From The Associated Press, 7/15/04:

Iraq Finance Audit Shows Lack of Controls

Thu Jul 15

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON -

An audit of Iraq's oil revenues revealed a lack of adequate financial
controls and an inability to get information on large non-competitive
contracts, including one awarded to Halliburton, the board established
to monitor Iraq finances reported Thursday.

The International Advisory and Monitoring Board on Iraq released an
audit prepared by accounting firm KPMG, which cited concerns about an
inability to track how much oil is being produced in Iraq and a lack
of proper internal controls on the money being spent.

The board, which met Wednesday and Thursday in Washington, said it had
been unable to gain access to audits already done by U.S. agencies on
a number of noncompetitive contracts awarded for various Iraq
reconstruction projects including one given to Halliburton to repair
Iraq's oil production facilities.

Halliburton, formerly headed by Vice President ***** Cheney, has been
awarded more than $7 billion in Iraq contract work, including not only
the oil production restoration project but also the feeding and
housing of U.S. troops.

Democrats in Congress have criticized those contracts.

Monitoring board members said L. Paul Bremer, the former head of the
American-led occupation in Iraq, had assured them U.S. audits of the
single-source contracts would be provided, but now they were being
told legal issues had to be cleared up before the audits could be
turned over.

The monitoring board said it was pressing U.S. authorities to provide
a list of all noncompetitive contracts that had been awarded.

"We are still waiting for a response," said Bert Keuppen, a senior
adviser to the finance department of the International Monetary Fund.

"I think as time goes by, the members of the board will get a little
more impatient."

The board is composed of officials from the United Nations, the IMF,
the World Bank and the Arab Fund for Economic and Social Development.

It was authorized by the U.N. Security Council in May 2003 to monitor
the operations of the Development Fund for Iraq, which was designated
as the recipient of Iraq oil revenues and assets of the previous
government frozen by various countries.

The KPMG audit, which covered the period from May through December of
last year showed $10.3 billion had been put into the fund, with $5.6
billion of that coming as a transfer from the U.N. Oil for Food
program.

The United Nations and Congress are conducting separate investigations
into allegations of corruption in that program, which was designed to
provide humanitarian relief to the Iraqi people from economic
sanctions imposed during the presidency of Saddam Hussein.

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Where have all the billions gone?

Harry