

Click HERE to see original article and click link below to see it on our system...