Today's Article
Up to $15 million of
oil revenues go
missing in Iraq each
day.
oil revenues go
missing in Iraq each
day.
The American Spark
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Billions In Iraq Oil Revenue, American Taxpayer Dollars Lost
By Cliff Montgomery - July 6th, 2007
Up to 300,000 barrels a day of Iraq’s oil production since the 2003 U.S.-led invasion remains unaccounted for,
and may have been siphoned off via corruption or smuggling rackets, says a draft American government report
quoted by the New York Times in May.
Assuming an average of $50 a barrel, the report declared the discrepancy amounted to a loss of up to $15
million every day.
The draft did not contain a final verdict on what happened to all that missing oil--or the money sure to be made
from it--but the audit further ensures that insurgents, smugglers and corrupt officials probably control huge
parts of Iraq's oil industry.
The draft also considered other ways in which the billions of barrels could have gone amiss, including the
notion that the country may have consistently overstated its oil production.
Iraq's government and the U.S. State Department, which are supposed to keep track of the oil numbers, have
been under constant pressure to show Americans actual progress in Iraq by increasing oil production levels.
Instead, production has fallen well short of the Bush Administration's goal of three million barrels every day.
Almost the entire economy of the war-torn country is dependent on oil profits.
The draft report was created by the U.S. Government Accountability Office (GAO) with the assistance of
government energy analysts, and was obtained by the Times through a separate government office that was
given a review copy. The GAO refused to provide a copy to the Times, or to answer questions about its
preliminary report.
Paul Anderson, an office spokesman, tersely replied that “we don’t discuss draft reports”--an almost-patented
Bush Administration response to any matter our would-be masters would rather not discuss with the American
public.
Numerous analysts outside the government told the Times that such a huge discrepancy reveals either a
major oil smuggling operation in Iraq, or that the country is currently incapable of producing accurate
production numbers.
“That’s a staggering amount of oil to lose every month,” independent economist and oil expert Philip Verleger
Jr. told the Times.
“But given everything else that’s been written about Iraq, it’s not a surprise,” he added.
Revenue runoff from oil fields isn't the only slick business Iraq suffers these days. House appropriators have
voiced disgust during recent meetings, which have revealed the depth of contracting ripoffs in Iraq stealing
billions of American taxpayer dollars. Representatives have declared they will work with other congressional
committees to fix this broken system.
At a House Defense Appropriations Subcommittee hearing in May, Rep. James Moran (D-VA) called the
ripoffs "egregious abuses of the procurement system" which U.S. officials would "never tolerate" if they
occurred on these shores.
Moran seemed especially disgusted by a study from the Special Inspector General for Iraq Reconstruction
which revealed that California-based Parsons Corp. has barely broken ground on most of the health-care
centers it was contracted to build.
Parsons has gleefully accepted $186 million over a three-year-span to build the necessary health-care centers
in Iraq, but has fully constructed only 15 of the 142 planned health-care facilities.
Of the 15 completed centers, only eight are available to the public, declared Joseph McDermott, an
investigator working for the special inspector general's office. He added one bright spot: 119 health care
facilities are now under construction...three years after the fact.
The inspector general's office also discovered that Aegis Defense Services, which employs thousands of
contract personnel in the war-torn country, has not fulfilled its contract duties, said McDermott.
Aegis also has not sufficiently documented its employees who carry weapons in Iraq; many Aegis employees
work as security personnel.
In another ripoff, a potential $1.8 billion contract was awarded in February 2004 to Dyncorp International Inc.
for the creation of an Iraqi police training program. The contract was canceled late that year after Dyncorp's
incompetence became a public embarrassment. But Dyncorp continued to receive money from the canceled
contract until 2006, McDermott stated.
And that wasn't all: it seems the State Department also discovered that no one could account for over $36
million worth of weapons and other equipment last seen at Dyncorp's failed training program.
"I think some of what you've said is shocking," replied Rep. Marcy Kaptur (D-OH).
At the hearing, McDermott admitted that a number of the contracting problems in Iraq had been made worse
by increasing sectarian violence. But such matters "do not decrease the importance of oversight," he added.
The Pentagon spent $151 billion outsourcing American democracy in fiscal 2006. But according to John
Hutton, GAO director of acquisition and sourcing management, Defense has finally begun to increase its
oversight efforts--after the free press has pummeled the Pentagon for years over its lack of contract oversight
in Iraq.
But inadequate competition, poor requirements and insufficient contract surveillance still exist, added Hutton.
Like what you're reading so far? Then why not order a full year (52 issues) of the The American Spark e-
newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!
By Cliff Montgomery - July 6th, 2007
Up to 300,000 barrels a day of Iraq’s oil production since the 2003 U.S.-led invasion remains unaccounted for,
and may have been siphoned off via corruption or smuggling rackets, says a draft American government report
quoted by the New York Times in May.
Assuming an average of $50 a barrel, the report declared the discrepancy amounted to a loss of up to $15
million every day.
The draft did not contain a final verdict on what happened to all that missing oil--or the money sure to be made
from it--but the audit further ensures that insurgents, smugglers and corrupt officials probably control huge
parts of Iraq's oil industry.
The draft also considered other ways in which the billions of barrels could have gone amiss, including the
notion that the country may have consistently overstated its oil production.
Iraq's government and the U.S. State Department, which are supposed to keep track of the oil numbers, have
been under constant pressure to show Americans actual progress in Iraq by increasing oil production levels.
Instead, production has fallen well short of the Bush Administration's goal of three million barrels every day.
Almost the entire economy of the war-torn country is dependent on oil profits.
The draft report was created by the U.S. Government Accountability Office (GAO) with the assistance of
government energy analysts, and was obtained by the Times through a separate government office that was
given a review copy. The GAO refused to provide a copy to the Times, or to answer questions about its
preliminary report.
Paul Anderson, an office spokesman, tersely replied that “we don’t discuss draft reports”--an almost-patented
Bush Administration response to any matter our would-be masters would rather not discuss with the American
public.
Numerous analysts outside the government told the Times that such a huge discrepancy reveals either a
major oil smuggling operation in Iraq, or that the country is currently incapable of producing accurate
production numbers.
“That’s a staggering amount of oil to lose every month,” independent economist and oil expert Philip Verleger
Jr. told the Times.
“But given everything else that’s been written about Iraq, it’s not a surprise,” he added.
Revenue runoff from oil fields isn't the only slick business Iraq suffers these days. House appropriators have
voiced disgust during recent meetings, which have revealed the depth of contracting ripoffs in Iraq stealing
billions of American taxpayer dollars. Representatives have declared they will work with other congressional
committees to fix this broken system.
At a House Defense Appropriations Subcommittee hearing in May, Rep. James Moran (D-VA) called the
ripoffs "egregious abuses of the procurement system" which U.S. officials would "never tolerate" if they
occurred on these shores.
Moran seemed especially disgusted by a study from the Special Inspector General for Iraq Reconstruction
which revealed that California-based Parsons Corp. has barely broken ground on most of the health-care
centers it was contracted to build.
Parsons has gleefully accepted $186 million over a three-year-span to build the necessary health-care centers
in Iraq, but has fully constructed only 15 of the 142 planned health-care facilities.
Of the 15 completed centers, only eight are available to the public, declared Joseph McDermott, an
investigator working for the special inspector general's office. He added one bright spot: 119 health care
facilities are now under construction...three years after the fact.
The inspector general's office also discovered that Aegis Defense Services, which employs thousands of
contract personnel in the war-torn country, has not fulfilled its contract duties, said McDermott.
Aegis also has not sufficiently documented its employees who carry weapons in Iraq; many Aegis employees
work as security personnel.
In another ripoff, a potential $1.8 billion contract was awarded in February 2004 to Dyncorp International Inc.
for the creation of an Iraqi police training program. The contract was canceled late that year after Dyncorp's
incompetence became a public embarrassment. But Dyncorp continued to receive money from the canceled
contract until 2006, McDermott stated.
And that wasn't all: it seems the State Department also discovered that no one could account for over $36
million worth of weapons and other equipment last seen at Dyncorp's failed training program.
"I think some of what you've said is shocking," replied Rep. Marcy Kaptur (D-OH).
At the hearing, McDermott admitted that a number of the contracting problems in Iraq had been made worse
by increasing sectarian violence. But such matters "do not decrease the importance of oversight," he added.
The Pentagon spent $151 billion outsourcing American democracy in fiscal 2006. But according to John
Hutton, GAO director of acquisition and sourcing management, Defense has finally begun to increase its
oversight efforts--after the free press has pummeled the Pentagon for years over its lack of contract oversight
in Iraq.
But inadequate competition, poor requirements and insufficient contract surveillance still exist, added Hutton.
Like what you're reading so far? Then why not order a full year (52 issues) of the The American Spark e-
newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!