Follow the money

George W Bush undertook to bring prosperity to the Iraqi people. Yet while oil revenue is soaring, p

One morning at the end of January this year, emergency workers in Baghdad converged on al-Rasheed Street, where a major fire had engulfed Iraq's Central Bank. No one had been killed in the still-smouldering ten-storey building, but the bank's records had gone up in smoke. Financial documents concerning billions of dollars had been turned to ash. As a comparison, it would be as if the records of the Bank of England had been accidentally incinerated.

The fire was no accident. "It's still being investigated, but it was arson," said Stuart Bowen, the American special inspector general for Iraq reconstruction, who examines how the United States spends its billions in Iraq. He has a thorough understanding of the failures of Iraq's reconstruction efforts.

Bowen, who spoke by phone from Baghdad, would not speculate as to the motive for the Central Bank fire, but other sources familiar with the case believe the torch job was intended to remove records of misconduct, theft or malfeasance. Photographs of the destruction show the twisted wreckage of a huge computer server.

Burning evidence is a time-honoured, if crude, way of covering tracks, but it is seldom so audacious in scope. The scale of corruption is equally audacious; it reaches staggering levels throughout the Iraqi government.

Consider: the leading former anti-corruption judge and his top investigator both fled the country in fear for their lives last August and are seeking political asylum in the US. The judge testified to the US Congress that "corruption in Iraqi today is rampant across the government, costing tens of billions of dollars".

The US secretary of state, Condoleezza Rice, has also called corruption in Iraq "pervasive".

"Follow the money!" advised the legendary source known as Deep Throat in All the President's Men, the book about the Watergate scandal in the White House. Wise advice in general for an investigative journalist, or anyone else, trying to understand motive and patterns. The trouble is, it is virtually impossible to follow the billions of dollars pouring into Iraq.

It has been five years since Paul Wolfowitz, then US deputy defence secretary, famously predicted to Congress that Iraq "could finance its own reconstruction, and relatively soon". Wolfowitz and his neocon colleagues had relied on the Iraqi politician Ahmad Chalabi for their information, and his predictions of oil wealth were alluring. Wolfowitz told the US Congress that "the oil revenues of Iraq could bring between $50bn and $100bn over the course of the next two or three years".

It was a wild overestimation. The real expectation for Iraq at that time was that it would sell about $12bn in oil for 2004 and an estimated $15bn in 2005. Nonetheless, in the long run, Wolfowitz may be proved right.

Bowen believes the Iraqi budget could exceed $50bn for 2008. Chiefly, he credits soaring oil prices. Costly oil, devastating to western econo mies, is giving Iraq's shaky government a windfall. "At $102 a barrel," Bowen says, "an extraordinary amount of revenue is going to be flowing into the government of Iraq's coffers."

But once it gets there, how will that $50bn be spent, and who will control it? Bowen, who has investigated American corruption in dealing with Iraqi counterparts, warns that "there are two pathways. One is to put the resources to beneficial use and that would require fighting corruption seriously."

The alternative, Bowen said, is grim. "Corruption could become worse because the opportunity to steal obviously expands with the growth in revenues." More money might simply mean more theft.

There is plenty of cause for concern in the various postwar government departments. In the defence ministry, procurement fraud allegedly topped $1bn in 2004. Investigators claim there have been large-scale diversions of medicines in the health ministry. In the oil ministry, high-level officials have been charged with stealing fuel.

Bribery and embezzlement

There is also concern about the ministry of finance, through which most of the $50bn oil revenue will ultimately be disbursed. Here, according to a draft US report on corruption in Iraq last year, "bribery and embezzlement are the most numerous bases for investigations".

The kidnapping of a British IT consultant, seized from the finance ministry last May, has also raised suspicions that some people may have been attempting to destroy evidence of corruption. A group of British contractors had just arrived on-site. A security team of well-trained veterans escorted Peter Moore, a computer expert contracted to a US company called BearingPoint, into the building. At this point, a platoon-strength posse of Iraqis, "dressed in police uniforms", according to press accounts, roared up in vehicles. They headed straight for their objective - the computer expert and his guards. Outgunned and apparently unclear whom they were dealing with, the British team put up no fight. The computer expert and his four-man detail were snatched away. It looked like an "arrest" but in reality it was a kidnapping.

For some time, US and UK forces launched noisy sweeps through Sadr City and other Shia districts. A source close to the case says the reason the kidnappers were "dressed in police uniforms" was that they were indeed police. It was a branch within the police loyal to the Sadr militia, explains the source.

Now, following the release of a hostage video at the end of last month, it is known that the men are being held by a group calling itself the Shia Islamic Resistance of Iraq. In the video, a man identified as Moore pleads for help. His captors are demanding the release of nine prisoners held by the British, and the Prime Minister, Gordon Brown, has become personally involved, appealing for the release of the British hostages.

However, both Iraqi and American investigators believe the kidnapping, like the Central Bank arson, was not initially an act of terrorism in the usual sense of the word but, more precisely, organised or business crime. The motive was to stop the consultant from installing a computer system which would introduce more accountability into the ministry's accounting systems.

It is hardly unusual in the 21st century to computerise records that deal with billions of dollars, and the project in hand was intended to centralise and automate Iraq's spending. The aim was to ensure accountability and financial transparency. Over the years, however, the Iraqis have objected to automation. As one American working with them explained, some feared that the system "would impose too much transparency".

Before the kidnapping, the project was near completion and due to go online. After the men were snatched, that all stopped. The "Iraq Financial Management Information System" was abandoned. The finance ministry still handles its paperwork the old-fashioned way.

Five years after the invasion, the Iraqi government has designated 2008 the "Year of Reconstruction and Anti-Corruption". By this summer, a windfall of oil money will be pouring into Baghdad. Whether the structures are in place for the beleaguered citizens of Iraq to enjoy the benefit is far less certain.

Aram Roston is the author of "The Man Who Pushed America to War: the Extraordinary Life, Adventures and Obsessions of Ahmad Chalabi", newly published by Nation Books (£15.99)

Clarification

On 13 March 2008 we published an article, "Follow the money", which made allegations about accounting procedures at the Trade Bank of Iraq. We now accept that there is no evidence to suggest that there has been any wrongdoing by the Trade Bank of Iraq or its chairman and we are happy to make that clear.

Killing figures

0 number of Commons votes on Iraq since invasion in 2003

1 number of Commons debates on the war between July 2004 and January 2008

£1bn annual cost of Iraq War to British taxpayer

$5bn cost of ten days' fighting in Iraq

50 percentage of trained Iraqi doctors who have left their country since war began

175 British soldiers killed in Iraq

3,980 US troops killed

7,987 Iraqi Security Force personnel killed

81,874 - 89,353 documented civilian deaths to 10 March

25,000 number of children forced out of their homes every month during 2007

This article first appeared in the 17 March 2008 issue of the New Statesman, Iraq: the war that changed us

Getty
Show Hide image

The French millennials marching behind Marine Le Pen

A Front National rally attracts former socialists with manicured beards, and a lesbian couple. 

“In 85 days, Marine will be President of the French Republic!” The 150-strong crowd cheered at the sound of the words. On stage, the speaker, the vice-president of the far-right Front National (FN), Florian Philippot, continued: “We will be told that it’s the apocalypse, by the same banks, media, politicians, who were telling the British that Brexit would be an immediate catastrophe.

"Well, they voted, and it’s not! The British are much better off than we are!” The applause grew louder and louder. 

I was in the medieval city of Metz, in a municipal hall near the banks of the Moselle River, a tributary of the Rhine from which the region takes its name. The German border lies 49km east; Luxembourg City is less than an hour’s drive away. This is the "Country of the Three Borders", equidistant from Strasbourg and Frankfurt, and French, German and French again after various wars. Yet for all that local history is deeply rooted in the wider European history, votes for the Front National rank among the highest nationally, and continue to rise at every poll. 

In rural Moselle, “Marine”, as the Front National leader Marine Le Pen is known, has an envoy. In 2014, the well-spoken, elite-educated Philippot, 35, ran for mayor in Forbach, a former miner’s town near the border. He lost to the Socialist candidate but has visited regularly since. Enough for the locals to call him “Florian".

I grew up in a small town, Saint-Avold, halfway between Metz and Forbach. When my grandfather was working in the then-prosperous coal mines, the Moselle region attracted many foreign workers. Many of my fellow schoolmates bore Italian and Polish surnames. But the last mine closed in 2004, and now, some of the immigrants’ grandchildren are voting for the National Front.

Returning, I can't help but wonder: How did my generation, born with the Maastricht treaty, end up turning to the Eurosceptic, hard right FN?

“We’ve seen what the other political parties do – it’s always the same. We must try something else," said Candice Bertrand, 23, She might not be part of the group asking Philippot for selfies, but she had voted FN at every election, and her family agreed. “My mum was a Communist, then voted for [Nicolas] Sarkozy, and now she votes FN. She’s come a long way.”  The way, it seemed, was political distrust.

Minutes earlier, Philippot had pleaded with the audience to talk to their relatives and neighbours. Bertrand had brought her girlfriend, Lola, whom she was trying to convince to vote FN.  Lola wouldn’t give her surname – her strongly left-wing family would “certainly not” like to know she was there. She herself had never voted.

This infuriated Bertrand. “Women have fought for the right to vote!” she declared. Daily chats with Bertrand and her family had warmed up Lola to voting Le Pen in the first round, although not yet in the second. “I’m scared of a major change,” she confided, looking lost. “It’s a bit too extreme.” Both were too young to remember 2002, when a presidential victory for the then-Front National leader Jean-Marie Le Pen, was only a few percentage points away.

Since then, under the leadership of his daughter, Marine, the FN has broken every record. But in this region, the FN’s success isn’t new. In 2002, when liberal France was shocked to see Le Pen reach the second round of the presidential election, the FN was already sailing in Moselle. Le Pen grabbed 23.7 per cent of the Moselle vote in the first round and 21.9 per cent in the second, compared to 16.9 per cent and 17.8 per cent nationally. 

The far-right vote in Moselle remained higher than the national average before skyrocketing in 2012. By then, the younger, softer-looking Marine had taken over the party. In that year, the FN won an astonishing 24.7 per cent of the Moselle vote, and 17.8 per cent nationwide.

For some people of my generation, the FN has already provided opportunities. With his manicured beard and chic suit, Emilien Noé still looks like the Young Socialist he was between 16 and 18 years old. But looks can be deceiving. “I have been disgusted by the internal politics at the Socialist Party, the lack of respect for the low-ranked campaigners," he told me. So instead, he stood as the FN’s youngest national candidate to become mayor in his village, Gosselming, in 2014. “I entered directly into action," he said. (He lost). Now, at just 21, Noé is the FN’s youth coordinator for Eastern France.

Metz, Creative Commons licence credit Morgaine

Next to him stood Kevin Pfeiffer, 27. He told me he used to believe in the Socialist ideal, too - in 2007, as a 17-year-old, he backed Ségolène Royal against Sarkozy. But he is now a FN local councillor and acts as the party's general co-ordinator in the region. Both Noé and Pfeiffer radiated a quiet self-confidence, the sort that such swift rises induces. They shared a deep respect for the young-achiever-in-chief: Philippot. “We’re young and we know we can have perspectives in this party without being a graduate of l’ENA,” said another activist, Olivier Musci, 24. (The elite school Ecole Nationale d’Administration, or ENA, is considered something of a mandatory finishing school for politicians. It counts Francois Hollande and Jacques Chirac among its alumni. Ironically, Philippot is one, too.)

“Florian” likes to say that the FN scores the highest among the young. “Today’s youth have not grown up in a left-right divide”, he told me when I asked why. “The big topics, for them, were Maastricht, 9/11, the Chinese competition, and now Brexit. They have grown up in a political world structured around two poles: globalism versus patriotism.” Notably, half his speech was dedicated to ridiculing the FN's most probably rival, the maverick centrist Emmanuel Macron. “It is a time of the nations. Macron is the opposite of that," Philippot declared. 

At the rally, the blue, red and white flame, the FN’s historic logo, was nowhere to be seen. Even the words “Front National” had deserted the posters, which were instead plastered with “in the name of the people” slogans beneath Marine’s name and large smile. But everyone wears a blue rose at the buttonhole. “It’s the synthesis between the left’s rose and the right’s blue colour”, Pfeiffer said. “The symbol of the impossible becoming possible.” So, neither left nor right? I ask, echoing Macron’s campaign appeal. “Or both left and right”, Pfeiffer answered with a grin.

This nationwide rebranding follows years of efforts to polish the party’s jackass image, forged by decades of xenophobic, racist and anti-Semitic declarations by Le Pen Sr. His daughter evicted him from the party in 2015.

Still, Le Pen’s main pledges revolve around the same issue her father obsessed over - immigration. The resources spent on "dealing with migrants" will, Le Pen promises, be redirected to address the concerns of "the French people". Unemployment, which has been hovering at 10 per cent for years, is very much one of them. Moselle's damaged job market is a booster for the FN - between 10 and 12 per cent of young people are unemployed.

Yet the two phenomena cannot always rationally be linked. The female FN supporters I met candidly admitted they drove from France to Luxembourg every day for work and, like many locals, often went shopping in Germany. Yet they hoped to see the candidate of “Frexit” enter the Elysee palace in May. “We've never had problems to work in Luxembourg. Why would that change?” asked Bertrand. (Le Pen's “144 campaign pledges” promise frontier workers “special measures” to cross the border once out of the Schengen area, which sounds very much like the concept of the Schengen area itself.)

Grégoire Laloux, 21, studied history at the University of Metz. He didn't believe in the European Union. “Countries have their own interests. There are people, but no European people,” he said. “Marine is different because she defends patriotism, sovereignty, French greatness and French history.” He compared Le Pen to Richelieu, the cardinal who made Louis XIV's absolute monarchy possible:  “She, too, wants to build a modern state.”

French populists are quick to link the country's current problems to immigration, and these FN supporters were no exception. “With 7m poor and unemployed, we can't accept all the world's misery,” Olivier Musci, 24, a grandchild of Polish and Italian immigrants, told me. “Those we welcome must serve the country and be proud to be here.”

Lola echoed this call for more assimilation. “At our shopping centre, everyone speaks Arabic now," she said. "People have spat on us, thrown pebbles at us because we're lesbians. But I'm in my country and I have the right to do what I want.” When I asked if the people who attacked them were migrants, she was not so sure. “Let's say, they weren't white.”

Trump promised to “Make America Great Again”. To where would Le Pen's France return? Would it be sovereign again? White again? French again? Ruled by absolutism again? She has blurred enough lines to seduce voters her father never could – the young, the gay, the left-wingers. At the end of his speech, under the rebranded banners, Philippot invited the audience to sing La Marseillaise with him. And in one voice they did: “To arms citizens! Form your battalions! March, march, let impure blood, water our furrows...” The song is the same as the one I knew growing up. But it seemed to me, this time, a more sinister tune.