Says the Defense Department shrink-wrapped $10.8 billion in American money, loaded it on 175 pallets and put it on a transport plane to Iraq where they passed out $100 bills and no one has any receipts.
Dennis Kucinich on Thursday, January 6th, 2011 in a FoxNews interview
Rep. Dennis Kucinich says shrink-wrapped cash sent to Iraq illustrates government misspending
Cleveland Democratic Rep. Dennis Kucinich blasts the Iraq war every chance he gets. With Republicans promising budget cuts now that they’ve taken control of the U.S. House of Representatives, it’s not surprising what’s at the top of Kucinich’s list of potential trims.
"To meet your stated purpose of protecting American taxpayers from waste, fraud and abuse, it is essential that you examine the Department of Defense and money wasted during unnecessary wars," Kucinich said in a Jan. 4 letter to Oversight and Government Reform Committee Chairman Darrell Issa, a California Republican.
Kucinich has also taken to television to make his case for Defense Department cuts. He alleged outrageous abuses during a Jan. 6 interview with Fox News anchor Jon Scott.
"Listen, when you can have a Defense Department that can shrink wrap $10.8 billion in American money, load it on 175 pallets and put it on a, on a transport plane and ship it to Iraq where they pass out $100 bills and no one has any receipts, when you know that kind of waste is going on, . . . we have concerns in this country that we have to start taking care of, and it's important that we track the misspending that's going on through the Department of Defense so that we can keep that money for the things we need at home," Kucinich said.
We thought it would be worth investigating Kucinich’s claim that the Pentagon loaded billions of shrink-wrapped U.S. dollars onto transport planes and flew them to Iraq, where these $100 bills were dispensed out without receipts.
Kucinich spokesman Nathan White said his boss’ claim stemmed from a February 2007 House Oversight Committee hearing conducted by the committee’s then-chairman, Henry Waxman of California, which examined massive shipments of U.S. currency to Iraq as part of the war effort.
A transcript of that hearing indicates the money at issue consisted of nearly $12 billion in cash that the Federal Reserve (not the Defense Department) sent to Iraq on C-130 cargo planes, mainly in shrink-wrapped packages of $100 bills, between May 2003 and June 2004. The money wasn’t U.S. tax dollars – it came from Iraqi oil sales that were put in a development fund for the Iraqi people. It was sent in cash because no banks or financial system existed in Iraq immediately after the U.S. occupation. Some of the money was used to stabilize the country by launching large public works programs to create jobs. Much of it was given to Iraqi ministries to pay the salaries and pensions of Iraqi civil servants who hadn’t had a paycheck since before the war. Although the Iraqi ministries lacked good payroll records, former Coalition Provisional Authority Administrator Paul Bremer told the committee that delaying their payments until better records were available would have been "demoralizing and unfair" to millions of Iraqi families, and "might well have exacerbated danger to the American soldiers on the ground."
"Under Saddam Hussein, the Iraqi government had been by far the country’s largest employer, providing about four out of five of all jobs," Bremer testified. "But for several months, since before the war, millions of Iraqi families had not received money owed them for civil service, salaries or pensions."
Special Inspector for Iraq Reconstruction Stuart Bowen, who was charged with auditing money sent to Iraq for reconstruction, told the committee that more should have been done to track how the money was spent. His auditors said nearly $9 billion was improperly accounted for. In a recent interview, he stressed that his findings didn’t mean all that money was used improperly, although his office found cases of graft that totaled in the tens of millions of dollars. He said 44 people have been convicted of crimes uncovered by his office.
"There were weak controls that made the money susceptible to waste and abuse," said Bowen. "The money was given to these interim Iraqi ministries who spent it and used it as they chose. The fact that it was Iraqi money didn’t in any way diminish our duty to make sure we carried out our fiduciary responsibilities. It was not well managed and not well accounted for."
Bowen’s office released an audit last year that found inadequate accounting for $8.7 billion of another $9.1 billion in subsequent shipments of Iraqi cash that the Defense Department sent to Iraq after January 2004. It found several cases of bribery, fraud and money laundering by U.S. officials that resulted in eight criminal convictions and $7.8 million in fines, forfeitures and restitution payments, the report said.
Kucinich’s spokesman did not respond to questions asking why Kucinich told Fox that $10.8 billion was at issue, when $12 billion was the amount discussed by Waxman’s committee. Bowen said he wasn’t familiar with any cases where $10.8 billion were shipped to Iraq on 175 pallets, as Kucinich claimed, though he applauded Kucinich’s advocacy for effective Iraq oversight.
"He is one of the reasons why the Special Inspector General for Iraq Reconstruction has been able to succeed in the last seven years of work," Bowen said of Kucinich.
- Kucinich is off-base in his tally of dollars sent to Iraq.
- He is correct, though, that it was shipped mainly as shrink-wrapped bundles of $100 bills and that the U.S. shipped immense amounts of cash to Iraq without properly overseeing its disposition.
- More significantly, the money he cited in his example was from Iraqi oil sales and belonged to the Iraqi people. That’s a critical fact that could easily give the listener a different impression.
Pentagon spending may be a legitimate place to look for budget cuts, but money misspent from this source could not be used "for the things we need at home."
For these reasons, we rate his claim Barely True.
Editor's note: This statement was rated Barely True when it was published. On July 27, 2011, we changed the name for the rating to Mostly False.
Published: Monday, January 24th, 2011 at 6:00 a.m.
Rep. Dennis Kucinich, letter to House Oversight Chairman Darrell Issa, Jan. 4, 2011
Interview with Dennis Kucinich on FoxNews, Jan. 12, 2011
Email from Kucinich spokesman Nathan White, Jan. 12, 2011
Interview with Stuart Bowen, Special Inspector General for Iraq Reconstruction, Jan. 12, 2011 .
Transcript of House Oversight Committee hearing on Coalition Provisional Authority and Iraq Reconstruction, Feb. 6, 2007
United Nations, news release titled "Security Council extends Development Fund for Iraq for another year," Dec. 21, 2009
Office of the Special Inspector General for Iraq Reconstruction, audit titled "Development Fund for Iraq: Department of Defense Needs to Improve Financial and Management Controls,"
July 27, 2010 .
Office of the Special Inspector General for Iraq Reconstruction, audit titled "Oversight of Funds Provided to Iraqi Ministries Through the National Budget Process," Jan. 30, 2005
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