If this is true, it certainly won’t help the effort in Iraq. However, take care with reading what the article actually says:

WASHINGTON – U.S. civilian authorities in Iraq cannot properly account for nearly $100 million that was supposed to have been spent on reconstruction projects in south-central Iraq, government investigators said Wednesday.

There are indications of fraud in the use of the $96.6 million, according to a report by the Special Inspector General for Iraq Reconstruction. A separate investigation of possible wrongdoing continues.

More than $7 million of the total is unaccounted for, the report said. An additional $89.4 million in payments do not have the required supporting documents.

We can see that the headline “US Can’t Account for $100M Spent In Iraq” is rather misleading. So far, seven percent of the total is unaccounted for. Hopefully, there will be proper documentation for the rest of the money.

Still, those in charge seem to have been running their own little (!) slush fund, handing out gobs of cash more or less will-nilly:

The money at issue is from proceeds from Iraqi oil sales and seizures from the former government of
Saddam Hussein. Distribution of the money was handled first by the Coalition Provisional Authority, the U.S.-run occupation government in Iraq from 2003 to June 28, 2004.

After that, the money was overseen by the Joint Area Support Group-Central, which is managed from the U.S. Embassy in Baghdad, the Iraqi capital.

Managers gave the cash to “division-level agents” responsible for distributing the money for reconstruction programs in a certain area. Those agents ???????? the report did not specify their nationalities ???????? were supposed to keep detailed, signed receipts and other documentation for the money they spent but usually did not, the report said.

Part of the problem was a last-minute push to spend millions on reconstruction projects before the interim Iraqi government took over, the report said. One agent got $6.75 million in cash a week before the handover, with the expectation that the money would be spent before the Iraqis took power, the report said.

Ä…Å

Controls over the cash were so lax that two of the agents hired to distribute the money were allowed to leave Iraq before they had accounted for all of it, the report said. Between them, those two had been given more than $1.4 million in cash which remains unaccounted for, the report said.

A different agent failed to provide proper documentation for more than $12.4 million in spending but had his accounts cleared by his supervisors, the report said.

Yet another agent kept distributing money for three weeks after his authority to handle the funds was revoked, the report said. That agent, told that $1,878,870 was missing from his account, delivered precisely that amount to his supervisors three days later, the report said.

This occured at a US outpost in Hilla. In one case, an official who had been fired for mishandling funds had been allowed to continue disbursing cash for almost a month after his termination. All payments for contracts were done in cash, with the proviso that the agents would keep clean records and obtain receipts to account for the outlays.

There are still hundreds of millions of dollars–both Iraqi and American money–that do not have the proper documentation. Okay, I understand that this is an imperfect system and in Iraq’s cash-based society it is difficult to account for every last penny spent in a war zone. Still, one would think that, knowing the forces arrayed against the US effort in Iraq, there would be a tighter hold on the people who hand out contracts and cash. One anonymous official is quoted as saying that, “The worst-case scenario is that someone took it home.”

This will only embolden the administration’s critics both at home and abroad.