Billions of dollars of Iraqi oil money have gone unaccounted for by the Coalition Provisional Authority (CPA), according to a new report released Monday.
The British charity Christian Aid 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.
The group says that the U.S.-controlled coalition in Baghdad is handing over power to an Iraqi government without having properly accounted for what it has done with those $20 billion of Iraq’s own money.
“Christian Aid believes this situation is in flagrant breach of the UN Security Council resolution that gave control of Iraq’s oil revenues and other Iraqi funds to the Coalition Provisional Authority (CPA),” the group said in a statement.
Watchdog groups have complained before about the opaque nature of the CPA’s handling of Iraqi money and the lack of transparency by U.S. and Iraqi officials.
“For the entire year that the CPA has been in power in Iraq, it has been impossible to tell with any accuracy what the CPA has been doing with Iraq’s money,” said Helen Collinson, head of policy at Christian Aid.
U.N. Resolution 1483 of May 2003 says that Iraq’s oil revenues should be paid into the Development Fund for Iraq (DFI), that the money be spent in the interests of the Iraqi people, and that it be independently audited.
But the group says that it took until April 2004 to appoint an auditor leaving only a matter of weeks to go through the books.
The group is concerned that the handover of power means that this money may never be tracked down and that the CPA is not going to be around to be held accountable.
The group compared the lack of audits of Iraqi oil money to the abundant information on the $18.4 billion of U.S. taxpayer funds being spent in Iraq. No less than four separate audits of the U.S. funds are underway.
“Too many oil-rich countries go down the road of unaccountable government, riches for the few, and poverty for the many. Iraq can avoid this route, but only by ensuring transparency,” said Collinson.
Some UN Security Council diplomats had previously criticized the CPA for cloaking the DFI authorized by the Security Council to safeguard the oil revenues and other money earmarked for reconstruction in secrecy.
In its report, Christian Aid called on the Treasury Department, the U.S. agency responsible for pushing Iraq to privatize its economy and, before that, for confiscating billions of dollars in Iraqi assets worldwide, and the CPA to come out publicly with clear figures.
Last October, the Treasury Department responded to allegations by the same group that $4 billion in Iraqi money was missing by saying that the money was actually returned to Iraq after the war ended in April 2003.
Even though Christian Aid says that since October the CPA has provided more information about what it is doing with Iraq’s oil revenues, a lack of information still persists.
“We still do not know exactly how Iraq’s money has been earned, which companies have won the contracts that it has been spent on, or whether this spending was in the interests of the Iraqi people,” says the report.
Christian Aid pointed to the difficulty of determining exactly what Iraq is earning from oil. Two different CPA documents give different figures for oil revenues through the end of May.
One says Iraq earned $10 billion, while another cites $11.5 billion for the same period.
Christian Aid says it attempted its own calculation of Iraq’s oil revenues using publicly available figures and came up with 13 billion dollars.
Groups critical of the lack of transparency in the CPA’s spending have been particularly angry that the authority is using Iraqi money to pay for questionable contracts some awarded without a public tendering process with U.S. companies.
Washington has restricted the most lucrative reconstruction contracts in Iraq to gigantic U.S. companies that appear set to rack up profitable contracts, fueling accusations that the Bush administration is seeking to benefit a select few U.S. companies rather than find the best, and possibly the cheapest, options to help the Iraqi people rebuild.