Accessibility links

Breaking News

Iraq: British Charity Urges Accountability As Donor Conference Begins

A British charity is urging U.S. and British administrators in Iraq to account for an estimated $4 billion that should go toward rebuilding the country. As officials from around the world gather in Madrid for an Iraq donors conference, the charity group Christian Aid says the U.S.-led Coalition Provisional Authority in Iraq had not given a public account of cash flows since ousting Iraqi leader Saddam Hussein in April.

Prague, 23 October 2003 (RFE/RL) -- Christian Aid says Iraq's U.S.-led Coalition Provisional Authority (CPA) has collected an estimated $5 billion in revenue from post-Saddam Hussein oil sales, as well as prewar revenue handed over by the United Nations.

But the charity says only $1 billion -- or 20 percent of the money -- has been accounted for, with the rest disappearing into what Christian Aid calls a "financial black hole." John Davison is a representative for Christian Aid and spoke to RFE/RL.

"The transfer of [Iraqi] funds to the CPA and the Development Fund [for Iraq] was sanctioned by the United Nations on the grounds, on the condition that there would be strict accountability and transparency," he said. "We have been exhaustively checking all the available data that [the CPA] has made available. And this is not just Christian Aid who is saying this. In our report, we quote UN diplomats who said they have no idea where this money's gone either. It's just disappeared into this 'black hole,' as we call it. Nobody knows where it's gone."

A spokesperson for the CPA in Baghdad has responded only by stating that the authority is committed to the full accountability in its handling of Iraqi funds and is complying with a UN resolution obliging it to do so.

Christian Aid is urging the international community to ensure that existing Iraqi funds are properly accounted for before donors are asked to pledge more money at the Madrid conference.

"We wanted to use the occasion to draw attention to this situation and to call on British and other representatives at the conference [in Madrid] to use the opportunity to press for greater accountability," Davison said. "What we are saying is that donors should not relax and stop asking questions about what's happening to the Iraqis' own money. Given a lack of representation in Iraq and given the highly sensitive nature of the use of Iraqi oil funds, we think this is a very important thing to be addressed."

Because of these problems with transparency and control of spending, a separate Iraqi donor fund is being established in Madrid by the United Nations and the World Bank. But not everyone believes the U.S. is doing a bad job and that two funds are needed.

Nile Gardiner is an international regulatory affairs fellow at the conservative Heritage Foundation. He believes the existence of two funds is a waste of resources and contends the UN has a bad record of managing aid funds.

"I believe that to have two rival reconstruction funds in Iraq would greatly complicate the situation on the ground," he said. "The United Nations' record in the Balkans, particularly in Kosovo, has been very poor and sets a very bad precedent, I think, in terms of UN control of reconstruction funds. I think that if we are going to talk about the UN-World Bank-controlled fund, there is going to be a far less level of transparency and openness there. The UN has a record of not opening up accounts to public scrutiny."

The UN Security Council decided in May to set up an international monitoring board to oversee how oil money and other Iraqi funds were being spent by the CPA. That watchdog was launched yesterday. The rules and powers of the International Advisory and Monitoring Board (IAMB) have been intensely negotiated for the past three months between international officials and the chief U.S. administrator in Iraq, L. Paul Bremer.

The delay in launching the IAMB had prompted criticism from some government officials who feared a lack of transparency in the use of Iraqi oil money could undermine international confidence in the rebuilding process.

UN Secretary-General Kofi Annan, speaking yesterday in Madrid, tried to dispel those doubts.

"I think we have in place enough mechanisms and arrangements that should assure people that the money will not only be properly used but there will be a good oversight mechanism."

U.S. Secretary of State Colin Powell -- who is in Madrid -- says he does not have a target for how much money the conference might raise. He is playing down expectations of substantial new commitments from the more than 60 countries attending the meeting.

Spain -- a U.S. ally in the Iraq war -- is among those donors who have answered the coalition's call, announcing it will contribute $300 million. Yesterday, Spanish Prime Minister Jose Maria Aznar assured that the monies will be properly spent.

"The contributions and the amounts from Spain and from other countries will be properly distributed. But what is very important is that there is a real commitment."

The need for aid to help rebuild is estimated at $56 billion over the next four years. So far, up to $3 billion has been pledged for Iraq by individual countries, in addition to the $20 billion the U.S. administration plans to contribute. The World Bank has said it plans to make available up to $5 billion to Iraq.

(The full Christian Aid report can be found on the Internet at