Iraqi officials say at least $1 billion disappeared from Iraq's defense ministry during the interim government of Iyad Allawi.
The officials call the situation one of the largest thefts in history. They say it left the Defense Ministry with almost no money to buy arms, further complicating its fight against insurgents.
The money was supposed to be spent on weapons, but current Iraqi officials say contracts for the arms were awarded without bidding, signed with intermediaries instead of directly with the suppliers, and prices were inflated.
Among the items purchased during the period in question were 28-year-old Polish helicopters.
Mr. Allawi's defense minister, Hazem Shaalan, denied allegations of irregularities, saying government committees oversaw all the deals.
Some information for this report provided by AP and Reuters.