US unable to account for billions of Iraq oil money

The US defence department is unable to account for almost $9bn taken from Iraqi oil revenues for use in reconstruction, according to an official audit released yesterday. The report by the US Special Investigator for Iraq Reconstruction says $8.7bn (£5.6bn) out of $9.1bn withdrawn between 2004 and 2007 from a special account set up by the UN Security Council is unaccounted for. This is separate from $53bn set aside by Congress for Iraqi reconstruction. Though the special investigator found that some of the money was spent properly, Iraqis continually complain that they see little sign of their infrastructure being rebuilt after 30 years of war and sanctions. Electricity, clean water and sewage disposal remain wholly inadequate and seven years after the overthrow of Saddam Hussein there are few cranes visible on the Baghdad skyline or any other signs of rebuilding. A total of 95 per cent of the country's federal budget comes from oil revenue. The scale of the sums unaccounted for are particularly striking given they cover periods well after serious fraud and corruption had been widely publicised in Iraq and abroad. The audit says that no organisation in the defence department was set up to oversee how money from the Development Fund for Iraq was spent. It adds that "the breakdown in controls left the funds vulnerable to inappropriate uses and undetected loss". Many of the organisations at the