More Allegations of Fraud in Iraq

In the middle of July, I did a post on fraud involving $300 million in arms deals in Iraq.

http://fraudwar.blogspot.com/2005/07/fraud-allegations-on-weapon-purchases.html

In an updated article put out by Knight Ridder, the total amount of the fraud has grown to over 500 million in weapons deals arranged by "middlemen, who reneged on promises after being paid or took huge kickbacks."

The total of the contracts being investigated total over 1.3 billion.

"The Iraqi Board of Supreme Audit, in a report reviewed by Knight Ridder, describes transactions suggesting that senior U.S.-appointed Iraqi officials in the Defense Ministry used three intermediary companies to hide the kickbacks they received from contracts involving unnecessary, overpriced or outdated equipment."

Although, the report states that no U.S. advisors were involved, the contracts were under the supervision of the embassy. The report also indicates that several american diplomats are extremely angry and feel they were duped, although the report is also questioning how american advisors could have been so close to the process and not noticed.

The Board of Supreme Audit published the following findings:

"-Multimillion-dollar contracts were awarded to favored weapons suppliers without a bidding process and without the required approval from the prime minister's office. Investigators wrote that the chief procurer went "beyond his authority" in purchasing equipment.

-Senior Iraqi officials kept little or no record of major purchases, sometimes noting lucrative deals in "undated and unnumbered" memos. Nearly all purchases contained a clause - unusual in international contracting of this magnitude - that required the contract's full value to be paid up front in cash.

-Instead of buying directly from a foreign company or government, Iraqi arms procurers hired third-party companies to negotiate the contracts. When Iraqi leaders later complained about unfulfilled contracts, they discovered they had no recourse to demand a refund because the payments were made to Iraqi middlemen who vanished after receiving the millions. "The undertakings make no obligation ... toward the Iraqi Ministry of Defense," according to the report.

-The sole beneficiary on 43 of the 89 contracts was a former currency-exchange operator, Nair Mohamed al-Jumaili, whose name doesn't even appear on the contracts. At least $759 million in Iraqi money was deposited into his personal account at a bank in Baghdad, according to the report. Internal records incorrectly "indicated that the Ministry of Defense signed contracts with Poland, Arab countries, the United States and Europe, but we discovered that all contracts were signed and executed with Iraqi suppliers," the report said."


Again, allegations, such as these, will do nothing, but inspire the lunatics professing "jihad." Our sons and daughters are in harm's way and some are making the ultimate sacrifice, daily. We owe it to them to ensure that this is investigated and that the people attempting to profit through fraudulent means are brought to justice and severely punished.

For more details on this, click on the title of this post.