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Iraq Reconstruction Fund Invested on Wall Street-No Comment from Pentagon Officials

by Open-Publishing - Sunday 3 April 2005
8 comments

Trade-Exchange Rates International USA

april 4th

April Fools Day Edition, 2005
HOAX for the april fool day !!!!
– http://www.counterpunch.com/cox04012005.html

Salina, Kansas

Of the $18.4 billion that Congess appropriated 16 months ago for postwar reconstruction in Iraq, only $3.6 billion has been spent to date. There has been much head-scratching over this uncharacteristic failure of the Pentagon to spend money promptly.

A recently unearthed portion of a Defense Department memo sheds some light on the issue, suggesting that more than $14 billion earmarked for reconstruction was actually invested on Wall Street. The memo’s author and date are unknown. This portion of the apparently classified document — marked "page 3" — was mistakenly sent to Mid-America Seed Savers, a nonprofit organization in Lawrence, Kansas whose members had filed a Freedom of Information Act request for documents related to the Army’s alleged distribution of genetically engineered wheat seed to farmers in Iraq. The memo fragment is reproduced here in full:

[page heading] Reconstruction fund enhancement - p. 3

[...] that among these, the scenario with greatest potential was investment in a medium-risk portfolio of U.S.-based securities. To accomplish this without incurring excessive and unwarranted scrutiny, the Secretary issued a classified order creating the Office of Special Brokerage Services (OSBS), to which management of the reconstruction funds was assigned. The OSBS, quietly through third parties, purchased approximately $5 billion in stock in February, 2004. Another $9.2 billion was invested the following month. As of December 31, 2004, the fund had shown a net growth of approximately -1.7%.

The negative growth observed to date should not be cause for gloom. This is a long-term investment of behalf of the Iraqi people. According to OSBS projections, the fund’s assets will achieve a value of $38.9 billion by a decade from now, assuming vigorous growth in the US economy.

It is important to compare that figure with the almost-certain undesirable outcome of spending the money directly on infrastructure enhancement. The past two years’ experience shows that new public works run a significant risk of damage or even instantaneous 100% depreciation due to hostile and friendly combat activities. And, as the CJCS [Chairman of Joint Chiefs of Staff General Richard Myers] has noted, insurgencies typically last 7 to 12 years. If invested on the ground in Iraq today, the reconstruction funds might well be worth precisely zero to the Iraqi people a decade from now.

Prudent investment, on the other hand, can help Iraq rebuild while becoming an ownership society. The OSBS has assigned portions of the fund’s assets to individual citizens, based on voting rolls from the January election. Although he or she is not yet aware of it, each and every Iraqi voter now owns a Personal Reconstruction Account (PRA) that will continue to grow in value, safely, until violence in Iraq subsides and normal economic activity can resume. At that point, Iraqi citizens will be able to draw on their PRAs as needed, putting that money to work in their economy and stimulating private-sector solutions to the problem of reconstruction.

PRAs will provide Iraqis with what they desire most: freedom of choice. Under this plan, money will go directly into the pockets of the Iraqi people, for whose benefit Congress intended it. Furthermore, the use of voting records to allocate PRAs will ensure that impetus for rebuilding the country will come from those who have demonstrated a commitment to the democratic process — not from Muslim extremists or Baathist dead-enders.

The question of whether to inform American or Iraqi citizens of OSBS activities and plans is a difficult one. Taking into consideration current political realities, it is probably best not [. . . end of page]

(Pentagon officials have offered no comment on the memo.)

Stan Cox is a plant breeder and writer in Salina, Kansas. He can be reached
at: t.stan@cox.net

http://www.uruknet.info/?p=m10828&a...

PS april 4th

April Fools Day Edition, 2005
– http://www.counterpunch.com/cox04012005.html

Forum posts

  • "The negative growth observed to date should not be cause for gloom. This is a long-term investment of behalf of the Iraqi people. According to OSBS projections, the fund’s assets will achieve a value of $38.9 billion by a decade from now, assuming vigorous growth in the US economy."

    What?! They aren’t going to use this money to rebuild Iraq until ten years from now? Why is the Bush administration asking for more money? Are they going to gamble the $82 billion more on wall street as well? And LOSE I might add. These crooks are unbelievably brazen!!

    ...assuming vigorous growth in the US economy....that’s a laugh.

  • Let’s see. If I go to a bank and borrow $30,000 to buy a new car but instead decide to put it in the stock market because now is just not a good time to buy a car, I’m thinking the bank will be none to happy about it. This is exactly what these crooks are doing. Since our government is out of control in it’s spending we have to borrow the money, a good part of it from China, just to invest it in the market. Oh, that makes a lot of sense.

    Thinking that money will grow in ten years is a joke. Between Peak Oil combined with the eminent collapse of the dollar and US economy, that money is as good as gone (and a lot sooner than ten years). But in the end I guess it really doesn’t make much difference. With the $10,000,000,000,000.00 figure in national debt quickly approaching and the fact the we will never be able to pay that money back my guess is a few billion dollars here or there is not going to make a bit of difference.

  • Per my comments on a Daily Kos diary that picked this up and my own site, this is a fairly obvious hoax.

    I would urge the author to consider the evidence and, if convinced of the hoax, amend or retract the primary text of this posting in order to prevent the story from spreading.

    If anyone sees this story spreading, could you please let me know where you’ve seen it? Let’s nip this in the bud before we give the fascists any evidence that we’re actually as hysterical and prone to regurgitating nonsense as they say we are.

  • Per my comments on a now-pulled Daily Kos Diary that picked this up, and on my site Marching Orders, this is a hoax. The original Counterpunch article is labeled, very clearly, "April Fool’s Day Edition" at the top of the page.

    Neither the OSBS nor "Mid-America Seed Savers" appears to exist. And in the continuation, the article talks about “citizen choice” reference to using voting records to distribute the fictitious accounts only to Iraqis who have voted for US-backed candidates. That’s patently ridiculous. The article is obviously a parody of Bush’s proposal to privatize Social Security, with a bit of a shot at Republican vote tampering.

    I respectfully request that the author retract or amend the text of this posting to stop the spread of the story.

    The rest of you: Stop by and leave a comment at Marching Orders and let me know if you see any more examples of this story being put forth as actual news.

  • email from author...

    Don’t worry, it is an April Fool story. The trouble is that the Pentagon has concocted so many bizarre schemes over the past 4 years (remember the futures trading market in predictions of the next terrorist attack?) it’s hard to think of something that people won’t find plausible, even when the heading’s there. And if you substitute the words "Social Security" for "Iraq", the story is mostly true.

    Thanks for writing -
    Stan

  • Until Bush is thrown out of the White House April Fool’s Day is redundant. Face it, he does something stupid every day