Moral Outrage
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Aiding the Iraqi Insurgency with US Taxpayer Dollars

According to several senior military and government personnel, USAID’s Community Stabilization Program (CSP) was responsible for sending millions of taxpayer dollars to Iraqi insurgents via a complex web of contractors and subcontractors. These sources claim that although USAID was fully aware of the problem, it delayed acting for as long as possible, unwilling to pull the plug on a program that generated propitious statistics, even when it jeopardized American lives.

Almost all USAID projects are administered through intermediaries—either private firms or nonprofits—and this one was no different. The cooperative agreement went to International Relief and Development (IRD), an American nonprofit. As with most USAID “implementing partners” in Iraq and Afghanistan, IRD delegated much of its authority to local subcontractors. Money had to pass through several middlemen before reaching its intended target.

Time sheets submitted to IRD by contractors listed thousands of Iraqis, each receiving wages from USAID. But many of these workers were phantoms, never seen by the US Army’s Dagger Brigade during its regular patrols of the area. Intelligence reports indicated that some contracts were going to militia members and that additional militia members were extorting “protection” bribes from legitimate contract winners.

A letter—obtained by The Nation through the Freedom of Information Act—presented new “sensitive and disturbing information from a well-placed source” advising that as much as 40 to 50 percent of funds had gone to insurgents and corrupt officials.

Precisely how much money went to the insurgency remains unknown. Occupation business has been conducted largely in cash. All told, $12 billion—some 240 tons of bills—has been shrink-wrapped and shipped to Baghdad from the Federal Reserve Bank in New York City. At its height the CSP was disbursing 
$1 million a day. “They would bring in money on pallets,” says Colonel Boston.

The Nation

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One Response to “Aiding the Iraqi Insurgency with US Taxpayer Dollars”

  1. The Company that this project was let to, was called International Relief and Development. Corrupt officials doesnt necessarily mean its gone to the insurgency. Corrupt officials are just that and its rife in Iraq and particularly Afghanistan. The problem for IRD is that they are controlled by a small group in the US who do not delegate sufficient authority to the field – so the COP is hamstrung to make any significant change, and until IRD COP are provided with great ability to make such changes as required this case can and will repeat itself. Another problem with this environment is that it is very very far removed from normal business practice in the rest of the world. Documentation is extremely poor and there is a one page rule for reports etc, or they just arent read by the USAID reporting officers who are overloaded with work and responsible for far too much funding for one individual. IRD are a reasonably honest organisation, and normally prudent with their money and I know this with some certainty. The problem with Development work is that for whatever reason – normal business practices are not applied by USAID who dont use and request the correct types of documentation – simple Project Documentation is not used – all they need do is develop a PM process, a one month job for some PMP guy and add it to their contract requirements. Not that hard – look in any international project worth 100million and ask where or who are their Project Managers, with that exact title like you would have in the normal world? You wont find one in afghanistan, or very very few.


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