The Mother Of All Heists

Steve Kroft Reports On Disappearance Of More Than $500 Million To Equip Iraqi Army

(CBS)  This segment was originally broadcast on Oct. 22, 2006. It was updated on June 14, 2007.

President Bush says the United States can’t leave Iraq until the country can govern and defend itself. Right now a number of inconvenient facts suggest it can do neither. Everyone knows about the chaotic security situation, but less has been reported about the rampant corruption that has infected a succession of Iraqi governments. In a story that first aired in Oct. 2006, Iraqi investigators told 60 Minutes that at least half a billion dollars that was supposed to equip the new Iraqi military was stolen by the very people the U.S. had entrusted to run it.

As correspondent Steve Kroft reports, it has been called one of the biggest thefts in history, the mother of all heists, and it happened right under the noses of U.S. advisors. But neither the United States nor its allies have shown much of an appetite for pursuing it.

---

"People have died. Monies have gone missing. Culprits are running around the world hiding and scurrying around. I have to ask myself, why has this happened? It is not every day that you get billion dollar scandals of this kind," says Ali Allawi, a Harvard-educated international banker who took over as Iraq’s Minister of Finance in 2005.

When he entered office, was confronted with a gaping hole in the treasury. $1.2 billion had been withdrawn by the new Ministry of Defense to supply the Iraqi army with desperately needed equipment to fight the growing insurgency. Millions had been misspent on old and antiquated equipment, and Allawi says most of the money simply disappeared.

Allawi thinks that probably 750 to 800 million dollars were stolen. "It is a huge amount of money by any standard," he tells Kroft. "Even by your standards. It's one of the biggest thefts in history, I think."

The story begins in June 2004 when presidential envoy L. Paul Bremer turned over authority to the interim Iraqi government, which would run the country until elections could be held.

The insurgency was already gaining momentum, and with the newly-constituted Iraqi army riding into battle in unarmored pick-up trucks, and scrounging for guns and ammunition, the Iraqi Defense Ministry went on a billion-dollar buying spree with almost no oversight.

The contracts were paid in advance, with no guarantees, and most of them involved a single company.

"They were awarded, without any bidding, to a company that was established a few months prior with a total capital of $2,000," says Allawi. "So you had nearly a billion dollars worth of contracts awarded to a company that was just a paper company, whose directors had nothing to do with the Ministry of Defense or the government of Iraq."

The name of that company was Alain al Jaria, which in Arabic means "the ever-flowing spring." Its address in Amman, Jordan was a post office box, its telephone number a mobile phone. The principal was a mysterious Iraqi by the name of Naer Jumaili, and a half a billion dollars in Iraqi defense funds would eventually find their way into his private account at the Housing Bank of Jordan. The exact whereabouts of that money and the whereabouts of Mr. Jumaili are presently unknown.

The person who knows the most about the case, and in fact the only person who seems to be investigating it, is Judge Radhi al Radhi, Iraq’s Commissioner of Public Integrity. It’s his job to prosecute official corruption in Iraq, and it may be the most dangerous job in the country.

Twice tortured and imprisoned under Saddam Hussein, he now receives death threats from both the insurgents and from corrupt officials. Seven of his people have been killed.

Through an interpreter, Radhi tells Kroft he has 30 bodyguards. When he was told that lots of people would like to see him dead, Radhi replied, "I don’t care. That’s their problem."

[infam_rider]

I hope people reread this.

Maybe then.. they will point fingers at the countries allowing these thieves to spend that stolen money in their country. You know the rich guys building villas. Maybe those countries would expediate them to Iraq to stand trial and be accountable.

Amazing.. if I said Iraq had a sandstorm someone would find a way to point a finger at Bush.

I stopped blaming the President when Jimmy Carter was in office. That's why we have a system peeps.. checks and balances.

[bm6005]

What part of this surprises anyone? It's time, people, to march down Pennsylvania Ave. with pitchforks, shovels and torches, to take America back from this SCUM in Washington!!

[jjp735i]

"no one in the U.S. government would talk on camera about the missing $800 million. Off-camera, 60 Minutes was told that this was Iraqi money, spent by a sovereign Iraqi government, and therefore the Iraqis%u2019 business".

Our government is wrong! That was taxpayer money and yes our government should account for all of it. Shame on the media for not pushing the White House on this issue over the years. A simple report and repeat of old news is not reporting.

[mayihavemore]

Received training at National Defense University Washington, D.C. He doesnt remember! Can we train them or what? Priceless!

[formrusmcsgt]

Stabilizing Iraq could take as long as a decade, says the U.S. commander in Baghdad.

"In fact, typically, I think historically, counterinsurgency operations have gone at least nine or 10 years," Gen. David Petraeus said Sunday.

----

Petraus apparently is ignorant of Guatemala's 36 year insurgency or the 40 year old insurgencies in the Phillipines and Colombia that continue today.

[formrusmcsgt]

Yet more testimony to the absolute ineptitude of the Bush administration and it's absolutely woeful oversight.

Another disgrace for America at the hands of the neocons. If they couldn't take steps backwards, they'd take no steps at all.

[incog-nito]

DigitalGravy:

You have no clue what you're talking about. These funds are underwritten by the U.S. government. The U.S. taxpayers will have to pay for it, with interest.

[wogerwabbit]

"too many people in positions of power and authority in the new Iraq have been in one way or another found with their hands inside the cookie jar. And if they are brought to trial it will cast a very disparaging light on those people who had supported them and brought them to this position of power and authority."

which is exactly what's happing in America today and explains the grovelling neocon shills we suffer through here in order to attempt itelligent discourse about relevant issues.

Lars, patriot and the be-atch (can't remember her name), are just the most blatent sores on the noecon posterior so nakedly exposed to us in these surreal times. They're mooning us on the way out the door and I salute them, but these morons gotta go.

[pastdue1]

These monies are part of the "War on Terror," so mismanagement need not be justified nor traced. Besides, according to the Kentucky senator the blame is to be laid on the Iraqi. What a misnomer the "war on terror" phrase is. It was coined to confuse, defend and justify what is currently going on. Will we ever learn not to be deluded by slogans intended to instill fear.

[oleander8]

Same thing happened with a succession rulers in Viet Nam. The rich got richer and the US paid for it. And it may have been borrowed from China but the US still has to pay it back.

[digitalgravy]

Well folks, I got news for you. That money stolen or evaporated or whatever... is all borrowed, no taxes period. Everyone thinks its our tax dollars.
Its not, its Chinese, Arab and off shore funds.
These funds will never be payed back! It is lost forever the people who lent it only think its going to be payed back. Are they in for a surprise LOL.
America is banko, yup, banko... it all borrowed as in its only numbers carried over from one column to another. Borrowed as in its carried over onto the backs of real greedy types. Just try and cash it in for say real GOLD... never happen period.
So if Halliburton, KBR or Rockefeller think they glommed some extra money, think again.
Don't worry tax payers, you will never ever pay back those moneys.
Tomorrow's lesson "How 911 pays or the gift that just keeps on giving"!

[digitalgravy]

Well folks, I got news for you. That money stolen or evaporated or whatever... is all borrowed, no taxes period. Everyone thinks its our tax dollars.
Its not, its Chinese, Arab and off shore funds.
These funds will never be payed back! It is lost forever the people who lent it only think its going to be payed back. Are they in for a surprise LOL.
America is banko, yup, banko... it all borrowed as in its only numbers carried over from one column to another. Borrowed as in its carried over onto the backs of real greedy types. Just try and cash it in for say real GOLD... never happen period.
So if Halliburton, KBR or Rockefeller think they glommed some extra money, think again.
Don't worry tax payers, you will never ever pay back those moneys.
Tomorrow's lesson "How 911 pays or the gift that just keeps on giving"!

[erinyc]

The abominable disregard for US tax paying citizens and vulnerable Iraqi citizens aside, the question still remains - who is accountable. Perhaps if the Bush administration gets charged with the war crimes they have instigated, there might be some restitution for this heist as well. But alas, this too will probably remain wishful thinking.

[erinyc]

The abominable disregard for US tax paying citizens and vulnerable Iraqi citizens aside, the question still remains - who is accountable. Perhaps if the Bush administration gets charged with the war crimes they have instigated, there might be some restitution for this heist as well. But alas, this too will probably remain wishful thinking.

[erinyc]

The abominable disregard for US tax paying citizens and vulnerable Iraqi citizens aside, the question still remains - who is accountable. Perhaps if the Bush administration gets charged with the war crimes they have instigated, there might be some restitution for this heist as well. But alas, this too will probably remain wishful thinking.

[buddica]

Pay no attention to the man behind the curtain (the one stuffing large amounts of money into a brief case) The omni impotent Bush administration knows what's best for us. Billions of dollars and hundreds of thousands of lives lost, all to "prove" that Daddy should have gone into Baghdad in '91 to scratch the thirty year itch of the neocons. I blame Babs. If she would have backhanded the smirking chimp when he was little we wouldn't have to suffer (and neither would the rest of the world) with a chicken hawk that could have, should have, but didn't man up during 'Nam. Nothing like trying to prove your man hood by killing other people's kids, destroying a sovereign nation, and bankrupting our own nation. Goddess, save us all.

[markdove1]

So, let me get this straight....they give our money to someone who cannot keep track of it...it gets stolen....and now I bet you I will have to pay taxes to make up for what was stolen. I bet if we would not have given so much away....well...we'd still have to pay taxes to give money to someone else who cannot manage it...the US Government....

[guyrugby]

This is a tiny drop in the bucket compared to what has dissappeared from our own Pentagon on the watch of Don Rumsfeld. see the following:
http://onlinejournal.com/artman/publish/article_1047.shtml
Following Zakheim and Pentagon trillions to Israel and 9-11
By Jerry Mazza
Online Journal Associate Editor
Think of this as part two of Recherche du trillions perdu, my Online Journal article on Dov Zakheim, former Bush appointee as Pentagon Comptroller from May 4, 2001 to March 10, 2004. At that time he was unable to explain the disappearance of $1 trillion dollars. Actually, nearly three years earlier, Donald Rumsfeld announced on September 10, 2001 that an audit discovered $2.3 trillion was also missing from the Pentagon books. That story, as I mentioned, was buried under 9-11%u2019s rubble. The two sums disappeared on Zakheim%u2019s watch.

Yet on May 6, 2004, Zakheim took a lucrative position at Booz Allen Hamilton, one of the most prestigious strategy consulting firms in the world. One of its clients then was Blessed Relief, a charity said to be a front for Osama bin Laden. Booz, Allen & Hamilton then also worked closely with DARPA, the Defense Advanced Research Projects Agency, which is the research arm of the Department of Defense. So the dark card was shifted to another part of the deck.
ABCNNBCBS doesn't have the balls to investigate
anything like this at all.

[mmeta]

God help us. Let me get this straight - there is 800 million dollars missing and some of this money may have ended up in the hands of the insurgents that are fighting against us? Gives new meaning to the word misappropriation. Well, not to worry. How many weapons, bombs, 737s, etc. can a lousy couple hundred million buy anyway? Er - the Admin's not worried about it, why should I be? I'm safer now that we've gone into Iraq. (Its just that pesky problem of getting out.)

One question though El Presidente - how are you going to tell American militay families that not only was it the unaccounted for/misused funds that probably killed their husbands, wifes, sons & daughters but oh yeah, we need an approval for more money to carry on this ridiculous & sad war. Just need the approval though, no real money - we can just use a little tool we like to call deficit spending. No good Republican would ever want to use the T word to have to actually pay for this foolishness.

Thanks George, ***, Don and Bremmer - doing a bang up job. It is absolutely F.U.B.A.R. boys. Have someone in cammo interpret that for you.

[bill_alex-va]

The lack of cooperation from US and other international authorities is accurate and disheartening Posted by MHardiman2 at 10:24 AM : Oct 23, 2006 This is a Great POST.
What are we doing mr. bush and mr. cheney? Please answer the g*d dammed question! We Want Answers