Wednesday, November 14, 2012

Special Inspector General For Iraq Reconstruction Finds Institutionalized Corruption In Iraq


According to the Special Inspector General for Iraq Reconstruction (SIGIR), Iraq has gone through three phases of corruption. First, was under Saddam Hussein where corruption was used to undermine the international sanctions imposed on the country for its 1990 invasion of Kuwait, while at the same time enriching the ruler’s inner circle. SIGIR called this controlled corruption, directed by the dictatorship. Then, after the fall of the regime came the chaos of looting, the insurgency, and the civil war. This period was characterized by individual corruption as Iraqi officials tried to run off with as much public money as they could since there was no real rule of law. That has now changed. Today, the Special Inspector General points to politicized and institutional corruption as the ruling parties are using the ever increasing government largess created by rising oil production and revenues to enrich themselves, their backers, and their followers. This makes it impossible to curb or contain, because every list in power is benefiting from this system, and therefore has no reason to stop it.

An example of how corruption has become institutionalized today in Iraq is the manipulation of government contracts, and currency auctions. Before he resigned in September 2011, the head of the Integrity Commission, the main anti-corruption agency in Iraq, Judge Rahim al-Ogaili was working with the Inspector Generals and the Board of Supreme Audit to investigate hundreds of shell companies set up by politicians and their parties. They found that every time a major deal was signed by Baghdad, it included some of these front companies. Sometimes the businesses would start the work, and a few actually finished, but most of them just walked away with the money. Sometimes entire projects that were announced would never materialize as a result, because they were simply created to enrich the ruling elite through these fake firms. The Board of Supreme Audit found that much of the money used in these scams was then sent out of the country to foreign bank accounts. The shell companies provide fake papers to banks saying that they have some kind of transaction that requires money being sent abroad such as buying imports from another country. This allows the parties to move their stolen public funds out of Iraq. The Board of Supreme Audit also found that the money exchanges were being used to launder money as well. Officials used money they have acquired illegally to buy U.S. dollars, which are daily auctioned by the Central Bank of Iraq using fake papers. The dollars are then transferred to foreign accounts the same way as the front companies do. The Board of Supreme Audit estimated that of the $1 billion in dollars sold each week in Iraq, around $800 million is laundered and transferred abroad. Judge Ogaili resigned when he went to the courts with this evidence, and they refused to act. Since the judiciary has come under the control of Prime Minister Nouri al-Maliki recently, they are now more reluctant than ever to disturb the status quo. That is maintained through the quota system in the Iraqi government. After each election since 2005, all the parties that win seats in parliament then divide up the government positions from prime minister, to president, to ministers, to director generals, on down. They then set about taking their piece of the pie by carrying out these scam contracts, then launder their stolen money, and move it into foreign bank accounts. Every party enriches itself, keeps its backers and supporters happy, and deprives the citizenry and the country of the development they so badly need.

SIGIR found that the anti-corruption agencies were being weakened as well, due to political interference. Judge Ogaili for example, claimed that he was going to be charged with corruption before he resigned. He said that he was accused of illegally giving information about the activities of the Integrity Commission to the United States. That ignored the fact that this was a requirement of the Commission receiving American aid. Afterward, the Prime Minister was able to name Ogaili’s temporary replacement, Izzat Tawfiq, giving Maliki sway over the anti-corruption agency. That doesn’t mean the Commission will stop looking into graft, but it will be reluctant or unable to take on any major cases or provoke the ire of the premier who could get rid of Tawfiq as a result.

It seems that when it comes to corruption Iraq has gone from bad to worse. Nepotism, bribery, and theft have been going on for the last thirty years. It went from the Saddam’s inner family and Baath Party circle, to individuals taking advantage of the chaos following the fall of the former regime, to now where every party in power is taking billions a year in public funds with no end in sight. This has been embedded into the governing system so much it would be nearly impossible to root out, because there is no reason to. If everyone is benefitting there is no motivation to do anything about it. It’s for those reasons that Iraq continuously ranks as one of the ten most corrupt countries in the world, because few others have reached this level and depth of graft ingrained into the entire fabric of society.

SOURCES

Ibrahim, Haidar, “Lack of Political Consensus Hinders Assigning New Integrity Head,” AK News, 12/16/11

International Crisis Group, “Failing Oversight: Iraq’s Unchecked Government,” 9/26/11

Special Inspector General for Iraq Reconstruction, “Quarterly report to the United States Congress,” 10/30/12

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