U.S. investigates alleged Iraq embezzle

May 4, 2005 at 10:56 PM
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WASHINGTON, May 4 (UPI) -- The U.S. government has opened an embezzlement investigation aimed at officials who failed to account for nearly $100 million in Iraqi reconstruction funds.

Federal investigators said Wednesday that auditors have been unable to document how the money was distributed to Iraqi workers by officials working from a U.S. outpost in Hillah, the Los Angeles Times reported. The special inspector general for Iraq reconstruction, Stuart Bowen, released the audit report Wednesday.

The report said auditors found "significant" problems in the Hillah office, including the case of an official fired for mishandling funds who was allowed to continue working with the money for nearly an entire month after his termination.

The case marks the first time the United States has investigated government officials for a major corruption scheme involving Iraq reconstruction efforts, despite a high volume of allegations against Iraqis and contractors from the United States.

The report said the examined reconstruction funds came from seized assets of Saddam Hussein's regime and from Iraqi oil revenue, not from U.S. taxpayer funds.

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