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

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The lost magic of England

The great conservative journalist Peregrine Worsthorne reflects on a long life at the heart of the establishment.

In a recent editorial meeting, our subscriptions manager happened to mention that Peregrine Worsthorne was still a New Statesman subscriber. A former editor of the Sunday Telegraph and, during a long Fleet Street career, a self-styled “romantic reactionary” scourge of liberals and liberalism, Worsthorne used to be something of a pantomime villain for the left, a role he delighted in. He had close friends among the “Peterhouse right”, the group of High Tory intellectuals who gathered around Maurice Cowling at the small, conspiratorial Cambridge college. He was a frequent contributor to Encounter (which turned out to be funded by the CIA) and an ardent cold warrior. His social conservatism and lofty affectations offended lefty Islingtonian sensibilities. On several occasions he was the Guardian’s reviewer of choice for its annual collection of journalism, The Bedside Guardian, and he invariably delivered the required scornful appraisal while praising its witty television critic, Nancy Banks-Smith. There is no suggestion, he wrote in 1981, that the “Guardian ever sees itself as part of the problem; itself as having some responsibility for the evils its writers described so well”.

His prose style was Oxbridge high table, more Walter Pater than George Orwell. It was essential not to take Worsthorne too seriously, because he delighted in mischief-making and wilful provocation – one of his targets for remorseless ridicule was Andrew Neil, when Neil edited the abrasively Thatcherite Sunday Times. He ended up suing Worsthorne, who was famous for his silk shirts and Garrick Club lunches, for libel; he was awarded damages of £1, the then cover price of the Sunday Times.

“I wrote that in the old days editors of distinguished Sunday papers could be found dining at All Souls, and something must have changed when they’re caught with their trousers down in a nightclub,” Worsthorne told me when we met recently. “I had no idea he was going to sue. I was teasing. I occasionally run into him and we smile at each other, so it’s all forgotten and forgiven.”

After his retirement in 1989, Worsthorne, although he remained a resolute defender of aristocracy, seemed to mellow, and even mischievously suggested that the Guardian had replaced the Times as the newspaper of record. In the 1990s he began writing occasionally for the New Statesman – the then literary editor, Peter Wilby, commissioned book reviews from him, as I did after I succeeded Wilby. Like most journalists of his generation, Worsthorne was a joy to work with; he wrote to length, delivered his copy on time and was never precious about being edited. (Bill Deedes and Tony Howard were the same.) He might have had the mannerisms of an old-style toff but he was also a tradesman, who understood that journalism was a craft.

Shortly before Christmas, I rang Wors­thorne at the home in Buckinghamshire he shares with his second wife, Lucinda Lambton, the charming architectural writer. I asked how he was. “I’m like a squeezed lemon: all used up,” he said. Lucy described him as being “frail but not ill”. I told him that I would visit, so one recent morning I did. Home is a Grade II-listed old rectory in the village of Hedgerley. It is grand but dishevelled and eccentrically furnished. A sign on the main gates warns you to “Beware of the Dog”. But the dog turns out to be blind and moves around the house uneasily, poignantly bumping into objects and walls. At lunch, a small replica mosque in the dining room issues repeated mechanised calls to prayer. “Why does it keep doing that?” Perry asks. “Isn’t it fun,” Lucy says. She then turns to me: “Have some more duck pâté.”

As a student, I used to read Worsthorne’s columns and essays with pleasure. I did not share his positions and prejudices but I admired the style in which he articulated them. “The job of journalism is not to be scholarly,” he wrote in 1989. “The most that can be achieved by an individual newspaper or journalist is the articulation of an intelligent, well-thought-out, coherent set of prejudices – ie, a moral position.”

His Sunday Telegraph, which he edited from 1986 to 1989, was like no other newspaper. The recondite and reactionary comment pages (the focus of his energies) were unapologetically High Tory, contrary to the prevailing Thatcherite orthodoxies of the time, but were mostly well written and historically literate. Bruce Anderson was one of the columnists. “You never knew what you were going to get when you opened the paper,” he told me. “Perry was a dandy, a popinjay, and of course he didn’t lack self-esteem. He had a nostalgia for Young England. In all the time I wrote for him, however, I never took his approval for granted. I always felt a tightening of the stomach muscles when I showed him something.”

***

Worsthorne is 92 now and, though his memory is failing, he remains a lucid and engaging conversationalist. Moving slowly, in short, shuffling steps, he has a long beard and retains a certain dandyish glamour. His silver hair is swept back from a high, smooth forehead. He remains a stubborn defender of the aristocracy – “Superiority is a dread word, but we are in very short supply of superiority because no one likes the word” – but the old hauteur has gone, replaced by humility and a kind of wonder and bafflement that he has endured so long and seen so much: a journalistic Lear, but one who is not raging against the dying of the light.

On arrival, I am shown through to the drawing room, where Perry sits quietly near an open fire, a copy of that morning’s Times before him. He moves to a corner armchair and passes me a copy of his book Democracy Needs Aristocracy (2005). “It’s all in there,” he says. “I’ve always thought the English aristocracy so marvellous compared to other ruling classes. It seemed to me that we had got a ruling class of such extraordinary historical excellence, which is rooted in England
almost since the Norman Conquest.

“Just read the 18th-century speeches – the great period – they’re all Whig or Tory, but all come from that [the aristocracy]. If they didn’t come directly from the aristocracy, they turned themselves very quickly into people who talk in its language. Poetic. If you read Burke, who’s the best in my view, it’s difficult not to be tempted to think what he says has a lot of truth in it . . .”

His voice fades. He has lost his way and asks what we were talking about. “Oh, yes,” he says. “It survived when others – the French and Russians and so on – were having revolutions. It was absolutely crazy to set about destroying that. There was something magical . . . the parliamentary speeches made by Burke and so on – this is a miracle! No other country has it apart from America in the early days. And I thought to get rid of it, to undermine it, was a mistake.”

I ask how exactly the aristocracy was undermined. Even today, because of the concentration of the ownership of so much land among so few and because of the enduring influence of the old families, the great schools and Oxbridge, Britain remains a peculiar hybrid: part populist hyper-democracy and part quasi-feudal state. The Tory benches are no longer filled by aristocrats but the old class structures remain.

“Equality was the order of the day after the war,” Worsthorne replies. “And in a way it did a lot of good, equalising people’s chances in the world. But it didn’t really get anywhere; the ruling class went happily on. But slowly, and I think unnecessarily dangerously, it was destroyed – and now there are no superior people around [in politics]. The Cecil family – Lord Salisbury, he was chucked out of politics. The Cecil family is being told they are not wanted. The institutions are falling apart . . .

“But there were people who had natural authority, like Denis Healey. I’m not saying it’s only aristocrats – a lot of Labour people had it. But now we haven’t got any Denis Healeys.”

Born in 1923, the younger son of Alexander Koch de Gooreynd, a Belgian banker, Worsthorne (the family anglicised its name) was educated at Stowe and was an undergraduate at both Cambridge (Peterhouse, where he studied under the historian Herbert Butterfield, the author of The Whig Interpretation of History) and Oxford (Magdalen College). “I have always felt slightly underprivileged and de-classed by having gone to Stowe, unlike my father who went to Eton,” Worsthorne wrote in 1985.

Yet his memories of Stowe remain pellucid. There he fell under the influence of the belle-lettrist John Davenport, who later became a close friend of Dylan Thomas. “He was a marvellous man, a famous intellectual of the 1930s, an ex-boxer, too. But in the war he came to Stowe and he was preparing me for a scholarship to Cambridge. He told me to read three books, and find something to alleviate the boredom of an examiner, some little thing you’ll pick up. And I duly did and got the scholarship.”

Can you remember which three books he recommended?

“Tawney. Something by Connolly, um . . . that’s the terrible thing about getting old, extremely old – you forget. And by the time you die you can’t remember your brother’s name. It’s a terrible shock. I used to think old age could be a joy because you’d have more time to read. But if you push your luck and get too far, and last too long, you start finding reading really quite difficult. The connections go, I suppose.”

Was the Connolly book Enemies of Promise (1938)?

“Yes, that’s right. It was. And the other one was . . . Hang on, the writer of the book . . . What’s the country invaded by Russia, next to Russia?

Finland, I say. Edmund Wilson’s To the Finland Station (1940)?

“Yes. Wilson. How did you get that?”

We both laugh.

***

Worsthorne is saddened but not surprised that so many Scots voted for independence and his preference is for Britain to remain a member of the European Union. “What’s happening is part of the hopelessness of English politics. It’s horrible. I can’t think why the Scots would want to be on their own but it might happen. The youth will vote [for independence]. This is part of my central theme: the Scots no longer think it’s worthwhile belonging to England. The magic of England has gone – and it’s the perversity of the Tory party to want to get us out of the European Union when of course we’re much more than ever unlikely to be able to look after ourselves as an independent state because of the quality of our political system.

“The people who want to get us out are obviously of an undesirable kind. That the future should depend on [Nigel] Farage is part of the sickness. I mean the real horror is for him to have any influence at all. And when you think of the great days of the Labour Party, the giants who strode the stage – famous, lasting historical figures, some of them: Healey, Attlee, who was probably the greatest, [Ernest] Bevin. I’m well aware that Labour in the good days produced people who were superior.”

He digresses to reflect on his wartime experience as a soldier – he served in Phantom, the special reconnaissance unit, alongside Michael Oakeshott, the philosopher of English conservatism who became a close friend, and the actor David Niven, our “prize colleague”.

“I remember Harold Macmillan saying to me, after the Second World War, the British people needed their belt enlarged; they’d done their job and they deserved a reward. And that’s what he set about doing. And he wasn’t a right-wing, unsympathetic man at all. But he didn’t – and this is what is good about conservatism – he didn’t turn it into an ‘ism’. It was a sympathetic feel, an instinctive feel, and of course people in the trenches felt it, too: solidarity with the rest of England and not just their own brotherhood. Of course he didn’t get on with Margaret Thatcher at all.”

Worsthorne admired Thatcher and believed that the “Conservatives required a dictator woman” to shake things up, though he was not a Thatcherite and denounced what he called her “bourgeois triumphalism”. He expresses regret at how the miners were treated during the bitter strike of 1984-85. “I quarrelled with her about the miners’ strike, and the people she got around her to conduct it were a pretty ropey lot.

“I liked her as a person. I was with her that last night when she wasn’t prime minister any more, but she was still in Downing Street and had everything cut off. The pressman [Bernard Ingham] got several of us to try to take her mind off her miseries that night. There’s a photograph of me standing at the top of the stairs.”

In the summer of 1989, Peregrine Wors­thorne was sacked as the editor of the Sunday Telegraph by Andrew Knight, a former journalist-turned-management enforcer, over breakfast at Claridge’s. He wrote about the experience in an elegant diary for the Spectator: “I remember well the exact moment when this thunderbolt, coming out of a blue sky, hit me. It was when the waiter had just served two perfectly poached eggs on buttered toast . . . In my mind I knew that the information just imparted was a paralysingly painful blow: pretty well a professional death sentence.”

He no longer reads the Telegraph.

“Politically they don’t have much to say of interest. But I can’t put the finger on exactly what it is I don’t like about it. Boredom, I think!”

You must read Charles Moore?

“He is my favourite. Interesting fellow. He converted to Catholicism and started riding to hounds in the same week.”

He has no regrets about pursuing a long career in journalism rather than, say, as a full-time writer or academic, like his friends Cowling and Oakeshott. “I was incredibly lucky to do journalism. What people don’t realise – and perhaps you don’t agree – but it’s really a very easy life, compared to many others. And you have good company in other journalists and so on. I was an apprentice on the Times, after working [as a sub-editor] on the Glasgow Herald.”

How does he spend the days?

“Living, I suppose. It takes an hour to get dressed because all the muscles go. Then I read the Times and get bored with it halfway through. Then there’s a meal to eat. The ­answer is, the days go. I used to go for walks but I can’t do that now. But Lucy’s getting me all kinds of instruments to facilitate people with no muscles, to help you walk. I’m very sceptical about it working, but then again, better than the alternative.”

He does not read as much as he would wish. He takes the Statesman, the Spectator and the Times but no longer the Guardian. He is reading Niall Ferguson’s biography of Kissinger, The Maisky Diaries by Ivan Maisky, Stalin’s ambassador to London from 1932 to 1943, and Living on Paper, a selection of letters by Iris Murdoch, whom he knew. “I get these massive books, thinking of a rainy day, but once I pick them up they are too heavy, physically, so they’re stacked up, begging to be read.”

He watches television – the news (we speak about Isis and the Syrian tragedy), the Marr show on Sunday mornings, and he has been enjoying War and Peace on BBC1. “Andrew Marr gave my book a very good review. He’s come back. He’s survived [a stroke] through a degree of hard willpower to get back to that job, almost as soon as he came out of surgery. But I don’t know him; he was a Guardian man.” (In fact, Marr is more closely associated with the Independent.)

Of the celebrated Peterhouse historians, both Herbert Butterfield (who was a Methodist) and Maurice Cowling were devout Christians. For High Tories, who believe in and accept natural inequalities and the organic theory of society, Christianity was a binding force that held together all social classes, as some believe was the order in late-Victorian England.

“I was a very hardened Catholic,” Worsthorne says, when I mention Cowling’s book Religion and Public Doctrine in Modern England. “My mother was divorced [her second marriage was to Montagu Norman, then the governor of the Bank of England] and she didn’t want my brother and me to be Catholic, so she sent us to Stowe. And I used to annoy her because I read [Hilaire] Belloc. I tried to annoy the history master teaching us Queen Elizabeth I. I said to him: ‘Are you covering up on her behalf: don’t you know she had syphilis?’

“Once I felt very angry about not being made Catholic. But then I went to Cambridge and there was a very Catholic chaplain and he was very snobbish. And in confession I had to tell him I masturbated twice that morning or something, and so it embarrassed me when half an hour later I had to sit next to him at breakfast. I literally gave up going to Mass to get out of this embarrassing situation. But recently I’ve started again. I haven’t actually gone to church but I’ve made my confessions, to a friendly bishop who came to the house.”

So you are a believer?

“Yes. I don’t know which bit I believe. But as Voltaire said: ‘Don’t take a risk.’”

He smiles and lowers his head. We are ready for lunch. 

Jason Cowley is editor of the New Statesman. He has been the editor of Granta, a senior editor at the Observer and a staff writer at the Times.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle