According to a GAO report of July 31, 2007 up to December 2005 there was no centralized system of records to track equipment transfers to Iraqi security forces. While the commander of the Multinational Security Transition Command- Iraq (MNSTC-I ) in 2004-2005 a certain David Petraeus reported that "about 185,000 AK-47 rifles, 170,000 pistols, 215,000 items of body armor, and 140,000 helmets were issued to Iraqi security forces as of September 2005," "the MNSTC-I property books contain records for only about 75,000 AK-47 rifles, 90,000 pistols, 80,000 items of body armor, and 25,000 helmets." This results in a discrepancy of "about 110,000 AK-47 rifles, 80,000 pistols, 135,000 items of body armor, and 115,000 helmets reported as issued to Iraqi forces as of September 22, 2005." Petraeus called it a clerical error but it is likely that much of this equipment ended up in the hands of militias, making Petraeus, not Iran, the biggest illicit arms supplier in Iraq. The government also doesn’t think it was just a clerical error and has launched numerous criminal investigations into this and related projects to equip Iraqi forces.
In July 2007, American Logistics Services, later Lee Dynamics International, was suspended from doing further business amid accusations that it had paid bribes to Army contracting officers. Additionally, in 2004-2005, an Iraqi businessman Kassim al Saffar ran a arms market out of one of its warehouses through which many of the untracked weapons passed and disappeared, all this with the knowledge and apparent approval of American government and company officials.