COMM: Almost three years ago the British and American coalition which had overthrown Saddam Hussein was given a very special responsibility by the United Nations. It was given trusteeship of more than twenty billion dollars which belonged to the people of Iraq. Over the next 14 months it spent almost all of it. Yet no-one can account for where it all went. Literally billions of dollars have gone missing.

GRAYSON SYNC American law was suspended, Iraqi law was suspended, and Iraq basically became a free fraud zone. In a free fire zone you can shoot at anybody you want, in a free fraud zone you can steal anything you like.

COMM: Tonight on Dispatches we reveal the fraud incompetence and corruption which is the Iraqi money pit.

WILLIS: I think that as trustees of the Iraq assets we did a very poor job. I think it was a failure. After all, it was their money, We should have spent it on the Iraqi people rather than sucking it out of them and putting it in the pockets of foreign businesses.

COMM: And today all across Iraq, ordinary people are paying the price of that failure.

IRAQI DOCTOR SYNC: This treatment is worse than primitive... it’s not even medicine… but we just don’t have the breathing mask we needDISPATCHES TITLE SEQUENCERESOLVES TOIRAQ’S MISSING BILLIONS

COMM: Ali Fadhil is an Iraqi doctor. But he is also a journalist who has won

COMM: Ali Fadhil is an Iraqi doctor. But he is also a journalist who has won international awards for his dangerous work uncovering the truth about conditions in Iraq today.We asked him to investigate the human consequences of the coalition’s failure to rebuild Iraq as promised. Ali and his family live in Baghdad. His daughter, Sarah, is just three.

ALI V/O:Sarah was born four days before Saddam fell.I think of her as the future of Iraq.

ALI V/O CONTINUES: But that future depends on Iraq being rebuilt.This was the promise made by the United States and Britain.

BUSH : we will help them to restore basic services, such as electricity and water, and to build new schools, roads, and medical clinics.

COMM:Few things provide a better barometer of the state of a nation’s health than the state of its health service. The coalition says it’s spent hundreds of millions on this so we asked Ali to use his medical expertise to see what’s been achieved.While Dispatches went to the United States in search of the people who spent Iraq’s money,Ali set off to look at reconstruction in one small area of Iraq .

ALI SYNC: they spent 527 million dollars in a very small city in the south of Iraq called Diwaniyah. I believe it’s a good place to go and see, so we’ll go and see.

COMM: Ali headed for Diwaniyah one hundred miles south of Baghdad, on one of the most dangerous roads in Iraq.Because of the danger, only an Iraqi could attempt this kind of investigation. But he will be risking his life to do it.

ALI VOI decided to visit Diwaniyah’s only state paediatric and maternity hospital.The years of war, neglect by Saddam and Western sanctions left this hospital in a terrible state.

So the staff were very pleased when last year the Americans promised a four million dollar refit.But with just a week to go before this part of the hospital opens, it’s not looking very promising.

ALI VOThe hospital manager has invited me to join an inspection tour.But the man representing the American contractor is not happy about me filming.

03 54 REP: Please… Why the filming? Who’s it for…

ALI VOAs we walk round the problems are obvious. Outside, we can see an open manhole and sewage in the garden.And in the kitchen – more blocked sewage.Everywhere the standard of work is terrible. New light fittings have melted. Pipes have not been connected. In the operating theatre changing room you can smell raw sewage.

But there’s one thing that to a doctor seems incredible. The flooring has been repaired so badly it is now a potential killer.

00:13:24 HOSPITAL OFFICIAL: If water gets under here, it will become a breeding ground for germs and pollute the operating theatre. It should be sealed.

ALI VOI can even see ants crawling under the flooring – and this is in an operating theatre that’s going to be in use in a week’s time.The man in charge of maintenance is in despair.
Roll 3 – 0 24 36 This is a hospital. I was expecting to receive high quality work. When someone says he has come to save us from the misery we’ve been living, we expect him to do something useful, not just make a profit.

COMMThe American contractor told us that all the work had been done by Iraqi subcontractors, overseen by them and US government agencies.

But for Iraqis, the real issue is this: The coalition had 23 billion dollars of Iraq’s own money. So what have they done with it?

The money included proceeds from the sale of Iraq’s oil under the United Nations’ oil for food programme, and seized Iraqi bank accounts. It was all put into a new fund run by the Coalition – the so-called Development Fund for Iraq.

SYNC///Any oil sales that were made in this period, those monies from those sales became part of the development fund for Iraq, all assets of the government, whether within the country or outside the country, were part of the development fund for Iraq.

COMM: The fund was turned into hard cash, stored by the Federal Reserve Bank in New York.

From there, literally tonnes and tonnes of crisp one hundred dollar bills were transported to Andrews air force base near Washington, then flown to Iraq.

Over the first 14 months of the occupation three hundred and sixty three tons of one hundred dollar bills were flown in. That’s 12 billion dollars in cash.


WILLIS: Iraq was awash in cash, in dollar bills.////A: US dollars, piles and piles of money.
The CPA – or Coalition Provisional Authority – ran Iraq during that period– and they were in charge of the Iraqi money. But who ran the CPA? Officially it was the coalition of the willing, including the UK. The reality was very different.The American State department had prepared plans for the post-war rebuilding of Iraq. But the Bush administration swept those plans aside. Instead power was handed to the people in this building: The Pentagon .The military – the people who run wars, not countries - were put in charge of nation-building.
COMM: The Pentagon’s man in Iraq was American Ambassador, L. Paul Bremer the Third. And he immediately put his stamp on the new regime. He said US contractors were not subject to Iraqi law.

GRAYSON 00.10.59 He gave them immunity from prosecution or even collection actions under Iraqi law. So American law was suspended, Iraqi law was suspended, and Iraq basically came a free fraud zone, in a free fire zone you can shoot at anybody you want, in a free fraud zone you can steal anything you like. And that’s what they did.

COMM: Frank Willis was one of Bremer’s top officials. He was a senior member of the Coalition Provisional Authority and was effectively in charge of all civil aviation in occupied Iraq. He has agreed to speak out about the Iraq Money Pit, and how it worked.

ROLL 105 25 53 WILLISContracts were negotiated fast and furiously, sums were paid, contractors went about their business, but there was very poor oversight of the performance of those contracts. There was a lack a personnel on our part and a lack of trained personnel on our part to provide effective supervision..

COMM: In an atmosphere of chaos fantastic sums of money were stashed by the Americans in Saddam’s captured palace. Bags of cash were handed out daily.

00:32:14WILLIS We were known to have played football with some of the bricks of hundred dollar bills before delivery, it was a Wild West crazy atmosphere, the likes of which none of us had ever experienced.

COMM]Security was incredibly lax.From one vault, three quarters of a million dollars was stolen.Another safe was left open.In one case, two American agents left Iraq without accounting for nearly one and a half million dollars.

ROLL 105 26 45 WILLIS When you have cash it stands, it stands to reason that you’re not going to be able to trace it in the same kind of way, it’s why a lot of dirty deals are done in cash.

COMM: As word spread of the deals to be done in Iraq, contractors from around the world began to congregate. Some were reputable. Some were not.

04 16 GRAYSON ROLL 102 it attracted soldiers of fortune and people who went into Iraq in order to make a buck. These were people who had no interest in fostering democracy in Iraq, they had no interest even in carrying out their instructions from the US military, what they were interested was in simply making a profit.They saw their opportunity and they went for it. These are the people who we know as the war profiteers ….
.
COMM: The profiteers were on their way - and the Iraqi people were about to pay the price.

END OF PART ONE……PART TWO

COMM: From the early days of the occupation in 2003, Iraq was awash in dollars - and in promises of a new tomorrow.
NASH: $18.4 billion to rebuild the country

BREMER: which will allow us to start putting money into essential services like healthcareHAVEMAN: The budget for 2003 will be somewhere between 600 million and 800 million.

WINKERBURGER: Money is flowing into the health care system.

COMM: So what happened to all those promises? Dr Ali Fadhil is in a paediatric and maternity hospital in Diwaniyah trying to find out.ALI VOThis hospital has just had a four million dollar refurbishment. But where did all that money go?Not on vital medical equipment.

Child screams in pain as cannula is inserted….

04 28 Please don’t blame me Doctor Ali, I’m an expert in using cannulas, but this is a large one. This is a problem we’ve had for a long time.

ALI VOThere’s a constant stream of children from Diwaniyah with severe diarrhoea and dehydration. To rehydrate them, special fine drip needles - canulas - are needed. This is a basic piece of equipment - very cheap.But an infant like this needs the very smallest of needles – and the hospital has none.Her mother has brought her here in desperation after another hospital spent three days trying unsuccessfully to get a large cannula into her.

NURSE Now this child and I are in trouble. Either I succeed using my expertise or not….

ALI VO: It’s all too much for the mother, who’s watched her child suffer unnecessarily for so long.
COMM: So how come after three years of occupation and billions of dollars of spending, hospitals are still short of basic supplies? Health experts who were in Iraq in the first weeks of the occupation say the mistakes were made from the start. This laid the basis for today’s problems in Diwaniyah

GARFIELD: What we should have done is flood the country with simple equipment - /// the simple basics is what you need, including the management systems to know what you have and what you don’t have. And those are the things that we didn’t do, we went more for big ticket showy items that you could splash around for symbolic value, than some of these less attractive but more important ? things that make all the difference between life and death in an emergency room.
COMMThe first international health professionals sent in to rebuild Iraq’s health service felt there were already good foundations..

PATERSON SYNC Iraq had a very reasonable primary health care system. They had experts, I worked with some of them. They they very clearly knew what needed to be done. If we had engaged with them, and worked with them, I think we would have been much farther along now because they understood as we could not their health care system and what was needed.
COMM: But Coalition provisional authority boss Paul Bremer had a different blueprint for the Pentagon’s new Iraq.

Every official with links to the old regime was to go. It was called de Baathification.But it was indiscriminate. So along with Saddam’s stooges and placemen, Bremer cleared out most of the people needed to run the health system.

KEESWe had no typewriters, no desks, no nothing anymore.. But we had left one kind of asset which was the people who were there to run the health system. They were still there. And so then to fire those very people is obviously not made, it doesn’t make sense. Because you can replace them, but you lose time in replacing them and training them.

COMMDr Ali Fadhil was working in Baghdad Medical City at the time. He saw first hand the effects of de-Baathification.

ALI SYNC Roll 34 18 10 approx We lost a very intelligent and a professional doctor because of the silly idiot policy of getting rid of the Ba’athist at the very beginning which was, you know totally wrong, he is just a physician, at least if he was there he would have saved lots of lives.

COMM: To head the reconstruction of the Iraqi health service, the Pentagon appointed a health administrator from Michigan. James Haveman.

HAVEMAN ARCHIVE:. I went to Iraq as a senior advisor. My role is to advise Ambassador Bremer on health car issues but also to work with the Ministry of health to make sure that it’s strong

COMMHaveman had little international health experience, but he WAS a prominent Bush supporter .

GARFIELD: He was appropriate as a political advisor because he had the trust of senior leadership in the Pentagon who related to the reconstruction of Iraq. He had the political qualifications but not the technical ones. //// He was a highly moral, religious individual and he fit with the profile of many of the people who were in senior administration.

HAVEMAN I happen to vote republican///.00:30:46I happen to support George W. Bush as president and his policies. And I did some consulting once for Jed Bush during the transition from one, one term to another. That all looks like pretty good credentials to me. And it's just who I am.

HAVEMAN Q: there were lots of people with experience, much more experience of developing health international, with dealing with post-conflict situations. You hadn't' had any experience in that?

00:32:44A. I didn’t deal with post-conflict situations. What's unique about a post-conflict situation, what's unique about a pre-conflict situation, what's unique about managing healthcare in Michigan. I think you've got to have the skill and ability. I happen to be a social worker by training. I happen to understand health. I mean when you're, I managed a healthcare system for Michigan for ten million people. I don't know why I'm trying to defend this because I think I've got the ability to do it.

00:33:20 A. And I think the president and people who interviewed me at the Pentagon and the State department elsewhere thought I had the skills as well.

HAVEMAN Q: there were lots of people with experience, much more experience of developing health international, with dealing with post-conflict situations. You hadn't' had any experience in that?

00:32:44A. I didn’t deal with post-conflict situations. What's unique about a post-conflict situation, what's unique about a pre-conflict situation, what's unique about managing healthcare in Michigan. I think you've got to have the skill and ability. I happen to be a social worker by training. I happen to understand health. I mean when you're, I managed a healthcare system for Michigan for ten million people. I don't know why I'm trying to defend this because I think I've got the ability to do it.

00:33:20A. And I think the president and people who interviewed me at the Pentagon and the State department elsewhere thought I had the skills as well.

COMM: Critics claim that people were given important jobs not because they were the best qualified, but because of their political connections..

PATERSON: I believe it had a lot to do with showing that the US was in control. And I believe that it had to do with rewarding people that were politically loyal. So rather than being a technical agenda, I believe it was largely a politically motivated reward and punishment kind of agenda.

00:16:39:Q. That sounds very like the way Saddam ran the country.A. If you were to interview Iraqis today, about what they see day to day, I think they will tell you that they don’t see a lot of difference.

COMMBack on the road, Ali is continuing his investigation of the failures in rebuilding Iraq’s essential services.He’s trying to find out why so many children are suffering diarrhoea and dehydration.

ALI VO A member of the city council took me on a tour, to neighbourhoods where there are no schools, no domestic water supplies, and sewage in the street.

The US ambassador for reconstruction says Diwaniyah has benefited from a five hundred million dollar reconstruction programme. But I can see little evidence of it.

00:13:48

00:12:06Nobody cares or listens to us, nobody cares about our demands. Even though it’s winter now, if you go inside our houses you will see mosquitoes filling the rooms, and I don’t even have to talk about the bad smell,

ALI VO I was told that a US company was paid nearly three million dollars to rebuild Diwaniyah’s sewage works. Yet the plant is still not working, because power cables have not been laid. So sewage goes into the river untreated, polluting drinking water downstream.

BULLET POINTSDISPATCHES COMMThe United States says it’s spent billions on Iraq’s essential services. Yet, according to its own latest figures, they’re worse than before the war.~They’re generating LESS Electricity – yet one and a half billion dollars has been spent on it.~They’re producing LESS Oil – yet half a billion dollars has been spent on itThey’re supplying LESS clean water – yet another half a billion dollars has been spent.

ALI VO Back in the hospital an anxious father fears his child may have meningitis, As so often in the desperate situation of Diwaniyah, angry parents turn on the doctors.

17.43 I want a good hospital, not a terrible hospital that makes my child worse….

19 45… I’m not blaming you, we are the same class. I’m talking about important people. Those controlling all those millions and the oil.! They didn’t come here to save us from Saddam, they came here for the oil, and so now the oil is stolen and we got nothing from it.

GIRL: If the people who run the country are stealing the money what can we do?

ALI VOBut at least I was able to tell the family that their child did not have meningitis. She had a complication arising from fever and dehydration, probably caused by bad sanitation.

COMM The money that should have helped those people was entrusted to the coalition by the United Nations.But official auditors have not been able to discover where it all went.
Now, investigations by the Special Inspector General for Iraqi Reconstruction are leading to arrests. But their inspectors have struggled to get at the truth about the Coalition Provisional Authority and the Development Fund for Iraq.

ROLL 117 26 1700:26:19:there were less than adequate internal controls in many cases. Very often we found that contracts were missing, that the individuals who were responsible for them had short terms, and they had left and turned it over to someone else. And so we had a very difficult time, actually trying to make sure that all the money was accounted for.

COMM: It was a climate which practically invited exploitation. The largest single recipient of Iraq’s money was American energy company Halliburton – formerly led by US vice president Dick Cheney.They received 1.6 billion dollars of Iraqi money to help reinstate the country’s oil supply.Auditors said 177 million dollars were overcharged.Although Halliburton continues to deny this, it recently reached a settlement with the US Government to repay nine million dollars.But while some companies may have overcharged, others went far further. Scott Custer and former Republican candidate Mike Battles were about to fleece Iraqi funds of millions of dollars. One man who worked with them – until he realised what they were up to - was Bob Isakson

BOB ISAKKSON ROLL 108 their background was impeccable, they were military officers, CIA one of them had run for the United States Congress, they were recommended by very high level US government officials as being, as being honest individuals.

COMMToday lawyer Alan Grayson is working with Bob Isakson to recover money from Custer Battles, using a US law which allows Isakson to share some of it.

ROLL 102 15 19 GRAYSON These were people who went over to Iraq without any presence there, without any employees there, without equipment, without facilities, without any tangible qualifications and without any money,

ROLL 108 25 11 ISAKSON A: They had no money. Scott Custer from what I am told by my men could not pay the fifteen dollars or the twenty dollars to get out of the Jordanian airport to immigration fee.

COMM: Almost immediately Custer Battles landed a fifteen million dollar contract to provide security for civilian flights at Baghdad Airport. But the flights never happened, so Custer Battles carried out other security duties. Frank Willis didn’t hire them, but as the coalition’s head of civil aviation, did have to pay them.

WILLIS ROLL 105 28 20 Two million dollars was due on the 1st of August. We went down to the vault and got the two million dollars in crisp, new, one hundred dollar bills, they were shrink wrapped in one hundred thousand dollar amounts

ROLL 105 31 38 We called the representative of Custer Battles and said, come on up and get your payment, bring a gunny sack, we’ve got your money ready for you.

Custer and Battles, meanwhile, from their base in Baghdad airport, were determined to expand their empire. And their next big chance was this. Iraq’s money exchange programme, known as the ICE project.It was a classic Coalition exercise. They couldn’t get desperately needed drugs to hospitals, but they would cheerfully devote enormous resources to replacing dinars showing Saddam’s face with ones that didn’t.

DAN SENOR : DOD ARCHIVEThe logistical challenge involved with this currency exchange is enormous the amount of cash is something in the order of 22 thousand tons of bills. It is an enormous challenge and something we believe is another sign that the reconstruction is on track

COMM: Custer Battles won a contract which would pay them their costs plus twenty five per cent.But they wanted far more than that - as one of their associates explained to Bob Isakson.

ISAKSON; He said that oh no we can make a dramatically more, we can make dramatically more money than that. I said what are you talking, how could you possibly do that

COMM The associate explained that they would simply create false companies to put in exaggerated bills for costs, which would be passed on to the Americans.

ISAKSON .33.52 And I said listen I am not going to do that, that’s illegal, we are not going to be involved, we don’t get involved in that kind of stuff, we are not going to be involved and it’s, it’s criminal.

COMM: But Custer Battles went ahead anyway.

GRAYSON SYNC A: they simply made up invoices from the companies that they controlled for numbers that were wildly different from what their actual expenses were, and they handed in those invoices in lieu of the real invoices.

COMM: For a new helipad, Custer Battles got another company to do the work, then charged a profit of more than 60 per cent on top.

And they rented to the Coalition fork lift trucks that were not even theirs.

GRAYSON They were Iraqi airways property that had been abandoned. They painted them over so that no-one would recognise them as Iraqi Airways fork lifts, ~And ~custer battles turned round and leased them to the government for 108 thousand dollars for 4 months alone

COMM:But then Custer Battles made an extraordinary mistake. They left a devastatingly incriminating document in a CPA meeting room. Grayson has a copy.

GRAYSON This is what they left behind It’s the spreadsheet…36 00 it lists various columns, one of the columns is spent, another column is invoiced. So this is what Custer Battles actually spent, this is what they billed to the government for the same items.billings to the government.

GRAYSON A five tonne truck, actual cost two hundred and forty thousand dollars for twelve of them. Invoiced cost six hundred thousand dollars. Filing cabinets, actual costs zero, evidently because they found them abandoned at Baghdad International Airport,invoiced cost two hundred dollars. Hand trucks, twelve of them, actual cost four hundred and eighty dollars, invoiced cost four thousand, eight hundred dollars.That’s a one thousand percent mark up. And on and on and on for page after page after pageuntil you reach the end and you see that three million dollars of expenses on their time and materials contract turned into a horrific ten million dollars in billings to the government

COMM: But perhaps the most extraordinary thing is this. Despite the evidence, the US government has taken no legal action to recover the money.

…and yet they continued this contract , they allowed Custer Battles to keep working and to receive other contracts, they took no action to prevent that for almost a year afterwards .What did they have to gain from not prosecuting these people
A: The .. the government in the United States wants to foster the view that things are going well in Iraq. Coming down hard on war profiteers is inconsistent with that goal.
if you’re a war profiteer in Iraq crime does pay.

COMM: In Diwaniyah, Dr Ali Fadhil is finding that the problem is not crime, but a lack of basic equipment.

ALI VOThis is a maternity hospital. Yet the neonatal care unit is desperately short of proper facilities.

There are only fourteen incubators and they are old – made in the seventies….

00.04.16Most are broken, doors held in place by wires and tubes and even plasters. This is unhygienic. They should be sealed to keep out germs.

NEONATAL NURSEWe put more than one child in each –sometimes two or three. We have only fourteenj incubators, while we sometimes receive twenty children, or twenty-five or sometimes more …

ALI VOStaff here feel angry – but they also feel betrayed. The coalition says it’s spent hundreds of millions of dollars on health, yet still babies suffer unnecessarily for lack of basic equipment.

ALI VOThe Coalition says security problems have slowed down progress in re-building Iraq. The climate of violence makes everyone nervous. On the road between Diwaniyah and Baghdad, I was becoming increasingly worried about my own safety.I was shot at by American troops on two occasions, once bursting the tyres of my car. They drove off without explaining. But worse was to come…

In the middle of the night, heavily armed American forces blasted their way into my home in Baghdad - the house we share with my wife’s family.

Roll31/3600:10:4000:10:59we heard a big explosion then all the windows of the house, we heard them start breaking down, then, my wife woke up and Sarah woke up and Sarah started crying and she jumped to me and said; daddy, I’m afraid, then the suddenly the door opens //three soldiers come into the room and lay me down on the ground.

00:11:31
ALI VOAround twenty American soldiers took part in the raid. The house was wrecked. My father and brother in law were beaten up. Their car was smashed.I was tied, hooded and taken in an armoured truck to a military base where they held me overnight. In the morning they said it was a mistake, released me, and gave me fifteen hundred dollars in compensation.

MOTHER IN LAW 00 23 45 I just want to say to Bush the “father of democracy”: “Is this the democracy you brought to Iraq?”

ALI ROLL 31/36 24 08 right now, I’m thinking just like the rest of the Iraqis that I know that I’m gonna leave Iraq, I’m not gonna stay here any more, I don’t think its gonna be possible for me to raise up Sarah here in Iraq but I’ll come back one day, I’ll come back,

ALI VOIt was only after Dispatches complained to the US Ambassador in Iraq that he apologised. But he said that, in the war against insurgents, such incidents might happen again.I felt angry, but determined to continue my investigation.I still wanted to know what happened to Iraq’s money.
END OF PART TWO

PART THREECOMM: In Diwaniyah paediatric hospital parents wait in anxious vigil by their sick children. But as in hospitals throughout Iraq, whether their children live or die could be determined by a lack of basic medicines and equipment..

ALI VO: In the emergency room I found this girl. Her name is Zehara and she is only two days old. She has Infant respiratory distress syndrome, a serious condition.

ALI VO: She urgently needs drugs, like synthetic surfactant to help her lungs work – and oxygen. But the hospital has no surfactant and no oxygen regulators. Instead staff have made a crude arrangement of old suction pipes.

There is no way to control the level of oxygen that goes to each incubator.

ALI VO : Zehara is a twin, born one and a half months premature. Her family live in Diwaniyah where her mother is a teacher. The other twin, Abbas, is in a different ward, where I met their father.

ALI: How is your son?FATHER: He is not doing well, his condition is not stable.

VO ALI The doctor said that because of shortages of drugs and equipment around half the children with this condition will die.I needed to understand why hospitals are still so short of vital medicines and equipment. Even a small part of Iraq’s 23 billion dollars could have paid for these things.I wanted to ask Paul Bremer, the man who was in charge of the money, but he declined to talk to me.

DISPATCHES COMM: But of all the mysteries surrounding the disappearance of so much Iraqi money perhaps the most bewlidering is this. The Coalition was due to hand over whatever was left of the Iraqi money to the incoming Interim Iraqi government But instead of trying leave them as much as possible, the CPA spent the weeks leading up to the handover on an extraordinary spending spree. In a series of increasingly exasperated emails, Federal Reserve bank Official Timothy Fogerty, told his colleagues what was going on.


ACTORJust when you think you’ve seen it all, the Coalition Provisional Authority is ordering two billion four hundred and one million, six hundred thousand dollars, to be shipped out on Friday June 18.

GINGERIn the last few weeks of the CPA, according to the records that we have we feel that there was a large push to expend the money that was remaining from the DFI and at the time we felt that there wasn’t adequate planning in place, thee wasn’t adequate prioritisation in place, and so there was a bit of a rush to get the money out the door, and to spend it on reconstruction projects that maybe could have been better thought through.

COMMAs the date of the handover approached, the coalition asked for more and more cash.



ACTOR: “I just left you voice mail” wrote the Federal reserves’ Timothy Fogerty. “The CPA is now asking if ….we can ADD $1 billion to the already scheduled Tuesday shipment……It …makes it a $3BN shipment.”

COMM: The CPA’s rush to spend saw no less than five billion dollars go in the month (CHECKED OK) before the handover.
One CPA official was given nearly seven million dollars and told to spend it in seven days.

. GINGER ROLL 118 00:00:17:A. (HE) was given six point seven five million dollars on the 21st June, and told to spend it by the 28th June. And he told our auditors that he felt that there was more emphasis on the speed of spending the money than on the accountability for that money.

00:00:38:Q. He was given that money in cash. A. Yes he was.

COMMOn the 28th of June 2004 – two days earlier than announced - Bremer handed power over to the interim Iraqi government

His authority had somehow disposed of 20 billion dollars of Iraq’s reconstruction money.Of that, the largest amount – 8.8 billion – went to the Iraqi ministries.But the coalition did not account for how it was all spent.

If a Ministry came in and said you know our portion of that money is two hundred million dollars, essentially the CPA would give them the two hundred million dollars and they would then be responsible for spending that. Where we felt there could have been better internal controls, is in tracking where that money was used.

ROLL 117 33 08 GINGER A.In one Ministry there were over eight thousand people that were on the payroll. And when we tried to verify how many people were actually on the payroll, we could only come up with a little over six hundred verified names. So there were concerns about the use of that money, and the abuse of that money. And we felt that there could have been better control.

COMMToday, US investigators are trying to track down those who stole Iraq’s money. They admit that their investigations into the Coalition Provisional Authority have come too late. Even so, they have fifty criminal investigations underway.
GINGER roll 117 34 00we launched several fraud investigations, and in the last couple of weeks we’ve actually had three arrests of individuals who are suspected of everything from bid rigging, to bribery, to fraud, to money laundering, and several other charges.

COMM: It wasn’t just crooked contractors who were stealing money. Even a Coalition Provisional Authority official was at it too. Last month Robert Stein jr. employed as an official by the CPA despite a previous conviction for fraud pleaded guilty to conspiring to steal more than two million dollars, and taking kickbacks in the form of cars, jewellery, cash and sexual favours.

COMM: So – rather than security – bribery, corruption, fraud, mismanagement and incompetence are the real reasons for the disappearance of billions of dollars down the Iraq Money Pit.In the end, only three and a half billion dollars was handed over by the Coalition to Iraq.Yet last November, Britain’s Foreign Secretary Jack Straw told parliament the government was not aware that any monies from the development fund for Iraq were unaccounted for.

US Secretary of Defense Donald Rumsfeld declined to talk to us about the Iraqi money, but, eventually, in the American Embassy in the heavily fortified green zone in Baghdad we did find a man prepared to speak to Ali

ALI VOI went to meet the new man in charge of America’s reconstruction efforts in Iraq.I wanted to ask Ambassador Dan Speckhard what happened to our money, but he was not willing to discuss it.

SPECKHARD: Most of the concerns about misspent money have to do about what happened two years before when you actually look for evidence of current problems there is only tiny little fractions…Magnitudes you are talking about are very very different. // Its useful to sort of evaluate what happened so we can avoid those problems in the future, but it’s a little bit water under the bridge at this point in terms of what we want to be focussing on for Iraq.

DISPATCHES COMM: So Iraq’s 20 billion dollars – much of it lost, wasted or unaccounted for – is now officially, water under the bridge. Though some former Coalition officials have a very different message for Iraqis today.

WILLIS I’m sorry we didn’t do a better job. I’m sorry we didn’t take more of the Iraqi money that we were trustees of, and made sure that it gotten to Iraqis. I’m sorry we didn’t do many small projects, perhaps less visible, but much more effective in the long run. That would have really restored Iraq. ///We should have done a better job. Q: What can be done now to rectify the mistakes that were made?

00.05.24 A: What could be done now? The Iraqis are going to determine that. I think what we can do is very limited. Our, our opportunity has gone. We blew it.

ALI VONow it’s too late. Iraq’s own money is spent and America says that once the additional twenty one billion dollars it pledged has gone there will be no more. It’s a far cry from the promises that were made at the beginnning

BUSH SYNC BUSH : we will help them to restore basic services, such as electricity and water, and to build new schools, roads, and medical clinics.

SPECKHARDyes expectations probably were too high by some of the Iraqis that when the world’s strongest economic power comes to its aid it can fix everything but in reality a country is a very complex situation the challenges are enormous when you have 26 million people…We have done what we can to help support and jumpstart the process of helping Iraq get back on its feet and return to a modern economic system.





ALI VOBack in the hospital at Diwaniyah, I wanted to check on the condition of Zehara and Abbas, the twins born one and a half months premature.Their mother was still unwell after the birth, and being cared for in another ward. She had not been told how weak her children were.When I found Zehara, the doctor was having a difficult time trying to treat the child without proper drugs or ventilation equipment.

ALI: With no suitable mask to resuscitate her, he could only hold the tube to her nostril

ROLL 13: 00 27 09 IRAQI DOCTOR SYNC: This treatment is worse than primitive... it’s not even medicine… but we just don’t have the breathing mask we need

MARY If the reports that were seen coming out of Iraq now are are even half true, the situation there should not exist. This was never a developing country /////with a third world kind of approach. This was a country that at one time had been the star of the Middle East, in terms of health care. It was a country that other Middle Eastern countries referred to as a model of healthcare. //// And yet they are functioning at a bare subsistence or below subsistence level.

HAVEMAN: Q. they haven't got basic equipment, they haven't got masks, they haven't got drugs, they should've had those within six months, not still be looking for them three years later?

00:39:08A. Yeah it's, it's, it's a type of distribution that is sporadic. It's a type of distribution that some people hoard equipment and supplies, it's a type of distribution system that is inefficient, in time it will get better. But it's not gonna happen overnight.

--00:39:28A. Hospitals are functioning, that's what's important here. Do they have every supply that you might have in the UK, no. Are, are people doing the best they can with what they have, yes.

ALI COMMThe problem is the doctors caring for Zehara have virtually nothing to “make the best of”. They have no ventilators, no adrenaline, not even a cheap but essential medicine like vitamin K. Even the cannula being used on Zehara had to be bought on the black market by her father.And now he’s gone into town again – this time looking for vitamin K.Only the grandmother is here.Then Zehara starts to deteriorate – she is gasping for breath. Her father has still not returned. But it is too late.

00:34:18THE DOCTOR Where is the mother of this child? This child has passed away.

ALI VOAnd then the father comes back .

FATHER I just went to get this for her, they told me to bring it. It’s vitamin K as they don’t have it here

ALI VO: If this hospital had had the correct equipment and the right drugs, Zehara should have survived.

Father: She saw nothing in her life….We all return to

Allah.Father: No, no, poor child. This box is too small. Go and get another one.Uncle: From where?Father: From the pharmacy.

ALI VO The next day, Abbas, Zehara’s brother, died too. This is not the new Iraq we were promised when the coalition invaded our country.

THE END