The Ministry of Interior, for instance, resembled a Mafia organization. Instead of working to guarantee the country's security, many of its officials, the judge discovered, were engaged in bribery, contract killing, and kidnapping. Hundreds of ghost workers collected wages that totaled more than $1 million a month. Meanwhile, the Mahdi Army, a Shiite militia devoted to cleric Moktada al-Sadr, had fully commandeered the ministries of health, trade, and transportation. Its soldiers, with the tacit approval of ministry employees, stole food and medical supplies, among other things, and resold them to fund the insurgency against the Americans and the Sunnis, the minority that still held power after Saddam Hussein's ouster. Over time, ambulances ferried weapons and mercenaries, while hospitals became integral to the militia's sectarian killing machine. Shiite soldiers executed Sunni patients and then killed family members listed in their medical files.

The Oil Ministry had many of the same problems. After the invasion, President Bush claimed that oil revenues would pay for most of Iraq's reconstruction. But even with the U.S. investing huge sums in oil projects, revenues weren't and still aren't covering costs, though $3 billion has been spent to date. Aging infrastructure and insurgents' attacks on pipelines were part of the trouble. But the biggest challenge was that criminal groups were stealing from depots and hijacking transport trucks, sometimes in collusion with ministry officials. Monthly, the state oil industry lost up to $90 million, and the judge claims that more than half of the smuggling profits went straight into local terrorism.

Although Radhi was officially in charge of investigating how the Iraqi government spent its budget, his work also uncovered how millions of American tax dollars were being diverted and used to bolster militia groups. The most visible way those American tax dollars ended up in the hands of the bad guys in Iraq was through U.S. capacity-building programs meant to help train ministry officials in everything from budgeting to delivering basic government services.

A recent Government Accountability Office report shows that the U.S. invested $169 million in these programs at about half a dozen of the most critical ministries in 2005 and 2006. Because the militias infiltrated most, if not all, of these ministries, the capacity-building money is, by extension, helping build the militias. In other words, by funding ministries, we are working against ourselves.

The amount of American tax money that has gone to the Iraqi militias is impossible to nail down, though Radhi says it could be tens, if not hundreds, of millions. So far, the U.S. has spent about $48 billion on Iraq reconstruction, with a notable chunk of that money passing through the agencies Radhi was investigating. Chris King, a former adviser to the judge at the State Department, says, "The worst elements in Iraq smile at us and take our money, but we're getting played. I went to the Justice Department guys and said, 'You are funding and training death squads. You can't say no one told you. I told you. You are funding death squads.' I have no doubt that U.S. reconstruction cash is funding militias."

Those death squads eventually targeted the judge. As his team built cases against some of the country's most powerful people—businessmen, clerics, politicians, warlords—threats came back. Grim voices muttered over cell phones, "Stop your investigations now" and "Do you know who you are messing with?" Soon his investigators and their families were dying: one body full of bullets, another hung on a meat hook, another disfigured with a power drill. There were sniper attacks and suicide bombers. Government officials blocked his investigations. Sometimes he spent the night at safe houses with friends, who increasingly worried that he would be killed.

The U.S., strangely enough, did not step in. Some said the U.S. was afraid to take sides, wary of alienating its allies in the Shiite-dominated government. Others suggested that Radhi's probes were becoming an embarrassment to the Bush administration, highlighting yet more trouble for a U.S. war effort that was already under siege. "There was a lack of due attention, political will, and support in the senior levels of the U.S. government," King says.

Still, the judge didn't waver. He worked through the interim and transitional Iraqi governments and through the rise of a newly sovereign Iraq. By the summer of 2007, even as his close advisers "focused solely on his survival," as one says, Radhi had launched almost 3,000 corruption cases. The accused included shady American companies and entrepreneurs, Iraqi ministers, and at least one member of Prime Minister Nuri al-Maliki's family. The total haul: $18 billion—a number as mind-boggling and damning to Iraqi politicians as it was to the Bush administration.