FacebookTwitterRedditEmail

Iraq Reconstruction Fund Invested on Wall Street

Salina, Kansas

Of the $18.4 billion that Congess appropriated 16 months ago for postwar reconstruction in Iraq, only $3.6 billion has been spent to date. There has been much head-scratching over this uncharacteristic failure of the Pentagon to spend money promptly.

A recently unearthed portion of a Defense Department memo sheds some light on the issue, suggesting that more than $14 billion earmarked for reconstruction was actually invested on Wall Street. The memo’s author and date are unknown. This portion of the apparently classified document — marked “page 3” — was mistakenly sent to Mid-America Seed Savers, a nonprofit organization in Lawrence, Kansas whose members had filed a Freedom of Information Act request for documents related to the Army’s alleged distribution of genetically engineered wheat seed to farmers in Iraq. The memo fragment is reproduced here in full:

[page heading] Reconstruction fund enhancement – p. 3

[…] that among these, the scenario with greatest potential was investment in a medium-risk portfolio of U.S.-based securities. To accomplish this without incurring excessive and unwarranted scrutiny, the Secretary issued a classified order creating the Office of Special Brokerage Services (OSBS), to which management of the reconstruction funds was assigned. The OSBS, quietly through third parties, purchased approximately $5 billion in stock in February, 2004. Another $9.2 billion was invested the following month. As of December 31, 2004, the fund had shown a net growth of approximately -1.7%.

The negative growth observed to date should not be cause for gloom. This is a long-term investment of behalf of the Iraqi people. According to OSBS projections, the fund’s assets will achieve a value of $38.9 billion by a decade from now, assuming vigorous growth in the US economy.

It is important to compare that figure with the almost-certain undesirable outcome of spending the money directly on infrastructure enhancement. The past two years’ experience shows that new public works run a significant risk of damage or even instantaneous 100% depreciation due to hostile and friendly combat activities. And, as the CJCS [Chairman of Joint Chiefs of Staff General Richard Myers] has noted, insurgencies typically last 7 to 12 years. If invested on the ground in Iraq today, the reconstruction funds might well be worth precisely zero to the Iraqi people a decade from now.

Prudent investment, on the other hand, can help Iraq rebuild while becoming an ownership society. The OSBS has assigned portions of the fund’s assets to individual citizens, based on voting rolls from the January election. Although he or she is not yet aware of it, each and every Iraqi voter now owns a Personal Reconstruction Account (PRA) that will continue to grow in value, safely, until violence in Iraq subsides and normal economic activity can resume. At that point, Iraqi citizens will be able to draw on their PRAs as needed, putting that money to work in their economy and stimulating private-sector solutions to the problem of reconstruction.

PRAs will provide Iraqis with what they desire most: freedom of choice. Under this plan, money will go directly into the pockets of the Iraqi people, for whose benefit Congress intended it. Furthermore, the use of voting records to allocate PRAs will ensure that impetus for rebuilding the country will come from those who have demonstrated a commitment to the democratic process — not from Muslim extremists or Baathist dead-enders.

The question of whether to inform American or Iraqi citizens of OSBS activities and plans is a difficult one. Taking into consideration current political realities, it is probably best not [. . . end of page]

(Pentagon officials have offered no comment on the memo.)

STAN COX is a plant breeder and writer in Salina, Kansas. He can be reached at: t.stan@cox.net

 

 

 

More articles by:

Stan Cox is the author of The Green New Deal and Beyond : Ending the Climate Emergency While We Still Can (City Lights, May, 2020) and one of the editors of Green Social Thought, where this piece first ran.

Weekend Edition
August 07, 2020
Friday - Sunday
John Davis
The COVID Interregnum
Louis Yako
20 Postcard Notes From Iraq: With Love in the Age of COVID-19
Patrick Cockburn
War and Pandemic Journalism: the Truth Can Disappear Fast
Eve Ottenberg
Fixing the COVID Numbers
Jeffrey St. Clair
Roaming Charges: Every Which Way to Lose
Paul Street
Trump is Not Conceding: This is Happening Here
Robert Hunziker
The World on Fire
Rob Urie
Neoliberal Centrists and the American Left
John Laforge
USAF Vet Could Face ‘20 Days for 20 Bombs’ for Protest Against US H-Bombs Stationed in Germany
Andrew Levine
Clyburn’s Complaint
Kavaljit Singh
Revisiting the Idea of Pigou Wealth Tax in the Time of Covid-19
Paul Ryder
Here Come the 1968 Mistakes Again
T.J. Coles
Fighting Over Kashmir Could Blow Up the Planet
David Macaray
Haven’t We All Known Guys Who Were Exactly like Donald Trump?
Conn Hallinan
What’s Driving the Simmering Conflict Between India and China
Joseph Natoli
American Failures: August, 2020
Ramzy Baroud
Apartheid or One State: Has Jordan Broken a Political Taboo?
Bruce Hobson
The US Left Needs Humility to Understand Mexican Politics
David Rosen
Easy Targets: Trump’s Attacks on Transgendered People
Ben Debney
The Neoliberal Virus
Evelyn Leopold
Is Netanyahu Serious About Annexing Jordan Valley?
Nicky Reid
When the Chickens Came Home to Roost In Portlandistan
Irma A. Velásquez Nimatuj
The Power of the White Man and His Symbols is Being De-Mystified
Kathy Kelly
Reversal: Boeing’s Flow of Blood
Brian Kelly
Ireland and Slavery: Framing Irish Complicity in the Slave Trade
Ariela Ruiz Caro
South American Nations Adopt Different COVID-19 Stategies, With Different Results
Ron Jacobs
Exorcism at Boston’s Old West Church, All Hallows Eve 1971
J.P. Linstroth
Bolsonaro’s Continuous Follies
Thomas Klikauer – Nadine Campbell
Right-Wing Populism and the End of Democracy
Dean Baker
Trump’s Real Record on Unemployment in Two Graphs
Michael Welton
Listening, Conflict and Citizenship
Nick Pemberton
Donald Trump Is The Only One Who Should Be Going To School This Fall
John Feffer
America’s Multiple Infections
Kollibri terre Sonnenblume
Thinking Outside the Social Media Echo Chamber
Andrea Mazzarino
The Military is Sick
John Kendall Hawkins
How the Middle Half Lives
Graham Peebles
The Plight of Refugees and Migrant Workers under Covid
Robert P. Alvarez
The Next Coronavirus Bill Must Protect the 2020 Election
Greg Macdougall
Ottawa Bluesfest at Zibi: Development at Sacred Site Poses Questions of Responsibility
CounterPunch News Service
Tensions Escalate as Logging Work Commences Near Active Treesits in a Redwood Rainforest
Louis Proyect
The Low Magic of Charles Bukowski
Gloria Oladipo
Rural America Deserves a Real COVID-19 Response
Binoy Kampmark
Crossing the Creepy Line: Google, Deception and the ACCC
Marc Norton
Giants and Warriors Give Their Workers the Boot
David Yearsley
Celebration of Change
FacebookTwitterRedditEmail