10.3  |  Reconstruction: oil, commercial interests, debt relief, asylum and stabilisation policy

the period from May 22, 2003 to December 31, 2003, and (ii) whether all DFI

disbursements were made for the purposes intended.”233

US Special Inspector General for Iraq Reconstruction (SIGIR) audits published in 2004

and 2005, and summarised in Hard Lessons, found that:

“… the CPA failed to exert adequate control of the DFI used to support the Iraqi

national ministries or reconstruction projects. An audit of DFI disbursements to

Iraqi ministries made through the national budget process concluded that the CPA

failed to enforce adequate management, financial, and contractual controls over

approximately US$8.8bn of DFI money. SIGIR found that there was ‘no assurance

that the funds were used for the purposes mandated by [UN] resolution 1483.’”234

Ambassador Bremer disagreed with SIGIR, arguing that they had failed to account

for the very difficult security environment and the steps taken to improve recognised

management weaknesses. SIGIR acknowledged the danger confronting the CPA, but

found that the CPA’s oversight of Iraqi funds was burdened by severe inefficiencies and

poor management. SIGIR concluded that the chaotic circumstances in Iraq required more

stringent oversight, not less, as the CPA suggested.

Hard Lessons concluded that the CPA appeared to be averse to oversight of the DFI.

Sir Jeremy Greenstock, the Prime Minister’s Special Representative on Iraq from

September 2003 to March 2004, told the Inquiry:

“The UK was not allowed sight of any of the figures on the use of money by the CPA

… A lot of cash was going round in suitcases to be dispensed to Iraqis, not all of

which was accounted for, and I was uncomfortable that I had no sight of this, might

be felt by London to be in some respects responsible for this, and had to explain

clearly that I was not responsible for this, and London made it quite clear that they

didn’t expect me to be responsible for this.235

“But as you have seen from books on this, from the report of the Special Inspectorate

for Iraq in the US [SIGIR], corruption crept into the system and I felt that I couldn’t do

anything about it.”

The Inquiry asked Sir Jeremy whether he was able to discuss his concerns with

Ambassador Bremer. He replied:

“We discussed corruption in the Iraqi administration, but when I asked for details of

economic spending, it was made clear that non‑Americans would not be given the

details.”

233 International Advisory and Monitoring Board on Iraq website, 15 July 2004, Statement by the

International Advisory and Monitoring Board on Iraq – Release of the KPMG Audit Reports on the

Development Fund for Iraq, 15 July 2004.

234 H Bowen SW Jr. Hard Lessons: The Iraq Reconstruction Experience. U.S. Government Printing Office,

2009.

235 Private hearing, 26 May 2010, pages 50-51.

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