Independent accounting of Iraqi funds is urgently required. The United Nations handed over to the American-run Coalition Provisional Authority (CPA) billions of dollars generated by the sale of Iraq petroleum with the understanding that these monies would be used to the benefit of the Iraqi people and would be accounted for by an independent auditor. The CPA delayed this audit month after month, and it was still not completed by the time the CPA ceased to exist. Any funds misused or misappropriated by U.S. officials should be repaid to the proper Iraqi authority. What that amount is we cannot predict at this time.

Although the funds turned over to the CPA by the U.N. constitute the largest amount in dispute, that is by no means the only case of possible misappropriation. Among several others reported, perhaps the most damaging to Iraq has been a project allocated to Halliburton's subsidiary Kellogg, Brown & Root as part of a $2.4 billion no-bid contract awarded in 2003. The $75.7 million project was meant to repair the junction of some fifteen pipelines linking the oil fields with terminals. Engineering studies indicated that as conceived the project was likely to fail, but KBR forged ahead and, allegedly, withheld news of the failure from the Iraqi Ministry of Petroleum until it had either spent or received all the money. Despite this, KBR was actually awarded a bonus by the Army Corps of Engineers, even though Defense Department auditors had found more than $200 million of KBR's charges to be questionable. There would seem to be more greed than prudence in the repeated awards to Halliburton in the run-up to the war, during the war itself, and in contracts to repair the war damages. Especially given that Vice President Dick Cheney was formerly CEO of Halliburton, the U.S. should make every effort to investigate this wrongdoing, prosecute and correct it, and depart from Iraq with clean hands.

The United States should not object to the Iraqi government voiding all contracts entered into for the exploration, development, and marketing of oil during the American occupation. These contracts clearly should be renegotiated or thrown open to competitive international bids. The Iraqi government and public believe that because Iraqi oil has been sold at a discount to American companies, and because long-term ``production-sharing agreements'' are highly favorable to the concessionaires, an unfair advantage has been taken. Indeed, the form of concession set up at the urging of the CPA's consultants has been estimated to deprive Iraq of as much as $194 billion in revenues. To most Iraqis, and indeed to many foreigners, the move to turn over Iraq's oil reserves to American and British companies surely confirms that the real purpose of the invasion was to secure, for American use and profit, Iraq's lightweight and inexpensively produced oil.

It is to the long-term advantage of both Iraq and the United States, therefore, that all future dealings in oil, which, after all, is the single most important Iraqi national asset, be transparent and fair. Only then can the industry be reconstituted and allowed to run smoothly; only then will Iraq be able to contribute to its own well-being and to the world's energy needs. Once the attempt to create American-controlled monopolies is abandoned, we believe it should be possible for investment, even American investment, to take place in a rapid and orderly manner. We do not, then, anticipate a net cost connected with this reform.