U.N. Criticizes Iraq Occupation Oil Sales

An audit board set up by the Security Council to monitor oil sales in Iraq reported Tuesday that during the 15 months that the United States-led occupation authority ran the country there was widespread mismanagement, including financial irregularities, a failure to curb smuggling and overdependence on no-bid contracts. The watchdog panel, the International Advisory and Monitoring Board of the Development Fund for Iraq, cited three main concerns over oil sales under the Coalition Provisional Authority: the absence of metering to keep track of how much oil was being pumped from Iraqi fields, noncompetitive bidding procedures for many contracts, and barter transactions with countries in the immediate region. The problem with the metering continues. Among the noncompetitive, or sole-source, contracts paid for with Iraqi oil money, the only ones specifically identified were those awarded to a subsidiary of the Halliburton Company, theHouston-based military and oil services conglomerate, which Dick Cheney headed before becoming vice president. The company's operations in Iraq, involving contracts worth more than $10 billion through its subsidiary Kellogg Brown & Root, have been dogged by charges of preferential treatment, overbilling, cost overruns and waste. Headed by the American diplomat L. Paul Bremer III, the provisional authority was the administrator of Iraq from the invasion in March 2003 until its dissolution as the occupation authority on June 28, 2004, with the formal return of sovereignty to Iraq. [more]