House of Mirth

Pardon this deviation from my normal, bookish beat, but I can't help myself: current events are driving me nuts. Here we go. According to a new report issued by the Iraqi Board of Supreme Audit, at least $500 million has been embezzled from the national defense budget by fraudulent middlemen. Minor palm-greasing is one thing. But this is a massive, systematic plundering of the till, and the more you read, the more you want to pull your hair out. One incredible example: the Board examined 89 contracts that had been signed between June 28, 2004 (when the U.S. handed over sovereignty) and Feb. 28, 2005. And as Knight-Ridder's Hannah Allam reports, "the sole beneficiary on 43 of the 89 contracts was a former currency-exchange operator, Nair Mohamed al-Jumaili, whose name doesn't even appear on the contracts. At least $759 million in Iraqi money was deposited into his personal account at a bank in Baghdad, according to the report."

Hold on. This guy had $759 million worth of NIDs (New Iraqi Dinaris) deposited into his personal bank account? Presumably he passed along at least some of this stash to arms suppliers in the United States, Poland, Pakistan, and the Arab world, but we'll never know how much. Nor did he get the best value for his money, since the Iraqis soon took possession of "shoddily refurbished helicopters from Poland, crates of loose ammunition from Pakistan and a fleet of leak-prone armored personnel carriers."

One more thought, though. The contracts under investigation add up to a whopping $1.27 billion. The money, we're told, did not come from the U.S. military budget or other foreign donations--it was siphoned directly from the Iraqi government. I found myself wondering how big a bite this would take out of the nation's resources. As it happens, it's pretty easy to figure out Iraq's projected revenues and expenditures for 2004: just stop by the Coalition Provisional Authority website and download the appropriate PDF. I'm no economist--I can hardly balance my checkbook--but I do see that the total projected revenues for 2004 add up to 19,258.8 billion NIDs, which equals about $12.839 billion. So the crooked contracts amount to ten percent of the entire budget for the year! Astounding, galling, demoralizing news. But I assume that Nair Mohamed al-Jumaili and his pals just took the old saying to heart: "Steal big and the world will love you."