Bush's Uncle In Iraq Contract $$

[FaGal]

Bush's Uncle In Iraq Contract $$
www.cbsnews.com - WASHINGTON - February 23, 2005


President Bush's uncle made more than $450,000 last month by selling stock in a defense contractor whose profits are growing because of the Iraq war, records show.

William H.T. Bush made the money by exercising stock options in St. Louis-based Engineered Support Systems, Inc. Bush is a member of ESSI's board of directors and therefore had to report the sale to the Securities and Exchange Commission.

Bush, the youngest brother of former President George H.W. Bush, did not return a telephone message seeking comment Wednesday afternoon. He told the Los Angeles Times, which first reported the stock sale Wednesday, he had not pulled any strings in Washington for the company.

ESSI on Tuesday reported record income of $20.6 million for the three months ending Jan. 31, a 31 percent increase.

The company said the expansion came mainly from increases in ESSI's military contracts. Those include adding armor to military trucks, refurbishing trailers the Army uses to haul tanks, and supporting satellite communications for troops in war zones, ESSI CEO Gerald Potthoff said in a statement.

Bush cashed in stock options on Jan. 20, weeks before the company's latest earnings report. SEC documents show he sold 8,438 shares of ESSI stock at a profit of $53.36 a share. That's a total profit of $450,251.68.

Bush wasn't the only ESSI official to cash in on the company's rising stock price. Five other officers or directors of the company have sold stock so far this year, SEC records show, with two of them profiting less than Bush and three making more. The biggest windfall went to Gary C. Gerhardt, the company's vice chairman and chief financial officer, who made nearly $7.5 million from selling stock on Jan. 31.

The Pentagon's inspector general is investigating whether an ESSI subsidiary improperly got a contract to make equipment from the Air Force. That contract was overseen by Darleen Druyun, a former Air Force contracting official serving a nine-month prison term for contract fraud involving Boeing.

[FaGal]

Iraq auditors target contracts corruption
www.menafn.com - February 24, 2005 - By BETH POTTER


BAGHDAD - Since Iraqis think their government is corrupt, the Board of Supreme Audit will audit all contracts made since U.S.-led forces invaded in April 2003 to find out the truth, its new president said Thursday.

Some $8.8 billion of Iraq funds handed out by U.S. administrators to Iraq ministries is "unaccounted for" because of bad management, a U.S. audit report released at the end of January said. The money was to be spent on salaries, operating and capital expenditures and reconstruction projects between October 2003 and June 2004, according to a report made by the Office of the Special Inspector General for Iraq Reconstruction.

"The Iraq government needs to rebuild trust with Iraq citizens," said Abdul Basit Turki Saeed, Board of Supreme Audit president. "All contracts with all ministries will be audited, ones made locally or with international companies."

Saeed declined to say specifically what he would look for in the auditing investigation, although he said has the same questions others have raised in newspaper articles and rumors on the street. Salaries paid to "ghost employees," overpriced furniture contracts with kickbacks built in, billing for goods that weren't delivered, and ministers who flew packages of U.S. dollars worth millions out of the country are just a few of the complaints.

"I hope it don't find all of what I hear," Saeed said. "When we have the results of any investigation, I promise you, I will announce them."

Because interim officials knew there was no oversight, they did anything they could to steal money, said an official close to the United Iraqi Alliance, the Shiite Muslim coalition that won close to 50 percent of the Jan. 30 vote for the new 275-member national assembly.

"There is no accountability," the official said, declining to be named. "That's why public services have collapsed in the last few months. Just look at the fuel. Look at the electricity."

Consumers sit in long lines at gas stations around the capital, even though Iraq spends $200 million per month to import gasoline, oil minister Thamer Ghadban said recently. The Electricity Ministry has ordered several new generators worth millions of dollars, but power remains sporadic in Baghdad.

Ministry council officials, a group that includes key ministers and a vice president in the interim government, gave the audit order, Saeed said. Iraq's interim government is at a virtual standstill as wrangling continues over key spots in a new 275-member national assembly approved by voters Jan. 30 that's expected to be seated at the end of the month.

A recent Commission on Public Integrity report also highlighted problems at some ministries, the Alliance official said. The commission has no authority to build cases or haul people it suspects into court, however, the official said. The commission, along with independent inspectors general in each ministry, were put in place by former U.S. administrator to Iraq Paul Bremer. The Board of Supreme Audit existed under former dictator Saddam Hussein.

At the same time, Ali Maousin Alak, Oil Ministry inspector general, said he will create a training program to teach other inspectors general and their staffs how to deal with corruption.

"We have to make fighting corruption a priority. We have to build an impartial system in Iraq," Alak said in a speech to the Institute for Financial Studies at Baghdad University. "Our people must maintain impartiality."

Saaed was named to his job in October after previous head Ihsan Karim was killed in July when a bomb went off under his car during an Iraq investigation of the former United Nations oil-for-food program. The food-ration program operated in Iraq since 1996 under international sanctions to bring food and humanitarian goods to the country paid for by oil sales. No one claimed responsibility for the attack.

The misused $8.8 billion -- all of it Iraq money -- came from oil sales and seized assets in the Office of the Special Inspector General for Iraq Reconstruction report. Auditors could not tell if the monies were spent properly. The audit did not look at oversight for the $18.4 billion approved for reconstruction by the U.S. Congress in November 2003.