Dick Cheney- Corporate Criminal


UN watchdog: $22 mln missing in Iraq contracts

Mon Nov 6, 2006 9:20pm ET

WASHINGTON, Nov 6 (Reuters) - An audit of 15 noncompetitive contracts paid for by U.S. government agencies with Iraqi oil money was unable to account for $22.4 million in funds, a U.N.-led watchdog said on Monday.

The audit by KPMG, ordered by the International Advisory and Monitoring Board, or IAMB, said in some cases Iraq did not receive goods, there were "unreconciled payments" and there was no evidence that steps were taken to fix previously reported problems.

The contracts varied, from oil pipeline security, police and military training, printing of the new Iraqi currency to the purchase of vehicles and food.

"In view of these findings, the IAMB recommends that the Iraqi government seek resolution with the U.S. government concerning the use of resources of the (Development Fund for Iraq), which might be in contradiction with the UN Security Council Resolution 1483," the board said in a statement posted on its Web site.

The IAMB, which also includes officials from the World Bank and International Monetary Fund, was created by the U.N. Security Council in 2003 to oversee the use of Iraqi oil money while the country was under an interim U.S. administration.

The watchdog's mandate expires at the end of December and its last meeting is tentatively scheduled for Dec. 11-12.

Meanwhile, the IAMB also said an audit by Crowe Chizek accounting firm that looked at Iraq contracts between the U.S. Army Corps of Engineers and Halliburton Co. (HAL.N: Quote, Profile, Research) subsidiary Kellogg, Brown and Root were found "to be reasonable."

"The audit reviewed the findings of earlier audit reports by the Defense Contract Audit Agency (DCAA) and found that the conclusions reached by the DCAA were supported by the underlying accounting and auditing records," the IAMB said.

But the audit noted that transportation costs incurred by the Halliburton unit for fuel supplies to Iraq between May 2003 and March 2004 were very high, in some cases as much as 86 percent of the total contract costs.

"The IAMB continues to question the reasonableness of these costs and the adequacy of the administration contracts," it said.

The Texas-based Halliburton, formerly run by U.S. Vice President Dick Cheney, has drawn scrutiny for its work in Iraq, where it was the biggest U.S. military contractor.

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