Reps Say Iraqi Leaders Steal Billions

WASHINGTON - Two Democratic senators have asked the Treasury Department to investigate allegations that Iraqi leaders have embezzled or misspent billions of U.S. tax dollars intended for the country's relief and reconstruction.

In a May 20 letter to Stuart Levey, the department's undersecretary for terrorism and financial intelligence, Sens. Byron Dorgan of North Dakota and Sheldon Whitehouse of Rhode Island called the scope of corruption within the Iraqi government staggering.

Levey's office, they said, should examine whether any Iraqi officials have set up bank accounts outside of Iraq "that might contain ill-gotten proceeds."

Citing recent congressional testimony from Arthur Brennan, a former State Department official, the senators said the inspector general of the Iraq's ministry of health had steered as much as $1 billion in medical supplies onto the black market and then pocketed the profits.

According to Brennan, it's likely some of that money is financing insurgent groups such as the Mahdi army, the militia loyal to Shiite cleric Muqtada al-Sadr.