Thursday, August 8, 2013

Russian Arms Deal Follows Pattern Of Corrupt Purchases By Iraq

Iraq is in the midst of finalizing a multi-million dollar arms deal with Russia. The contract was surrounded in controversy when it was originally announced in late-2012 with accusations of corruption. Now Baghdad is moving ahead with it claiming that it was re-negotiated, but the same claims of kickbacks and commissions for officials and businessmen have resurfaced. This follows a pattern started when Iraq first regained control of its government in 2004 using middlemen in weapons procurement contracts that skim off millions of dollars. It is deals like these that make the country one of the most corrupt in the world.

Baghdad has a contract to buy 30 Mi-28NE attack helicopters from Russia, but the deal involves large commissions to Iraqi officials and middlemen taking a large cut as well (Wikipedia)

Baghdad has been attempting to buy two weapons systems from Russia for the last several months, but it was held up over corruption charges. In June 2013, Russia said it received the first payment of the $4.2 billion deal for 30 Mi-28NE attack helicopters and 50 Pantsir-S1 mobile anti-aircraft systems. Negotiations for the systems was first announced in October 2012, but then cancelled the next month over corruption allegations. The Iraqi government then began new talks. By February 2013, Foreign Minister Hoshyar Zebari said that the deal had been completed. In March an Iraqi delegation went to Moscow to finalize things. The purchase will make Russia the second largest arms supplier to Iraq. Most of the country’s weapons come from the United States through the Foreign Military Sales program, but Iraqis have complained about the long wait time it takes to receive the equipment. That has led Iraq to increasingly look for other suppliers, but the large amounts of money included in these contracts also offers another way for officials to steal money.

The new Russian arms contract has come under criticism just like the first one. A member of parliament’s integrity committee stated that Prime Minister Nouri al-Maliki was insisting on buying the weapons from Moscow despite the last deal including major pay offs to officials. The lawmaker went on to say that documents pointed to continued corruption. Originally, it was the Sadrists who raised questions about the October 2012 negotiations with the Russians claiming there were kickbacks. The integrity committee started an investigation in November. (1) The head of the committee ended up asking the premier to cancel the contract, but Maliki said he had no strong proof of any wrongdoing. Of course the prime minister was uncooperative as well, refusing to answer any questions made by investigators, while the Defense Ministry did not provide any documentation on the contract. Despite that, the committee did find discrepancies between the prices for the equipment initially given and then what was later stated ranging from 9-30%. A Kurdish parliamentarian claimed that middlemen were taking 30% of the contract, while the Russian press reported that up to $500 million had been given to Iraqi officials in commissions. The committee eventually named fourteen senior officers that it suspected of taking illegal money from the Russians including acting Defense Minister Sadoun Dulaimi, government spokesman Ali Dabbagh, State of Law parliamentarian Izzat Shabandar, adviser to Iraqi President Jalal Talabani Abdul Aziz al-Badri, Maliki media adviser Ali Musawi, various generals, and members of the Defense Ministry staff. Sadrists and Dabbagh went on to accuse the prime minister’s son Ahmed Maliki of also being involved as well. Iraqi and Lebanese businessmen Majid al-Qaisi and Hassan Fahadh, and Jordanian arms dealer Qasim Rawi were mentioned as the middlemen who worked out the deal between Moscow and Defense Minster Dulaimi. In November 2012, Dabbagh was forced to resign over these accusations, in what appeared to be a calculated campaign by Maliki to scapegoat him. Dabbagh was the only one in this entire affair who faced the least bit of punishment. A criminal case was later dropped for lack of evidence, and Maliki moved ahead with the new deal claiming that all the problems had been resolved. That’s highly unlikely given this history, and past arms contracts.

Defense Minister Shalan was accused of signing millions of dollars in corrupt arms deals that delivered few weapons and goods to the Iraqi military (Getty)

As soon as Iraq regained control of its government in 2004 it set about to rearm its military, but many of these deals were surrounded in controversy. A 2007 U.S. Embassy report from Baghdad noted that these purchases were a major source of corruption with up front payments, no performance benchmarks, and often including middlemen that charged large amounts. (2) Hazim Shalan, the Defense Minister under interim Prime Minister Iyad Allawi set this precedent using front companies and businessmen in a number of arms contract. The Board of Supreme Audit looked into 89 deals made by the Defense Ministry from June 2004 to February 2005, and found that Shalan used three middlemen and a select few companies that took large kickbacks, and bought overpriced, unnecessary, and sometimes unusable equipment. Nair Mohammed Jumail received 43 of the 89 contracts for at least $759 million. Two of the businesses used were Al Aian Al-Jareya and Safin. They were actually fronts set up by relatives of Defense Ministry officials, including Shalan’s brother-in-law, the chief of staff of one of the two vice presidents of Iraq, and Nair Mohammed Jumail. Al Aian Al- Jareya was given $850 million to buy 64 M18 attack helicopters. It ended up only purchasing four that turned out to be 25 years old. The Iraqi Army rejected them as a result. The Defense Minister signed a no bid contract with another Baghdad based company to buy armored cars from Pakistan. The money was paid up front, and the vehicles proved unusable, because of poor armor and mechanical problems. A third example was the Defense Ministry using the American Wye Oak Technology to refurbish old military equipment. The owner of the company told the U.S. government that he suspected Iraqi officials of taking kickbacks in the deal. He went on to say that the Ministry was using a Lebanese businessman as a middleman, who Baghdad gave three separate checks for $24.7 million, which was then to be passed along to Wye Oak Technology. That money was never delivered to the U.S. business. Minister Shalan later blamed the procurement chief at the Defense Ministry Ziad Cattan for all these problems. An arrest warrant was later issued for Cattan leading him to flee the country. Shalan ended up leaving as well when he was publicly implicated in these corrupt deals. There were many other cases involving Shalan and other Defense Ministers. When Iraq uses the United States to buy weapons it has to file papers, and go through a detailed process that takes a while to complete, which is one reason why Iraqis complain about it. Other countries do not have such strict regulations, and in some cases the middlemen didn’t appear to even go to other governments, but rather used arms dealers. Since graft and bribery is common in Iraq, the post-2003 prime ministers have done nothing about their Defense Ministers partaking in these corrupt deals. Maliki only reluctantly admitted to corruption in the Russian deal, then put the blame on Dabbagh, so that he could restart negotiations with Moscow. Iyad Allawi and Ibrahim Jaafari never took responsibility or action either. This is simply part of how Iraq does business.

It is not by mistake that Iraq is considered such a corrupt country. The Defense Ministry under various ministers has partaken in one crooked arms deal after another. These all involve front companies or middlemen that skim money off the top, and Iraqi officials who receive payoffs as well. This started in 2004 under the interim government of Iyad Allawi and has continued all the way to the present regime of Nouri al-Maliki. The current prime minister is set on completing the arms deal with Russia even though it’s known that it involves large commissions and kickbacks. This is a reflection of how corruption has become institutionalized within the country, and is used as part of governing. Each ruling party takes as much money as it can get while in office, and distributes it to its followers as part of patronage networks. Since everyone does it, no one is willing to put an end to it since everyone could be implicated. Instead, they deny it is happening, and continue on as if everything is normal. That’s the reason why there is no serious effort to stop the graft and bribery as the current Russian weapons procurement highlights.


1. Sabah, Mohammad, “A parliamentary committee: Prime Minister and Minister of Defense declined to provide a copy of the Russian arms deal contacts,” Al-Mada, 1/13/13

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


Adhoob, Salam, “An Inside View of the ‘Second Insurgency’: How Corruption and Waste Are Undermining the U.S. Mission in Iraq,” Senate Democratic Policy Committee Hearing, 9/22/08

AIN, “Breaking News …Maliki instructs to change negotiating delegation over Russian armament deals, Says Jihad,” 11/9/12
- “Dabbagh key figure in corruption of armament deal with Russia, says Bazouni,” 11/23/12
- “Dabbagh: “Maliki’s son, Sinaid involved in corruption accompanying Russian armament deals,”” 2/7/13
- “Integrity Committee: “New evidences over corruption accompanying armament deal with Russia,” 1/22/13
- “Investigation Commission: “Maliki decline to answer our questions over armament deal with Russia,”” 1/21/13
- “Maliki denies firm proofs over corruption in armament contracts,” 11/30/12
- “Source informs AIN details over Dabbagh’s involvement in Russian armament deal,” 11/22/12
- “Vice Chest: Maliki’s son among defendants with Russian arms deal corruption,” 11/25/12

Allam, Hannah, “Audit: Fraud drained $1 billion from Iraq’s defense efforts,” Knight Ridder, 8/11/05

Aswat al-Iraq, “Corruption shrouding arms deal – MP,” 5/16/08
- “Maliki denies Dabbagh informed him of Russian deal corruption,” 11/21/12
- “Pressures block questioning some ministers – MP,” 4/18/09

BBC, “Iraq cancels $4.2bn Russian arms deal over ‘corruption,’” 11/10/12

Cockburn, Patrick, “What has happened to Iraq’s missing $1bn?” Independent, 9/19/05
Elliot, DJ, “Iraqi Arms Purchases October 2012,” Montrose Toast, 10/15/12

Filkins, Dexter, “Iraq can’t find $300 million taken abroad to buy weapons,” San Francisco Chronicle, 1/22/05

Garaa News, “Disappearance adviser to Iraqi President Abdel-Aziz al-Badri in Jordan,” 12/2/12

Al-Mada, “Criminal denounce the integrity decision regarding the closure of Russian arms suit and return to court,” 5/15/13

Moore, Solomon, “Secret Iraqi Deal Shows Problems in Arms Orders,” New York Times, 4/13/08

Mroue, Bassem, “Defense Ministry accused of corruption in overspending,” San Francisco Chronicle, 8/3/05

National Iraqi News Agency, “Government Spokesman : fired,” 11/29/12

Radio Free Europe/Radio Liberty, “Confusion Over $4.2 Billion Iraqi Arms Deal With Russia,” 11/10/12

Al Rayy, “Mehdi Haji: on the government to continue the Russian arms deal without going through agents,” 7/22/13

Sabah, Mohammad, “A parliamentary committee: Prime Minister and Minister of Defense declined to provide a copy of the Russian arms deal contacts,” Al-Mada, 1/13/13

Shafaq News, “Integrity Commission announces names of wanted in the Russian arms deal investigation,” 11/29/12
- “Russian arms committee limit the responsibility of the deal on eight people,” 12/26/12

Silverstein, Ken, Miller, T. Christian, and McDonnell, Patrick, “U.S. Contractor Slain in Iraq Had Alleged Graft,” Los Angeles Times, 1/20/05

Sowell, Kirk, “Inside Iraqi Politics No. 50,” 11/21/12
- “Inside Iraqi Politics No. 51,” 12/5/12

Special Inspector General for Iraq Reconstruction, “Quarterly Report and Semiannual Report to the United States Congress,” 1/30/12

Strategy Page, “Iraq Invaded By Russians,” 6/20/13

Al-Tamimi, Iyad, “The integrity of Parliament: the government fears the penalty clause for a deal corrupt Russia and bought a 9 storey building,” Al-Mada, 7/15/13

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

Vulliamy, Ed and Norton-Taylor, Richard, “Millions embezzled at Iraqi ministry,” Guardian, 8/22/05

No comments: