US raises possibility that $6.6 billion of Iraqi reconstruction money was stolen (VIDEO)

About $6.6 billion in Iraqi oil money designated for the country’s reconstruction may have been stolen, the US official responsible for auditing the funds has said, as Washington continues to try to track down the missing money, the Financial Times reported.

Following the US-led invasion of Iraq in 2003, Iraq’s oil revenues and seized assets were taken to the US and used to fund the interim government, as well as reconstruction programs run by the Coalition Provisional Authority. Since Iraq had no banking system, the money was placed in an account at a US Federal facility for the Development Fund for Iraq and was flown into Baghdad when it was needed.

The money, which came from Iraqi oil sales, seized Iraqi assets and surplus funds from the United Nations' oil-for-food program, was flown into Iraq in planes, in the form of shrink-wrapped bricks of 100 dollar bills, the Los Angeles Times reported.

In the first months after Saddam Hussein was overthrown, about $12 billion in cash was airlifted to Iraq. The money was stored at US military bases and in the basement of one of Saddam Hussein’s former palaces and then paid out to Iraqi ministries and government contractors, the Financial Times said.

This month, the Pentagon and the Iraqi government are closing the books on the program that handled all that money. But after years of audits and investigations, U.S. Defense officials still can't say what happened to $6.6 billion in cash, the Los Angeles Times said.

According to CNN:

"It has not been properly accounted for," said Stuart Bowen, special inspector general for Iraq reconstruction.

US auditors are suggesting that some or all of the cash may have been stolen, not just mislaid in an accounting error, the Los Angeles Times reported. Bowen said the missing $6.6 billion may be "the largest theft of funds in national history."

According to the Los Angeles Times:

Theft of such a staggering sum might seem unlikely, but U.S. officials aren't ruling it out. Some U.S. contractors were accused of siphoning off tens of millions in kickbacks and graft during the post-invasion period, especially in its chaotic early days. But Iraqi officials were viewed as prime offenders.

Iraqi officials say that the US government was supposed to safeguard the money under a 2004 legal agreement it signed with Iraq, and that makes Washington responsible, they argue. Iraqi officials have said they may sue to reclaim the lost money, CNN said.