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Bush administration not recovering stolen money in Iraq
17 Jan. 2006

WASHINGTON, Jan. 17 (HalliburtonWatch.org) -- The Bush administration has not moved to recover large sums in Iraq that have disappeared through fraud and price gouging, the Wall Street Journal reports today.

In an article titled, "Some Iraq Rebuilding Funds Go Untraced," the Journal said, "there hasn't been a concerted effort to trace what happened to the money and make recipients pay back any ill-gotten gains." Moreover, the Bush administration "said it doesn't plan to ask the Justice Department to file lawsuits or to conduct widespread audits of individual contracts to look for fraud."

The inspector general of the U.S. Coalition Provisional Authority estimated that $8.8 billion in public funds had gone missing in Iraq.

The Journal article reports that, since U.S. officials in Iraq "didn't keep extensive records, and often didn't track whether contractors performed the work they were paid to do," there is little chance that private or government lawsuits will recover any stolen or missing money.

"One question facing the government is whether to seek recovery of funds paid to the largest contractor, Halliburton Co.'s KBR unit," the Journal reports. Military auditors have called into question at least $1.4 billion in Halliburton expenses, but the Pentagon paid the money to the company anyway. According to the Journal, suggestions by military auditors that funds be withheld from Halliburton "have been resisted by Pentagon units that awarded the contracts."

Under the False Claims Act, first passed during the U.S. civil war to prosecute corrupt military contractors, employees with evidence of contracting abuse may sue contractors and the Justice Department can choose to intervene on behalf of the complaint. But, reports the Journal, "The Justice Department won't disclose how many whistle-blower suits have been filed against contractors in Iraq" and "the only Iraq-related False Claims Act case on which the Justice Department so far has announced a decision, it declined to intervene." Lawyers familiar with such suits estimate that at least two dozen are pending.

The Journal article, by Scot J. Paltrow, can be accessed here.