By Patrick Cockburn
12/09/05 "CounterPunch.org" -- -- Baghdad - The British government is
trying to stall an investigation into the theft of more than $1.3bn
(�740m) from the Iraqi Ministry of Defense, senior Iraqi officials
The government wants to postpone the investigation to help its
favored candidate Iyad Allawi, the former prime minister, in the
election on December 15. The money disappeared during his
The UK's enthusiasm for Mr Allawi may have led it into promoting a
cover-up of how the money was siphoned off and sent abroad. One Iraqi
minister believes the investigation will be dropped when the next
government is formed.
The scandal is expected to explode with renewed force in the next few
weeks. The Independent has learnt of secret tape recordings of a wide-
ranging conversation between a Ministry of Defense official and a
businessman, naming politicians and officials involved.
"It is possibly one of the largest thefts in history," Ali Allawi,
Iraq's Finance Minister, said. "Huge amounts of money have
disappeared. In return we got nothing but scraps of metal." Most of
the military purchases were made in Poland and Pakistan. They
included obsolete helicopters, armoured vehicles unable to stop a
bullet and grossly over-priced machine guns and bullets. Payments
were made in advance. Often the Ministry of Defense did not even have
a copy of contracts under which it was paying hundreds of millions of
Ahmed Chalabi, the Deputy Prime Minister, says William Patey, the
British ambassador in Baghdad, asked him not to give prominence to
the scandal before the election because this might "politicise the
investigation". Mr Patey denies he had asked for the investigation to
A former senior British adviser was quoted as saying that Tony Blair
was convinced Mr Allawi "is the best hope" for Iraq. He added that Mr
Blair had sent a small team of operatives to give political help to
Mr Allawi. In background briefings, British officials have heavily
supported the former prime minister despite evidence that government
corruption was rife under his administration.
Mr Allawi is a former member of the Baath party who fell out with
Saddam Hussein in the 1970s. Resident in Britain for many years, he
became the leader of an opposition group, the Iraqi National Accord.
He has never denied a close association with British intelligence and
the CIA said he was justified in taking support from any foreign
intelligence service willing to help him fight Saddam.
Supporters of Mr Allawi have denounced allegations about widespread
fraud while he was prime minister in 2004-05 as an attempt to damage
him before a close-fought election next week. But documents seen by
The Independent show Mr Allawi's office authorising astonishingly
large sums of money to be spent by the Defense Ministry. The cabinet
was excluded at the request of Hazem al-Shaalan, the Defense Minister.
He asked for and received permission from the prime minister's office
to spend money without oversight in September 2004, citing the
gravity of the crisis facing the Iraq. In November, Mr Shaalan
received a letter from the cabinet secretariat saying the prime
minister had agreed to spend $1.7bn "for the purpose of creating two
rapid intervention divisions". By the winter of 2004, large sums were
being sent out of Iraq in sacks filled with $100 bills loaded on to
planes. One shipment of $300m was noticed and intercepted.
The Iraqi army and police have paid heavily in lives because of the
misappropriation of the almost all the defense procurement budget.
Insurgents are often better armed than government forces. Soldiers
travel through Baghdad in ageing white pick-ups normally used to
carry cabbages to the market.
The men chosen, primarily by the US, to run the Iraqi Defense
Ministry were extraordinarily inexperienced. They included Mr
Shalaan, the Defense Minister, who had worked in real estate in a
small way in London during the 1990s. He may have appealed to
American and British advisers because he was vociferously anti-
Ziyad Cattan was the head of military procurement at the Defense
Ministry who signed cheques for hundreds of millions of dollars. He
openly admits to knowing nothing about weapons. He returned to Iraq
just before the war in 2003 after 27 years in Poland. His previous
jobs included selling flowers, shoes and used cars. At one time he
ran a pizza parlour.
Mr Cattan is allegedly one of the voices secretly recorded when he
was talking in a car with Naer Mohammed Ahmed Jumaili. Mr Jumaili
acted as middle man for the arms deals, Mr Chalabi said at a press
conference in Baghdad this week. He said 35 cheques from the Ministry
of Defense worth $1.1bn were paid into Mr Jumaili's account at the Al
Warkah Bank in Baghdad.
A mystery surrounding the alleged misappropriation of military
procurement budget is that it passed unnoticed by American and
British officials in Baghdad. This was despite the fact that they
were supposedly supervising the build up of a new Iraqi army and
police force. Mr Shaalan and Mr Cattan both protest that nothing was
done in the Iraqi Ministry of Defense at this time that was not known
to the US.
A problem facing the investigation into the missing money is that so
many politicians and officials from the Sunni, Shia and Kurdish
communities in Iraq were either implicated or failed to notice what
was happening. The National Assembly has not lifted Mr Shaalan's
Supporters of Mr Allawi, the Kurdish parties and some members of Shia
religious parties have sought to delay the investigation.
Britain has backed Mr Allawi strongly in the hope that as a secular
Shia with nationalist credentials he can unite people from the three
Despite British support, Iraqi political observers do not believe Mr
Allawi will be the next prime minister. Last weekend he was chased
from the shrine in the holy Shia city of Najaf by worshippers hurling
shoes whom he says were trying to kill him.
With most Iraqis voting on sectarian or ethnic lines Mr Allawi will
be doing well if he can win more than 25 seats in the 275-member