One after another, the heads of independent institutions and
some of the largest banks in Iraq have been charged with corruption. The first
was the director of the Trade Bank of Iraq in May 2011, followed by the
commissioner of the Election Commission in April 2012, and then the head of the
Central Bank of Iraq in October. The chief of the Integrity Commission claimed
he was going to be accused of corruption as well before he resigned in
September 2011. Corruption is a huge problem in Iraq, and it is continuously
ranked as one of the worst in the world. Therefore it’s believable that there
would be graft and theft at these organizations. However, the fact that Prime
Minister Nouri al-Maliki and his State of Law list were directly involved in
each case makes many believe that the premier is attempting to gain control of
each one of these institutions. They also follow a Supreme Court ruling that
the Integrity Commission, Election Commission, and Central Bank were all under
the executive rather than legislative branch. Maliki has now gained leverage
over most of them by appointing their temporary leaders. This all points to the
prime minister manipulating corruption charges to centralize power in his
hands.
The Trade Bank of Iraq was the first target on Maliki’s
list. According to the Bank’s Director Hussein al-Azri, on June 2, 2011, Prime Minister Maliki paid him a visit. He asked that the bank to finance a $6
billion deal with a South Korean company to build power plants. Azri asked for
a sovereign guarantee on the loan where the government would be responsible for
the balance should the company default. Maliki said that one wasn’t needed. He
then demanded that the department heads at the bank come to the meeting. A
Maliki adviser then arranged a press conference where he said that the bank was
under investigation for corruption, followed by security forces surrounding the
building. Azri ended up fleeing, and eventually turned up in Lebanon where his family resides. In the aftermath, the integrity committee in parliament
that looks into illegal government activities and the Finance Ministry issued a
report saying that there were irregularities at the bank. One article said that Azri had given out $400 million in defaulted loans. Maliki stated that $500 million was missing from the bank. It later turned out that the
investigation was never completed, and all the accusations against Azri came
either from the prime minister or members of his State of Law list. Not only
that, but the charges against Azri were made back in 2007, raising questions
why it took four years for anyone to act upon them. The bank director ended up being sentenced to 15 years in prison in absentia in October 2012. In
his place, Maliki named Hamida al-Jaff as the new head of the bank. The
raid on the bank was immediately seen as political. A British adviser to the bank Sir Claude Hankes said that Maliki was behind the move. He told
reporters that the government had attempted to manipulate the bank before, but
had been rebuffed. Critics believed that the prime minister wanted control of the bank’s $14.9 billion in assets to fund development projects. In 2003,
the Americans created the bank, which handles most major trade and
financial deals. J.P. Morgan helped set it up, giving it ties with
international financial markets. That was why it was the only bank in Iraq that could get credit from foreign institutions. Iraq does not provide sovereign guarantees, which makes it very difficult for Baghdad to finance
large infrastructure projects outside of the energy field, which benefits from
interest from foreign oil companies. Instead, the government has to rely
upon foreign aid, private contractors, and cash payments to fund projects. With
control of the Trade Bank, Maliki could use its billions to cover projects.
After the head of the Integrity Commission Judge Rahim
al-Ogaili resigned it was revealed that he, and members of his staff were
facing corruption charges as well. Judge Ogaili resigned from the main
anti-corruption agency in September 2011 claiming that the government was
preventing him from doing his work. Later, he told the Special Inspector
General for Iraq Reconstruction that he was going to be charged with illegal
activities before he left. His violations included providing statistics on the
Commission’s work to the United States, a requirement for it to receive aid
from Washington, and exaggerating the levels of corruption in the country in
talks with the press. Judge Ogaili quit before he could be brought to court.
Other members of the Commission faced similar accusations, forcing some to
resign as a result. Prime Minister Maliki then named Izzat Tawfiq the acting commissioner. Since he is temporary, Tawfiq can be replaced anytime the
premier wants. Maliki has opposed the Integrity Commission, and has continuously tried to block its investigations as a result. He has also
demanded that all its major inquiries go through him. Now he might have that
ability with Ogaili out of the way, and his man Tawfiq in office.
Maliki was less successful taking on the Election
Commission. On April 12, 2012, the head commissioner Faraj al-Haydari was arrested, along with some of his staff. He was charged and found guilty of paying $130 to members of the State Property Commission to get public land. In October, an appeals court overturned his conviction. Haydari said that
the charges stemmed back from 2008, and that State of Law parliamentarian Hannan al-Fatlawi was behind his detention. The commission head claimed that a court dismissed the case, and then Fatlawi went to another judge who
eventually issued a warrant. Fatlawi was also the one that announced Haydari’s arrest, not the judiciary. Again, this case was seen as an
attempt by Maliki to gain sway over an independent body. A member of the Board
of Supreme Audit, which goes through the government’s books, said that acts of
corruption at the Election Commission had been known for years, but no one
acted upon them. The Board official told the International Crisis Group that he
believed Maliki went after the commission for not going along with him during
the 2010 elections. In that vote, Maliki’s State of Law came in second place,
when the premier believed he would win. He then demanded a recount, but it did
not change the results. The prime minister then allegedly accused the commission of helping the Iraqi National Movement win the balloting. Not
only that, but lawmaker Fatlawi had gone after the commission before. Starting in May 2011, Fatlawi led an unsuccessful no confidence vote against
Haydari for corruption, which was defeated in parliament in July. Then in
September 2012, State of Law was blocked from expanding the number of commissioners from 9 to 15, which could have been used to put more of its
followers on the staff. Iraq is due for two more rounds of elections,
provincials in 2013 and parliamentary in 2014. If Maliki had been able to
replace Haydari with his own election head or pack the commission with State of
Law members that would give him great sway over the upcoming balloting. Those
were leading causes for other parties to vote against Fatlawi’s no confidence
vote in the summer of 2011, condemn Haydari’s arrest in the spring of 2012, and
why Maliki was unsuccessful in expanding the number of commissioners this fall.
These were all seen as crass moves by Maliki to take over the commission.
Today, the Central Bank of Iraq is caught up in the latest
controversy involving the prime minister. At the end of October, arrest
warrants were issued for the director of the Central Bank of Iraq Sinan
al-Shabibi and members of his staff. A committee found evidence against them that had to deal with the sale of foreign currency. The premier then named
the head of the Board of Supreme Audit Abdul Basit Turki the acting bank chief.
The investigation into Shabibi started in August 2012 when a State of Law
parliamentarian accused bank officials of laundering money. That led the
Speaker of Parliament Osama Nujafi to call for a special committee to be
formed. What that group found is under dispute. A State of Law member claimed
that there was corruption involving dollar auctions the bank holds every week.
Another lawmaker said he quit the committee, because others were going to form
their own special group and release an anti-Shabibi report. Shabibi claimed that the government had been trying to get rid of him since 2009. He told
the press that Baghdad wanted to use the Central Bank’s $63 billion reserves to
fund development projects. The bank chief went on to say that was against
the bank’s rules, and that he received threats and was intimidated as a result. Maliki and Shabibi have also argued over a wide range of issues such as revaluing
the dinar and interest rates. In March, the prime minister ordered that all the
bank’s policy decisions be sent to the cabinet for approval. The next month
there were rumors that Maliki wanted Shabibi out to be replaced by one of the
premier’s economic advisers. This was just like the Trade Bank of Iraq case.
All the accusations against the Central Bank came from legislators belonging to
Maliki’s list. With the long time director out of the way, Maliki could name
his replacement that would then be beholden to him. Together, Baghdad would
have over $70 billion to help finance projects. Whether this works out as well
for Maliki as the Trade Bank is yet to be seen as Shabibi has said he will
fight his charges, and no one has actually been arrested yet.
The prime minister’s intention to gain control of Iraq’s
independent institutions was revealed in January 2011. That was when the
Federal Supreme Court made a very controversial ruling that the Election and
Integrity Commissions as well as the Central Bank of Iraq were all under the
authority of the executive. This was despite explicit language in the
constitution, which said that only parliament had that power. In February 2012,
the Higher Judicial Council affirmed the court’s decision. Both happen to be under Chief Justice Medhat Mahmoud who is considered to be an ally of Maliki. Neither the commissions nor the bank were willing to go along with the courts.
Now the premier has been able to name the heads of the Integrity Commission and
Central Bank, while failing to do the same with the Election Commission. That
was done by using corruption charges, which never go anywhere against important
officials, unless someone more powerful is able to manipulate them. This
appears to be the case here, as Maliki and his State of Law were behind all of
the charges.
Many believe that Prime Minister Maliki is becoming an
autocrat. Some of those accusations don’t appear to hold water. These four
cases however, are more clear-cut. Maliki personally led the raid against the
Trade Bank of Iraq, and legislators from State of Law made all the accusations
against the Integrity and Election Commissions, and now the Central Bank of
Iraq. Corruption is endemic in Iraq, but some of the charges have appeared
minuscule at best like those against Election Commissioner Haydari and Judge
Ogaili or have never become clear such as those against Central Bank head
Shabibi. Not only that, but nothing is ever done against high officials like
these over corruption, unless someone powerful wants action to be taken. That
person is the premier who now at the least has gotten rid of officials who
refused to follow his dictates. At the worst, he has gained de facto control
over several independent institutions. This has all been possible by manipulating
graft and theft charges to fulfill his political goals. This is a direct threat
to Iraq’s developing political system. Without checks and balances, Iraq’s
leaders like Maliki will be able to do what they like. The fact that he has
attacked the commissions in charge of voting and fighting corruption are
especially troubling, because he could now influence future elections and
ensure that nothing is done about the rampant theft and graft within the
government. This sets a dangerous precedent that the prime minister will use
the courts and corruption to get rid of those that stand in his way. The Iraqi
parliament has only been partially effective in blocking these moves, and could
do a lot more. The problem is that the party bosses are unwilling to shake the
boat, because they all benefit from the status quo. That means Maliki may be
able to continue with these actions, concentrating more and more authority in
his hands.
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