That $6.6 Billion In Cash ‘Lost’ In Iraq? Turns Out It Was In The Bank


Back in 2004, in an effort to rebuild Iraq, the United States flew at least 20 planes full of money — tightly-wrapped stacks of $100 bills — into the country. In total, $12 billion was airlifted to Iraq, all in cash. This June, when the books were closing on Development Fund for Iraq, which was under the rule of the Coalitional Provisional Authority (which dissolved in 2004), it was reported that $6.6 billion of the cash was missing. The cash wasn’t America’s; it was money from seized Iraqi assets, oil sales, and surpluses. We were just, essentially, returning it to them. Still, it’s a hefty sum to misplace (or, as some believed, to have stolen). Paul Richter, of the Los Angeles Times, wrote:

The White House decided to use the money in the so-called Development Fund for Iraq, which was created by the Federal Reserve Bank of New York to hold money amassed during the years when Hussein’s regime was under crippling economic and trade sanctions.

Richter added that House Government Reform Committee investigators charged in 2005 that U.S. officials, “used virtually no financial controls to account for these enormous cash withdrawals once they arrived in Iraq, and there is evidence of substantial waste, fraud and abuse in the actual spending and disbursement of the Iraqi funds.” Since the U.S. was responsible for the safe-keeping of the cash, Iraq was threatening to sue for the $6.6 billion that we had let slip through our fingers.

This week, however, a report based on a Pentagon audit revealed that the money was never stolen — it was transferred to the Central Bank of Iraq. “That money is not missing,” Inspector General Stuart Bowen told Bloomberg’s Tony Capaccio and David Lerman. CNN’s Charley Keyes points out that the Inspector General’s report concludes, “sufficient evidence exists showing that almost all of the remaining $6.6 billion was transferred to actual and legal CBI (Central Bank of Iraq) control.”

So all’s well that ends well, right? Maybe not. The report says that sufficient evidence exists that the deposit was made. But it doesn’t necessarily mean that the location of the $6.6 billion is actually known, or that it can be accounted for. The money might still be missing — we just know, and have evidence of, where we put it last. It’s now in the hands of Iraq to figure out what happened to it.

And this just paves the way for a new mess. Now that the location of the $6.6 billion has been figured out, to a degree, Bowen expressed concern that many more millions are still unaccounted for, including $217 million in cash that was stored in the basement of the Republican Palace. “I know just from talking to Iraqis and just my travels to Iraq—I’ve been there 30 times. What I’ve learned,” Bowen told CNBC’s Eamon Javers, “is that hundreds of millions if not billions of dollars of development fund for Iraq money was stolen by senior Iraqi officials for their own personal gain.”

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