United Nations Sharply Criticizes U.S. over Iraqi Oil Revenues

Published Jun 24, 2004 12:01 AM by The Maritime Executive

A leaked copy of an interim report by financial advisers KPMG into the Development Fund for Iraq (DFI), which collects and spends oil money, has revealed questionable bookkeeping and "resistance" among Coalition Provisional Authority staff to scrutiny.

The U.S. run DFI was mandated by the U.N. Security Council to collect and spend Iraqi oil revenues in May of last year, but has been dogged from its inception by accusations of a lack of transparency.

Agreement on an international advisory body to oversee the DFI was not reached until October, as Paul Bremer, the U.S. governor in Iraq, argued over the scope of the watchdog's power. In the interim, its second function as a repository for all reconstruction money has been largely overtaken by U.N. and World Bank funds, as donor countries became weary of contributing to an un-audited fund.

Officials say the audit only began in April and expressed fears that if the work is not done by June 30th, no audit of its spending would ever be complete.

Svetlana Tsalik, Iraq Revenue Watch's director, warned that the apparently hurried nature of the spending would make the money more difficult to account for.

"With so much money available for cash give-aways, and so little planning on how the process will work, it will be all but impossible to avoid corruption and waste," she said.