This is a repost and revision of our earlier post on the DPC (Democratic Policy Committee) hearings last week on Corruption in Iraq that featured three Iraqi or Iraqi-American testifiers who provided specific examples and details of rampant corruption in the Iraqi side of reconstruction spending. This is pretty rare to get details from Iraqi witnesses (other than Judge Radhi, former head of the Commission of Public Integrity - CPI).
Below, at the link, you can read a story by the Washington Post plus a short overview of the testimony from US News & World Reports, plus find links to the full hearing video and the full transcripts of the submitted, written testimonies, PLUS my own transcriptions of the question and answer session between witnesses and Senate Committee members, including Senator Dorgan, Byrd & Tester.
My overview & Comments
I worked as a US advisor at CPI in 2004 to 2006, but did not work with the witness who was a Chief Investigator at CPI. This testimony (I encourage you to read the specifics in the transcripts) is specific and gives examples of corruption cases from inside Iraq & CPI and from the Iraqi perspective. Most other hearing witnesses in the past have been from the US advisory side.
You can get details of major cases in the transcripts and articles below. My one point is that the DPC Committee has these good hearings, but doesn't really do anything about the issues but say "that is terrible...". In the case of these three witnesses, only the third one presented any recommendations for action, which are below. The problem is you can keep establishing more "audit" and investigation teams and committees, but unless you set up an agency to cut funds to agencies like the State Dept, or cut or DELAY foreign aid to any country that doesn't aggressively act to reduce corruption and implement standard work process controls, you are doomed to keep finding more corruption. So, these recommendations may have merit, but not unless the "enforcement or investigative committee" has legislative authority to stop, reduce or delay funds to specific agencies, contracts, foreign aid recipients, etc. it won't stop corruption. I would also like to see DPC describe follow up actions on prior hearing issues.
vj
Here are the recommendations from the third "anonymous" witness:
1) Form a Special Senate Committee to aggressively and effectively investigate
corruption in the Iraqi government immediately and, as necessary, recommend
that the Department of Justice initiate legal action against those suspected of
stealing American money or conspiring to attack American troops in Iraq;2) Create a special anti-corruption investigative team that operates in Iraq and
reports to the Special Senate Committee; and3) Pass legislation that empowers the U.S. government to freeze the assets of
persons or institutions that have conspired with terrorists to engage in corrupt
practices in Iraq, and to prevent them from entering the United States.
$13 Billion in Iraq Aid Wasted Or Stolen, Ex-Investigator Says
By Dana Hedgpeth
Washington Post Staff Writer
Tuesday, September 23, 2008; A19
A former Iraqi official estimated yesterday that more than $13 billion meant for reconstruction projects in Iraq was wasted or stolen through elaborate fraud schemes.
Salam Adhoob, a former chief investigator for Iraq's Commission on Public Integrity, told the Senate Democratic Policy Committee, an arm of the Democratic caucus, that an Iraqi auditing bureau "could not properly account for" the money.
While many of the projects audited "were not needed -- and many were never built," he said, "this very real fact remains: Billions of American dollars that paid for these projects are now gone."
He said a report that went to Iraqi Prime Minister Nouri al-Maliki and other top Iraqi officials was never published because "nobody cares" about investigating such cases. Many investigators, he said, feared for their safety because 32 of his co-workers have been murdered.
Adhoob said he reported the abuses to the U.S. Special Inspector General for Iraq Reconstruction, an agency charged by Congress with helping to root out cases of waste, fraud and abuse in the nearly $50 billion U.S. reconstruction effort. SIGIR spokeswoman Kristine Belisle said her agency continues to "actively follow up" on Adhoob's information, but she would not discuss ongoing investigations.
Adhoob was one of three Iraqi men who testified before the Democratic panel yesterday. Abbas S. Mehdi, a former Iraqi official who held a cabinet-level post, told of widespread corruption. And an Iraqi American who for five years has been a senior adviser to Defense and State department officials in Iraq testified in silhouette by video from an undisclosed location because, he said, he feared for his safety. In a modified voice, he said Iraqi government officials worked with al-Qaeda terrorists at the Baiji refinery to steal oil to sell on the black market.
Sen. Byron L. Dorgan (D-N.D.), who chairs the committee, said that "taxpayers have been bled dry with massive misuse of public dollars."
"It is all pretty sobering," he added later. "Our country cannot continue to be blind or oblivious to what is happening."
Adhoob, who worked for three years at the Iraqi agency and oversaw 200 investigators and other employees, said he had a "firsthand, up-close look at corruption" and eventually had to flee the country because of death threats. He said his agency -- the Commission on Public Integrity, which U.S. government officials say is the equivalent of the FBI -- estimates that an additional $9 billion in U.S. funds was lost because of corruption and waste. Because the $13 billion figure came from the Iraqi auditing bureau and the $9 billion figure came from Adhoob's agency, Dorgan's staff members said there could be some overlap.
Adhoob's agency has been accused of pursuing investigations against political rivals.
In one scheme described by Adhoob, Iraqi Defense Ministry officials helped set up two front companies that were to buy airplanes, armored vehicles, guns and other equipment with $1.7 billion in U.S. funds. The companies were paid, but in some cases they delivered only "a small percentage" of the equipment that had been ordered and, in one case, delivered bulletproof vests that were defective and could not be used.
The companies also overcharged for military helicopters and tried to deliver aircraft that were more than 25 years old, he said. Instead of demanding the money back, Adhoob said, the Defense Ministry renegotiated with the companies for "a series of mobile toilets and kitchens -- which have never been delivered."
Adhoob said some of the investigations conducted by his agency and others uncovered "ghost projects" that never existed or instances in which Iraqi and U.S. contractors did poor-quality work. In one case, $24.4 million was spent on an electricity project in Nineveh province but an oversight agency found that it "existed only on paper."
Investigations by Iraqi oversight agencies also found that some of the money sent to the Defense Ministry was diverted to al-Qaeda in Iraq, Adhoob said, and deposited into banks in Jordan and elsewhere.
Staff researcher Julie Tate contributed to this report.
from US & News Reports (followed by Senate hearing transcripts)
Corruption and Waste in Iraq: Two former Iraqi officials and an anonymous former adviser to the U.S. government appeared before the Senate Democratic Policy Committee to discuss the "corruption and waste" they've seen in Iraq. They cite numerous troubling examples of widespread cheating on the part of what one calls "a significant percentage of Iraqi officials." Salam Adhoob, a former chief investigator for Iraq's Commission on Public Integrity, says that the financial waste has cost about $18 billion—$4 billion of it "due to corruption and criminal acts in the Ministry of Defense." Some of the funds, he says, are used "to support the al Qaeda terrorists, militias, and insurgents who are killing U.S. soldiers in Iraq." Moreover, Adhoob estimates that 31 of his colleagues have been killed in retaliation for their efforts to investigate the corruption. He warns that "there are powerful people in Iraq who do not want this story to be told" and cites a lack of support by Prime Minister Nouri al-Maliki. Abbas Mehdi, another former Iraqi official, notes that "the costs of corruption fall most heavily on ordinary Iraqi citizens," who lack basic security and public services.
=============================================================
How to see or read the full hearing transcripts
You can view a video of the entire hearing (about 2 hours and five
minutes - skip forward to about 15:30 where the hearing actually
starts) at http://dpc.senate.gov/dpc-hearing.cfm?A=47
. But, because the three Iraqi witnesses used translators or had
strong accents, I would read the printed transcripts first, then read
my quick and dirty transcript of the question and answer session (DPC
doesn't provide a transcript of Q&A), or skip forward in the video
to about 1hr 40 minutes to see the q&a session.
Here is an outline of the Senate committee members and witnesses, with attachments of the hearing transcripts, followed by the quick and dirty transcript I made of the Q&A session. You can find all of this currently at the above DPC link except my Q&A transcripts. I include the attachments here for the record.
Monday, September 22, 2008
1:30 p.m. to 3:00 p.m.
628 Dirksen Senate Office Building
Click here to see the webcast of this hearing (RealVideo).
(Links go to transcripts of printed, opening statements)
Senator Byron L. Dorgan
Chairman, Senate Democratic Policy Committee
Senator Jeff Bingaman
Senator Robert C. Byrd
Senator Amy Klobuchar
Senator Jon Tester
Salam Adhoob
Former Chief Investigator (Baghdad), Iraqi Commission on Public Integrity
Abbas Mehdi
Former Chairman, Iraqi National Investment Commission
Anonymous Whistleblower
Former Senior Advisor to the U.S. Government in Iraq
============================================================================
FiscalRangers quick & dirty transcript of Question & Answer Session
Question and Answer session (only on video starting at 1:26 and not in transcripts):
Below are my quick and dirty transcripts of the audio. Vj
Adhoob – response to Byrd
I was responsible for many investigations, and some US advisors helped me, but to be honest, not all American counselors and advisors at American Embassy were helpful. Some of these helped the corrupt people.
Here is an example – one American advisor specializing in Human Rights. He visited office and screamed that they shouldn’t investigate a specific case. Why are you investigating – it is not your money. Many American advisors asked them not to investigate since it was not Iraqi money, but American money.
Q from Byrd: If people moved money outside of Iraq, what resources did you have to track or recover the stolen funds??
Ans from Adhoob - Here is one example. There is an American who helped officials in MOD to (Defense Ministry) physically smuggle outside of Iraq $600-million to Jordan, and another $100-million to Beihrut.
That was the advisor to the Iraqi central Bank (editor: The US Advisor for banks was from the Treasury dept. - vj). When officials at Baghdad airport saw it, he used his influence with Central Bank to overcome airport officials questioning.
Q from Byrd: When someone steals millions of dollars, the money has to go somewhere. Did your investigations establish which countries or specific banks were used by corrupt Iraqi officials to hide the funds?
Ans from Adhoob: Jordanian Housing Bank (then transferred to Germany – documents to prove this exist) and current Ministry of Defense and prior one have accounts in Germany, Jordanian bank, UAE, Beirut. Also banks in NY and PA.
Q from Byrd: Do you really believe that 50% of Iraqi officials are corrupt like you said?
Ans: Yes – educated guess. I originally thought 90% but do not have evidence, so I reduced the estimate to 50% to corruption, 40% to security, and 10% to public. For instance, electricity, $30bn spent, and still hardly working.
Q from Byrd: Explain type of corruption
Ans from W2 - People don’t have degrees they state to get positions in government. Every official brings all family members. There are ghost positions, and people are sitting in London, but getting paid.
They also get a commission (kickback) on a contract when it is let.
Q from Sen Tester to Adhoob: Was there any other oversight agency besides CPI.
Ans from Adhoob: He didn’t know about a contract discussed. But there is the BSA report about distribution of money with help from American advisors. (Note: Tester came in after Dorgan gave the preamble and talked about BSA).
Q from Tester to Adhoob: The Iraqi law says Iraqis have no authority to investigat what Americans are doing. Any noted American violations should be given to SIGIR and were given to them in 2007.
Was anything done – “I think so…”
Q from Tester – about helicopters – was the money reconstruction money or military money?
Ans from Adhoob: This money came from Iraqi treasury. The Iraqi government didn’t have assets, so much was American money and rest from Iraq.
Q – How paid. Was it lump sum up front. Were there any controls in US contract dictating how money was to be spent?
Ans: All the contracts by MOD with American or Iraqis. Payments are lump sum up front without guarantees. Company has rights to do what they want. Equipment received was substandard, or recipients were told they could only get weapons from China. All companies would be like that. The FMS program. Under this, Iraqi government transferred 2.6bn but got 1975 weapons and they were used and rusty.
Lady stood up and started talking. Couldn’t hear – something about the money spent in Iraq and Iraqi citizewns suffered, while we are spending funds on wall street bailout.
Sen Klobuchar statement – wasn’t there before
Q from Klobuchar - Given pervasive corruption, what recommendations and role that congress could play to W2
Ans from W2 – Iraqi people at beginning were happy, but now, five years on, Iraq not working. So many mistakes. When Bremer went, made constitution mistake, plus gave foreign people power.
You have to bring new people and start over. Iraq only has electricity 1 hour in 7, no medicine. Either do something dramatic, or leave them alone.
Q from Klobuchar to W2- Committee has heard under CPA that there was lack of accountability. Was that a signal to Iraqis that corruption was ok. Ans: The perception to US is negative. No food, medicine, electricity.
Q of W2 - No officials yet filed statement. Ans - Most Iraqis if they steal won’t put it under there names, thus very difficult to track them. I believe US knows exactly where money is – Jordan, Dubai, Lebanon…
Q of Abhoob - I was a former prosecutor. You stated 31 CPI staff were murdered. Were any murderers prosecuted or did American government do anything to mitigate danger?
Ans – There has been no hearings or investigation whatsoever. Example – One man went to get passports, and he was Sunni, and he was kidnapped from inside passport building. This is a country of gangs and they control the day.
Q of Anon by Dorgan - About the prison meetings. We spent $40-million to build it, but Iraqis said at meeting they didn’t want it. What was American officials response. Ans - “The project is on its way, and we advise you that Min of Justice has need for space…thus take it. It is a done project. The Iraqi Minister was upset and they would not accept it. Americans can do whatever they want here.
Ans – Total amount is more than $40-million.
Dorgan – The Iraqis refer to it as the “whale”. It seems to be the “hood ornament” of what is wrong.
2:06 - Q of Adhoob – re BSA report that was never made public, but said they could not account for $13-billion in US funds. Have you seen that report personally? Ans – He was able to get copy through personal sources. It was not public because no one cared about American funds.
Q – was the report provided to American officials? - Ans – An IG (SIGIR) is investigating the report and CPI. CPI is not considered serious in reviewing the issue since it is American funds. Q – Is the IG from the US or ? It is the American IG – SIGIR.
Statement from Dorgan – Testimony today was pretty sobering about substantial amount of corruption. Funds were diverted and it gives us no joy to listen to this. Our country cannot continue to be blind to this.
Q from Dorgan of Abhoob – Are there questions of security at this point. I know you now live in US. Does your coming forward raise security issues for you?
Ans - Yes he does feel his life and families is threatened all the time. He has decided to do whatever duty dictates and attend here non anonymously to send message to American people to tell them what is going on in Iraq. It is very important for Americans to know why there is no success in Iraq and why Iraqis are suffering. He would like more sympathy for them.
Q of anon from Dorgan –
Ans – SIGIR people are good people – but all Abdoob’s documents on MOD? were given to them. They are so polite and follow the rules. They don’t have teeth and Iraqis not afraid of them because SIGIR only issues reports. SIGIR needs to be more aggressive.
Example: - Present CPI Judge – he ordered CPI to not use Sudanese and Lebanese interpreters and won’t let them in CPI building. SIGIR obeys. Put more pressure on SIGIR or form special committee I recommended. The level of corruption in Iraq is much bigger than SIGIR can fight. It is shameful that no electricity in iraq. There is hope. We have to start and start immediately.
Dorgan – What we have heard is pathetic. When you hear that billions are moving overseas without oversight makes my blood boil. This government needs to do something. Maybe these hearings will embarrass those responsible for oversight.
Hearing adjourned at 2:17 recording time. Call 4-4977 Senate Recording Studio for more info.
- end -
The Senate messed up on this one BIG TIME. When you look at the details....real details of the testamony given by these 'witnesses' you will find that the information they present, where trying to pin the corruption on US citizens and Military has been disproven years ago and published in minor publications like the LA Times, Sydney Herald, or Washington Monthly.
The Senate did not do their homework here, and are directly taking the word of the corrupt.
Isn't that how we got in this place to begin with?
Posted by: Monster Cat | October 19, 2008 at 01:56 PM