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IRAQI FIRE SALE: CPA RUSHES TO GIVE AWAY
BILLIONS IN IRAQI OIL REVENUES
June 2004
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the full briefing 
New York, June 16, 2004—With international attention
focused on the impending transfer of power in Iraq, the Coalition
Provisional Authority is committing billions of dollars to
ill-conceived projects just before it dissolves, according
to a new briefing by the Open Society Institute's Iraq Revenue
Watch Project. The briefing, Iraqi Fire Sale: CPA Giving
Away Oil Revenue Billions Before Transition, says that
the U.S.-controlled Program Review Board in charge of managing
Iraq's finances recently approved the expenditure of nearly
$2 billion dollars in Iraqi funds for reconstruction projects.
"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" said
Svetlana Tsalik, director of OSI's Revenue Watch.
The money will come out of the Development Fund for Iraq,
the main repository for Iraqi oil revenues. But a number of
the expenditures the Program Review Board approved will go
toward sectors for which Congress has already allocated American
tax dollars. This includes $500 million earmarked for Iraqi
security forces, even though Congress allocated $3.2 billion
for the same purpose. Likewise, the Program Review Board approved
$315 million for the electricity sector despite a $5.5 billion
U.S. appropriation for the same sector. And $460 million,
on top of the $1.7 billion allocated by Congress, is set to
go to Iraq's oil industry.
Although few would object to the need for funding in these
areas, it is unclear why these appropriations were not made
when the 2004 Iraqi budget was adopted and subsequently revised
this past March. The briefing questions why the CPA is rushing
to commit Iraqi oil funds instead of waiting for the interim
government to make these decisions when it assumes power at
the end of the month.
The UN Security Council resolution passed on June 8 requires
the new government to satisfy all outstanding obligations
against the Development Fund for Iraq made before June 30,
leaving the new interim Iraqi government with no choice but
to honor the Program Review Board's questionable expenditures.
Iraqi Fire Sale warns that without mechanisms in place
to ensure accountability, the $2 billion in Iraqi funds will
be vulnerable to mismanagement and corruption.
Read
the full briefing
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