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Companies working in Iraq, auditors and the U.S. government office running the $18.4 billion U.S. rebuilding program all say contracting staff shortages in Baghdad are a problem as overworked employees struggle to oversee and award contracts in a stressful, hostile environment.

Numerous breakdowns in management and oversight occurred when the Interior Department, on behalf of military forces in Iraq, hired private sector interrogators to work in the notorious Abu Ghraib prison, according to a Government Accountability Office report.

The U.S. government has opened a criminal inquiry into suspected embezzling by officials who failed to account for nearly $100 million they disbursed for Iraqi reconstruction projects, federal investigators said 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.

Some may not remember that these truck drivers and other civilian contractors in Iraq are being paid a godawful amount of money to be there. Some make nearly $10,000/month! Meanwhile, driving right next to them, is a soldier who gets a $450/month "hazard duty pay" bonus to do the same job. Some of these servicemembers are Reservist and National Guard members who have left civilian jobs that pay 3 or 4 times their military wage.

It was Rumsfeld, CEO of the Pentagon, who was complicit in trying to conceal shenanigans by Haliburton subsidiary, KBR, and allowing his people to censor sections of critical audit reports.

Public records suggest Doug Wood went through several years of money troubles and tax battles. His friends wondered if that was what led him back overseas to Iraq, where contractors commonly pull down six-figure salaries in danger bonuses. "I saw real potential to work, to build things, to make things happen in Iraq," he told a newspaper.

The government either doesn't know or won't say the actual number of workers engaged in reconstruction, and companies won't discuss it, citing security concerns. But the Department of Labor does know the death toll: As of March 31, death claims for civilians working on U.S. government contracts in Iraq had reached 276.

Campaign Against Arms Trade, which includes the group Christian Campaign Against Arms Trade, is calling for an end to the unfair political influence which arms companies have on Government policy.

The United States has carelessly, and possibly fraudulently, handled some Iraqi money meant for rebuilding and poorly managed billions of dollars of U.S.-funded contracts, said U.S. audits.

Halliburton representatives testified that the Halliburton employees being investigated for taking kickbacks under the LOGCAP troop support contract were not managers but were "administrative people." Yet according to the Justice Department, a Halliburton manager has now been indicted for this kickback scheme.

Japanese officials scrambled to find information on the kidnapping of a 44-year-old Japanese security specialist working as a consultant for Hart Security Ltd., a Cyprus-based security contractor.

Like many other Iraqis, businessmen invariably make then-and-now comparisons with Saddam Hussein. Saddam ran his own massive corruption of the UN oil-for-food program and he and his cronies regularly demanded a cut of any new business or contract. But Iraqi businessman said: "I'd say that about 10 per cent of business was corrupt under Saddam. Now it's about 95 per cent. We used to have one Saddam, now we have 25 of them."

Custer Battles is under investigation by the Department of Defense for allegedly overcharging the government millions by making up invoices for work never done, equipment never received, and guards who didn't exist.

Brigadier Hussan Zuyad, chief of the Iraqi National Guard for Al Muthanna province, said the arrival of Australian troops would give him an opportunity to evaluate their equipment. "We want many things because we are really starting from the ground rebuilding our army," he said.

Documents, including a Pentagon audit, found $8 million in overpricing in the sale of agricultural products to Saddam Hussein by a company tied to Prince Bandar bin Mohammed bin Abdulrahm al-Saud.

The Saskatchewan Wheat Pool has emerged as one of the companies involved in Iraq oil-for-food deals now under investigation by a U.S. congressional committee probing the United Nations aid program, which Saddam Hussein manipulated to skim off billions of dollars for himself.

German industry has come under the scrutiny of UN investigators. As far back as October, UN staffers with the investigation contacted Germany's Foreign Ministry in Berlin and submitted a list containing 50 German companies. According to government sources, that list "also included some very well-known companies."

Pentagon officials now say the costs for stricter safeguards on price information, cost accountability and conflicts of interest will cost $25 million to $75 million just three weeks after Army said there would be no "significant costs" in restructuring the contract for the Future Combat System.