Bookmark for later

I should find out more about Bechtel and waste-water treatment contracts

Bookmark for later

Inside a War-Time Contract: A timeline of Fuel Distribution Task Order 0005 By André Verlöy, Centre for Public Integrity.

[Eds note: I am flat out at work for the next month or two, however, I will continue to bookmark relevant articles for reading when I get a chance.]

About the CPA inspector general

A fairly critical description of the CPA Inspector General, Stuart Bowen, is available in this article. It states that:

• Bowen has worked with the President for 8 years, most recently as a White House legal counselor, and before that in the Texas governor's office.
• Bowen lobbied for Iraq contracts for the consulting firm URS Group, landing up to $30 mill in contracts.

From the other end, here's a bio from results.gov:

Stuart Bowen -- White House
Deputy Assistant to the President
and Deputy Staff Secretary

Prior to holding his current position, Stuart Bowen served as Associate Counsel to the President. Previously, Stuart served for six years on Governor George W. Bush's legal staff, first as an Assistant General Counsel and then as Deputy General Counsel. Stuart has held positions as an Assistant Attorney General of Texas, as a Briefing Attorney for the Texas Supreme Court, and as a Captain in the United States Air Force (Intelligence). He is a graduate of the University of the South and he received his J.D. from St. Mary's in San Antonio.

CPA Inspector General Report

The "Coalition Provisional Authority Control Over Seized and Vested Assets" dated 30 July 2004 is available here. I will update on it when I get a chance to give it a decent read. In the meantime, here are some articles about it.

The Los Angeles Times reported that criminal investigations are proceeding into the use of Iraq's funds. A reprint is on Common Dreams.

A comprehensive examination of the U.S.-led agency that oversaw the rebuilding of Iraq has triggered at least 27 criminal investigations and produced evidence of millions of dollars' worth of fraud, waste and abuse, according to a report by the Coalition Provisional Authority's inspector general.

A few details are

In one case, a senior U.S. advisor "manipulated" the contracting system to award a $7.2-million security contract. The contract was later voided and the money returned.

In another incident, a contractor billed $3.3 million for nonexistent personnel working on an oil pipeline repair contract. A security contractor guarding the pipeline overcharged the CPA by $20,000. Both incidents are under criminal investigation.

In another example, a military assistant to a Pentagon employee gambled away part of a $40,000 grant issued to help coach an Iraqi sports team, the report found.

"In the early days, there was no record keeping. They were flushed with money and seized assets. People just didn't follow established procedures," said Charles Krohn, a former CPA official. "You were dealing with inexperienced people who didn't understand that there's always a day of reckoning."

Besides the more than two dozen criminal cases under investigation by the inspector general, about 35 other matters have been referred to other U.S. agencies for further investigation, said James Mitchell, an inspector general spokesman.

MSNBC have a similar article.

KPMG Audit of the DFI

The press release from the IAMB is available here:

First, according to the press release

KPMG has concluded that all known oil proceeds, reported frozen assets, and transfers from the Oil for Food Program have been properly and transparently accounted for in the DFI.

Unfortunately, the word "known" in that sentence appears to be an important qualifier

At the same time, based on a review of the KPMG reports, the IAMB believes that controls were insufficient to provide reasonable assurance (i) for the completeness of export sales of petroleum and petroleum products for the period from May 22, 2003 to December 31, 2003, and (ii) whether all DFI disbursements were made for the purposes intended.

Number (ii) is concerning.

You can get the report and the appendices here. The appendices are the better read. They detail issues with the DFI that KPMG identified, and the response from the CPA to those issues raised.

• 1.2.2 and 1.2.3 was foreshadowed in the interim report, which basically says that they had difficulty getting their hands on the info that they needed.
• 2.2, 2.4 and 3 are about the awarding of contracts without a transparent competitive bidding process.

You'll note that 3.4 doesn't get much of a response from the CPA. The IAMB press release notes

DFI funds were used to award contracts on a non-competitive basis. To ascertain the conditions and circumstances, the IAMB has requested copies of reports on audits of sole-sourced contracts that have already been undertaken by various US agencies, before determining whether additional audits are necessary. Despite repeated requests, these reports have still to be made available to the IAMB.

Now, I could have this completely wrong, but I think those are the same contracts reported by the Washington Post and The Guardian. Quoting from The Guardian

But the report's concerns also lead back to the US company that has become inextricably linked with the occupation: Halliburton. Given that the US vice president Dick Cheney was previously chief executive of Halliburton, the potential conflict of interest over its business dealings in Iraq were always going to be a focus of concern. Yet when the monitoring board's auditors asked for details of contracts involving Halliburton being paid for out of the oil funds, the Pentagon repeatedly refused. At issue are three contracts, worth a total of $1.4bn, awarded in noncompetitive tenders - meaning Halliburton was the sole bidder. The monitoring board rightly concluded that further investigation is required.

The IAMB press release above says

In the meantime, the IAMB will follow-up on its earlier decision for a special audit of the sole-sourced contracts that utilized DFI funds.

In other news:

• I think KPMG have lost the contract and Ernst & Young will be taking over.
• There's a Democrat congressman by the name of Henry Waxman who's interested in this. His website his info is a little out of date.