This is the sort of disheartening news that will cause the American people to drop their support of the Iraq effort quicker than anything.
Almost the entire procurement budget allocated to Iraq's defense ministry has been stolen. It amounts to 1.3 billion dollars. It's going to be awful hard for the Bush administration to ask the American taxpayer to come up with that kind of money again, but if the money is not replaced the progress of the Iraqi military toward self-sufficiency will be seriously impaired.
Americans have been generous because they believe that Iraq is on the road to being able to fend for itself. If we see our investment just disappearing down a rat-hole, enthusiasm for saving Iraq will evaporate like morning mist, and the most bitter consequences for both us and the world will ensue.