Friday, July 4, 2008

Iraqi Corruption

The major story in Iraq today is that security is improving. While the government is beginning to establish its monopoly over violence in the country, it’s still incapable of providing basic services, and is hampered by massive corruption. In September 2007, the Berlin based Transparency International ranked Iraq the third most corrupt government in the world. The major causes are that Baghdad’s anti-corruption office has been eviscerated, Prime Minister Maliki and other top politicians actively work to stop investigations, and the U.S. has not done its part either.

In 2007 the State Department’s Office of Accountability and Transparency wrote a report on Iraq’s corruption that was later leaked to the press. The paper was a devastating account of how pervasive the problem was, affecting every single ministry. The report said that, “Currently, Iraq is not capable of even rudimentary enforcement of anticorruption laws.” It went on to say that corruption was the norm within the government. Anti-corruption agencies were weak, while the top politicians from Maliki on down routinely stopped investigations. The Interior Ministry was accused of selling U.S. weapons and vehicles on the black market, and the head of intelligence would intimidate and threaten anyone that tried to investigate it. Contracting was a major source of graft within the Defense Ministry. They didn’t have effective bookkeeping or transparency for such deals, and often used middlemen that also skimmed off money. The previous Defense Minister in the Jaafari government was accused of stealing $850 million for example. The ministry showed no interest in prosecuting him. The Ministry of Trade was involved in smuggling, with criminal gangs controlling different parts of it. The Ministry of Health was controlled by the Sadrists, and had the worst reputation. Investigators couldn’t go there because they were afraid of the Mahdi Army. It demanded bribes from doctors and hospitals, and stole drugs to be sold on the black market. The inspector general at Health was also involved in corruption. The Sadrists also controlled the Transportation Ministry, and was accused of selling vehicles. The Oil Ministry stole oil, which was made easy by the fact that it didn’t accurately account for production, delivery, etc. This rampant corruption weakens the government’s ability to provide basic services and undermines public support. Since the steep rise in oil prices Iraq is bringing in millions of dollars in extra cash. Little of this money has been spent, partially because of corruption. It’s also making prices increase instead of increasing production and services.



CSPAN snippet of Judge Radhi testifying to the House Committee on Oversight and Government Reform on corruption in Iraq in October 2007

There are four Iraqi agencies involved in the fight against corruption, and all of them are weak. There’s the Board of Supreme Auditors that looks into finances, the inspector generals in each ministry that are either involved in corruption themselves or intimidated by their ministers, the courts, which are weak and open to political influence, and finally, the Commission on Public Integrity, which is an independent group that is besieged by the rest of the government. Judge Radhi Hamza al-Radhi, who was the former head of the Commission before he fled the country, told the House Committee on Oversight and Government Reform in October 2007 that corruption cost Iraq $18 billion from 2004-2007. In investigating such crimes 31 members of his staff and 12 family members had been killed. The Judge himself quit his job and fled Iraq because of threats on his life. Radhi accused Maliki of being personally involved in trying to control and block investigations.

The U.S. Inspector General for Reconstruction in Iraq said that the U.S. wasn’t much help either. The former head of the State Department’s Office of Accountability and Transparency and his chief of staff told the Senate Democratic Policy Committee in May 2008 that their main job was taking complaints about Judge Radhi, and that the U.S. Embassy routinely ignored their work. According to them, the State Department was never committed to anti-corruption. The lack of interest began during the Coalition Provisional Authority that was more interested in propping up the Iraqi government than whether it was efficient or not. This trend of tuning a blind eye to the problems within Baghdad is a dangerous one. The U.S. has put most of its effort into security at the expense of creating an effective Iraqi government. The ministries are divided up between the major political parties, who take as much as they can in graft and theft without regard for the general welfare. With fighting subsiding, Iraq is left with an administration whose main impact is upon the Green Zone where they’re housed, rather than on the general public. General David Petraeus recently issued a 23-point guidance sheet for U.S. forces in Iraq where he wrote that, “Legitimacy in the eyes of the Iraqi people is essential to overall success.” The widespread corruption within Baghdad can only undermine this goal.

SOURCES

Flahert, Anne, “Ex-officials: Bush admin. ignored Iraq corruption,” Associated Press, 5/13/08

Gunter, Frank, “Economic Development During Conflict: The Petraeus-Crocker Congressional Testimonies,” Strategic Insights, December 2007

Kadhim, Abbas, “A Plan for Post-Surge Iraq,” Strategic Insights, November 2007

Petraeus, General David, “Multi-National Force Iraq Commander’s Counterinsurgency Guidance,” Headquarters, Multi-National Force – Iraq, 6/21/08

Schoof, Renee, “Iraqi judge: Corruption undermines Iraq’s future,” McClatchy Newspapers, 10/4/07

U.S. Embassy, “Review of Anticorruption Efforts in Iraq Working Draft,” 2007

Vennin, Loic, “Somalia, Myanmar, Iraq top corruption blacklist,” Agence France Presse, 9/26/07

1 comment:

Sleepless in Baghdad said...

"The Iraq Study Group Report: The Way Forward - A New Approach" cited corruption in the oil sector as a critical problem. Ninety-five percent of the government of Iraq's revenue comes from the oil sector. However, according the the report, "... experts estimate that 150,000 to 200,000 -- and perhaps as many as 500,000 -- barrels of oil per day are being stolen." "One senior US official told us that corruption is more responsible than insurgents for breakdowns in the oil sector." So potentially, one in every five dollars of Iraqi government revenue is being stolen.

At $50 a barrel (the price on April 4, 2009 was $52.40), the loss in revenue amounts at the high end (500,000 barrels stolen per day) to $260 million. With the US currently spending over $400 million a day in Iraq (see David Kilcullen's book -- "Accidental Guerrilla" p. 25), Iraqi corruption is equivalent to more than half of our daily investment here.