- Henry Waxman is an awkward customer. For 30 years, this
California congressman has probed, badgered and embarrassed US administrations
of every hue.
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- As the senior Democrat on the House of Representatives'
government reform committee, Congress's principal standing investigative
panel, he is a difficult man to ignore.
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- Right now, Mr Waxman has a question on Iraq. In fact,
he has several - and in typically robust fashion, he is demanding answers.
What he wants to know is whether the Bush administration has been fiddling
with Iraq's oil revenues.
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- He wrote to the Republican chairman of the reform committee
on July 9, suggesting there was a serious case to answer. Subpoenas should
be issued, he said, "to investigate potential mismanagement of the
Development Fund for Iraq (DFI) by the United States".
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- The DFI was set up after last year's invasion as the
depository for Iraq's multi-billion-dollar oil revenues and was administered,
until June 28, by the US-led Coalition Provisional Authority (CPA) - with
notional UN oversight.
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- In particular, Mr Waxman is curious about "the [Bush]
administration's last-minute 'draw-down' of billions of dollars from the
DFI for unspecified expenses" prior to last month's transfer of sovereignty.
"For example, $1bn [about £550m] was withdrawn from the DFI
during the last month of the CPA's existence for unspecified 'security'
purposes."
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- The administration provided no information about how
these funds would be spent, Mr Waxman says, and has yet to do so.
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- He is concerned about apparent attempts by the then CPA
chief, Paul Bremer, to mandate and direct the spending of a further $4.6bn
in Iraqi oil funds after the handover.
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- He is also exercised by the results of a belated audit
of the DFI's accounts that concluded they were "open to fraudulent
acts" and lacked "transparency". In all, the CPA earmarked
more than $6bn of Iraqi funds in the last two months of its existence.
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- He wants to know whether CPA officials obstructed the
auditors, KPMG, who were employed by the UN-created International Advisory
and Monitoring Board (IAMB).
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- And he also asks why the White House has "failed
to comply with numerous IAMB requests [for information about] payments
of approximately $1.5bn in DFI funds to Halliburton" - the Texas-based
oil services company formerly headed by the vice-president, Dick Cheney.
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- Mr Waxman is not alone in asking questions. In April
this year, the chairman of the IAMB, Jean-Pierre Halbwachs, wrote to Mr
Bremer saying the awarding of three contracts to Halliburton without a
competitive bidding process was "a source of concern". His letter
appears to have had little effect.
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- The IAMB is now reviewing the CPA's overall conduct and
must decide whether a full investigation is necessary.
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- Given the problems over alleged misappropriation and
fraud that engulfed the UN's oil-for-food programme in Iraq from 1997 to
2003, and which are now under investigation, swift, rigorous action in
this instance may also be deemed essential.
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- Officials from Congress's financial watchdog, the general
accounting office, have pointed out meanwhile that while the CPA was keen
to appropriate Iraqi oil revenues, it was much more reluctant to spend
bilateral US aid funds.
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- Nearly all of the $20bn in the DFI was spent or allocated
by June 28 - but only 2% of the $18.4bn promised by the US for reconstruction
was actually spent. According to White House figures, for example, and
despite all the rhetoric about building a new Iraq, not a cent of America's
own money had been spent on construction, healthcare, sanitation and water
projects as of last month.
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- Last month, Iraq Revenue Watch, part of the Soros Foundations
network, accused the CPA of "committing billions of dollars to ill-conceived
projects" using Iraqi rather than US funds, effectively pre-empting
budgetary decisions that should have been left to the interim Iraqi authority.
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- This is a charge also voiced by senior Iraqi officials
in Baghdad, quoted anonymously this month by the Washington Post; and,
intriguingly, by British government aid officials who reportedly blocked
spending projects proposed by Mr Bremer in the dying days of the CPA. But
at Westminster, only the Liberal Democrats have formally called for an
investigation.
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- Such matters are plainly extremely sensitive as the US
presidential election approaches - especially for George Bush and Mr Cheney.
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- In this context, two facts may be of interest: Halliburton
was the largest single recipient of Iraqi oil funds during the occupation,
according to the Army Corps of Engineers' figures released last month.
And among US politicians, according to the Center for Public Integrity,
Mr Bush has been the largest single recipient of US oil and gas industry
campaign contributions since 1998 - his total stands at $1,724,579.
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- Guardian Unlimited © Guardian Newspapers Limited
2004 http://www.guardian.co.uk/usa/story/0,12271,1264765,00.html
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