U.S. Officials Suspected of Embezzlement in Iraq

latimes: The U.S. government has opened a criminal inquiry into suspected embezzlement by officials who failed to account for almost $100 million they disbursed for Iraqi reconstruction projects, federal investigators said Wednesday.

Auditors have been unable to fully document how the money was allocated to Iraqi workers by a small group of officials working from a U.S. outpost in Hillah, according to an audit report released Wednesday by Stuart W. Bowen Jr., the special inspector general for Iraq reconstruction.

[..]The case is the first time U.S. government officials have been investigated for a suspected major corruption scheme involving the Iraq reconstruction

[..]In one case, two U.S. officials left Iraq after completing their tours of duty without accounting for a total of $1.5 million. The manager of the cash funds zeroed out the balance on a spreadsheet - an apparent attempt "to remove outstanding balances by simply washing accounts," the audit report says. The officials, like all others in the audit, were not named.

In another case, the U.S. on May 30 ordered the removal of the official in charge of the overall cash program, but he remained in the job until June 20. When told he had failed to account for $1,878,870, the official returned exactly that sum three days later - leading to suspicions that he had "a reserve of cash and turned in only the amount" needed to complete the clearance process, the report says. Link