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Follow the Money

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One of the unremitting leitmotifs of one-hundred-percent Americanos is the complaint that “the media just won’t print positive stories about Iraq.” Apparently all the canons of journalism dictate that our dailies should be filled with edifying tales about Tikriti tykes receiving soccer balls and canned asparagus, or a venetian blind factory opening in Irbil. Yet somehow, the media conspiracy prevents the public from reading “fair and balanced” accounts that might be stenographically reproduced from the [now defunct] CPA’a press releases. Or perhaps the good news just gets lost amid the blizzard of media stories about airliners that landed safely, neighbors who didn’t get murdered, and laborers who remained employed.

Imagine the surprise, then, at reading the Office of Management and Budget’s chaste announcement that only 2 percent has been spent from the $18.4 billion in Iraq reconstruction funds approved last October. This was no mere data point indifferently churned out by the faceless automatons at OMB; no, the White House was grudgingly releasing something it would prefer to hide. The only information the government releases on a Friday afternoon before a three-day weekend is bad news; when it is hoped that the Beltway nomenklatura, streaming over the Bay Bridge to the Delmarva fleshpots, will be distracted. You can be sure the White House wasn’t ballyhooing what a good steward of the taxpayers’ money it was by sitting on the money. What, then, is the explanation?

There are two plausible hypotheses, neither of which is mutually exclusive:

1. The military situation in Iraq is so disastrous that projects simply cannot be undertaken. The Washington Post’s story [1, contained in Reference 2 below] on the reconstruction aid suggests this reason, and quotes administration spokesmen to that effect. But this hypothesis, while likely to be at least partially true, itself raises a host of questions:

a. If it is too dangerous to do widespread reconstruction, doesn’t that suggest a reason for the absence of good news stories from Babylon that is more fundamental than the mere ill nature of a bunch of pack journalists (34 of whom have been killed in Iraq thus far, contrary to Deputy Secretary of Defense Wolfowitz’s public impugning of journalistic elan)? And overwhelming anecdotal evidence suggests there is little real reconstruction going on; the CPA administrators, the would-be heirs of Lucius Clay (fabled in the reconstruction of post-war Germany) huddle instead in the Emerald Palace did little more than churn out press releases, befitting their origins as Capitol Hill press hacks.

b. Too dangerous it may be to let contracts with the vast bulk of the appropriated reconstruction money; why, then, has the administration encountered no such difficulty obligating money in one particular instance: reimbursing Halliburton for fuel delivery? Just another coincidence, surely.

c. According to the same Washington Post story, the CPA likewise had no difficulty in earmarking or disbursing nearly $20 billion of Iraq’s own funds in various ways (ways that cannot be verified, because there is no independent audit — more on this below). Given the supposedly ephemeral nature of L. Paul Bremer’s recent viceroyalty, does the rapid disposition of Iraqi assets before the establishment of a native-run administration have the suspicious smell of a looting operation? That is the conclusion of the British charity Christian Aid, which says that at least $20 billion in oil revenues and other Iraqi funds intended to rebuild the country have disappeared from banks administered by the CPA [2]. And before an independent audit could take place, the CPA liquidated itself and Bremer departed Baghdad in the manner of Baby Doc or Ferdinand Marcos – unseemly haste for so regal a personage.

2. Regardless of whether Iraq was more unstable and dangerous than foreseen in October 2003, the second hypothesis argues that the administration never intended to spend the vast bulk of the money on Iraq reconstruction in any case. Quite apart from the fact that this intention would have violated article I, section 9 of our late Constitution, there are other curious features as well.

The White House repeatedly emphasized how vitally important it was for Congress to pass the Iraq reconstruction package quickly. Why the haste, if the first year disbursement rate is so minuscule? Two possibilities:

a. Even if the administration had no intention of spending the money, it wanted a signed bill before the Madrid donor’s conference in order to induce third countries into donating money and/or cannon fodder to the Great Crusade. In other words, sucker Congress and the taxpayers into putting up the bait to sucker the Europeans.

b. The WMD argument having fallen flat (David Kay released his report in September), the administration needed a fresh argument to justify to the public its military invasion of Iraq. Hence the need to swathe harsh realities with the bogus argument that the occupation was really and truly an undertaking of the most noble and altruistic character. At the time of the debate over the reconstruction aid, the rebuilding of Germany was the false historical analogy du jour; if we can rebuild the Brutal Hun’s industrial machine and thereby pacify him, so the tale went, why can’t we demonstrate our transcendent virtue to the people of the Middle East and incur their lasting gratitude? There was just enough plausibility in this snake oil that some Americans downed a whole jug of it.

The next step, as in the solution to any complex crime, is to follow the money. Will Congress, on learning of the shaky pretenses behind the appropriation of $18 billion, schedule hearings on the matter? Anything is possible, but by no means certain. The partisan impulses of the majority party in an election year are the most obvious reasons for stonewalling, but there are more personal reasons as well: too many reputations have been staked on the reconstruction vote. Many would doubtless write off $18 billion rather than admit error.

Will Congress rescind or transfer the appropriation? Again, that is doubtful. Meanwhile, the spending authority is sitting there, a no-year (i.e., unexpiring) slush fund in the hands of people who learned accounting from their campaign benefactors at Enron and Halliburton. Connoisseurs of the Congressional Record will recall that at the administration’s insistence the House and Senate leadership killed a certain provision in the appropriations legislation when it was in conference committee. This provision had been previously approved by a recorded vote, and would have subjected the Iraq reconstruction contracts to audit. Why would (just to pick a random example) the Office of the Vice President not want independent auditors poking around its philanthropic enterprises in Iraq?

Readers who are aficionados of black budgeting will appreciate the issues that arise. What can a government do with no-year money it doesn’t feel compelled to account for? One is certain there is any number of warlords, dope-peddling “intelligence sources,” and other deserving gentry eager to be reconstructed with good-will payments from Uncle Sam. Or, if you like, your government could pre-fund its next installment of the adventures in neo-conservative military strategy, much as it pre-funded the invasion of Iraq with $700 million that was supposed to fund the take-down of Al Qaeda. Or, suitably fumigated, it could fund an ad campaign in several battleground states.

That is admittedly speculation, conditioned, one is compelled to admit, by a somewhat less than charitable view of the political class as it exercises its fiduciary responsibility over the public fisc. But without public accountability, how will we ever know for sure?

[1] “U.S. Funds for Iraq are Largely Unspent,” The Washington Post, 4 July 2004.

[2] “Fuelling suspicion: the coalition and Iraq’s oil billions,” Christian Aid press release, 28 June 2004.

WERTHER* is the pen name of a Northern Virginia-based defense analyst

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