Watchdog Presses US to Appoint Oil Auditors

February 14, 2004

An international watchdog overseeing how Iraq's oil money is spent during the US-led occupation pressed the US authorities today to finalise the appointment of auditors so its work can begin in earnest.

The International Advisory and Monitoring Board (IAMB) on Iraq, including representatives from the United Nations, World Bank, International Monetary Fund (IMF) and Arab Fund for Economic and Social Development, said the US-led Coalition Provisional Authority (CPA) had invited proposals from independent auditing firms by February 18.

On orders from the UN Security Council, the outside auditors are supposed to monitor Iraqi oil sales and spending from the Development Fund for Iraq (DFI), which is under the CPA's control. "The IAMB will work with the CPA to approve expeditiously the appointment of duly qualified external auditors," the watchdog group said in a statement after a meeting in Washington.

"The IAMB remains anxious to involve Iraqi nationals in its oversight work and resolved to continue to pursue the nomination of suitably qualified Iraq nationals as observers," it added.

UN officials and private aid groups have expressed concern the CPA was operating with excessive secrecy and delaying the IAMB's work, but US officials said the CPA's task was complex. "(It is) a complex project without precedent in the last 50 years and it has taken a while to assemble the views of four separate international organisations and the CPA and to come to a conclusion," Patrick Kennedy, US envoy to the United Nations for UN Management, told reporters.

Kennedy said the auditors' work would continue even after June 30, when the CPA is due to shut down and transfer power to a provisional Iraqi government. "My assumption is there will be a close-out audit of the DFI, conducted by the external auditors, that will go over all the expenditures from June 30 backwards to the beginning of the DFI," he said.

Isam al Khafaji, a former member of the CPA's Iraqi Reconstruction and Development Council who is now Baghdad director of billionaire financier George Soros' Iraq Revenue Watch, said he had conferred earlier in the week with IAMB representatives on ways to help achieve their goals.

He said the officials had assured him they intended to monitor oil sales and CPA spending of the proceeds, even if an auditing firm was not appointed before June 30. "The IAMB is planning to keep doing the auditing even if Iraq resumes its sovereignty," he said yesterday.

"This is the good news. The bad news is that it will take place after the fact," he added.

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