Scandal and Stupidity, Home and Abroad by William Pfaff

Scandal and Stupidity, Home and Abroad

William Pfaff

Paris, May 29, 2008 – The U.S. Defense Department's auditors last week told the House of Representatives Committee on Oversight and Government Reform that virtually none of the $8.2 billion disbursed by the U.S. Army to contractors in Iraq was spent according to established federal rules, and little of it now can be accounted for.

Among their examples: a cash payment of $320.8 million made on the basis of an invoice saying "Iraqi salary payment" bearing one signature; $11.1 million paid to an American contractor identified as "IAP" in exchange for a voucher with no indication of what the money was for.

Nearly two billion dollars in frozen Iraqi assets were paid out on pallets of packaged Iraqi currency for no identified reason. An earlier report by the independent federal Special Inspector General for Iraq Reconstruction had already reported that $8.8 billion in Iraq oil money and seized assets could not be accounted for.

All this money was either seized public funds of the Iraqi state and state corporations or American public funds. The Defense Department also made payments overseas of $68.2 million to the United Kingdom, $45.3 million to Poland and $21.3 million to South Korea. The auditors cannot find out what these payments were for.

Please note that we are not talking about the first days after the invasion of Iraq, when money lying about might be expected to disappear in the fog of battle, as they say, or "be liberated." The auditors' work covered the entire period from April 2001 to June 2006.

Anthony Cordesman of the Center for Strategic and International Studies in Washington offers as explanation that the Pentagon had allowed itself "to become more and more dependent on contractors in peacetime. We were unprepared to use contractors in wartime, and all of this had an immense impact."

But surely peacetime contractors were expected to identify what the money was for before they were paid? And the payment was not handed over as pallets loaded with bundles of currency taken from another government's vaults, or shrink-wrapped bundles of hundred-dollar bills.


Among the formal payments in Iraq were a U.S. Treasury check in the amount of $5,674,075, written to the Al Kasid Specialized Vehicles Trading Company in Baghdad, for items not described; and $6,268,320.07 went to the contractor Combat Support Associates with no explanation at all.

Let us suppose that all of this money was paid by upright American military officers and civilian officials for real supplies and services honestly furnished, but no one had the time to keep track of where the money was going, or why. And after all, the disappeared $8.2 billion amounts to petty cash in the total expenditure of the war, which now runs into the trillions. What does total irresponsibility and incompetence matter in carrying out a great national undertaking?

"When I was in this man's army," the old veteran complains, "you couldn't get the supply sergeant to issue you a broom without signing a chit in triplicate." On payday the company executive officer who handed out the dollars demanded signatures, and had a cocked .45 pistol on the desk in front of him to deter the larcenous.

In explaining what has happened, I would be inclined to extrapolate from the implication of Cordesman's comment, who follows military matters closely: that privatizing the military services and the wars they fight has not been a good idea. Let us say that it has not produced the predicted efficiencies.

Rather, I would surmise that in addition to benefiting the stockholders of America's great corporations, whose executives play golf with Dick Cheney, it has opened the floodgates of grand and petty chiseling all the way up, and all the way down.

I would go with that explanation were it not for another recent item in the news. It concerned the powerful and ever-alert Homeland Security Department of the U.S. government, created by the Bush administration with great fanfare after 9/11, to amalgamate a dozen or more seemingly functional and reasonably efficient existing federal agencies like the Coast Guard and the FBI into a monstrous and dysfunctional security apparatus.

Its management was confided to Republican political cronies, and it has focused on making mothers traveling with small children and elderly invalids disrobe, throw away their water bottles, shaving tools, nail scissors, reading matter and Milky Ways before boarding airplanes, in order to thwart global terrorism.

The item I saw said that Homeland Security currently refuses to disburse to its state counterparts the full amount of federal money due them until they present plans to protect their states from IEDs.

Yes, IEDs – improvised explosive devices, as in war in Iraq. Rhode Island, Idaho, and Iowa can't have their federal money until they show they are prepared to protect vacation motorists from attack by bands of bearded al Qaeda, planting IEDs along the highways of America.

Aside from the lunatic irrelevance of this demand is the consideration that nobody in Iraq, or in the military-industrial complex, has found a way to reliably identify and disable IEDs. Maybe America's hometown tinkerers and backyard inventors can do it.

However from considering these two reports together, one asks oneself if America in this misbegotten war suffers more from swindlers, large or small, than from bunglers and incompetence. The stupidity at the top that would conceive and launch such a war by now has leaked down, contaminating every aspect of the affair.

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