Ex-official: Piles of cash, little accountability in Iraq

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

Because the country lacked a functioning 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 prepared to give Monday before a panel of Democratic senators who want to spotlight waste of U.S. funds in Iraq.

A senior official in the 1980s at the State and Transportation departments under President Ronald Reagan, Willis provided the Associated Press with a copy of his testimony and answered questions in an interview.

James Mitchell, spokesman for the special inspector general for Iraq reconstruction, told the AP that cash payments in Iraq were a problem when the occupation authority ran the country and they continue during the massive U.S.-funded reconstruction.

“There are no capabilities to electronically transfer funds,” Mitchell said. “This complicates the financial management of reconstruction projects and complicates our ability to follow the money.”

The Pentagon did not comment. But the administrator of the former U.S. occupation agency, L. Paul Bremer III, in response to a federal audit criticizing the CPA, defended the agency’s financial practices.

Bremer said auditors mistakenly assumed “Western-style budgeting and accounting procedures could be immediately and fully implemented in the midst of a war.”