Federal auditors can't trace $96.6 million earmarked for Iraq

Nearly $100 million in Iraqi reconstruction cash - which was supposed to be handed out by U.S. workers in shrink-wrapped bricks of new hundred-dollar bills - can't be accounted for, federal auditors reported Wednesday.

A criminal investigation into possible fraud in a handful of cases is under way to determine what happened to some of the $96.6 million that was earmarked to rebuild south-central Iraq, according to a new report by the Special Inspector General for Iraq Reconstruction.

The money came from Iraqi oil sales and other local revenues, not from U.S. taxpayers, and it was supposed to be distributed by the main financial office of the U.S. rebuilding effort in Iraq. That financial office - first part of the now-defunct Coalition Provisional Authority and now run by Joint Area Support Group-Central - hired a cadre of U.S. workers who pay cash to locals and contractors to repair Iraq and provide relief to Iraqis.
(KnightRidder)