Monday, November 12, 2012

The Board of Supreme Audit, Part III Of Washington And Baghdad’s Failed Attempt To Fight Corruption

Corruption was endemic under Saddam Hussein. During the sanctions period, the government manipulated the Oil for Food Program for instance, and used petroleum smuggling to earn extra cash. Saddam’s extended family and the top leadership within the Baath Party benefited from this system. Corruption continued, and even expanded after 2003 as billions in reconstruction money and oil profits flowed into Iraq with little oversight and management. That opened up opportunities for abuse by the ruling elite. They have divided up the country’s wealth, and created new institutionalized forms of corruption as government contracts are manipulated to enrich the parties. The Board of Supreme Audit, the oldest anti-corruption agency within the country, has seen all of this. During the Saddam era it was emaciated, and then under the Americans it was hampered by a new and complicated set of bureaucrat rules. Today, it suffers from infighting with the other anti-graft groups, and attempts to dominate Prime Minister Nouri al-Maliki to control it, which has greatly limited its effectiveness.

The Board of Supreme Audit (BSA) has existed for over eight decades. The British created the agency in 1927, to go through the government’s accounts. In 1980, it was given additional power to look into Baghdad’s financial and economic policies. Still, the Board didn’t have any real authority under Saddam Hussein, as it only dealt with corruption when it threatened him or the Baath Party. When the Coalition Provisional Authority (CPA) was created in April 2003, it temporarily abolished the BSA as part of a sweeping order getting rid of Baathist institutions. The head of the Board Dr. Ihsan Ghanim al-Ghazi went to the CPA, to explain to them his duties, and successfully got the Board reinstated in September with CPA Order 57. Unfortunately, the next year, Dr. Ghazi was assassinated in a car bombing in Baghdad. Abdul Bassit Turki replaced him. Their organization was understaffed and lacked equipment. Out of its 1,200 employees, only 100-150 were actual auditors, and it only had five computers. The U.S. didn’t give it much support either, other than some training. Although the Board had such a storied history, before and after the fall of Saddam, it was not that effective. Its teeth had been pulled by the Baath regime, and it had no time to recover after the U.S. disbanded it, and then brought it back. That was unfortunate, because its oversight duties were needed after 2003 as huge sums of money started flowing into the country.

In April 2004, the CPA attempted to integrate the Board of Supreme Audit within a new anti-corruption framework, but the Coalition ended up hamstringing the Board’s work more than facilitating it. The Coalition tired to make the BSA subservient to the U.S. created Inspector Generals (IG) within the ministries and the Integrity Commission. Taking away the Board’s power to send cases directly to the courts did that. Instead, it had to go through the IGs’ and Integrity Commission. The Board greatly resented these new agencies and rules created by the Americans. It felt, as the oldest anti-corruption body in Iraq that it should be equal to or above the inspectors and Integrity Commission. As a result of its hurt pride, it often did not cooperate with them or share information hampering investigations against theft and graft.

At the same time, the Board only had a limited affect upon the wave of corruption that took hold after the 2003 fall of Saddam. One of its largest cases, an investigation of the Defense Ministry under the interim government of Premier Iyad Allawi for example, led nowhere. The BSA found that the Ministry had wasted $1.27 billion on military purchases through kickbacks, middlemen, and useless equipment. This happened just in the first eight months after Iraq got its sovereignty back in June 2004. The Ministry claimed that it was buying equipment from Poland, the U.S., Europe, and Arab countries when in fact it gave contracts to Iraqi companies who were paid up front in cash. Some companies went ahead and actually bought equipment, but most of it was unusable such as a fleet of leaking Armored Personnel Carriers. Another case involved the purchase of 64 Mi-18 attack helicopters from Poland and Russia, which turned out to be just four that were 25 years old. Other middlemen just walked away with the cash, never to be heard from again. One company was partly owned by the Defense Minister Hazim Shalan’s brother-in-law and an adviser to one of the vice presidents. As a result of this investigation, only nine Defense Ministry officials were fired or placed on leave. Minister Shalan later left the country in 2005, and no real punishments were ever meted out. Here, the Iraqis were emerging from decades of dictatorship, and the first thing they decided to do was take off with over one billion dollars of public money. The Board of Supreme Audit was able to discover this massive theft, but because it garnered no domestic support the case went nowhere. This showed to the new Iraqi officials they could do what they wanted with no real repercussions.

Violence also played a role in limiting the effectives of the Board. From 2005-2008 several workers at the BSA were killed. Some were specifically targeted for assassination. One official had a grenade thrown into his car right after he finished doing some work at a ministry. The headquarters of the Board was also often off limits as there were constant gun battles and sniper fire outside on the street. For weeks, workers couldn’t go to their offices as a result, and the Board essentially shut down its work.

The new Iraqi government was not supportive of the BSA doing its work either. Authorities actively attempted to limit its investigations. They went after the Board’s independence and interfered in cases. In 2007, Prime Minister Nouri al-Maliki told U.S. officials that he was against agencies like the Board investigating corruption. This was true for the other two anti-corruption agencies as well. Because nepotism, bribery, and theft were so rampant within Baghdad, Maliki did not want anyone looking into the government’s books, and causing problems. The premier therefore did anything he could to block the work of the Board.

The premier also tried to manipulate the Board to further his own political aims. In 2012, charges were brought against the head of the Election Commission Faraj al-Haydari for giving $130 to members of the State Property Commission in return for obtaining government land. A Board official said that it had known about corruption in the Commission for years, but not one ever acted upon it. He thought the case was being used by Maliki to gain control over the independent agency. He claimed that Maliki was angry with the Election Commission after his State of Law list came in second place in the 2010 elections. The Board member was not alone in his suspicions, as the case was later dropped, and Haydari found innocent. The charges and amount of money involved seemed minor at best. The fact that it involved the head of the Election Commission a year before provincial elections also raised eyebrows. Given the fact that it also came as the premier attempted to increase the number of Commission members all pointed to Maliki using all means at his disposal to gain sway over the up coming vote. The Board of Supreme Audit simply became a pawn in this game.

In the last 20 years, the Board of Supreme Audit has had a difficult history. First, during the 1990s, it lost much of its authority as Saddam Hussein concentrated power in his hands, his family’s, and that of the upper echelons of the Baath Party. Then when the U.S. came along it didn’t help by setting up new regulations that limited its abilities. As a result, the Board was not able to carry out its duties as corruption not only expanded, but also reached new heights after the fall of the old regime. Today the Board’s work is limited by the political situation. It can find as many cases of corruption as it wants, but nothing will happen with them unless they involve low-level officials or a high level official wants something to happen. The same is true for the other anti-graft agencies. That’s why Iraq consistently ranks as one of the most corrupt countries in the world for the last several years, because there are no real checks and balances within the government.


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

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

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

International Crisis Group, “Failing Oversight: Iraq’s Unchecked Government,” 9/26/11

Special Inspector General for Iraq Reconstruction, Hard Lessons, 1/22/09
- “Quarterly Report to the United States Congress,” 4/30/09

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

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