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Progress Report: Is stealing public money the real reason for invasion? The Spoils of War: Billions Over Baghdad

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Cross-posted at the Geonomics' Progress Report, by Jeff Smith

War is wrong in more than one way. This story is excerpted from Vanity Fair (October 2007 Edition) where the authors, the only journalists in history to have won two Pulitzer Prizes and two National Magazine Awards, are contributing editors. By Donald L. Bartlett and James B. Steele Ten miles west of Manhattan in New Jersey stands a fortress-like building behind an iron fence. In East Rutherford at 100 Orchard Street, it is the largest repository of American currency in the world. EROC (East Rutherford Operations Center) of the Federal Reserve Bank of New York is where the bank processes checks, makes wire transfers, and receives and ships out paper money.

An immense three-story cavern known as the currency vault, with storage space to rival a Wal-Mart's, can hold upwards of $60 billion in cash. Few human beings are allowed in; a robotic system, immune to human temptation, handles everything.

One day, forty pallets of cash, weighing 30 tons, were loaded in a tractor-trailer which drove to Andrews Air Force Base, near Washington, DC. There the seals on the truck were broken, and the cash was off-loaded and counted by Treasury Department personnel. The money was transferred to a C-130 transport plane. The next day, it arrived in Baghdad.

That transfer of cash to Iraq was the largest one-day shipment of currency in the history of the New York Fed. It was not, however, the first such shipment. Beginning soon after the invasion and continuing for more than a year, $12 billion cash was airlifted to Baghdad.

After the money arrived, oversight and control evaporated. Of the $12 billion delivered to Iraq in 2003 and 2004, at least $9 billion cannot be accounted for. The company that was hired to keep tabs on the outflow of money existed mainly on paper. Based in a private home in San Diego, it was a shell corporation with no certified public accountants. Its address of record is a post-office box in the Bahamas, where it is legally incorporated. That post-office box has been associated with shadowy offshore activities.

When the US military delivered the cash to Baghdad, the money passed into the hands of the staff of the American-led Coalition Provisional Authority. Not subject to the usual restrictions and oversight of most agencies, the CPA during the 14 months of its existence would become a sump for American and Iraqi money as it disappeared into the hands of Iraqi ministries and American contractors.

Of 8,206 "guards" drawing paychecks courtesy of the CPA, only 602 warm bodies could be found; the other 7,604 were ghost employees. Halliburton, the contractor once headed by Vice President Dick Cheney, charged the CPA for 42,000 daily meals for soldiers while serving only 14,000 of them. Cash was handed out from the backs of pickup trucks. Another time, the CPA spent $500 million on "security." No specifics, just a half-billion dollars with this explanation: "Composition TBD" (to be determined).

In one of his last official acts before leaving Baghdad, Bremer issued an order -- prepared by the Pentagon, he says -- declaring that all coalition-force members (the coalition of the billing) "shall be immune from any form of arrest or detention other than by persons acting on behalf of their Sending States." Contractors also got the same get-out-of-jail-free card. The Iraqi people, who had no say over Saddam Hussein's illegal conduct, now have no say over US administrators' illegal conduct.

And the "Sending State" itself is not pursuing misconduct. With the exception of a few low-level individuals, the Bush administration's Justice Department has avoided the prosecution of corporate fraud stemming from the occupation of Iraq. The Custer Battles case brought under the False Claims Act -- a case in which the Justice Department refused to get involved -- is the only one that has gone to trial.

To date, America has spent twice as much in inflation-adjusted dollars to rebuild Iraq as it did to rebuild Japan -- an industrialized country three times Iraq's size, two of whose cities had been incinerated by atomic bombs.

Queries sent repeatedly to the army's public-affairs desk in Baghdad and the Pentagon have gone unanswered, as have those to the office of the secretary of defense.

JJS: Would more Americans care if they paid for war now themselves instead of Bush's administration going into debt so future generations must pick up the tab?

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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a former blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:

Scott is a former and current President of Common Ground-NY (, a Geoist/Georgist activist group. He has written dozens of (more...)

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