Monday, May 3, 2010

Half Of Corruption Case Against Iraq’s Former Trade Minister Dropped

Iraq has routinely been ranked one of the most corrupt countries in the world over the last several years. In 2009 for example, Transparency International, a German based organization that tracks corruption around the world, had Iraq tied with Sudan for the 4th most corrupt country in the world. That hasn’t stopped Iraq’s main anti-corruption agency, the Integrity Commission from its Herculean task of fighting this problem. In mid-2009 it faced its most high profile case when the Trade Minister Abdul al-Falah al-Sudani, one of his brothers, and several other Ministry officials were arrested for fraud and embezzlement

The story started on May 3, 2009 when the government issued arrest warrants for several Trade Ministry officials, including the Trade Minister, his two brothers, the Grain Board Director, the Director General of the Foodstuffs Trading Company, and the ministry’s oversight official on orders from the Integrity Commission. When the security forces arrived at the Trade Ministry, a gunfight ensued between them and Ministry guards. During the shooting all of those wanted escaped. A few days later, Minister Sudani, while still a wanted man, said that he had replaced all of those with arrest warrants for them. On May 9, one of the Minister’s brothers, Sabah Mohammed al-Sudani was arrested at a border spot in Basra trying to flee the country. He was found with $150,000 on his person, and tried to bribe the border police with $50,000 to let him escape. Minister Sudani was eventually brought before parliament’s Integrity Committee for questioning about the charges against his ministry in mid-May where he denied everything, and faced a no confidence vote. Before that could happen he resigned to save face for himself and Prime Minister Nouri al-Maliki since Sudani was from his Dawa Party. Eventually, Sudani was arrested on May 30 as he tried to leave the country, and placed in a Baghdad prison. 

The charges against Sudani and others has to do with the $5.3 billion food ration system, the largest in the world, that the Trade Ministry controls, which was ripe for stealing. The head of parliament’s Integrity Committee claimed they had papers showing that $4 billion was missing from the Ministry, and that figure might be as high as $8 billion over the last four years. Ministry officials participated in a huge number of scams. One was to buy cheap expired food and charge the Ministry full price and pocket the difference. Another was for officials to buy food for the Ministry but for them to keep it for themselves to sell on the black market. The stolen food was replaced with cheap substitutes in the Ministry’s coffers. A third case was for officials to work with merchants to buy goods for double their price and split the difference. Authorities found several examples of each. Minister Sudani was discovered to have signed a contract with an export company owned by his son for $50 million worth of old tea that was only valued at $20 million. The Integrity Commission also had evidence that the Ministry was buying contaminated milk from China.  Investigators also found $8 million worth of expired food in a warehouse in Muthanna province. Finally, parliament claimed that Sudani’s brother and nephew got $40 in kickbacks from every ton of sugar imported by the Ministry. The result of all these crooked acts was that only half of Iraqis got what they were supposed to in their food rations, and would often complain of receiving rotten and unusable food stuffs.

On April 28, 2010 Sudani finally faced his day in court over the first of two major charges against him, corruption over food imports. The case was dropped however for lack of evidence. The Integrity Commission said it would appeal. Sudani still has a second court date over squandering public funds pending against him as well. That one may end like the first, as there have been charges of political interference by Maliki’s office, and one judge even resigned over it. 

Sudani’s example is just the latest in what often seems like Iraq’s futile fight against corruption. While the Integrity Commission announced an increase in convictions from 2008 to 2009, almost all of those sent to jail were low level officials like average policemen. Last year, only four senior officials were punished for their crimes, and only two the year before that. In the Trade Ministry case only three people have been convicted. The Director General of the Foodstuffs Trading Company was given one year for stealing money and taking kickbacks, the ministry spokesman was given one year, and the Director General’s deputy was given two years in prison for one of the largest corruption cases in Iraq’s recent history. The story reveals all of the raw nepotism and political cronyism that are rampant within the country, which prevents the efficient running of government, the provision of services, and the rule of law. Until Iraq’s elite gives more than lip service to being opposed to these practices, the country is going to be mired in more cases of fraud and embezzlement in the future.

SOURCES

Alsumaria, “Iraq court acquits former Trade Minister,” 4/29/10

Antelava, Natalia, “Iraq arrests minister’s brother,” BBC News, 5/9/09

Aswat al-Iraq, “Ex-trade minister appears before Samawa court on corruption charges,” 6/1/09
- “Lawmaker says trade minister misled authorities, violated the law,” 5/17/09
- “Pressures block questioning some ministers – MP,” 4/18/09

Bakri, Nada, “In Iraq, Assertive Parliament Emerges Under New Speaker,” Washington Post, 5/27/09

Bureau of Democracy, Human Rights, And Labor, “2009 Human Rights Report: Iraq,” U.S. State Department, 3/11/10

Colvin, Marie, “Iraq’s trade ministry hit by £2.6 billion fraud,” Sunday Times of London, 3/7/10

Dagher, Sam, “Gunfight Breaks Out as Iraqi Soldiers Try to Arrest Trade Officials,” New York Times, 5/3/09

Dolan, Jack and Hammoudi, Laith, “Iraq’s disgraced trade minister expected to step down,” McClatchy Newspapers, 5/23/09

Dow Jones, “Iraqi Trade Officials Ousted In Corruption Sweep – Sources,” 5/6/09

Al Jeeran, “The Integritiy Committee in the Iraqi parliament warns of intervention in the case of Minister of Commerce accused of corruption,” 12/5/09

Kadhim, Abbas, “Iraq’s Quest for Democracy amid Massive Corruption,” Arab Reform Bulletin, 3/3/10

Rasheed, Ahmed and Ibrahim, Waleed, “Iraq issues warrants for trade chiefs over corruption,” Reuters, 5/3/09

Reuters, “Iraqi trade officials jailed for corruption,” 12/24/09

Transparency International, “Corruption Perceptions Index 2009,” 11/17/09

3 comments:

Jason said...

Perfect example of how Socialism lends itself to corruption. NOt to mention how it undermines domestic production. Iraq's food ration system should be immediately converted to an American-style food stamp (voucher) system.

amagi said...

And yet, by all accounts I've read the ration system is still incredibly popular.

Go figure!

Joel Wing said...

Jason

I think the food program was ripe for corruption because it involved so much money and iraq's institutions are weak. Remember that America has a long and infamous history of political corruption as well and most of that flourished when there weren't even regulations on the economy.

Amagi

the food program is still very popular because so many Iraqis are still struggling economically and they are use to a large welfare state.

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