Billion dollars plundered from Iraq’s military

9/21/2005 12:00:00 PM GMT

A billion dollars have vanished from the coffers of Iraq's Defense Ministry, seriously affecting the government's ability to secure the country, Iraq's Finance Minister said in an interview.

"Huge amounts of money have disappeared. In return we got nothing but scraps of metal," Finance Minister Ali Allawi told British newspaper, The Independent.

"It is possibly one of the largest thefts in history," he added.

The Independent said most of the money was "siphoned abroad in cash and has disappeared" to finance the purchase of weapons in Poland and Pakistan. But rather than buying state-of-the-art weaponry Iraq had procured "museum-piece weapons," the paper said.

The report also listed a number of problems with the weapons acquired including armored vehicles which "turned out to be so poorly made that even a bullet from an elderly AK-47 machine-gun could penetrate their armor". It added that other armored cars leaked so much oil that they had to be abandoned.

A shipment of the latest MP5 U.S. 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 Independent said.

Most of the illegal contracts are said to have been signed under the previous government, led by Iyad Allawi, which served from June 28, 2004 until late February this year, Reuters reported. The former Defense Minister, Hazim Shaalan, is now living as a private citizen in Jordan. He has denied any wrongdoing.

Huge

The rip-offs were so huge, the report said, that Iraqi officials estimate that the Iraqis involved "were only front men and 'rogue elements' within the U.S. 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 million dollars and then 500 million dollars, but in fact it is at least twice as large," the report said.

"If you compare the amount that was allegedly stolen of about $1 billion compared with the budget of the ministry of defense, it is nearly 100 percent of the ministry's (procurement) budget that has gone AWOL (absent without leave)," Allawi told the Independent.

Allawi added that a further 500-600 million dollars had disappeared from the electricity, transport, interior and other ministries.

"This helps to explain why the supply of electricity in Baghdad has been so poor since the fall of Saddam Hussein 29 months ago despite claims by the U.S. and subsequent Iraqi governments that they are doing everything to improve power generation."

The newspaper reported that the total amount missing from all the ministries could reach 2 billion dollars.

UK forces free 2 soldiers from Iraqi jail
British forces stormed the central prison in the southern city of Basra on Monday and released two British soldiers, who were detained earlier in the day for shooting two Iraqi policemen while on an undercover mission, Iraqi Defense Ministry and Interior Ministry said, according to The Associated Press.

But the British government said the two soldiers were freed as a result of negotiations.

On Monday, Basra authorities arrested the two Britons, described as special forces commandos dressed in Arab clothing, for shooting two Iraqi police officers, one of whom died.

The arrests of the two British soldiers appeared to be the first public test of how far is the sovereignty of the Iraqi authorities. There have been no incidents of Iraqi officials arresting foreign soldiers operating in the country.

An Iraqi defense ministry official said more than 150 Iraqi detainees escaped the prison after the British forces rammed down the door. "A large force of British troops surrounded the police building, smashed down the main entrance with a vehicle, and freed the two Britons along with 150 prisoners," he said.

"Barbaric"
Mohammed al-Waili, the governor of Basra province, slammed the British forces for storming the jail, an act he described as "barbaric, savage and irresponsible". He said that the British force moved the detained soldiers to an unknown location, according to AP.

On the other hand, the British Ministry of Defense said that the two soldiers were released after negotiations. A spokesman confirmed the two soldiers had been freed, but declined to comment on the Iraqi report of an attack on the Basra prison.

"We're certainly not denying it, but we're not confirming it either," he said.

Other British Defense officials claimed that a wall was destroyed as British forces tried to "collect" the two soldiers, BBC reported.

More on Iraq...

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Iraq slams U.S.’s “illegal” detentions

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