Iraqi Ministry of Defense and Corruption

Yahoo News:

Iraqi investigators have uncovered widespread fraud and waste in more than $1 billion worth of weapons deals arranged by middlemen who reneged or took huge kickbacks on contracts to arm Iraq's fledgling military, according to a confidential report and interviews with U.S. and Iraqi officials.

The Iraqi Board of Supreme Audit, in a report reviewed by Knight Ridder, describes transactions suggesting that senior U.S.-appointed Iraqi officials in the Defense Ministry used three intermediary companies to hide the kickbacks they received from contracts involving unnecessary, overpriced or outdated equipment.

Knight Ridder reported last month that $300 million in defense funds had been lost. But the report indicates that the audit board uncovered a much larger scandal, with losses likely to exceed $500 million, that's roiling the ministry as it struggles to build up its armed forces.

The episode deprives Iraq's military of essential gear that could help prepare the way for U.S. forces to withdraw. It also raises questions about the new government's ability to provide an effective defense against an entrenched insurgency and win broad acceptance among Iraqis.

This appears to be Iraqi money, not US dollars, so I'm less concerned about this than one might think. But, this sort of corruption is what we should have been looking for and the Iraqi government should take every appropriate action against those responsible and recover as much of the cash as they can.