Bremer's Next Insurgency: Auditors

Less than than two months after former Coalition Provisional Authority (CPA) administrator L. Paul Bremer received the Presidential Medal of Freedom, a scathing audit by a longtime confidante of George W. Bush is bashing Bremer's agency for failing to establish "adequate financial controls," leaving some fiscal reporting systems "either weak or non-existent." The audit charges that the CPA left large portions of the $8.8 billion Iraqi treasury "open to fraud, kickbacks, and misappropriation of funds," according to a draft obtained by TIME. The report was written by Stuart Bowen, a lawyer from Texas who became special inspector general for Iraq reconstruction. His audit cites Bremer for lax accounting (on one payroll, for instance, only 602 of the 8,206 names could be confirmed, with no paper trail for the rest of the cash) and inadequate disclosure (the CPA allowed Iraqi officials to delay reporting the $2.5 billion the interim government received in oil-for-food money last spring).

Bremer, in an angry eight-page reply appended to the draft, rapped Bowen for "misconceptions and inaccuracies" and for expecting the CPA, amid postwar chaos, to follow accounting standards that "even peaceful Western nations would have trouble meeting within a year." Among the details Bremer may have trouble explaining: at a press conference last spring, he said the CPA had approved "fundamental" internal controls for the Health Ministry before handing it over to the interim government. But, the report notes, his staff members said they were "unaware of the basis" for that assertion. --By Timothy J. Burger