US Treasury Looted in Iraq

TimesDispatch.com | U.S. payments in Iraq: 'Bring a bag'

U.S. officials in postwar Iraq paid a contractor by stuffing $2 million worth of bills into his gunnysack and routinely made cash payments around Baghdad from a pickup truck, a former official with the occupation government says.


Because the country lacked a banking system, contractors and Iraqi ministry officials were paid with bills taken from a basement vault in one of Saddam Hussein's palaces that served as headquarters for the Coalition Provisional Authority, former CPA official Frank Willis said.

Officials from the CPA, which ruled Iraq from June 2003 to June 2004, would count the money when it left the vault, but nobody kept track of the cash after that, Willis said.

"In sum: inexperienced officials, fear of decision-making, lack of communications, minimal security, no banks, and lots of money to spread around. This chaos I have referred to as a 'Wild West,'" Willis said in testimony he is prepared to give today before a panel of Democratic senators who want to spotlight the waste of U.S. funds in Iraq.

A senior official in the 1980s at the State and Transportation departments under then-President Ronald Reagan, Willis provided a copy of his testimony.

The Pentagon, which had oversight of the CPA, did not immediately respond to requests. But the administrator of the former U.S. occupation agency, L. Paul Bremer III, in response to a federal audit criticizing the CPA, strongly defended the agency's financial practices.

When the authority took over the country in 2003, Bremer said, there was no functioning Iraqi government and services were primitive or nonexistent.

Iraq's economy was "dead in the water" and the priority "was to get the economy going."

Also in response to that audit, Pentagon spokesman Bryan Whitman had said, "We simply disagree with the audit's conclusion that the CPA provided less than adequate controls."

Willis served as a senior adviser on aviation and communications matters for the CPA during the last half of 2003 and said he was responsible for the operation of Baghdad's airport.

Describing the transfer of $2 million to one contractor, Willis said: "We told them to come in and bring a bag."

He said the money went to Custer Battles of Middletown, R.I., for providing airport security for civilian passengers.

Sen. Byron Dorgan, D-N.D. and head of the Democratic group holding today's hearing, said he arranged for Willis' testimony because "This isn't penny ante. Millions, perhaps billions of dollars have been wasted and pilfered."