"Free fraud zone"

A documentary scheduled to run on the UK's Channel4 tonight will look at the scandal of Iraq's missing billions—huge amounts of cash, earmarked for Iraqi reconstruction, but either stolen outright by American contractors or doled out on now-familiar Bush-regime lines of loyalty.

"[R]ather than being a technical agenda, I believe it was largely a politically motivated reward-and-punishment kind of agenda," said Mary Patterson, an experienced health worker who was eventually asked to leave Iraq by James Haveman, the man appointed by the Pentagon to supervise the reconstruction of the Iraqi health service.

Haveman, who had zero experience in international health work, was however highly qualified to work for the Bush regime, with his track record of being "a loyal Bush supporter, who had campaigned for Jeb Bush, and a committed evangelical Christian."

Another plugged-in contracting company, Custer Battles, billed the U.S. government for $10 million dollars in return for $3 million of actual expenditure. "Perhaps more remarkable is that the US government, once it knew about the scam, took no legal action to recover the money."

When the coalition troops arrived in Iraq, they were received with remarkable goodwill by significant sections of the population. The coalition had control up to a point and, perhaps more importantly, it had the money to consolidate that goodwill by rebuilding Iraq, or at least make a significant start.

Best of all for the US and its allies, the money came from the Iraqis themselves. Because the Iraqi banking system was in tatters, the funds were placed in an account with the Federal Reserve in New York. From there, most of the money was flown in cash to Baghdad.

Over the first 14 months of the occupation, 363 tonnes of new $100 bills were shipped in - $12bn, in cash. And that is where it all began to go wrong. "Iraq was awash in cash - in dollar bills. Piles and piles of money," says Frank Willis, a former senior official with the governing Coalition Provisional Authority. "We played football with some of the bricks of $100 bills before delivery. It was a wild-west crazy atmosphere, the likes of which none of us had ever experienced."

The environment created by the coalition positively encouraged corruption. "American law was suspended, Iraqi law was suspended, and Iraq basically became a free fraud zone," says Alan Grayson, a Florida-based attorney who represents whistleblowers now trying to expose the corruption. "In a free fire zone you can shoot at anybody you want. In a free fraud zone you can steal anything you like. And that was what they did."

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It's rather important to remember that this was Iraqi money that was stolen. At the start of America's atack on Iraq, "around $23bn-worth of Iraqi money was placed in the trusteeship of the US-led coalition by the UN. The money, known as the Development Fund for Iraq and consisting of the proceeds of oil sales, frozen Iraqi bank accounts and seized Iraqi assets, was to be used in a 'transparent manner,' specified the UN, for 'purposes benefiting the people of Iraq.'"