Bremer Paid "Ghost Employees" "To Keep The Peace"; Where Bid 363 Tons Of Cash Go?

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Lawmaker: Where did 363 tons of cash go?

Waxman: Top Iraq Reconstruction Official Flown To Baghdad To Avoid Oversight Hearing

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Welch grills Bremer on disbursements of cash in Iraq
By EVAN LEHMANN, Reformer Washington Bureau
Brattleboro Reformer

Wednesday, February 7
WASHINGTON -- Vermont's congressman was struck Tuesday by the image of green mountains -- of cash.

In the first in a string of hearings this week that will burrow into the White House's prosecution of the Iraq war, Rep. Peter Welch sparred with witness L. Paul Bremer III, who controlled Iraq as the head of the Coalition Provisional Authority for more than a year until June 2004.

A picture of shrink-wrapped American currency, shoulder high and filling the frame, was displayed in the Committee on Oversight and Government Reform's hearing room.

"There were 363 tons of cash shipped to Iraq on 484 pallets," Welch said, repeating a statistic from an audit by a special government inspector. "I'm new to Washington. But even by Washington standards that's a fair amount of money."

The hearing focused on the CPA's performance after the 2003 invasion, when more than $20 billion fueled its efforts to reconstitute a government. Contractors were sometimes paid in chunks of cash, dispersed from truck beds and carried in duffle bags.

"There were at least 10 disbursements that we viewed, ranging from $200 (million) to $900 million each, that failed to satisfy the requirements of CPA's rules," said Stuart Bowen Jr., the special inspector general for Iraq reconstruction.

He said Bremer's establishment failed to follow its own security measures, such as receiving receipts after delivering millions to Iraq ministries. When Bowen toured the CPA vault that housed pallets of American money, the key was kept in a duffle bag near the door, he said.

Under questioning from Welch, Bremer bristled in defense, saying the inspector did not verify that taxpayer money had been misused.

"We were in a war zone," Bremer said. "I'm not sure I understand what the alternative was. This was a cash economy. No bank transfers, no Internet, no computers, no telephone systems. I don't understand what people think the alternative was frankly to paying these people in cash."

Welch asked why Bremer didn't delay payments until he was sure the money was being used appropriately.

"Are you suggesting I should not have paid the Iraqi civil servants, I should not have paid the pensions, I should not have paid the people running the government?" Bremer responded testily.

Some of those recipients of American cash, however, were likely "ghost employees," or figments created by Iraqi handlers who pocketed the money, Bremer acknowledged under questioning by Welch.

Bowen cited one example of ghost employees: One ministry reported having 8,206 guards on the payroll, but Bowen's investigation found it had only 602.

He said the CPA was aware of such deceit but continued paying "to keep the peace."

In a telephone interview after the hearing, Welch said the session shows the Bush administration relied on "Alice in Wonderland accounting."

"They had no plan," he added. "They were completely clueless. The chaos they spoke about on the ground was matched by the chaos in their own efforts."