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Last Updated: Wednesday, 25 January 2006, 12:58 GMT
Cash meant for Iraqis 'misused'
An Iraqi at work
Iraq's infrastructure is still not reliable
Large bundles of cash meant for Iraq's reconstruction were stashed in filing cabinets, handed over without receipts and gambled away, a report has found.

The audit, by US-appointed inspectors, paints a picture of the chaotic misuse of millions of dollars of funds.

The lack of oversight had a tragic outcome in one case, when a hospital lift, supposed to have been fixed, crashed killing three people.

The report said US post-war planning was limited by a desire for secrecy.

There were no detailed, overt preparations for the reconstruction of Iraq in the run-up to the 2003 invasion "to avoid the impression that the US government had already decided on [military] intervention", the report by the Special Inspector General for Iraq Reconstruction (SIGIR) said.

Nevertheless, the US has allocated billions of dollars to rebuilding Iraq, and large amounts have been raised through the sale of Iraqi oil.

Significant sums of this have been disbursed without any accounting procedures, SIGIR said.

Gambled thousands

One official kept $2m (1.1m) in a bathroom safe, while another allegedly stole $100,000 from a colleague's unsecured stash to balance his own books, investigators found.

Payment was handed over for projects without any official contract being drawn up or checks on the work carried out.

More than 2,000 contracts were found to be at fault.

In one case a contractor was paid $100,000 to refurbish an Olympic swimming pool.

US officials certified the work was complete, but it later turned out that the contractor had just polished the equipment, which was found to be defective. The pool has not been used since.

One US military assistant is said to have gambled away up to $60,000 while accompanying the Iraqi Olympic team to the Philippines.

"What's sad about it is that, considering the destruction in the country, with looting and so on, we needed every dollar for reconstruction," Wayne White, a former US state department official, told the New York Times.

Correspondents say the authorities are struggling to make Iraq's infrastructure reliable.

Previous findings by SIGIR have resulted in corruption charges against four Americans.


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