If there’s one thing the U.S. government should do well, it’s manage Iraq’s oil revenues. For goodness sakes, our country is led by a president and vice president, both of whom are former oil executives. This should be the one area they excel in.
Alas, the Financial Times has learned that an audit, sponsored by the United Nations, has concluded that we’ve created a system where we spend too much, invite fraud, and keep the entire process secret.
United Nations-mandated auditors have sharply criticized the U.S. occupation authority for the way it spends Iraqi oil revenues and say they have faced “resistance” to performing their job by coalition officials.
In an interim report obtained by the Financial Times, KPMG said the Development Fund for Iraq (DFI), which is managed by the U.S.-led Coalition Provisional Authority (CPA) and channels oil revenue into reconstruction projects, is “prone to error” and at risk of fraud.
It’s ironic, in many ways. When Hussein resisted cooperation with U.N. inspectors, Bush used this as a casus belli. Now the U.S.-backed CPA doesn’t want to work with U.N. auditors who are looking into how we’re managing Iraqi oil.
In their first interim report, KPMG said it had “encountered resistance from CPA staff (including the contracting unit) regarding the submission of information required to complete our procedures.” CPA staff told KPMG they were overworked and had given them a “low priority.” The company also said they faced “bureaucratic hurdles” getting passes for the green zone in central Baghdad, where CPA headquarters are situated.
The delay tactics, in fact, may have been part of an effort to stall auditors indefinitely.
KPMG warned that these difficulties could prevent it meeting its June 30 deadline to complete work, when the CPA is dissolved and cedes sovereignty to an Iraqi government.
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An adviser to a member of the recently-disbanded Iraqi Governing Council said the report raised the fear no audit of the CPA’s work would ever be completed.
A minister in the Iraqi government due to take office on June 30 told the FT he and many colleagues felt “let down by how the CPA has controlled resources.”
Sounds like the administration has been running Iraq pretty much the same way they’ve been running the U.S.