Dermot Ahern (Louth, Fianna Fail)

I propose to take Questions Nos. 37 and 41 together.

I share the deep concern of Deputies about the situation in Iraq. The level of sectarian violence has been increasing in recent months with terrible consequences for ordinary Iraqi citizens. For well over a year, armed groups based in the Sunni community have engaged openly in sectarian attacks on Shia and Kurdish civilians. The cynical aim of their suicide and car bomb attacks on markets, mosques and other public places has been to cause the maximum number of civilian casualties, provoke retaliation and foment civil strife and chaos across Iraq.

Until recently, the Shia community has generally followed the guidance of its political and religious leaders and avoided retaliation. However, the attacks and killings following the destruction of the holy Shia shrine in Samarra in February were a stark reminder of the danger of uncontrolled sectarian violence. There had already been disturbing signs of a growing level of retaliatory violence by Shia militias, including evidence of death squads operating within the Iraqi security forces. The House will be aware that US troops have, on a number of occasions in recent months, located large numbers of prisoners who were secretly detained by these groups and, in some cases, abused and tortured.

This deterioration in the security situation has developed despite considerable progress in the formal process of political reconstruction, under UN guidance. Three democratic national elections have been successfully held. A new constitution has been approved by referendum and adopted and a freely-elected Iraqi Government has been in office since May 2005. These are substantial achievements and the high level of participation by the Iraqi people in the democratic process has shown the importance they attach to the political process, following decades of brutal dictatorship. The maintenance of this level of political commitment will be crucial if civil war in Iraq is to be avoided.

Most people now accept the only way to avoid further chaos and to build a secure future for the Iraqi people is for the Iraqi Government to establish effective administration over the country with the assistance and support of the international community. This must involve the development of effective national security forces with the capacity to take over responsibilities exercised by international forces operating in Iraq under UN sanction.

Following the democratic elections held in December 2005, the next important step must be the formation of a new broadly-based and sovereign Government, mandated for four years. Undoubtedly the recent violence has made agreement between the parties representing the different Iraqi communities more difficult to achieve. The strong message, however, from the EU and the wider international community has been that the establishment of a Government with the broadest possible base in the Iraqi parliament is an urgent national priority for Iraq.

The Taoiseach and I discussed the Iraqi situation with the US President, Mr. Bush and his advisers when we met at the White House on St. Patrick's Day. Mr. Bush was aware of the difficult situation in Iraq. He indicated his determination to maintain US involvement as long as is necessary. The situation in Iraq has also been discussed at the recent meetings of the General Affairs and External Relations Council. It will be on the agenda for next Monday's meeting in Luxembourg.

It remains the Government's position, and that of our EU partners, to continue to support the Iraqi people and their elected government as they work to create the conditions under which they can assume full authority for the security of their country. The EU's support will continue to focus on assistance to the political process, capacity building in Iraqi Government ministries, training of criminal justice professionals, reconstruction of infrastructure and public services and humanitarian relief.

Against this difficult background, it is disturbing and deeply disappointing to learn of serious allegations of misappropriation of funds that should have been devoted to reconstruction and to the welfare of the Iraqi people. The allegations relate to Iraqi funds controlled by the UN and to US Government funds. If true, some of the more recent allegations are simply disgraceful. Some individuals and companies, including well-established ones, have already paid substantial fines following proceedings in US courts.

Most of the allegations which have so far come to light relate to the period of the US-led Coalition Provisional Authority in 2003 to 2004.

Additional information not given on the floor of the House.

There seems very little doubt that major mistakes were made at that stage in addressing and overseeing the work of reconstruction. The position is that the UN Security Council authorised payment of Iraqi funds, including frozen accounts and oil revenues, into the development fund for Iraq, which was administered by the Coalition Provisional Authority. The Security Council also established a body, called the International Advisory and Monitoring Board for Iraq, to oversee and audit the use of these funds. The body, and its auditors, KPMG, have drawn attention in their reports to the lack of control over expenditure both in the Coalition Provisional Authority and in Iraqi ministries. However, only a few months after the auditors were appointed the Coalition Provisional Authority was dissolved, and administration of the funds transferred to the new Iraqi Government.

The Government has no way of assessing accurately the basis of the allegations made. However, I agree fully that it is unacceptable if funds intended for the relief of the Iraqi people have been misspent, or worse. Responsibility for investigating such allegations rests primarily with the United Nations Security Council, and with the International Advisory and Monitoring Board established by it. The Iraqi Government and the US Administration clearly also have their own substantial responsibilities.

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