U.S. Decisions On Iraq Spending Made in Private

By Jackie Spinner and Ariana Eunjung Cha
Washington Post Staff Writers
Saturday, December 27, 2003; Page A01

Iraqis spooked by rumors of a fuel shortage were hoarding the precious commodity, inadvertently causing exactly what they feared. Officials in charge of oil for the U.S.-led occupation government in Baghdad were worried that there would be riots if they didn't do something to improve the situation fast. And so on Nov. 29, they went to Saddam Hussein's former presidential palace and sought help.

By nightfall, they had received an emergency allotment of $425 million to import fuel from neighboring countries. Although it didn't solve what appears to be a chronic fuel shortage, it did help avert a crisis.

The spending was approved by the 11-member Program Review Board, a mini-Congress of sorts for the occupation government in its power to allocate money. The board -- comprising mostly Americans, Britons and Australians -- was appointed by L. Paul Bremer, the top administrator of the Coalition Provisional Authority. It uses Iraqi money that includes oil revenue and seized assets from the Hussein era to pay for projects not anticipated by the country's budget. So far the board has approved more than $4 billion in such spending.

During its twice-weekly afternoon meetings, the board has approved more than 500 projects, including $120 million for printing and distributing currency, $36 million for renovating police stations, $15 million for a national microcredit program and $4 million for creating a radio system for the railroad network. It also has signed off on scores of smaller projects, including $3,500 to start a Baghdad theater festival, $50,000 to pay two zookeepers and $79,245 to reestablish the Baghdad stock exchange.

As the skeleton of an Iraqi government has been formed, the board has begun to hand off more of the responsibility for handling specific projects to the ministries. But the board still handles the overall allocations.

Of the billions of dollars appropriated or promised for the largest nation-building project since World War II, the Iraqi money doled out by Bremer and the Program Review Board is the least visible. Spending of the $18.6 billion the U.S. Congress approved this fall for Iraqi reconstruction will be overseen by an office run by a retired U.S. admiral. The $13 billion pledged from other countries will be monitored by an Iraqi-run oversight board.

Despite detailed regulations and pronouncements about "transparency," the Coalition Provisional Authority's process for spending Iraq's money has little of the openness, debate and paper trails that define such groups in democratic nations. Though the interim government has extensive information on its Web site, it doesn't include, for example, when contracts have been awarded. Citing security concerns, it also doesn't say what companies won them.