Thursday, March 24, 2005

Iraq Reconstruction: "The Biggest Corruption Scandal in History"

Search Google News with the keywords "Global Corruption Report," and you'll realize what Americans are missing: Transparency International's "Global Corruption Report 2005," which says that "[i]f urgent steps are not taken, Iraq will . . . become the biggest corruption scandal in history" (emphasis added, p. 87). No corporate media outlet in the United States has said a single word about the report.
Global Corruption Report 2005
Voice of America (Joe De Capua, "Transparency International Says Construction Most Vulnerable to Corruption," 16 Mar. 2005) and Radio Free Europe/Radio Liberty (Mark Baker, "World: Transparency Report Focuses on Corruption in Construction," 16 Mar. 2005) -- US-government-funded propaganda channels that target foreign audiences -- did mention "Global Corruption Report 2005," but the latter managed to say nothing about its findings on Iraq, and the former merely included an innocuous sentence: "Transparency International calls on the international community to ensure there's transparency in the rebuilding of Iraq."

The only American media that covered what "Global Corruption Report 2005" says about Iraq are small independents on the left: Tai Moses, "Take the Money and Run" (AlterNet 18 Mar. 2005); and Chris Shumway, "Privatization, Corruption Mar Iraq’s Recovery, New Report Finds" (NewStandard, 22 Mar. 2005). Moses's piece is only a brief notice on the AlterNet newslog, so the only in-depth analysis of it is Shumway's.

As the "Global Corruption Report 2005" notes, "[a] UN body to audit the Fund [the Development Fund for Iraq, into which Iraq's oil revenues have been channeled and which has been managed by the Coalition Provisional Authority’s Programme Review Board], the International Advisory and Monitoring Board (IAMB)," has already "found gross irregularities by CPA officials in their management of the DFI, and condemned the United States for 'lack of transparency' and providing the opportunity for 'fraudulent acts'" (p. 85). But you ain't seen nothing yet. Transparency International's prognosis is bleak: "It is likely that we have not yet seen the full scale of corruption in Iraq for the simple reason that much of the anticipated expenditure on building contracts and procurement has yet to begin" (emphasis added, p. 87). (Shumway says that "only $5 billion" have been disbursed for rebuilding Iraq, "according to February figures provided by the State Department," employing "only 41,450 Iraqis, out of a workforce of 7 million," in infrastructure reconstruction, while Iraqi workers suffer from the official unemployment rate of 48% [emphasis added, 22 Mar. 2005]). Worst of all, "[t]here is a danger that rapid privatisation is soon to be enforced by the IMF and the Paris Club of official creditors as a condition for reducing and rescheduling some US $120 billion foreign debt accrued under Saddam," which is likely to result in "widespread corruption," judged by experiences of privatization in the former Soviet Union and other indebted countries (emphasis added, p. 84).

Last but not the least, Shumway's article supplements the "Global Corruption Report 2005" with reminders of important recent exposures.
The TI assessment does not specifically refer to the testimony of a former CPA advisor who told Congress in February that large amounts of US cash were regularly handed to Iraqi ministries and American contractors. On one occasion, officials handed $2 million in shrink-wrapped $100 bills to a representative from Custer Battles, a US mercenary firm, without properly accounting for the cash award, according to testimony and photographic evidence provided to lawmakers by former CPA employee Frank Willis. (Shumway, 22 Mar. 2005)
If you would like to plumb the depth of the problem, read the transcript of "Senate Democratic Policy Committee Hearing: 'An Oversight Hearing on Waste, Fraud and Abuse in U.S. Government Contracting in Iraq'" (14 Feb. 2005).

Postscript: if you appreciate Shumway's work, make donations to the NewStandard.

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