Global Policy Forum

Audit Board Investigates Contracts

Integrated Regional Information Networks
February 28, 2005

Iraq's Board of Supreme Audit (BSA) plans to scrutinise all government contracts made since the US-led war in April 2003 to assess whether allegations of corruption are true, its new president told IRIN. According to a US watchdog report released at the end of January, some US $8.8 billion of Iraqi funds handed out by US administrators to Iraqi ministries is "unaccounted for" because of bad management. The money from Iraqi oil sales was to be spent on salaries, operating and capital expenditure, and reconstruction projects, between October 2003 and June 2004, a report from the Office of the Special Inspector-General for Iraq Reconstruction said.

"The Iraqi government needs to rebuild trust with Iraqi citizens," Abdul Basit Turki Saeed, BSA president, told IRIN. "All contracts with all ministries will be audited, ones made locally or with international companies." Saeed declined to say specifically what he would look for in the auditing investigation, although he said he had the same questions that others have raised in newspaper articles and rumours on the street. Salaries paid to "ghost employees"; overpriced furniture contracts with kickbacks built in; billing for goods that weren't delivered; and ministers who flew packages of US dollars worth millions out of the country, are just a few of the complaints.

"I hope it doesn't [confirm] all of what I hear," Saeed said. "When we have the results of any investigation, I promise you, I will announce them." Before the war, revenue from Iraq's oil sales were held by United Nations officials and disbursed under the former UN Oil-for-Food programme, which brought food and humanitarian goods into the country to offset international sanctions. Because interim officials after the war knew there was no monitoring, they did anything they could to steal money, said an official close to the United Iraqi Alliance, the Shi'ite Muslim coalition that won close to half of the votes in January's elections.

"There is no accountability," the official said, declining to be named. "That's why public services have collapsed in the last few months. Just look at fuel. Look at electricity." Drivers sit in long lines at petrol stations around the capital, even though Iraq spends $200 million per month to import petrol, Oil Minister Thamer Ghadban said recently. The electricity ministry has ordered several new generators worth millions of dollars, but power remains sporadic in Baghdad.

Officials in the interim government gave the audit order, Saeed said. Iraq's current government is at a virtual standstill as wrangling continues over key posts in the new 275-member national assembly expected to be formed at the end of March. A recent Commission on Public Integrity report also indicated financial irregularities at some ministries, the Alliance official said. The commission has no authority to build cases or haul people it suspects intocourt, however, he said. The commission, along with independent inspectors-general in each ministry, were put in place by the former US administrator in Iraq, Paul Bremer.

At the same time, Ali Maousin Alak, oil ministry inspector-general, said he would create a training programme to teach other inspectors-general and their staff how to deal with corruption. "We have to make fighting corruption a priority. We have to build an impartial system in Iraq," Alak said in a speech to the Institute for Financial Studies at Baghdad University. "Our people must maintain impartiality."

Saeed was appointed in October after the previous head, Ihsan Karim, was killed in July when a bomb went off under his car during a local investigation into the Oil-for-Food programme. The food ration programme operated in Iraq from 1996 until the middle of 2004 under international sanctions. No one claimed responsibility for the attack. The misused $8.8 billion in funds came from oil sales and seized assets, the report from the Office of the Special Inspector-General for Iraq Reconstruction said. Auditors could not tell if the monies were spent properly.

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