Bremer Paid "Ghost Employees" To Avoid "Real Trouble"

Paul Bremer told members of Congress today that he was aware that nonexistent "ghost employees" were on America's payroll when he was administrator of the Coalition Provisional Authority in Iraq in 2003 and 2004.

But because the real employees - who provided security for Iraqi ministries - were "74,000 armed men, it seemed a lesser risk to continue paying" everyone while trying to figure out who was actually showing up for work.

"On the streets, you'd call that protection money," remarked Congressman Danny Davis, an Illinois Democrat. When Davis asked whether any of that money had wound up in the hands of insurgents, Bremer said he didn't know. But "if we stopped paying them, my judgment was we could have real trouble."

Stuart Bowen, the Special Inspector General for Iraq Reconstruction, also testified before the House Committee on Oversight and Government Reform today, and told the panel that the problem of ghost employees was not a major reason that $8.8 billion distributed to Iraqi ministries is unaccounted for.

The real problem, Bowen said, was a general lack of transparency: the only accounting Americans asked for was assurance from the various ministries that the money was indeed being spent. The Coalition also failed to follow its own rules on securing money sent to Iraq; in one case, Bowen said auditors found the key to a safe containing a huge amount of cash left in a duffel bag left in plain view in the Coalition comptroller's office.

But Bremer argued that a number of the accounting problems were actually due to the fact that "we had no idea" how hobbled the economy and infrastructure had been in Saddam's Iraq. "It's a fair question to ask why we didn't know more about how run-down the economy was. They were focused on the WMDs, though we didn't get that right, either."

He also faulted pre-war planning, and said he did not have anywhere near enough staff to do the job: "If we'd been focused on the basis of a plan, we would have been more in touch with reality" from the first.

But Bremer has backed the Bush administration's proposal to send more troops to Iraq.

When auditors first confirmed that there were ghost employees in a couple of ministries, "we asked what they had done about it," Bowen said, "and they said they had made the decision to keep paying it, to keep the peace." In one ministry, about 25 percent of the total 8,200 could not be "validated," - matched with a person, Bowen said. In another, "just a fraction" of the 1,400 employees could be located.

After the committee chairman, California Democrat Henry Waxman, said that continuing to pay ghost employees struck him as reckless, Bremer responded that the only alternative, as he saw it, was "74,000 armed men who are angry at us," if payments were held up for any reason. "I would certainly do it again today."

Waxman also questioned the wisdom of sending billions in cash to Baghdad - 363 tons of bills, sent in enormous pallets via military planes and passed out from the back of pickup trucks.

But Bremer, unruffled throughout the hearing, said he was responding to an urgent request from the Iraqi minister of finance, who wanted the cash delivered ahead of the planned handoff to his own government.

"He said, "I am concerned that I will not have the money to support the Iraqi government expenses for the first couple of months after we are sovereign. We won't have the mechanisms in place. I won't know how to get the money here.'"

Republicans on the committee repeatedly defended Bremer's decisions: "Maybe even billions were not spent the way it should have been spent," said Christopher Shays, a Connecticut Republican. "And I'm not happy about that, but tell me how he could've gotten that money out" where it was needed otherwise. "The Iraqis spent the money badly, right?"

Democrats on the committee also wondered why the president was asking American taxpayers for $1.7 billion more for reconstruction in Iraq when Iraq has not spent $12 billion it has already been sent for that purpose." "Perhaps," Waxman suggested, "That's to pay for ghost employees."

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