AFX News Limited
Iraq finance ministry says one bln usd stolen from defense
LONDON (AFX) - A bln usd has been plundered from the coffers of Iraq's defence ministry, seriously affecting the government's ability to combat the insurgency, the Independent newspaper here reported, citing the Iraqi finance minister.
'It is possibly one of the largest thefts in history,' the centre-left paper quoted finance minister Ali Allawi as saying.
Most of the money was 'siphoned abroad in cash and has disappeared' to finance the purchase of arms in Poland and Pakistan, according to the report.
But rather than purchasing state-of-the-art weaponry Iraq had procured 'museum-piece weapons,' the Independent charged.
The paper listed a series of problems with the arms purchased including armoured cars which 'turned out to be so poorly made that even a bullet from an elderly AK-47 machine-gun could penetrate their armor.'
Other armored cars reportedly leaked so much oil that they had to be abandoned.
A shipment of the latest MP5 American machine-guns turned out to be Egyptian copies worth a fraction of the price, according to the report.
'Many Iraqi soldiers and police have died because they were not properly equipped,' the daily added.
The rip-offs were so huge, said the paper, that Baghdad officials estimate that the Iraqis involved 'were only front men and 'rogue elements' within the US military and intelligence services may have played a decisive role behind the scenes'.
Iraqi Prime Minister Ibrahim Jaafari has been informed of the problem 'but the extent of the losses has become apparent only gradually. The sum missing was first reported as 300 mln usd and then 500 mln usd, but in fact it is at least twice as large,' the paper said.
'It is nearly 100 pct of the ministry's procurement budget that has gone AWOL (absent without leave),' Allawi was quoted as saying.
Allawi says a further 500-600 mln usd has allegedly disappeared from the electricity, transport, interior and other ministries.