The Rapid Reconstruction Response Program or “R3P” was supposed to allow Paul Bremer’s Coalition Provisional Authority, which ran postwar Iraq, to quickly get local construction projects under way, in an effort to juice up an economy mired down by violence, corruption and chaos.
But an audit by the Special Inspector General for Iraq Reconstruction found that in the South Central Region, based in Hillah, officers “cannot properly account for or support $96.6 million in cash and receipts.”
These funds were just a small part of the multibillion-dollar “Development Fund of Iraq,” or DFI — money which had been entrusted to the CPA by the United Nations after the war.
Handling of DFI funds was sensitive because the United States, as the occupying power, had promised to spend Iraqi money transparently and wisely and for the good of the Iraqi people.
However, in this case, according to the audit, the Rapid Reconstruction Response Program officials did not “properly document transfers of cash,” or reconcile the amount disbursed and the amount received by its agents.
All told, $119.9 million reached the office, but there was not proper accounting for $96 million. $7.2 million was completely unaccounted for.
“There were indications of potential fraud, and these were turned over to criminal investigators for further review,” said Jim Mitchell, the spokesman for the inspector general’s office.
In one case referred to in the audit report, the CPA stripped the right to control cash from one representative who had failed to account for funds.
But even after his authorization was revoked, he disbursed $1.5 million in cash. According to the audit, “eight individuals received cash for the RRRP,” but no one is referred to by name in the report.
NBC News obtained a spreadsheet last May describing some of the R3P projects in the region:
$162,163 for a “date palm nursery wall”
$18,000 for “anti-dash fencing.”
$30,000 for “training of trainers.”
$3.2 million for “landfills south.”
But now it’s unclear what was spent and what was not.
One American official working on Iraqi reconstruction issues, who is familiar with the allegations, spoke on the condition of anonymity, saying, “The worse-case scenario is that someone took it home.”
This is not the first time that questions have arisen about missing funds in Iraq.
Auditors found that $9 billion handed over to Iraqi ministries by Bremer’s CPA could not be accounted for.
An additional $1.5 billion in Iraqi funds was given to Halliburton in sole source contracts. And the contract to build an accounting system for DFI funds was awarded to a small company run out of a home in California, which wasn’t even a certified public accounting firm.
Paul Bremer could not be reached for a response, but in the past he and his associates have argued in general that the accounting procedures they used were adequate and that the war required them to move quickly.
However, commanders in Iraq concurred with the findings of the audit.