Bernard Allen (Cork North Central, Fine Gael)
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Question 37: To ask the Minister for Foreign Affairs if he will demand a United Nations investigation into the manner in which moneys set aside for reconstruction work in Iraq have been spent; and if he will make a statement on the matter. [13298/06]

Michael D Higgins (Galway West, Labour)
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Question 41: To ask the Minister for Foreign Affairs his views on whether Iraq is experiencing, or is on course to experience, a civil war, in view of the ongoing attacks and reprisals between Shia and Sunni Islam groups; if this matter was discussed in talks over the St. Patrick's Day period between his officials and officials representing the US Administration; if initiatives have emanated at European Union level directed towards an improvement in these matters; and if he will make a statement on the matter. [13232/06]

Dermot Ahern (Louth, Fianna Fail)
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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.

Bernard Allen (Cork North Central, Fine Gael)
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I asked if the Minister for Foreign Affairs would press for a UN investigation into the misappropriation of funds. Instead the Minister spent four minutes before addressing the misappropriation of 363 tonnes of 100 dollar bills imported into Iraq since the lifting of sanctions on 22 May 2003. There is a black hole of accountability in this matter with no monitoring of spending. The administrative arm of the US and UK forces in Baghdad failed to establish a monitoring committee on the spending of the reconstruction funding. An administrative monitoring agency was only established when a further UN resolution insisted on it.

This is the largest financial fraud in the UN's history. People are dying in hospitals and on the side of the street because of the lack of services in that war-torn country. What specific actions will the Minister take to ensure an investigation into the misappropriation of this funding?

Dermot Ahern (Louth, Fianna Fail)
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I accept the Deputy's comments on the length of reply.

This is primarily a matter for the UN Security Council which authorised the payment of these funds into the development fund for Iraq. It established the International Advisory and Monitoring Board for Iraq to examine these allegations.

Bernard Allen (Cork North Central, Fine Gael)
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Yet UN Resolution No. 1483 failed to do so.

Rory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Allow the Minister reply without interruption.

Dermot Ahern (Louth, Fianna Fail)
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The body and its auditors, KPMG, have drawn attention to the lack of control over expenditure. These allegations relate to the US-led Coalition Provisional Authority's time in power. It has been dissolved and the administration of the funds has been transferred to the new Iraqi Government. So far no allegations have been made against that government of misappropriation or misuse of funds. The Irish Government can exhort its colleagues on the UN Security Council which has the primary responsibility to ensure funds are not misappropriated.

Michael D Higgins (Galway West, Labour)
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It is important to recognise that those funds that have gone missing, have done so at the level of the banking system. In the oil for food programme, it was not the persons who were distributing the food in Iraq that were involved in fraud but those contracted to supply the food. It is the same on the construction side. Again, international trading companies defrauded the most vulnerable of the vulnerable.

Mr. Allawi, the former Prime Minister of Iraq, told the BBC, "We are losing each day an average 50 to 60 people throughout the country, if not more. If this is not civil war, then God knows what civil war is". The destruction of the Shi'ite mosque in Samarra was followed by the destruction of other mosques. Is it not clear that Iraq is at the edge, if not in, a civil war? Is that not indicated by the talks taking place between the US and Iranian authorities on how to construct a Shi'ite consensus? If that happens, it will lead to the further exclusion of the Sunni population in Iraq. Is there any basis for assuming a unitary state in Iraq will remain? Current talks indicate a division on a religious basis. Will the Minister agree that the loss of 50 to 60 civilian lives every day is an indication that the situation has deteriorated into a civil conflict?

Dermot Ahern (Louth, Fianna Fail)
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The argument of whether the horrendous loss of life in Iraq should be defined as "civil war" is semantic. There is a concerted effort to drag the country into a sustained period of civil strife. Despite the killings, several religious and political leaders have been restrained in their responses to them. Efforts are continuing to draw together a broadly-based Iraqi Government but it has not been easy. The Iraqi people have a strong desire for the establishment of democratic institutions and their own hands on power. However, there is a long way to go yet.

Recently I had discussions with the newly accredited Iraqi ambassador to Ireland. Given our history, the Irish are cognisant of the TV pictures of the awful events in Iraq. However, the ambassador pointed out to me that substantial peace reigns in 14 out of the 18 regions in Iraq. In some places, there are daily flights to and from Frankfurt and Amsterdam. That is not to diminish what is happening in other significant areas of Iraq. All efforts of the international community are to endeavour to have as broadly based a representative government as possible.

Michael D Higgins (Galway West, Labour)
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There has been a failure to form a government three months after the elections. Will the Minister agree that the talks between US representatives and Iran on constructing a Shi'ite consensus is working in the opposite direction to the stated position of the EU, which is in favour of a unitary state even with federal arrangements? Is it the view of the European Union that a religiously or ethnically divided Iraq is acceptable?

Dermot Ahern (Louth, Fianna Fail)
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The answer is "No". The priority must be to get a government which is supported by all sides.

Bernard Allen (Cork North Central, Fine Gael)
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The Minister says he is a great friend of President Bush and the US Administration, but has he asked the President where all the money has gone from Iraq? Where have the 363 tonnes of hundred dollar bills that were shipped to Iraq gone? There were enough banknotes to pay for the Pentagon four times over but where has that money gone? Will the Minister get real and accept that the Administration there, beyond the green line, has lost control in Iraq? There is no water or electricity and people cannot walk the streets without the fear of being kidnapped or killed. The police force in Iraq has been infiltrated by militias so one does not know whether a peacekeeping unit or a death squad is calling to one's house. The Minister should get real and accept that the war there is one against humanity and that nobody is safe on any side. Will the US Administration be asked the hard question about where the money has gone? Will the Taoiseach and the Minister insist on an audit of the moneys shipped to Iraq and the expenditure concerned?

Dermot Ahern (Louth, Fianna Fail)
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The UN Security Council has responsibility for this matter. Any information concerning the improper use of funds must be transmitted to the monitoring board. We did not raise this issue with the President when we met him recently, although we did raise the unfortunate and difficult situation in Iraq. It is important to emphasise what has happened there over recent years. There has been a huge resurgence in the people's desire to have their own government and the establishment of democratic institutions. It must be recognised that there are a small number of insurgents who are endeavouring to cause civil war and undo the good that has been done. Many people were surprised at the developments concerning the elections, the referendum and the establishment of an Iraqi government. It was never going to be easy given the different religious factions there. The main focus should be on trying to get a government in place that has broad support from all factions. We should not focus on other issues.