AFP reports that 90 percent of the $1.9m batch of US-purchased computers destined for schoolchildren but allegedly sold off on the cheap have been recovered.
As we reported on Saturday, an unnamed senior official at Umm Qasr port had reportedly misappropriated the gift and auctioned the computers for just $45,700.
But customs chief Nofal Salim denied the claim, saying the sale was in accordance with a legal disposal procedure for all goods not claimed by the addressee 90 days after their arrival in Iraq.
"On May 19 we received a list from the port of Umm Qasr of containers arriving more than 90 days earlier and which had not been claimed," Salim said.
"No container belonging to the American military appeared on the list.
"However, there were two belonging to a company named Global, although there was no indication that they were destined for the education authorities in Babil province."
Global did not submit a claim for the containers until August 22, six months after their arrival, Salim said.
"The customs service in the south cancelled the sale and has recovered more than 90 percent of the cargo, which will be sent to the Umm Qasr port where the company can get them back."
But in a statement received on Saturday the US military disputed Salim's version of events.
"The disposition of the shipment was unknown until early April when the two containers, containing the computers, were identified through shipping documents," a spokesman from the US army's southern division told AFP.
"Once identified, US forces began coordinating transportation for the containers and computers from the port to Babil province.
"During this process the containers were declared abandoned by custom officials and subsequently put up for and sold at auction."
The US army commander in southern Iraq, Major General Vincent Brooks, called on Friday for "an immediate investigation into the actions of the Umm Qasr official."
Umm Qasr is a large port, and corruption issues led the British military to dismiss many officials there when they administered the facility following the 2003 US-led invasion that toppled Saddam Hussein.