Bring a suitcase!

David Whyte
Tuesday, 12 July 2016

In 2007, I published an article in the British Journal of Criminology that began with the quote 'Bring a Bag'. The quote came from a case that seemed at the time to perfectly sum up the logic of the occupation of Iraq between 2003 and 2004.

In evidence to the Senate Democratic Policy Committee, Franklin Willis, an American administrator from the Coalition Provisional Authority (CPA) the US-UK government of occupation) reported that he had phoned the CEO of a small private military company and instructed him to 'bring a bag' to collect a payment of $2 million for security services, that was then carted off in a duffle bag. Those services, a subsequent court hearing found, were never actually provided.  

The article tried to show in detail precisely how the Iraqi economy had been opened up to enable the transformation of the economy and the routine corruption that enabled companies like Custer Battles and the major contractors to exploit the 'free money' that one British administrator argued characterised the economy of ‘reconstruction.’

The bulk of the Chilcot report aims to explain the period of Occupation following the invasion in March 2003. And there is quite a lot of material that acknowledges the subject of my 2007 article: that British officials and politicians (including Blair, Hoon, Straw, Short and Benn) were acutely aware of their responsibilities under international law and the possibility that the occupation was breaching the Geneva and Hague conventions due to the economic and political transformation it sought.

Yet Chilcot only mentions in passing the way that Iraqi oil money was disbursed in a way that fueled endemic corruption.

It recognises the corruption – and indeed UK joint legal responsibility for the corruption –  without considering it to be particularly important. In one of those, the most senior British civil servant at the CPA, Jeremy Greenstock, recalls 'a lot of cash was going round in suitcases to be dispensed to Iraqis, not all of which was accounted for.' It is an assertion that passes without comment in the report.

  Coalition Provisional Authority whistleblower Franklin Willis and two private contractors pose with $100 bill bricks of Iraqi oil revenue that circulated in a ‘free fraud zone’

In fact, contrary to Greenstock’s indication, the bulk of the cash was not going to the Iraqis. At the time, a report by the Open Society Institute noted that around 85 per cent of the contracts over $5 million paid for Iraqi oil revenue and disbursed by the CPA for ‘reconstruction’ went to US and UK firms. Just two per cent of those contracts went to Iraqi firms.

The funds were significant to have allowed the Iraqi economy to get back on its feet. The estimated CPA spend was something in the region of $20 - $30 billion. It was estimated that in the first year of occupation, between $8.8 billion and $12 billion of Iraqi oil revenue remained accounted for.

The disbursal of Development Fund for Iraq (DFI) revenue was conducted with little or no adequate system of monitoring or accounting. The CPA kept no list of companies it issued contracts to.

In addition to the discrepancies noted above, a report by the International Advisory and Monitoring Board found evidence of incomplete DFI accounting records; untimely recording, reporting, reconciliation and follow-up of spending by Iraqi ministries; incomplete records maintained by US agencies, including disbursements that were not recorded in the Iraqi budget; lack of documented justification for limited competition for contracts at the Iraqi ministries; possible misappropriation of oil revenues; and significant difficulties in ensuring completeness and accuracy of Iraqi budgets and controls over expenditures.

In sum, the CPA – encouraged by a political will to remove normal mechanisms of accountability that originated in the White House – created a liminal market space that enabled the reconstruction economy to exist without reference to international conventions of auditing and legal scrutiny or its UN mandate set out in United Nations Security Council Resolution 1483.

The earlier paper noted that the various executive orders introduced by the CPA had profound and irreversible structural consequences for the Iraqi economy. Thousands of businesses were forced under because of the ending of state tariffs and protections. This was no 'reconstruction' of Iraq in the sense of the infrastructure and the normal way of life being restored and rebuilt.

During the period of formal occupation, the CPA did everything to prevent the recovery of Iraq’s business sector in a process that might easily be described in the sanitising language used by neo-liberal theorists as ‘creative destruction’. For example, Iraq’s oil refinery capacity (which declined under the UN sanctions regime and then was destroyed by the military invasion) was left largely to market players and market forces to rebuild.

As a result, Iraq remained dependent upon import of refined petroleum products in order to maintain a catastrophic policy that I described at the time as ‘selling oil to the Iraqis’. All of this was not only illegal under the terms of the Geneva and Hague Convention, but was a deliberate strategy to ‘liberate’ the oil.  Much of this again is buried deep in the Chilcot report, but was deemed by the Iraq Inquiry as not important enough to make the 146 page summary, which is all that even the most diligent of journalists have had the time to pick through.

The Chilcot report actually uses some of the documents revealed earlier in Greg Muttitt’s book Fuel on the Fire. His book makes clear what Chilcot does not: that this illegal occupation mobilised British diplomatic resources around the control oil after the formal occupation was over. In this context, the term pillage does not seem very wide of the mark. 

The institutionalisation of corruption in the Iraqi reconstruction economy bears similarities to other periods in history, notably the era of the robber barons in the US and the epidemic of fraud and embezzlement in the UK encouraged by the dawn of a new economy in the late nineteenth century. This was a period in which the monopolisation of capital in industrialised economies both enabled and encouraged routine law breaking amongst the business elite. 

If we follow the money, we can see it was often quite literally carried out of the country. The only issue in dispute was how its method of transportation was described. If you are a US administrator, it was a duffle bag. If you are a British civil servant, it was a suitcase.

David Whyte is Professor of Socio-legal Studies at the University of Liverpool.