Wednesday, March 20, 2013

Prime Minister Maliki Completes His Clear Out Of Central Bank of Iraq

At the end of 2012, the governor of the Central Bank of Iraq Sinan Shabibi was charged with corruption, and forced out of office. At first, his deputy Matheher Mohammed Mudher Salah tried to put a positive spin on events, and was even mentioned as a possible replacement to his boss. Instead, he ended up being placed under house arrest for several weeks. Now it’s been reported that Salah has been retired upon orders from Prime Minister Nouri al-Maliki. The entire affair was seen as a power grab by the premier who disagreed with the Central Bank’s policies.

Deputy Governor of the Central Bank of Iraq Salah was forced into retirement by Premier Maliki to complete his clearing out of the old administration (Al Masalah)

On March 13, 2013, it was reported that deputy governor of the Central Bank of Iraq Matheher Mohammed Mudher Salah was being retired. This came at the orders of Prime Minister Nouri al-Maliki. This was the final act in the removal of the leadership of the bank by the premier. Back on October 15, 2012, the anti-corruption Integrity Commission issued a warrant for Central Bank Governor Sinan Shabibi, and several members of his staff. At that time, Salah claimed that he was not wanted, but that he was under investigation. He tried to put a positive spin on things by saying that the bank needed change, and that people were mentioning him as a candidate to be the new bank head. Things didn’t go his way as Maliki named the chief of the Board of Supreme Audit Dr. Abdul Basit Turki as the temporary head of the Central Bank, while Salah was placed under house arrest on embezzlement charges for several weeks. The official reason for the take down of the bank officials was manipulation of the weekly dollar auctions the bank held. Few believed that however, and instead pointed towards Maliki’s disputes with the Shabibi over his policies. The main one was the governor’s desire to revalue the dinar, which the prime minister objected to. It was also said that the premier wanted access to the bank’s reserves to fund development projects outside of the budget. The governor refused to go along with Maliki’s demands on all those issues. The prime minister has established a trend of using the security forces and corruption charges to get rid of those that oppose him. The charges against Shabibi, Salah, and the others fit that pattern, and accomplished its goal. Shabibi was out of the country when he was told about his arrest warrant, and has not returned to Iraq since then. Salah was then placed under arrest, and now forced into retirement, eliminating him from the administration. Maliki now has an acting governor that he can eventually replace with whoever he wants to solidify his hold over the institution.

The handling of the Central Bank of Iraq was another disturbing example of how the prime minister has attempted to assert his control over Iraq’s independent institutions. In 2011, Maliki charged the head of the Trade Bank of Iraq will corruption, forcing him to flee the country. That same year, the head of the Integrity Commission Judge Rahim al-Ogaili resigned, and later revealed that he was going to be charged with illegal activities. Then in 2012, the head of the Election Commission was arrested, but then found not guilty of bribery. That was followed by the warrant for the Central Bank officials. Finally, at the beginning of 2013, Maliki dismissed the head of the Accountability and Justice Commission after it tried to remove Chief Justice Medhat Mahmoud for ties to Saddam Hussein’s regime. All these actions were based upon a ruling that Mahmoud made that placed all of the country’s independent commissions under the cabinet, even though the constitution explicitly says they are part of parliament’s jurisdiction. Since then the prime minister has taken on the banks and agencies one by one, trying it replace their directors, and put allies in charge of each one. It’s that background that explains what happened to Salah and the rest of the leadership at the Central Bank.


Abedzair, Kareem, “Commission orders arrest of Iraqi Central Bank Governor on corruption charges,” Azzaman, 10/15/12

Al Masalah, “Refer the Deputy Governor of the Central Bank of the appearance of Mohammed Salah to retire after the cancellation of the extension service,” 3/13/13

Peel, Michael, “Iraq leaders’ fairness queried in scandal,” Financial Times, 10/22/12

Shafaq News, “Shabibi deputy: there is no official notice against me,” 10/17/12

Al-Shaher, Omar, “Iraqi Government Seeks Control Over Central Bank,” Al-Monitor, 1/21/13

Sowell, Kirk, “Inside Iraqi Politics No. 49,” 10/31/12

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