FRAT:
I worked in the "accounting" (it was just basic bookkeping) dept and part of what I did was process invoices from local vendors for payment.
When I first went out there, bases just had big safes with cash in them. So someone would need something, create a requsition, Purchasing would create a PO, vendor would deliver it and an invoice. Then my dept would match up the invoice, receiving report, PO & requisition. If it all matched up, invoice was approved for payment. The vendor could literally walk in and get paid in cash.
Well, the company didn't use their own money for this. They borrowed money for operating expenses.
Now it begs mentioning that at the time, all the contracts were on a "cost plus" basis. If you think of a normal type job here, a contractor puts in a bid, the company accepts it, then it's up to the contractor to do the job for less than whatever they bid so they make a profit.
"Cost plus" is basically the govt giving you a blank check. You as the contractor front your money to do a job. You then submit the money you spent to the govt with proper "justifiticaion" for why you spent it. The govt then reimburses you your "cost" "plus" your fee. I think it was like 3-4%.
And the govt basically "approved" everything.
So the more money you spent, the more you got reimbursed on, the more you got your fee on, the more you got paid. So if you could find a way to spend more money, you'd make more money.
The company I worked for spent STUPID amounts of money. Especially with personnel. We're talking departments that shoulda had two people in them would have seven. Shit like that.
I was good buddies with the guy that ran the billetting dept of the first camp I was at. Maybe two months after I got there, he told me he was basically instructed by his manager to buy new mattresses for every single trailer (hundreds of them) on the camp. Why? Just to do it. They didn't "need" to be replaced.
It was silly how much needless money was spent and the govt did NOT care. They approved EVERYTHING.
Fast forward maybe a year or so. Public support for the war is dying down and the govt realizes they finally have to start scaling back. (This was the late '00s.) All contracting companies out there know that the handwriting is on the wall for "cost plus" and they're soon gonna have to go to what we'd consider as more "normal" contracts. Which means if they wanna be awarded new contracts, they're gonna have to put in viable bids.
Problem is if they bid what they've been spending already, they'll lose - another company will undercut them. But if they bid something manageable, it ends up being so much less than what they had been charging, that it makes everything look suspect.
A sort of "if you have been needing $XX all this time, how come now you can suddenly do it for $YY?"
Anyway, they company started reducing its spending.
As I said, they didn't front their own $$$ for anything. They'd borrow money to spend on the project - the interest they paid was less than what they could make by parking their own $$$ in some kinda investment. And they could charge the govt for the interest.
Well, they didn't wanna do that anymore.
So instead borrowing as much money or fronting their own, they actually convinced the govt to pay them first.
Go back to above scenario - someone needs something, they fill out requisition, purchase order, etc. The item comes in & is approved for payment.
At this point, instead of paying the vendor, they told them they had to go net 30 or net 60. And they had to get paid via wire transfer.
Thing is, most big banks outside of Iraq wouldn't deal with Iraqi banks for many reasons you'd assume. So the vendors would have to set up accounts with banks in not only Iraq, but then banks in other countries outside of Iraq that actually *would* deal with Iraqi banks - typically in Jordan. So our banks in Dubai would wire the $$$ to a bank in say Jordan, which would then have to forward the money to the vendor's bank in Iraq.
The reason our company went this route was they still had to justify payment to the govt to get their "cost plus" (which was still going on at the time). Only they'd do it BEFORE actually paying the vendor.
So you need something, requisition it, PO is cut, etc. Item is delivered & approved for payment. Before we'd pay it, we'd submit it to the govt so the govt could pay us FIRST...plus our 3-4%. We keep our fee, then turn around wire the vendor their money...which then has to go through multiple banks.
The govt was totally on board with this and thought it was a good idea.
The second camp I was at pretty small - maybe 300 expats and likely <1000 people in total when you add up contractors, military, security, etc. Yet at one point, we had something like a $million worth of goods that we had ordered, received, been paid for, yet had never paid the vendors for over 6 months. (Meaning the vendor shoulda been paid 6+ months prior.)
And we were a small camp in Diwaniyah with <1000 people. Imagine a big camp like Anaconda that had something ilke 100k people.
It apparently took the govt something like a year to even realize this was going on. It was a complete shitshow.
POINT IS
If this kinda meaningless (big picture wise, anyway) shit was going on at this scale...imagine what goes on behind closed doors they won't want anyone to know about...