March 7, 2010
Iraq's trade ministry hit by £2.6 billion fraud
Rampant government corruption emerged as one of the biggest issues in the election campaign, with the exposure of a huge fraud at the trade ministry.
Sabah al-Saadi, head of the Iraqi parliament’s anti-corruption committee, said documents showed that $4 billion (£2.6 billion) had gone missing from the ministry, but that the total could be as high as $8 billion in the past four years.
Saadi said he was pursuing 20,000 legal cases for official corruption, most of which had been delayed until a new government was installed.
At his flat in central Baghdad, Saadi said his committee had found corruption in “almost every government ministry”. The scandal at the trade ministry has already resulted in the resignation of Abdul Falah al-Sudani, the minister, who was arrested as he tried to flee the country for Dubai.
Saadi considered the fraud at the trade ministry the worst example — not just because of its scale but because it hit so many poor Iraqis. The ministry supplies vital food rations to 60% of the country.
Saadi, a candidate for Fadila, a Shi’ite party, explained how the fraud worked. In one scam, corrupt officials bought cheap, out-of-date food and charged the ministry the full price, pocketing the difference.
In another fraud, officials bought goods at full price, then stole them and sold them back on to the market, replacing them with cheap substitutes from the ministry’s stocks. In a third, greedy officials worked in tandem with merchants, paying up to double the real price and splitting the difference.
The scandal came to light last year when the ministry had to ask parliament to top up its budget. Saadi said an investigation showed only half those eligible were receiving their full rations of essential items, including sugar, tea and cooking oil.
Shopkeepers confirmed Saadi’s charges. Makkey Khazal Racheed, who owns a shop in the affluent Karrada district of Baghdad, produced a series of ration cards. They showed that of nine staples supplied monthly, sugar had not been available for seven months. Supplies of tea were sporadic.
Saadi also cited the defence ministry, where alleged fraud has ranged from the purchase of officers’ commissions to millions spent on bribes for aircraft bought overseas.
Another enormous fraud under investigation involves a British firm said to have been paid $85m by the interior ministry to supply “wands”, which supposedly detect explosives. The Iraqi government paid £26,000 per wand, even though they are allegedly worth a fraction of this.
The money that is being siphoned off comes from Iraqi oil revenues. “They are stealing from the Iraqi people,” Saadi said. “I estimate that 50% to 75% of the financing of terrorism comes from corruption.”
AP
