Review Iraq Against The World, Saddam, America, And The Post-Cold War Order

Helfont, Samuel, Iraq Against The World, Saddam, America, And The Post-Cold War Order, New York: Oxford University Press, 2023

 

Professor Samuel Helfont of the Naval War College has written his second book, Iraq Against The World, Saddam, America, And The Post-Cold War Order, again largely based upon Baathist documents that were captured after the 2003 invasion of Iraq. This time he focuses upon how Iraq tried to break down the new world order that President Bush proclaimed after the Gulf War. The U.S. hoped that there would be an international system based upon rule of law and enforced by the United Nations. Iraq was the focus of this strategy as it had U.N. sanctions and weapons inspectors for over a dozen years. Saddam’s response was to have Baathist offices and embassies around the world organize information campaigns and protests against Iraq’s treatment. Helfont breaks new ground with this work as few have delved into this topic before.

Review Invisible War, The United States And The Iraq Sanctions

Gordon, Joy, Invisible War, The United States And The Iraq Sanctions, Cambridge, London: Harvard University Press, 2010

 

If you want to learn about the United Nations sanctions on Iraq which lasted from 1990-2003 then Professor Joy Gordon’s Invisible War, The United States And The Iraq Sanctions should be on the top of your list. The U.S. wanted to use the sanctions to make sure Iraq could never rebuild its weapons of mass destruction (WMD) and contain Saddam Hussein. Washington argued that it was Saddam’s fault that the sanctions lasted, that he abused the system, and that Iraq received all the basic necessities it needed all of which were false. In fact, U.S. policy devastated the people of Iraq and destroyed the economy.

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Corruption In Iraq, An Interview With Stuart Bowen, Special Inspector General for Iraq Reconstruction

Stuart Bowen started out working on Iraq as the Special Inspector General for the Coalition Provisional Authority (CPA) in 2004. When that organization ceased operating in the middle of that year, he became the Special Inspector General for Iraq Reconstruction (SIGIR). SIGIR releases quarterly reports to Congress along with audits and assessments on the rebuilding of the country. One issue SIGIR has focused upon from the beginning is corruption. Based upon his conversations with high-ranking Iraqi officials Mr. Bowen believes that the state of graft and bribery are worse than ever. Below is an interview with the Inspector General on this very important topic.

Stuart Bowen, the Special Inspector General for Iraq Reconstruction, sees corruption more entrenched in Iraq now than ever (Wired)

1. The last quarterly report by the Special Inspector General for Iraq Reconstruction (SIGIR) said that Iraq has gone through three phases of corruption. The first was called controlled corruption under Saddam. Can you explain how that worked?

As detailed in U.N. reviews of the Oil-for-Food program, businesses involved with Saddam Hussein’s regime were required to provide kickbacks for business opportunities.  Corruption was “controlled” because the regime, in effect, regulated it and thus approved of it.

2. The period immediately after the 2003 U.S. invasion was called uncontrolled corruption. What were the characteristics of that time?

In 2003, there existed in Iraq what has been termed a “wild west” milieu, wherein Iraqis, a few Coalition Provisional Authority officials, and some contractors demanded or received bribes to secure official action. At that time, Iraq was essentially a cash economy, which made accountability virtually impossible. Moreover, very few U.S. oversight personnel were deployed to Iraq in 2003 to rein in the chaotic environment.

The failure to follow best practices by the CPA, as detailed in our early audit reports, exacerbated the operation’s inherently unstable situation. U.S. officials believed that the devolving security situation required quick action, justifying sidestepping standard accountability procedures that could have ensured better accountability for funds and property.  Our audits discovered that this lack of controls led to a widespread loss of accountability over funds.

3. Finally the SIGIR report said that corruption has become part of governing the country. How are the ruling parties contributing to this?

Today, corruption in Iraq is widespread. While petty corruption is endemic to the country and the region, it is grand corruption that drains Iraq of its economic resources. Iraqi officials repeatedly told us that grand corruption is “worse than it has ever been.” We were told that there exists a review committee at the ministerial level with approval authority over major contracts, and that such approval is contingent upon members of that committee receiving financial benefits from these contracts.

4. The Board of Supreme Audit found that crooked officials are moving a lot of this stolen money out of the country by laundering it through the weekly foreign currency auctions held by the Central Bank of Iraq (CBI). How are they doing that?

As described to us by a senior Iraqi official, money laundering occurs when phony contracts are presented to the CBI, which then releases funds to pay them. It does nothing to verify the validity of such contracts. The money is then transferred out of the country. Any goods delivered generally do not justify the amounts released. We have been told that as much as $800 million per week might have been subject to this money laundering process. The October 2012 removal of the CBI governor, and the arrest of many of its senior officials appear to be actions taken in response to Iraqi recognition of the problem. 

5. Before he quit, the chief of the anti-corruption Integrity Commission Judge Rahim al-Ogaili said that he found hundreds of front companies run by the political parties. How are those firms used to steal public funds?

We were told by Judge Ogaili that these party-controlled front-companies regularly receive payments from the government without providing goods or services. Naturally, these government agencies do nothing to investigate these corrupt transactions. 

6. There have been a growing number of controversial corruption charges against bank and commission heads since 2011. First was the director of the Trade Bank of Iraq, then the leader of the Election Commission, and currently the Central Bank chief has an arrest warrant out for him. Not only that, but the former Integrity Commission head Judge Rahim al-Ogaili said he was going to be facing accusations as well before he retired. Do you think these are legitimate cases or have they been politicized by Prime Minister Nouri al-Maliki?

Prosecutions in current-day Iraq sometimes appear to take the form of persecutions. While not privy to the facts underlying the various charges you outline, I have worked with Judge Rahim for several years and never found reason to believe that he is anything other than reliable. Under Iraqi law, it is quite simple to file charges of corruption, and very difficult to combat them. The lack of meaningful habeas corpus protections can lead to lengthy detentions based on allegations alone. Moreover, Iraq criminalizes mere negligence by government officials as corruption.

7. Overall, how have Iraq’s anti-corruption agencies been doing?

Poorly, but not simply because of their own weak systems, although that is part of it.  Their legal status is generally unsettled. We are told that some, if not most, ministerial Inspector General offices could be eliminated; some already are effectively emasculated by the sway of individual ministers or the Council of Ministers. Moreover, the Commission of Integrity’s 2012 arrest rate is down about 2/3 compared to 2011. The Board of Supreme Audit, Iraq’s only long-existing oversight agency, appears to be the only effective accountability entity in the country.   

8. The U.S. has several on-going programs meant to help Iraqis fight graft. Do you think those programs have been adequately funded and staffed, and how have they done?

Our audits of these programs concluded that they were underfunded. See, e.g., SIGIR Audit Report 13-001, Sustaining the Progress Achieved by U.S. Rule of Law Programs in Iraq Remains Questionable (October 25, 2012). This weak support caused these programs to be of limited value.

9. Iraq is a country going through a very tough transition after decades of dictatorship, wars, invasion, and sanctions. Do you think the growth of corruption after 2003 is simply one more of these difficult issues that comes along with going through this process or could it have been stemmed?

Better planning in advance of the operation, better oversight at every step along the way, and better support to Iraq’s anti-corruption community would have bolstered the fight against corruption. The absence of all three of these elements contributed to today’s pervasive problems.  

SIGIR supports revamping the way the United States plans, executes, and accounts for stabilization and reconstruction operations (SROs). We have proposed creating an independent office, designated the United States Office for Contingency Operations (USOCO), which would report to both the Secretaries of State and Defense, and have responsibility for carrying out the SRO. USOCO would also have an independent inspector general to monitor its activities.

As part of its mission, USOCO would explicitly plan to address and ameliorate the problem of corruption inevitably present, at some level, during SROs. It would develop methods to strengthen existing institutions and would judiciously encourage the creation of new entities that might be necessary to improve the rule of law.

10. Looking towards the future, do you see Iraq eventually building strong institutions and moving towards more transparency?

No. Presently, only the Board of Supreme Audit is making any headway against corruption. The future of the Inspector General community and the Commission of Integrity remains obscure. Unless the Prime Minister’s Office and the Parliament commit to the statutory independence and durability of both of these U.S.-created systems, it is likely that they will continue to weaken.

SOURCES

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

The Growth Of Organized Crime And Gangs In Iraq

With violence decreasing in Iraq, organized crime is becoming a larger issue. Gangs were initially co-opted by the Baath Party, and then after the state collapsed with the U.S. invasion, they had free reign in the country. They eventually helped swell the ranks of the insurgency and militias, and funded their activities. Today, many militants have gone back to being criminals to make a living, where they continue to threaten the security and development of the country.

Modern organized crime had its birth in Iraq in the 1970s. Two events helped its spread. One was the 1972 nationalization of the oil industry. The second was the creation of a trust for the Baath Party’s funds. Both created a huge amount of money that could be manipulated by officials. Some tapped gangs to buy and sell items illegally such as petroleum or launder money. In return, the government allowed the criminals to operate within set boundaries. That created a close connection between the Baath party and organized crime.

The sanctions period changed that relationship, making the government rely upon gangs. In 1990 Iraq was hit by international sanctions due to its invasion of Kuwait. They strangled the economy that was largely dependent upon oil exports. Per capita GDP dropped from $2,304 in 1989 to $938 in 1990 to $507 or below from 1991-1996. Saddam became focused upon preserving his regime, and turned to criminals to undermine the United Nations’ restrictions and shore up domestic support. This took many forms. One was that Sunni tribes in western and central Iraq were allowed to smuggle, loot, and hijack along the highways in their areas, in return for backing the government and providing local security. Another was using gangs to smuggling goods and oil through Jordan, Syria, Turkey, Saudi Arabia, Kuwait, Iran, and Egypt. The government itself also began acting something like a criminal organization under the U.N. run Oil for Food program, demanding kickbacks, making companies increase their prices and having the difference paid to Baghdad, making illegal oil deals, attempting to bribe officials and companies to work against the sanctions by offering them oil vouchers. All of these profits were also money laundered through front companies and foreign banks before they arrived in Iraq. These activities allowed Saddam to stay in power, while bringing in millions of dollars in illicit funds to keep the government running. Organized crime also grew in strength, and became an almost legitimate operation within Iraq.

The U.S. invasion in 2003 removed all restrictions upon Iraq’s gangs. First, before the U.S. attack Saddam released 30,000-100,000 criminals in October 2002. Second, the Americans invaded without enough troops to secure the country. Then the government collapsed, followed by the economy falling apart. Finally the U.S. disbanded the Iraqi military. All of those factors together emboldened gangs, and the anarchic situation that Iraq found itself in created powerful incentives towards lawlessness to make a living.

Crimes from the Baath period continued after the fall of Saddam, while new ones developed. Murder, looting, and kidnappings exploded immediately after the fall of the government, which lasted for months. All of the smuggling through neighboring countries expanded as the police were emasculated, the army was disbanded and then had to be rebuilt, there was no border control, and the U.S. military was caught up chasing militants. Stealing copper from the electricity grid and selling it on the black market became a major business. Gangs could basically do whatever they wanted.

Eventually the insurgency and militias also became intertwined with organized crime. Many criminals joined militant groups, while militants turned to crime for funding. They would steal fuel from refineries, and then sell it on the black market. They would kidnap children and fathers and ransom them off to their family. They would smuggle crude out of Basra. They would demand protection money from businesses to operate. They would tap into power lines or water pipes and sell the services. This allowed groups to be financially independent, while expanding the reach of organized crime.

Today, as militant groups are in decline, their former members need to find a living. Many have continued with their criminal activities as their new jobs. That’s shown in Iraqi headlines where every week there’s news of bank robberies, jewelry stores being held up, gang members being arrested, kidnappings, the selling of women and children for prostitution and sex slaves, etc.

Organized crime has seen a steady expansion in Iraq since the 1970s. At first, gangs were organized by the Baath Party to steal from the government. Then Saddam came to depend upon them to break the U.N. sanctions. The U.S. invasion increased the opportunities and incentives to partake in crime, and those have hardly changed up to the present time. The Iraqi government still does not consider this a major issue, and many officials are corrupted themselves either being directly involved in crimes or getting payoffs to look the other way. There’s no other way that such large-scale criminal activity could continue without it. Until the economy improves, the government gains more strength, and there’s a real concerted effort to fight corruption gangs and crime will continue to flourish in Iraq.

SOURCES

Aswat al-Iraq, “Mafias in Baghdad, clever in changing masks,” 2/5/08

Cordesman, Anthony, “The Changing Situation in Iraq: A Progress Report,” Center for Strategic and International Studies, 4/4/09

Dodge, Toby, “The failure of sanctions and the evolution of international policy towards Iraq, 1990-2003,” Journal Contemporary Arab Affairs, January 2010

Iraq Survey Group, “Comprehensive Report of the Special Advisor to the DCIA on Iraq’s WMD,” 9/30/04

Kelly, Dr. Terrence, “An Iraqi Modus Vivendi How Would It Come About and What Would It Look Like?” Senate Foreign Relations Committee, 4/3/08

Williams, Phil, “Criminals, Militias, And Insurgents: Organized Crime In Iraq,” Strategic Studies Institute, June 2009

General Electric Fined For Corrupt Practices During Oil For Food Program

In July 2010, General Electric (GE) was fined $23.5 million by the Securities and Exchange Commission (SEC) for illegal dealings with Iraq during the Oil for Food Program. Last year GE had to pay an additional $50 million for fraudulent activities in Iraq from 2002-2003. The SEC claimed that GE broke the Foreign Corrupt Practices Act when it offered equipment and services in illegal deals to Iraqi officials to win contracts. This was just the latest example of the vast corruption that occurred during the Oil for Food Program.

The Oil For Food Program was started in 1995 to allow Iraq to sell its oil under United Nations supervision in return for buying food, medicine, and humanitarian supplies. Since 1990 Iraq had been under U.N. sanctions for first invading Kuwait and then not fully declaring its weapons of mass destruction and nuclear programs. The Iraqi economy was strangled by the international restrictions, while malnutrition and infant mortality rates skyrocketed. (1) The U.N. came under public pressure to relieve these problems, which resulted in the Oil for Food Program.

Saddam Hussein took advantage of the new situation to undermine the sanctions. Iraq made companies pay a 10-35% surcharge on each barrel of oil sold through the program, with the difference being paid to Baghdad. It sold oil illegally for cash, and smuggled it out of the country as well to be sold on the black market. It offered oil vouchers to prominent individuals and businesses in return for them to work against the sanctions. Finally, Iraq demanded kickbacks from any company that wanted to sell goods to Iraq. That was the situation with GE. It had to bribe officials in the Iraqi Health Ministry in order to win deals with them. A review of abuses under the Oil for Food Program found that General Electric was just one of approximately 2,000 companies that paid kickbacks in return for contracts with Iraq. It also found that Baghdad earned between $10.8 billion to $12.8 billion through these illegal methods.

FOOTNOTES

1. Tyler, Patrick, “Western Health Study in Iraq Finds Child Mortality Has Nearly Tripled,” New York Times, 10/22/91

SOURCES

Iraq Survey Group, “Comprehensive Report of the Special Advisor to the DCIA on Iraq’s WMD,” 9/30/04

Lemer, Jeremy and Kirchgaessner, Stephanie, “GE pays $23m after Iraq probe,” Financial Times, 7/27/10

Tyler, Patrick, “Western Health Study in Iraq Finds Child Mortality Has Nearly Tripled,” New York Times, 10/22/91

Williams, Phil, “Criminals, Militias, And Insurgents: Organized Crime In Iraq,” Strategic Studies Institute, June 2009