Friday, September 26, 2008

Writing blank checks

As the nation debates giving $700bn of emergency authorization to an executive agency in a situation of extremely asymmetric information, let's take a look back at the way this administration has spent money in Iraq to stabilize another grave and uncertain situation. Just for kicks. Ed Harriman covered the story for the LRB:
On 12 April 2004, the Coalition Provisional Authority in Erbil in northern Iraq handed over $1.5 billion in cash to a local courier. The money, fresh $100 bills shrink-wrapped on pallets, which filled three Blackhawk helicopters, came from oil sales under the UN’s Oil for Food Programme, and had been entrusted by the UN Security Council to the Americans to be spent on behalf of the Iraqi people. The CPA didn’t properly check out the courier before handing over the cash, and, as a result, according to an audit report by the CPA’s inspector general, ‘there was an increased risk of the loss or theft of the cash.’ Paul Bremer, the American pro-consul in Baghdad until June last year, kept a slush fund of nearly $600 million cash for which there is no paperwork: $200 million of this was kept in a room in one of Saddam’s former palaces, and the US soldier in charge used to keep the key to the room in his backpack, which he left on his desk when he popped out for lunch. Again, this is Iraqi money, not US funds.
Ed Harriman, Burn Rate (LRB, 6 September 2007)
Ed Harriman, The Least Accountable Regime in the Middle East (LRB, 2 November 2006)
Ed Harriman, Cronyism and Kickbacks (LRB, 26 January 2006)
Ed Harriman, Where has all the money gone? (LRB, 7 July 2005)

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