Official: Billions missing in Iraq may be 'largest theft of funds in national history'

Approximately $6.6 billion in cash was likely stolen after being flown to Iraq during the months that followed the U.S.-led invasion, Pentagon officials said recently.

Stuart Bowen, the U.S. Special Inspector General for Iraq Reconstruction, told The Los Angeles Times that the sum just might be "the largest theft of funds in national history."

The cash was part of a series of shipments totaling more than $12 billion, taken largely from the U.N. "oil-for-food" program and the sales of Iraqi oil. Officials in the Bush administration had hoped the massive pallets of cash would help calm Iraq's civilian population following the chaotic and violent invasion and toppling of Saddam.

The funds -- which were separate from a $53 billion appropriation Congress approved for Iraqi reconstruction efforts -- were cobbled together by the Federal Reserve Bank of New York before being flown to Baghdad and distributed to interim Iraqi ministers, who U.S. officials see as the most likely culprits in the theft: an allegation that's not officially been leveled.

The Pentagon admitted last year that it could not account for over $8.7 billion in Iraqi reconstruction funds, and that about $2.6 billion of it was sent out without any documentation at all.

Investigators said in 2005 that Bush officials apparently neglected to put procedures in place to track the money or hold recipients accountable for its proper applications.

Iraqi officials have since threatened to take the U.S. to court to reclaim the funds.