US Congress incredulous at $4bn cash sent to Iraq on pallets

GIANT pallets loaded with cash amounting to more than $4 billion (£2 billion) and weighing a total of 363 tons were sent to Baghdad aboard military planes shortly before the United States gave control back to Iraqis, it has been revealed to Congress.

The money, which had been held by the United States, came from Iraqi oil exports, surplus dollars from the UN-run oil-for-food programme and frozen assets belonging to the ousted Saddam Hussein regime.

The notes were loaded on to military aircraft in the largest cash shipments ever made by the Federal Reserve, said Representative Henry Waxman, the chairman of the House of Representatives committee on oversight and government reform.

"Who in their right mind would send 363 tons of cash into a war zone? But that's exactly what our government did," the California Democrat said during a hearing reviewing possible waste, fraud and abuse of funds in Iraq.

On 12 December, 2003, $1.5 billion was shipped to Iraq, initially "the largest pay-out of US currency in Fed history," according to an e-mail cited by committee members.

It was followed by more than $2.4 billion on 22 June, 2004, and $1.6 billion three days later. The CPA turned over sovereignty on 28 June.

Paul Bremer, who as the administrator of the Coalition Provisional Authority ran Iraq after initial combat operations ended, said the enormous shipments were made at the request of the Iraqi minister of finance.

"He said, 'I am concerned that I will not have the money to support the Iraqi government expenses for the first couple of months after we are sovereign. We won't have the mechanisms in place, I won't know how to get the money here,'" Mr Bremer said. "So these shipments were made at the explicit request of the Iraqi minister of finance to forward fund government expenses, a perfectly, seems to me, legitimate use of his money," Mr Bremer told Congress.

Democrats led by Mr Waxman also questioned whether the lack of oversight of $12 billion in Iraqi money that was disbursed by Mr Bremer and the CPA somehow enabled insurgents to get their hands on the funds, possibly through falsifying names on the government payroll.

"I have no knowledge of monies being diverted. I would certainly be concerned if I thought they were," Mr Bremer said. He pointed out that the problem of fake names on the payroll existed before the US invasion.

The special inspector general for Iraqi reconstruction, Stuart Bowen, said in a January 2005 report that $8.8 billion was unaccounted for after being given to the Iraqi ministries.

"We were in the middle of a war, working in very difficult conditions, and we had to move quickly to get this Iraqi money working for the Iraqi people," Mr Bremer said. He said there was no banking system and it would have been impossible to apply modern accounting standards in the midst of a war.

"I acknowledge that I made mistakes and that, with the benefit of hindsight, I would have made some decisions differently," Mr Bremer said.

Republicans argued that Mr Bremer and the CPA staff did the best they could under the circumstances and accused Democrats of trying to score political points over the increasingly unpopular Iraq war.

"We are in a war against terrorists; to have a blame meeting isn't, in my opinion, constructive," said Representative Dan Burton, an Indiana Republican.

Five face charges ovet Iraq Bribes

THREE United States army reserve officers and two American civilians have been charged with taking or helping to funnel more than $1 million in cash, sports cars, jewellery and other items as bribes to rig bids on Iraqi reconstruction contracts.

The five have been indicted by a federal grand jury in New Jersey over a scheme said to involve the theft of millions of dollars of Iraq reconstruction money and the awarding of contracts to Philip Bloom, who doled out the bribes.

US officials said the agency in charge of reconstruction had lost more than $3.6 million (1.8 million) because of the corrupt scheme.

More than $500,000 was smuggled into the US, with some of it going on decking and a hot tub for a house owned by two of the accused - one of the soldiers and one of the civilians are a married couple from New Jersey.

The indictment charged Col Curtis Whiteford, Lt Col Debra Harrison and Lt Col Michael Wheeler, and civilians Michael Morris and William Driver. Harrison was the provisional authority acting comptroller. Wheeler was an adviser for reconstruction