Tough times for American public as billions go missing down black hole of Iraq

From The Niagra Falls Reporter, 12/4/07:

http://www.niagarafallsreporter.com/hanchette277.html

By John Hanchette

OLEAN --

Let's consider two recent figures and why they reflect our current

abominable position as a nation.

$12 billion:

Amount of U.S. currency, in cash, delivered to Iraq in 2003 and 2004

at the start of the current war to keep the Iraqi economy from

collapsing.

$9 billion:

The amount that was stolen, simply disappeared, or, three years later,

cannot be accounted for.

Much of the money -- airlifted in huge C-130 military transports --

consisted of small bills: denominations of $1, $5 and $10.

This, according to legendary investigative reporters Donald Barlett

and James Steele, writing in "Vanity Fair" magazine, was arranged on

the theory that these could be quickly circulated through the Iraqi

economy "to prevent a monetary and financial collapse," as the

Treasury Department explained.

These were the heady days when the White House and Pentagon, of

course, had no inkling of the force of the insurgency that was coming

or number of American deaths and injuries, and thought the worst

threat might be grumbling by the otherwise grateful Iraqi population

about lack of walking-around money.

The cash itself was delivered to Iraq in 21 separate flights in

plastic-covered "bricks" of bills on tarped wooden pallets.

The last reliable figures kept by the Federal Reserve Bank show the

bank notes weighed a mind-boggling 363 tons.

The money went to the CPA -- the Coalition Provisional Authority --

the interim government set up by President George W. Bush and the

Pentagon to run the invaded and supposedly conquered nation for a few

months until the happy freed Iraqis could start running it themselves.

The ironic acronym CPA -- as the authors point out -- had nothing to

do with the "Certified Public Accountant" definition usually assessed

those letters by trusting Americans.

The stupefyingly inept provisional office itself received, in its 14

months of existence, another $1.6 billion to run everyday Iraq, over

and above the $12 billion in cash mentioned above.

(Dubya and the Pentagon have always tried to portray the CPA as

approved by Congress, or at one point, by the United Nations. That is

incorrect. It was approved by neither, and is solely an executive

creation of the White House and Defense Department.)

There was no real oversight, no checks and balances, no real

accounting procedures, no real supervision, no real line of authority,

no chain of command.

Sometimes administrators and staffers would play pretend football with

the wrapped bricks of cash.

Much of the money went to pay corrupt contractors, both American and

Iraqi.

The payments were often delivered in paper grocery bags filled with

cash, or in loose bills thrown from the back of pickup trucks.

It should have been called the MFE -- Mammoth Fraud Everywhere.

Some of the stories are already well-known by that minuscule portion

of the American public paying close attention.

Of the 8,206 "security guards" supposedly protecting the CPA compound,

7,604 were ghost employees.

Only 602 could be verified as existing.

Halliburton, the huge company once run by Dick Cheney before he became

vice president (and which gifted him with $43 million on his

retirement), received $1.5 billion in no-bid contracts from the CPA.

Halliburton, under one contract, subsequently charged the CPA and

American taxpayer for 42,000 daily meals.

It was only preparing and delivering a third of that number.

Just an example -- some day I'll write much more about the Halliburton

angle.

Suffice it to say, when you have that much cash floating around, the

people supposedly keeping track of it -- an impossibility -- are bound

to stop giving a crap.

Retired American admiral David Oliver, the CPA's budget manager, was

once asked by a British reporter what had happened to all of it.

"I have no idea," he responded.

"I can't tell you whether or not the money went to the right things or

didn't. ... What difference does it make?"

Did the CPA ever make an effort to keep track of this literal mountain

of money?

Only a pretend one -- a sham that ended up a subject of congressional

hearings.

The CPA awarded a $1.4 million contract for "accountant and audit

services" to an obscure firm called NorthStar Consultants, the

principals of which are a couple named Thomas A. and Konsuelo Howell,

who ran the business out of a two-story stucco house in La Jolla,

Calif.

Also headquartered there, according to the "Vanity Fair" article, were

other Howell operations -- International Financial Consulting and Kota

Industries, Inc., whose main business appears to be kitchen

remodeling, furniture, flooring, and home refurnishings and repair.

When Barlett and Steele asked the Pentagon why a small home-remodeling

company run out of a living quarters was given a contract to audit the

dispersal of $12 billion, the Pentagon replied in typical fashion by

providing a heavily redacted contract with any useful information

totally blacked out.

L. Paul Bremer III, the bumbling envoy sent to run the CPA, told

subsequent congressional inquisitors the Pentagon handled the hiring

of NorthStar, and that he'd never even heard of NorthStar until after

he'd left Iraq and come home, and even now only knew it as an

accounting firm -- which it wasn't.

NorthStar had no accountants, certified or otherwise.

When the two reporters finally contacted Howell, he refused to discuss

the contract in any detail.

But the Pentagon -- so inefficient these days it can't even manually

black out information it's trying to hide -- had left Barlett and

Steele one important clue:

the mailing address of the NorthStar mystery firm.

It was in the Bahamas -- home of offshore money scandals, swindles and

scams.

Non-Bahamians, wrote the investigative reporters, "often use

post-office boxes in the Bahamas and other tax havens for three

purposes: to conceal assets, to avoid taxes, and to launder money. ...

Post-office boxes in tax havens around the world have been flooded

with contractor business based in Iraq."

No one seems to know, wrote the two, if anyone at the CPA or at the

Pentagon even questioned why one of its important contractors used an

offshore post-office box.

The NorthStar mailing address was P.O. Box N-3813 in Nassau.

When the "Vanity Fair" authors dug further, they discovered the very

same box had served as the address of record for Bahamian businessman

Patrick Thomson and his notorious Lions Gate Management firm, both of

them figuring prominently in the collapse of Evergreen Security -- "a

Ponzi scheme masquerading as a mutual fund" and "one of the more

spectacular offshore frauds in recent years."

Evergreen siphoned $200 million from unaware investors in the United

States and abroad.

When the two investigative reporters interviewed Thomson by phone, he

admitted he had incorporated NorthStar for Howell in the Bahamas as an

IBC -- an "international business company" that is merely paper.

An IBC, notorious among law enforcers and prosecutors, are usually

empty business vessels that can be used for almost anything, with no

real CEOs or boards of directors or annual reports or financial

statements or owner listings.

They can be headquartered anywhere on the planet, and don't even have

to allow inspection of their books, if they have any books.

"They are shells," write Barlett and Steele, "operating in total

secrecy."

Boy, this Bush administration is doing a good, careful job of looking

after American taxpayer dollars, huh?

Thomson declined to discuss the matter further with "Vanity Fair."

So far, California Democrat Henry Waxman is about the only member of

Congress showing much outrage over this obvious planned heist and

others in Iraq.

But he is stymied by a notable indifference to the gross theft our

money -- yours and mine -- on the part of fellow members from both

major political parties.

Frankly, they seem in on the conspiracy of silence to keep Americans

from talking about this outrageous stuff.

Only one CPA major player has gone to jail so far, Robert J. Stein,

who was the comptroller for the provisional authority, and he was

sentenced earlier this year to nine years in the federal slam mostly

because he was sloppy and overt about his greed.

(Stein controlled more than $82 million in contracts for Iraqi

development, and was successfully accused of stealing $2.6 million

outright from the CPA and Iraqi funds, with money laundering,

bid-rigging and wire fraud, and with accepting $1,082,279 in bribes --

plus "watches, alcohol, cigars and prostitutes" over two years from

favored contractors.)

Stein, it turns out, was hired by the CPA despite having served an

eight-month federal sentence just seven years before for "access

device fraud" that netted him at least $45,000 from financial

institutions.

Nice due diligence Bush administration executives showed there.

Now for the frosting on the cake.

In one of his last official acts, Paul Bremer issued an executive

order carefully prepared by the Pentagon that declared all members of

the CPA "shall be immune from any form of arrest or detention other

than by persons acting on behalf of their Sending States" and that

"contractors shall be immune from Iraqi legal process with respect to

acts performed by them pursuant to the terms and conditions of a

contract or any sub-contract thereto."

The Bush administration has bitched ad nauseam over the corruption and

theft Saddam Hussein displayed without having to answer to the Iraqi

people -- even using it as one excuse for invasion.

Yet this giant Get Out of Jail Free Card that Dubya's people arranged

does the same thing.

The Iraqis, even if they cared, will have no say in their new

democracy over illegal conduct by American contractors.

The authors note that the Bush administration has now spent double the

money in trying to rebuilt Iraq that the United States took to rebuild

Japan after World War II.

And that takes into account inflation, two nuclear bombings that

incinerated two major cities, bringing Tokyo almost to grade with fire

bombs, and the fact that Japan is an industrialized nation three times

the size of Iraq.

The Bush administration has clammed up, of course.

No one at the Pentagon or the White House or in Washington or Baghdad

will even answer public affairs requests about the missing $9 billion,

or NorthStar, or Howell, according to the "Vanity Fair" authors, who

make the accurate observation:

"The simple truth about the missing money is the same one that applies

to so much else about the American occupation of Iraq. The U.S.

government never did care about accounting for those Iraqi billions

and it doesn't care now. It cares only about ensuring that an

accounting does not occur."

Amen to that.

This was corruption -- totally premeditated, carefully planned,

hideously broad, all-purveying corruption, by officials military and

otherwise on the taxpayer payroll, and by private greedball

businessmen.

And don't hand me this fog-of-war excuse that Bremer and his sidekicks

were always trying to sell.

It was so well thought-out that Pentagon conspirators made sure the

purveyors and recipients of its illegal largess could never be legally

prosecuted.

This corruption is rampant and epidemic in this administration, on a

scale never seen before.

And it should be the first count in George W. Bush's impeachment.

____________________________________________

Harry