The US government shipped nearly $12 billion in cash to the US-run Coalition Provisional Authority in Iraq in the year up to June 2004, lawmakers say.

Henry Waxman (Democrat-California) told a House of Representatives panel Tuesday that the money was drawn from the proceeds of the sale of Iraqi oil held at the US Federal Reserve Bank, reports UPI.

More than $5 billion of that amount - nearly half - was flown into Iraq in the last six weeks before the US gave Iraq back its sovereignty in June 2004, according to a report drawn up by the Democratic staff of the House Committee on Government Reform.

Of that amount, $4 billion alone was rushed to Iraq in week before the handover.

The Coalition Provisional Authority had the authority to spend that money on behalf of Iraq because the US was the occupying power. And spend it did.

Fully $19 billion of the $23 billion then in the Development Fund for Iraq was obligated or spent in the year after Saddam Hussein was invaded. That money came on top of the $18.4 billion provided to Iraq by US taxpayers for reconstruction efforts.

The money in the Development Fund for Iraq comes from oil proceeds and is supposed to be watched over by the UN, but the US government has not provided the documentation to allow it to do so, according to the report.

The Coalition Provisional Authority also turned over $8.8 billion to the nascent Iraqi government ministries, but those offices did not have the systems set up to handle and account for the cash. An inspector general's report found major problems, including "billion dollar discrepancies" in the Iraqi accounts.

Waxman's report calls for a full investigation into the disbursement of Iraqi funds by the US government.

"The full extent of the waste, fraud and abuse will not be known without additional investigation," the report states.