Alwaght- Financial and administrative corruption is one of the pillars of the challenges Iraq has been suffering from over the past two decades. It has wasted billions of dollars that were to build the spinal cord of the Iraqi economy in the new era.
Since 2003 and with the lifting of international sanctions and increasing the level of oil production, Iraq's annual budget received billions of dollars from oil sales. The oil money accounts for more than 94 percent of the country's federal budget. These billion-dollar budgets have not met the expectations of the society in improving the economic and living conditions of the majority of people, however. Experts consider one of the main reasons for this situation to be widespread corruption in the political, administrative, and bureaucratic structure of the post-Saddam Iraq.
Iraq is among the world's most-vulnerable countries to corruption. Transparency International, a global watchdog, rated Iraq 157th out of 180 countries on its 2021 index for clean governance.
Iraqi officials do not deny the existence of widespread corruption in the country. Former Prime Minister Haider al-Abadi said in September 2014 that about 50,000 employees and soldiers in the Iraqi Ministry of Defense receive salaries without showing up to work. In August 2015, Adel Abdul Mahdi, who was the oil minister at the time, revealed that Iraq's budget from 2003 to 2015 amounted to $850 billion, and of this figure, about $450 billion was wasted by corruption.
In September 2021, the time's President Barham Salih revealed in a television interview that the oil revenues since 2003 have reached $1 trillion, with estimates showing that $150 billion of national money was looted and transferred out of the country. Now the Iraqi government is trying to return as much as possible of this money to the country by forming an international anti-corruption committee.
Despite publishing these figures by Iraqi officials, Abdul Rahman al-Mashhadani, a professor of economics at the University of Baghdad, in an interview with Aljazeera believes that there are no accurate statistics, especially in relation to corruption related to money transferred abroad. He added that Salih’s claim that limits the amount of money transferred abroad to $150 billion is incorrect, and the amount of stolen money is between $350 and $600 billion.
Al-Mashhadani makes his claim based on the fake or uncompleted projects between 2006 and 2018 when the government spent the money without supervision on the contracts and projects. He continues that during these years, $300 billion were lost on 6 thousand fake projects in the country since because the time's governments paid the project checks immediately after signing the contract without applying a relative system based on which the money is paid in accordance with the percentage of the project progress.
For example, a member of the Parliamentary Finance Committee, Jamal Koger, reports that from over 3000 schools for which the government allocated budgets in 2010, only 300 were built after 12 years.
Forming probe committee by previous government
With surging discontentment and then protests at deep-rooted corruption in the country's administrative and political structure, the previous government led by Prime Minister Mustafa al-Kadhimi, which was a product of 2019 protests, announced fighting corruption as its leading agenda.
As a result, ‘supreme committee’ to investigate major corruption cases was launched at the time. With the start of the work of this body, a wave of revelations of large corruptions with astonishing amounts in the past years and the arrest of government officials on charges of corruption in September 2020 was launched.
In just one case, Saha al-Najar, the head of National Investment Commission, revealed that over 400,000 square meters of state lands, worth $62 million, were encroached on under the cover of fake investment projects.
The federal Commission of Integrity in its annual report for 2021 suggested that over 11,000 state officials, including 54 ministers, were involved in the corruption cases. This parliament-affiliated commission added that all of them are charged with corruption, with it making 15,000 charges against them.
In the report issued by this commission, it has been concluded that the investigations have led to the issuance of 632 convictions, including one sentence against a minister and 42 cases for 23 people with special ranks. The investigation in this regard is ongoing, the report added.
Waves of arrests targeted high-ranking government officials like Ahmed al-Saadi, the former head of retirement authority, Shaker al-Zamli, the chairman of Baghdad Investment Commission, and Adel Attia Khudhair, the general manager of Agricultural Cooperative Bank.
Disclosing “heist of the century”
Despite the creation of protective layers and anti-corruption institutions, auditors in Iraq have again reported finding clues to a massive economic corruption in which a network of businesses and officials embezzled about $2.5 billion from the country's tax authority. The media and parliament label this latest case “the heist of the century.”
The auditors' report, obtained by the AP and first published by the Guardian, shows that the embezzlement was facilitated by a wide network of highest officials, civil servants and businessmen.
The heist came to light last month when the Iraqi Finance Ministry's internal audit revealed that the General Commission for Taxes fraudulently paid five companies 3.7 trillion Iraqi dinars, equaling $2.5 billion.
These payments were made via 247 checks between 9 September to 11 August 2021 from the Rafedain Bank branch located at the tax commission.
The account contained billions of dollars in corporate deposits that were supposed to be returned to them after taxes were deducted and updated financial statements were presented. Reportedly, these five companies withdrew their money without paying any required state amounts.
When the finance minister inquired about the remaining balance in the account, the country's tax authority said it had about $2.5 billion, but further inspection revealed the actual balance was $100 million, an official familiar with the development said.
This was the first sign of this hyper embezzlement. A subsequent audit submitted to the Iraqi parliament's finance committee revealed the rest. The AP recently obtained a copy of that report.
The financial scandal is a test of resolution to fight corruption for Iraq's fledgling government, which was finally formed late last month after a long political stalemate. PM al-Sudani, announced commitment to fighting corruption as a top priority of his cabinet.
Earlier this month, al-Sudani used “the pandemic of corruption” term to describe the extent of corruption in the country and tell the voters he is resolved to settle this economic disease. He said that the retaking of the money embezzled from the tax commission is underway on a daily basis.
Last Wednesday, the PM press office announced formation of ‘Supreme Anti-corruption Commission.’ Although this institution had a predecessor under previous PM al-Kadhimi, its naming is indicative of its special and extraordinary mandate compared to the similar ones founded by previous governments.
Al-Sudani also ordered formation of a team with massive powers for full support to the Supreme Anti-corruption Commission in the substantial corruption cases.
The PM appointed Judge Badr Hanoun as the head of the newly-formed commission, replacing Alla Javad al-Saadi. During his visit to the Commission of Integrity last month, al-Sudani had said that there was no red line to fighting corruption cases related to a political party or individuals.
During the first half of this year, 731 arrest warrants were issued by the judicial authorities, of which 396 arrest warrants targeted 8 ministers and 53 general managers.
According to the commission of Integrity, the cases included 280 ministers, officials with special ranks, general managers, and people with similar ranks.
Al-Sudani’s initiatives under potential pressure
Many political circles and economic experts in Iraq believe that any al-Sudani’s effort to confront corruption ringleaders may involve him in an open confrontation with some political factions and mafia networks of power and wealth, which may cause him to lose much of the parliamentary support necessary for implementing his plans. On the other hand, al-Sudani is under the threat of rival alliances such as the Teshreen and Sadrist movements that are standing watchful to see weakness in government's performance in the fight against rampant corruption in order to sink it.
2019 protests forced PM Adel Abdul Mahdi to resign. In order to bring down this government, which was formed against its will, Sadrist Movement may resort to mobilizing its supporters in the street for protests citing corruption and economic problems.
However, despite the pessimism and worries about the PM being alone in facing the corruption mafia, there is a strong parliamentary alliance that threw its weight behind al-Sudani and freedom of government for firm and unexceptional dealing with the economic corruption. Thaer Mukhif, of State of Law parliamentary bloc, told media that the PM is distant from serious political pressures in his fight against corruption and punishing the corrupt.
“There is a lot of political and parliamentary support for the prime minister to fight corruption and corrupt people, especially since the government's program focuses on what the Iraqi people and religious authorities have been demanding for for years," Mukhif explained.
Saad al-Matlabi, a leader in the State of Law bloc, stressed that al-Sudani’s anti-corruption campaign covers all those against whom there are documents. Pointing out that anybody with proven corruption charges would have no party immunity, al-Matlabi said that this campaign targets everyone against whom there is evidence and documents.
Actually, the political factions under the ruling coalition find al-Sudani government's failure a blow to the coalition survival and stability of a government formed after months-long, costly political stalemate.