One billion dollars (plus) in US-taxpayer funded money reportedly stolen from the Iraqi defense ministry. And another $500,000 to $600,000 in loose change stolen from the transport, electricity, and other ministries:

...Most of the money was supposedly spent buying arms from Poland and Pakistan. The contracts were peculiar in four ways. According to Mr Allawi, they were awarded without bidding, and were signed with a Baghdad-based company, and not directly with the foreign supplier. The money was paid up front, and, surprisingly for Iraq, it was paid at great speed out of the ministry's account with the Central Bank. Military equipment purchased in Poland included 28-year-old Soviet-made helicopters....

Among those whom the US promoted was a man who was previously a small businessman in London before the war, called Hazem Shaalan, who became Defence Minister.

Mr Shalaan says that Paul Bremer, then US viceroy in Iraq, signed off the appointment of Ziyad Cattan as the defence ministry's procurement chief. Mr Cattan, of joint Polish-Iraqi nationality, spent 27 years in Europe, returning to Iraq two days before the war in 2003. He was hired by the US-led Coalition Provisional Authority and became a district councillor before moving to the defence ministry.

For eight months the ministry spent money without restraint. Contracts worth more than $5m should have been reviewed by a cabinet committee, but Mr Shalaan asked for and received from the cabinet an exemption for the defence ministry. Missions abroad to acquire arms were generally led by Mr Cattan. Contracts for large sums were short scribbles on a single piece of paper. Auditors have had difficulty working out with whom Iraq has a contract in Pakistan.

Authorities in Baghdad have issued an arrest warrant for Mr Cattan. Neither he nor Mr Shalaan, both believed to be in Jordan, could be reached for further comment.

More on Cattan here from this brief from the Polish embassy:

Iraq interested in Polish help in tank modernisation. Warsaw, Oct. 29: Cooperation between Poland and Iraq envisages the modernisation of T-55 and T-72 tanks and this will be one of the most important contracts. In two weeks a Polish delegation will go to Iraq to examine the tanks. The value of the contract is still being negotiated, according to representatives of the Iraqi defence ministry. During a visit to Poland the Iraqi delegation said that modernisation would probably cover 200 tanks and that the country still considers a possible involvement of Ukraine in the task. Ziyad Cattan from the Iraqi delegation has said that the value of contracts reached with Poland up till now exceeds 50 million USD and that three other contracts worth 20 million USD are being drafted. The signed contracts cover deliveries of ammunition and optical equipment. Iraq has considered the purchase from Poland of choppers for the transport of troops and VIPs as well as for medical evacuation. A group of Iraqi experts will come to Poland at the beginning of November. The biggest partner of the Iraqi defence ministry is Bumar group that has signed some arms contracts and plans to open an Ursus tractor factory in the more peaceful, northern part of Iraq.

And under the spelling Ziad Kattan, several more entries. Cattan/Kattan and the Defense Ministry rip-off recall the the cast of characters suspected in the killing of US defense contractor Dale Stoffel.

Via Atrios.

Update: More from Juan Cole and Nadezhda.

Update II: As Juan and others note, Knight Ridder's Hannah Allam has already written the ground-breaking piece on Iraqi Defense Ministry swindling and the strange case of Ziad Cattan:

Former Defense Minister Hazem Shaalan has told U.S. and Iraqi officials that Bremer personally requested that Ziad Cattan - the alleged ringleader of the corruption and the ministry's former procurement chief - stay in his job after sovereignty was transferred last summer.

Bremer said this week, through his former CPA spokesman Dan Senor, that he didn't know Cattan. "At least to his knowledge, he'd never met him," Senor said.

Cattan, a dual Polish-Iraqi national, was fired in May and a warrant was issued for his arrest in connection with "the abuse of an employer's funds." He fled Baghdad and hasn't returned to answer the charges...

Even as hints of a corruption scandal emerged last spring, Cattan told others in the ministry that U.S. Defense Secretary Donald H. Rumsfeld personally had assured his job and no Iraqi had the power to remove him, al Dulaimi said. Instead of fleeing the investigation closing in on him, Cattan lobbied for even more authority. He wanted to become defense minister, a seat reserved for a Sunni Arab by al Jaafari's Shiite-dominated government, which was elected last January.

Cattan, a Sunni, contacted the Iraqi National Dialogue Committee, the main Sunni faction negotiating with al-Jaafari on Cabinet appointments, and offered members $10 million cash to nominate him as their candidate for the post, said Mohammed al-Daini and two other committee members who heard Cattan's proposal. The group refused, and al-Jaafari handed the post to al-Dulaimi, a British-educated sociologist who isn't implicated in the scandal.

In several e-mail messages last month, Cattan gave Knight Ridder photos and documents purporting to show his close working relationship with U.S. officials and his repeated requests for their help in streamlining the contracting process. He denied wrongdoing, but acknowledged that some Western officials who are accustomed to peacetime standards might take exception to the aggressive weapons procurement he conducted to quickly arm an Iraqi force against the insurgency.

Shouldn't there be Senate and House armed services committee hearings that require Bremer, Cattan and others to testify about the missing one to two billion dollars? And what motivated Cattan's appointment?

Update III: Reading a bunch of reports on Cattan from Nexis, it seems one purpose he served was to essentially bribe Poland into keeping troops in Iraq by furnishing Polish arms manufacturers with hundreds of millions of dollars worth of contracts from the Iraqi MoD. This from the AP January 21 2005:

Iraqi Deputy Defense Minister Ziad Cattan appealed to Poland on Friday to keep troops in Iraq for as long as possible.

Poland contributed combat troops to the U.S.-led invasion of Iraq and currently has 2,400 troops serving in the international security force it leads, but plans on reducing the number to 1,700 after Iraqi elections at the end of the month.

"We ask you that your troops stay in our country for as long as possible and that you do not reduce your contingent," Cattan said at a news conference after signing a US$20 million (US$15.43 million) weapons contract with state-owned arms company Bumar PHZ. "Your men are highly honored in our country, they understand our customs and our needs - we need them there."

He dismissed charges in a recent British Museum report that said Polish and U.S. troops using the area around the ancient city of Babylon had damaged archaeological sites.

"The Polish and the American troops actually helped us in preserving those precious art pieces," he said.

Bumar has many contracts with the Iraqi army, which total some US$320 million (US$247 million).

Why do none of these stories mention he has dual Polish-Iraqi citizenship?

Posted by Laura at September 18, 2005 11:57 PM