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Billions Missing from U.S.-Controlled Development Fund

A British charity alleges that billions of dollars transferred to a U.S.-controlled account have disappeared. In a report issued Oct. 23 entitled, "Iraq: the missing billions," U.K.-based Christian Aid reveals that the fate of $4 out of $5 billion transferred to the Coalition Provisional Authority (CPA)'s Defense Fund for Iraq (DFI) remains unknown
The only funds accounted for appear to be about $1 billion in pre-war funds transferred from the U.N. Oil for Food Program. However, the CPA has not disclosed the fate of $2.5 billion in seized state assets and $1.5 billion from oil revenues handed over to the Development Fund for Iraq and held in the U.S. Federal Reserve Bank.

"We have absolutely no idea how the money [from Iraqi oil revenues] has been spent," an unnamed U.N. diplomat told Christian Aid in October. "We know that more than $1 billion has already been transferred from the U.N. escrow Oil-for-Food account and we don't know how this money has been spent, and this is Iraqi money. ... I wish I knew, but we just don't know. We have absolutely no idea..."

At issue is the CPA's failure to adhere to the U.N. Security Council's Resolution 1483. Ratified in May, the resolution requires that the DFI be "managed in a transparent manner for and on behalf of the Iraqi people."

According to Christian Aid, the Program Review Board responsible for allocating DFI funds has failed to meet its requirements to publish and disseminate funding plans in Arabic, as well as publish the minutes of all its formal sessions. The charity notes its own requests for an overview of the fund's finances have received no response.

More crucially, the CPA has stymied the work of the International Advisory Monitoring Board (IAMB), a group with four international voting members (representatives from the U.N., International Monetary Fund, World Bank and the Arab Fund for Social Development) charged with oversight of DFI funds.

Under Resolution 1483, the IAMB is responsible for guaranteeing the fund's transparency as well as its integrity. It is also obliged to observe CPA's activities for the Security Council.

Charity Aid's U.N. source said that the CPA "was attempting to limit the authority of the IAMB" by curtailing members' responsibilities to monitoring CPA-selected auditors, "without the power to more closely examine how funds were being used or accounted for."

The CPA has denied misusing the $4 billion dollars, and that the money will be accounted for. Regardless, spending any DFI money without accountability to date means that the CPA "has been effectively operating outside its mandate," stated Christian Aid.

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lost funds. 15.Nov.2003 18:43

James

Why not your fund. The federal government has raided every fund they have any control over. Sometimes they do not need control. Where are the funds for the Social Security, Military Retirement Trust Fund, and I'll bet there are even more.