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12/09/2005:

"Britain 'trying to stall $1.3bn theft inquiry that could hurt Allawi's election chances'"

The British government is trying to stall an investigation into the theft of more than $1.3bn (£740m) from the Iraqi Ministry of Defence, senior Iraqi officials say.

The government wants to postpone the investigation to help its favoured candidate Iyad Allawi, the former prime minister, in the election on 15 December. The money disappeared during his administration.

The UK's enthusiasm for Mr Allawi may have led it into promoting a cover-up of how the money was siphoned off and sent abroad. One Iraqi minister believes the investigation will be dropped when the next government is formed.

The scandal is expected to explode with renewed force in the next few weeks. The Independent has learnt of secret tape recordings of a wide-ranging conversation between a Ministry of Defence official and a businessman, naming politicians and officials involved.

"It is possibly one of the largest thefts in history," Ali Allawi, Iraq's Finance Minister, said. "Huge amounts of money have disappeared. In return we got nothing but scraps of metal." Most of the military purchases were made in Poland and Pakistan. They included obsolete helicopters, armoured vehicles unable to stop a bullet and grossly over-priced machine guns and bullets. Payments were made in advance. Often the Ministry of Defence did not even have a copy of contracts under which it was paying hundreds of millions of dollars.
independent.co.uk