The Klepto-Plutocracy at War
by Chris Floyd
By Chris Floyd on 7/7/2005, 7:33pm PT  

(A guest post in honor and support of BradBlog from American journalist Chris Floyd, columnist for The Moscow Times and perpetrator of the blog "Empire Burlesque".)

Between October 2003 and July 2004, almost $9 billion went missing from the accounts of the Iraqi "interim government." Despite investigations by Congress, the Pentagon, the General Accountability Office, the International Advisory and Monitoring Board and the Special Inspector General for Iraq Reconstruction, no one knows exactly where the money went.

But from the evidence gathered by the official bodies named above, it's evident that part of the money went to faction leaders in the U.S.-backed interim government: money they used to enrich themselves, pay off cronies, bribe American officials --- and fund the deadly sectarian militias that are even now threatening to drive the country into civil war. It's equally evident that some of the money went straight into the coffers of Bush-favored American contractors and to fund innumerable off-the-books military and intelligence operations.

It's also likely that at least some of this vast tub of illicit swag made its way into the back-alleys of Bush's re-election campaign, funding various political "black ops" on the home front: bankrolling the "independent" attack dogs that battened on John Kerry, funding the multitudinous voting scams run by Bush operatives, and providing a general slush fund to draw upon as needed.

This kind of money laundering is standard practice in American politics, of course, and Republicans in particular are past masters of this dark art. I have some small personal experience with such operations. In 1992, I was a founding member of a start-up company trying to put together educational software for the then-emerging market. (In this case, multi-media critical editions of Shakespeare plays.) Looking for money to stay afloat while the programmers hammered out what was then a unique cross-platform system, we met with a series of venture capitalists --- a most enlightening experience for anyone interested in how the world really works, and what really matters to those who run the world.

In one meeting, one go-getting VC (clad in a fine gray suit, not black pajamas) waxed lyrical about his many contacts and connections in the national power structure --- controlled then, as now, by the Bush clan. Of particular interest was one tidbit he tossed out --- more as an aside, a simple fact, nothing special. He told how he'd been involved with a Republican operation to funnel secret money to the Bush campaign through various fronts in Luxembourg. As I recall, some of it was foreign money, some of it was American cash being laundered to skirt legal restrictions on campaign financing. Millions were pouring in through this secret conduit, he said --- then moved on to other matters he found more interesting than this common, run-of-the-mill practice.

Our system is run by Big Money for Big Money --- in order to make more money. That's it. That's all of it. That's the reality behind the fierce sideshows of "culture war" and ideological combat that consume so much of our attention. Now, it's true that these latter concerns are important, because the repression they can spawn has a very real impact on the lives of millions of people. And it's also true that we may be reaching a point in America where the manipulators of these sideshows --- the Big Money elite, epitomized by the Bush clan --- could lose control of their creations, with extremely dire consequences.

But despite all its ideological/religious trappings --- its evangelical foot soldiers, its neo-con outriders, etc. --- what ultimately drives the Bush Regime, and its war machine, is the lust for unlimited swag. The sack of Iraq has been the greatest act of looting and rapine in history, in terms of the sheer scale of the money involved. The $9 billion that went walking in those crucial months before the election is just a drop in the surging flood of blood money pouring out of Iraq into the pockets of the Bush gang and its allies and acolytes.

An excellent overview of the klepto-plutocracy's operation in Iraq can be found in the current edition of the London Review of Books. In Where Has All The Money Gone? Ed Harriman commits the increasingly rare act of journalism - actually examining the reports of the auditors and talking to actual people involved on the ground in Iraq. It's highly detailed, dispassionate but devastating in the cold, hard truth it lays out. You need to read all of it, but here are a few choice excerpts (plucked randomly, not sequentially):

"An Iraqi hospital administrator told me that, as he was about to sign a contract, the American army officer representing the CPA [Coalition Provisional Authority] had crossed out the original price and doubled it. The Iraqi protested that the original price was enough. The American officer explained that the increase (more than $1 million) was his retirement package."
"The 'reconstruction' of Iraq is the largest American-led occupation programme since the Marshall Plan. But there is a difference: the US government funded the Marshall Plan whereas Donald Rumsfeld and Paul Bremer have made sure that the reconstruction of Iraq is paid for by the 'liberated' country, by the Iraqis themselves. There was $6 billion left over from the UN Oil for Food Programme, as well as sequestered and frozen assets, and revenue from resumed oil exports (at least $10 billion in the year following the invasion). Under Security Council Resolution 1483, passed on 22 May 2003, all of these funds were transferred into a new account held at the Federal Reserve Bank in New York, called the Development Fund for Iraq (DFI), so that they might be spent by the CPA 'in a transparent manner . . . for the benefit of the Iraqi people'. Congress, it's true, voted to spend $18.4 billion of US taxpayers' money on the redevelopment of Iraq. But by 28 June last year, when Bremer left Baghdad two days early to avoid possible attack on the way to the airport, his CPA had spent up to $20 billion of Iraqi money, compared to $300 million of US funds."
"The GAO report of July 2004 found that in the first nine months of the occupation, KBR [Halliburton] was allowed a free hand in Iraq: a free hand, for example, to bill the Pentagon without worrying about spending limits or management oversight or paperwork. Millions of dollars' worth of new equipment disappeared. KBR charged $73 million for motor caravans to house the 101st Airborne Division, twice as much as the army said it would cost to build barracks itself; KBR charged $88 million for three million meals for US troops that were never served… One of KBR's contracts was for transporting supplies between American bases. Fleets of new Mercedes Benz trucks, costing $85,000 each, travelled up and down Iraq's central highways every day, accompanied by armed US military escorts. If there were no goods to transport, KBR dispatched empty lorries anyway, and billed accordingly. The lorries didn't carry replacement air and oil filters, essential when driving in the desert. They didn't even carry spare tyres. If one broke down, it was abandoned and destroyed so no one else could use it, and left burning by the roadside. For fear of ambush, KBR drivers were told not to slow down. 'The truck in front of the one I was riding ran a car with an Iraqi family of four off the road,' a KBR employee told Waxman's committee. 'My driver said that was normal.'"
"'In the war of ideas or the struggle for hearts and minds . . . American efforts have not only failed, they may also have achieved the opposite of what they intended' was the principal finding of the Pentagon's Defense Science Board. The answer was a big rethink - a strategic spending review. The $18.4 billion Iraq Relief and Reconstruction Fund that Congress had voted to rebuild Iraq, and which Bremer had left largely untouched and possibly never intended to spend as mandated, would be spent on counter-insurgency warfare directed by US commanders and John Negroponte from the new US embassy in Baghdad."
"In January this year, the SIGIR issued a report detailing evidence of fraud, corruption and waste by the Iraqi Interim Government when Bremer was in charge. They found that $8.8 billion - the entire Iraqi Interim Government spending from October 2003 through June 2004 - was not properly accounted for. The Iraqi Office of Budget and Management at one point had only six staff, all of them inexperienced, and few of the ministries had budget departments. Iraq's newly appointed ministers and their senior officials were free to hand out hundreds of millions of dollars in cash as they pleased, while American 'advisers' looked on. 'CPA personnel did not review and compare financial, budgetary and operational performance to planned or expected results,' the auditors explained. One ministry gave out $430 million in contracts without its CPA advisers seeing any of the paperwork. Another claimed to be paying 8206 guards, but only 602 could be accounted for. There is simply no way of knowing how much of the $8.8 billion went to pay for private militias and into private pockets."

Read it and weep - but know that it's just the tip of the iceberg, and that the same system of klepto-plutocracy is also operating in the Homeland, albeit in a slightly less naked fashion.