One To Two Billion Dollars Missing At

One to Two Billion Dollars Missing at Ministry of Defense

Hannah Allam of Knight Ridder broke the story this past summer that a billion dollars was missing at the ministry of defense, according to a government audit.

Patrick Cockburn of the Independent now confirms that report based on his own sources, saying that actually between one and two billion dollars were embezzled from the Iraqi ministry of defense under Defense Minister Hazem Shaalan.

It was always mysterious where Shaalan came from. He is said to have been a former member of the Baath Party from Hillah in the Shiite south. Ahmad Chalabi alleged that he was a double agent for Saddam in the late 1990s, spying on the dissidents. He then went to the UK. When the US and the UN installed Iyad Allawi as interim “prime minister” on June 28, 2004, Shaalan became minister of defense. Larry Diamond in his book, Squandered Victory reports a story that Shaalan led “his tribesman” in firefights against Muqtada al-Sadr’s Mahdi Army in spring of 2004. Let’s just say that I suspect that it is a cock and bull story and very much doubt Shaalan saw action. My deep suspicion is that he was, like Allawi, an asset of US intelligence and was rewarded with Defense for past services. Shaalan immediately began beating the drums of war against Iran, calling it Iraq’s “number one enemy.” Given that the majority of Iraqis has warm feelings toward Iran, this posturing never made any sense in Iraqi terms and one suspects that the Americans put him up to it.

Ahmad Chalabi, who knows a fraud when he sees one, warned about an operation in which Shaalan sent $300 or $500 million in cash in a private plane to Beirut, ostensibly for military purchases. But the purchases had not been approved by the cabinet and certainly not in this irregular way. Shaalan, a true thug, threatened to have Chalabi arrested. Chalabi is now vice premier, and Shaalan is a private citizen in Jordan.

There is also the unsolved case of two US contractors who warned last fall of massive fraud in the ministry of defense. One wrote to Senator Rick Santorum about it, who in turn went to US SecDef Donald Rumsfeld. The contractors were driving near Taji when their car was rammed and then they were shot multiple times. Their personal effects were photographed and put up at a radical Salafi website. But then anyone can post to a website.

Now it transpires that Shaalan, who is in exile in Jordan, presided over a process whereby at least a billion dollars of money intended to help build the Iraqi military disappeared into thin air.

Americans should be outraged at this news, which has now been reported twice by fine journalists in Iraq, but which has not become an issue in American politics. The embezzlement at the ministry of defense left the Iraqi military poorly equipped, and greatly delayed the moment at which it could take over from the US in providing security to the country. The embezzlement is directly tied to the Iraqi government losing control over its own capital, as reported here yesterday. The scale of it matches Saddam’s kickbacks in the oil for food scandal, but the US journalists who were so outraged at the former don’t seem to have the time of day for the embezzlement story.