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Kleptocrats United to Loot the World

In Monday’s Independent Patrick Cockburn reported on the Special Inspector General for Iraq Reconstruction (SIGIR) report suggesting that as much as $125 billion might have been stolen from both Iraqi and American funds allocated for reconstruction.  The thefts were carried out with the collusion of senior US military personnel.  http://www.independent.co.uk/news/world/americas/a-fraud-bigger-than-madoff-1622987.html [1].  Readers of TAC might recall that the story of Iraq corruption was first aired in an article I wrote in October 2005.  At that time the money stolen was in the range of $30 billion, but it was early days and obviously the crooks have since refined their techniques.  $125 billion might be on the low side.  As Cockburn notes, in spite of huge sums contracted for reconstruction no cranes or signs of work can be seen in Baghdad.  If the numbers prove accurate, the theft would be three times larger than the ponzi scheme of Bernard Madoff.  As near as I can tell, the Cockburn story has not been replayed in the MSM in the US, though it has been discussed by Juan Cole.

Iraq is only part of the story.  Recently retired intelligence officers have been actively engaged in this wholesale plundering of central Asia in addition to Iraq.  Intelligence officers have the unique ability to exploit multinational contacts to move commodities and money across borders clandestinely, a key element in laundering proceeds.

The real problem is that much of the United States goverment has, over the past eight years, become a kleptocracy in which former senior officials believe themselves entitled to a golden parachute when they leave government service.  The list of Pentagon officials, military officers, and intelligence types who have become very rich is long and becoming longer.  Many are affiliated to consulting groups headed by prominent figures from both Democratic and Republican administrations.  Some of the names would surprise you.

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#1 Comment By Greg Panfile On February 18, 2009 @ 7:47 am

This post, along with the Dineen one below it and recent ones by Buchanan, illuminate why the connection between conservatives and the Republican Party must end. It is now clear that small government cannot regulate big business and protect the public from it, and that government and business left to themselves will corrupt both our financial system and also our military culture. In addition, the narrative about imperial overstretch does indeed converge with what the New Left was saying in the Sixties. It is ridiculous to think that the Republican remnant in the former Confederacy is at any point going to reverse its belief in the essentially militaristic model of business and warfare. Best for those who have some understanding of these things to get inside the Democratic tent and make a difference on a policy level, rather than allying themselves on the outside with the dead-enders… exemplified most recently by the House Republicans… who either believe, or cynically affect, the notion that we have some divine imperial right to make money by allowing lobbying and revolving-door policies to combine with arms-merchant global aggression, and that that is what God wants and is the essence of America. This is ridiculous, and it is Bush Republicanism, and it is the continuation of the Confederacy by other means, and it is neither conservative nor patriotic.

#2 Comment By Jack Tracey On February 18, 2009 @ 11:07 am

Endless foreign intervention, federal power without limit, inflation and debt, corporatist influence, major parties both in the same bed. Now, the inevitable corruption and profiteering of modern war. This all looks a little daunting.

By the way, Monday’s article on the Campaign for Liberty site was great, Doc. Thanks to you and the other old-timers who are still fighting for the next generations.

You crack me up, Mr Panfile. “The Confederacy”? Do you live in the South or just know all about it? Weren’t all the neocons lefties back in the sixties?

#3 Comment By Thomas O. Meehan On February 18, 2009 @ 11:09 am

Perhaps this is a smaller subset of the whole, but it would be interesting to see reportage focusing on the Neoconservative’s personal, financial stake in the Iraq war. This would include contracts and high positions in the occupation. Some of this was exposed, but it was not followed up upon. Given the scenario above, a look at where the Neo’s channeled some of the loot would be valuable.

BTW, Thank you you’re long and extremely illuminating piece on the CIA. It confirms a lot of what I saw from the outside. The iron law of bureaucracy holds there as in all places. Parts of Moynahan’s critique was correct. In the old days a lot of very valuable intelligence was collected by the State Department via business contacts. Moynahan’s extreme solution was to dissolve the CIA and go back to the 1930’s model. I wonder if a positive step wouldn’t be to have rival intelligence agencies compete. Assuming they were judged by results, this might bring some functionality back into the equation. I gather State Department intelligence is a poor thing now, but perhaps it might be rejuvenated to fill this role. Any thoughts?

#4 Comment By Philip Giraldi On February 18, 2009 @ 12:10 pm

Thanks for the kind comments. Many thoughtful Americans realize that a radical change is necessary in terms of how we operate internationally and one might hope that the Obamas will see that too.

I too would like to see a serious probe into how the neocons make their money and where they have hidden it. I’m sure that there could be a year long investigation into Richard Perle alone.

Concerning CIA, competition would be healthy and State Department Intelligence could again become a moderating force. Problem is it is relatively small and relies on top leadership to energize it, which has been lacking lately. CIA would be a lot better if it were able to focus on a handful of significant international threats in a serious way. It should be smaller and more professional. During my time overseas I saw again and again third world intelligence services operating rings around us because they were better prepared and better focused. America has an obsession with size and budgets, unfortunately. Panetta is a smart guy working for a smart president and maybe they will figure some of this out.

#5 Comment By eep On February 18, 2009 @ 12:19 pm

I was wondering what was going on after I read that there was mismanagement of funds and failures in reconstruction in Iraq.

Greg, all these things have happened under Big Government. The early US government was so small that it couldn’t be a global empire. Military Keynesianism is a disease that has infected this country. The development of military weapons is spread across the country so politicians will vote for defense bills.

There are other issues at play with the financial system such as the existence of the Federal Reserve and how it manipulates the money supply and interest rates leading to malinvestment as described in the “Austrian Business Cycle Theory.” What the government is doing now is bailing out crooks. I think the best way to prevent problems is to remove monopoly power of moneyed interest (like patents and occupational licensing) and change our monetary system by getting rid of the Fed along with the fiat currency.

How does joining the Democrat tent help? It doesn’t look much different from the Republican tent beyond rhetoric. Democrats didn’t pick Dennis Kucinich or Mike Gravel for President. Mike Gravel was even removed from the debates by the corporate media.

#6 Comment By Payment Gateway On November 13, 2009 @ 5:27 am

Good read, thanks. Always looking out for weird and wonderful stuff to read 🙂