Of the $9.1bn allocated to the Pentagon for development in Iraq, $8.7bn is not ‘properly accounted for’—$2.6bn for which there are no records at all—according to a audit by the Spc.I.G. for Iraq reconstruction. “The report also said the U.S. military continues to hold at least $34.3 million of the fund, even though it was required to return it to the Iraqi government in December 2007,” Ernesto Londoño reported last week at The Washington Post after stating: “U.S. officials failed to create bank accounts for $8.7 billion in the Development Fund for Iraq, as mandated by the Department of Treasury”.

“Inside Story”, hosted by Mike Hanna at Al Jazeera English, discussed with:

Mundher Adhami, an analyst on Iraqi affairs;

Jeremy Carver, a board member of Tranparency International; and

Scott Lucas, a professor of American Studies at the University of Birmingham and editor of Enduring America.com

Mr. Adhami and Mr. Carver are right—this was no “blunder”, but a “deliberate effort”. Government accounting flaws, especially relating to international affairs, are calculated under-rug sweepings. the blunder is when the rug is lifted. Mr. Lucas added that, “ironically”, the policies to create what the U.S. calling a “free market economy” were antithetical to that of a free market, though still very different from the “State-controlled economy under Saddam Hussein” (24:41):

29 July 2010 | AJE

Billions of dollars meant for reconstructing Iraq have gone missing with fingers pointing out to the U.S. Department of Defence.

According to a newly released audit by the special inspector general for Iraq reconstruction, the Pentagon was entrusted with $9.1bn after the fall of Baghdad—money that came from the sale of Iraqi oil and gas.

Out of this, nearly 95 per cent, around $8.7bn, has not been properly accounted for.

Subsequently, most of it has been at least partially tracked. However, the military failed to produce any records whatsoever for $2.6bn.

In addition, the U.S. military continues to hold over $34mn, which it was supposed to return to the Iraqi government in 2007.

The Pentagon has blamed poor record-keeping and lax oversight. They have pledged to undergo what they call a process of archival accounting to track missing funds.

Iraqi officials say they know nothing about the missing billions.

So, where has the money gone? And with no agreement on forming a new government in Iraq who is going to take action?

Inside Story, with presenter Mike Hanna, discusses with Mundher Adhami, an analyst on Iraqi affairs, Jeremy Carver, a board member of Tranparency International, and Scott Lucas, a professor of American Studies at the University of Birmingham and editor of Enduring America.com.

This episode of Inside Story aired from Wednesday, July 28, 2010.