Iraqis protest against the government’s employment policy in Baghdad's Green Zone. AFP
Iraqis protest against the government’s employment policy in Baghdad's Green Zone. AFP
Iraqis protest against the government’s employment policy in Baghdad's Green Zone. AFP
Iraqis protest against the government’s employment policy in Baghdad's Green Zone. AFP

Iraq's lost battle against corruption: from early failures to the 'heist of the century'


  • English
  • Arabic

In October, Iraq’s acting finance minister Ihsan Jabbar shocked the world by announcing an investigation into $2.5 billion that had gone missing from Iraq’s General Commission for Taxes, a department in the Ministry of Finance. It was described as the heist of the century.

The money had been given to five shell companies set up last year and investigations are ongoing, but experts tell The National that while several political parties have been implicated, senior officials are unlikely to be punished.

Earlier this month, it was alleged that attempts to toughen anti-corruption efforts by former prime minister Mustafa Al Kadhimi ended in a series of raids against rivals resulting in the death of one suspect under torture.

New Iraqi Prime Minister Mohammed Shia Al Sudani has placed a former intelligence chief and Iran-linked enforcer in a new anti-corruption team, while the new head of the country's biggest anti-corruption body is close to the Iran-linked Badr Organisation, stirring fears of more purges that do little to get to the root of the problem.

After 20 years of purges and pervasive growth of patronage networks, there simply aren’t that many capable and clean officials at the top
Omar Al Nidawi,
analyst at the Enabling Peace in Iraq Centre

“If you look at the people in positions linked to the organisations where the theft happened, or those reported to be involved, you get a lot of political actors. From the Popular Mobilisation Forces [a largely Iran-backed militia force] to [former prime minister Mustafa Al] Kadhimi to [Parliament Speaker Mohammed Al] Halbousi to the Sadrists. It's unlikely that such a big theft went on without a major player taking a cut,” says Hamza, a consultant in Iraq who used to work for the main government auditing body. His name has been withheld for security reasons.

One problem, experts say, is that senior positions in ministries are often held by incompetent but politically connected staff whose role it is to illegally raise funds for parties.

Senior ministry positions known as “special grades” include “director generals” who are almost impossible to remove. They have the power to form new organisations related to their ministry.

“A director general is appointed by a council of ministers' vote and cannot be demoted by a minister. Should he be transferred elsewhere, he remains in that role, and that transfer needs the approval of the cabinet. Sometimes such an attempt to remove him by the cabinet might not work if a person is well connected,” Hamza says.

One recent victim of the anti-corruption drive was a director general at Iraq's ministry of trade, who died after being detained by Mr Al Kadhimi's anti-corruption force.

No transparency

Corruption in Iraq exploded after 2003 as the US rushed in reconstruction funds at a colossal rate with little oversight, sending billions of dollars in cash because the banking system was not functioning.

In 2007, the former head of the Integrity Commission, Radhi Hamza Al Radhi, told the US congress — after fleeing Iraq — that $18 billion had gone missing.

Since then, that figure may have gone as high as $320 billion, according to Iraq’s Parliamentary Transparency Commission.

Omar Al Nidawi, an analyst with Enabling Peace in Iraq Centre, says one challenge is that the country’s main anti-corruption body, the Commission of Integrity, lacks skilled staff after being intimidated by political parties.

“There are limited options in the appointment of officials in key posts that are either tasked with fighting corruption or are suspected of prior corruption. After 20 years of purges and pervasive growth of patronage networks, there simply aren’t that many capable and clean officials at the top of any given department who are also brave enough to go to war with the Moqtadas and Nouris of Iraq,” he says.

Former prime minister Nouri Al Maliki and one of his main rivals, the influential Shiite cleric Moqtada Al Sadr, are accused of overseeing some of the worst thefts and intimidating the commission.

Moqtada al-Sadr with Qais al-Khazali, Hadi al-Amiri, Ammar al-Hakim and Nouri al-Maliki in Baghdad, December 2021. Reuters
Moqtada al-Sadr with Qais al-Khazali, Hadi al-Amiri, Ammar al-Hakim and Nouri al-Maliki in Baghdad, December 2021. Reuters

Kirk Sowell, who runs the Iraq-focused Utica Risk consultancy, highlights the partisan character of the new commission head, but also notes how his predecessor failed to instil accountability.

“[Former commission head] Ala Jawad Al Saadi was useless in the position under Maliki, useless under Kadhimi. Given the current make-up of this cabinet, even talking about fighting corruption is a joke,” he says.

The practice of stealing through shell companies was first discovered on a large scale in 2011, when, according to Transparency International, “a network of shell companies that embezzled procurement funds” had “close links to senior political parties and politicians, including the prime minister’s office”.

A history of theft

In 2008, investigators from the Commission of Integrity uncovered evidence of corruption at the Ministry of Trade, but trade minister Falah Al Sudani faced no repercussions from the prime minister, Mr Al Maliki, despite evidence that he had rigged state food purchases.

By some estimates, hundreds of millions of dollars were stolen from state food welfare programmes.

Other scandals worsened security, such as army generals selling fuel, food and ammunition for personal profit, undermining the army as ISIS gained strength in 2013-2014.

Corruption scandals in Iraq's defence sector 2003-2019

After the conflict against the militant group, not even reconstruction was spared from theft. Former Mosul governor Nufal Hammadi was dismissed in 2019 amid allegations by the UN of attempting to extract bribes from reconstruction projects — a rare case of accountability.

In the health sector, the ministry is widely regarded to be divided between Mr Al Sadr and Mr Al Maliki, who have seeded the ranks of staff with loyalists, which in the past has enabled the theft and resale of medicine, according to health officials who spoke to The National.

Neglected education

In 2008, Mr Al Maliki announced plans to build 200 schools in Iraq, setting aside nearly $240 million.

Contracts were awarded to four companies, three Iraqi and one Iranian. All contractors received a 20 per cent down payment, but they left behind only steel skeletons, an education ministry official told The National.

Some are still being worked on but are years behind schedule and the ministry has paid out approximately 235 billion of the 242 billion dinars — almost all the project allocations, the ministry official said.

As of last year, fewer than 100 schools had been accepted by the ministry, including 20 that were completely finished, he said.

Thousands of mud schools are still scattered across Iraq, a stark example of the collapse of the education system in a country that needs about 10,000 new schools.

Every year at the beginning of the school season, videos flood social media showing poorly refurbished schools and crowded classes. At some schools, pupils sit on the ground due to the lack of desks.

Water woes

Over the years Iraq has been gripped by prolonged droughts, worsening the already difficult challenge of water access for communities where infrastructure is crumbling.

This has not stopped officials from trying to profit from water reconstruction projects.

The situation reached crisis point in summer 2018 when water levels dropped sharply in the Shatt Al Arab, a river formed by the confluence of the Tigris and Euphrates. Seawater encroached in the river’s estuary, overwhelming water treatment systems in the port city of Basra, which could not cope with the highly saline water.

Iraqi school children using piped water. Amnar / Unicef Iraq
Iraqi school children using piped water. Amnar / Unicef Iraq

One piece of infrastructure could have alleviated the problem: a water treatment station on the Shatt Al Arab, built with aid money by a Japanese-French and Egyptian consortium.

The plant could have provided fresh water for hundreds of thousands of people in Basra that summer, but was years behind schedule. A government inquiry found that vital components for the plant had been held up at customs by officials demanding bribes.

Electricity

Iraq’s lack of power becomes a major news story each summer, when demand surges far above supply as Iraqis switch on air conditioning to combat the soaring temperatures. That overwhelms the grid and causes blackouts.

But while most experts agree reform of the sector is vital — such as reducing subsidies on tariffs ― corruption plays a role as well, eating into the electricity ministry’s funds.

A leaked 2018 report by US consultancy Hakluyt alleged that a powerful businessman close to Mr Al Maliki was helping the former prime minister’s party to take a percentage of power plant funds.

Last year, former electricity minister Mahdi Hantoush alleged that figures loyal to Mr Al Sadr had been over-valuing power plant contracts and pocketing the surplus, or demanding that contracts went to political loyalists.

According to interviews with government officials by academics Toby Dodge and Renad Mansour, as much as a quarter of ministry budgets might be lost to corruption.

"For Iraq to succeed in reducing corruption, the country must break the rent-seeking cycle that extends from the party bosses all the way down to the most junior civil servants and their interactions with the citizenry," Mr Al Nidawi says.

What is blockchain?

Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.

The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.

Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.

However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.

Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.

Need to know

The flights: Flydubai flies from Dubai to Kilimanjaro airport via Dar es Salaam from Dh1,619 return including taxes. The trip takes 8 hours. 

The trek: Make sure that whatever tour company you select to climb Kilimanjaro, that it is a reputable one. The way to climb successfully would be with experienced guides and porters, from a company committed to quality, safety and an ethical approach to the mountain and its staff. Sonia Nazareth booked a VIP package through Safari Africa. The tour works out to $4,775 (Dh17,538) per person, based on a 4-person booking scheme, for 9 nights on the mountain (including one night before and after the trek at Arusha). The price includes all meals, a head guide, an assistant guide for every 2 trekkers, porters to carry the luggage, a cook and kitchen staff, a dining and mess tent, a sleeping tent set up for 2 persons, a chemical toilet and park entrance fees. The tiny ration of heated water provided for our bath in our makeshift private bathroom stall was the greatest luxury. A standard package, also based on a 4-person booking, works out to $3,050 (Dh11,202) per person.

When to go: You can climb Kili at any time of year, but the best months to ascend  are  January-February and September-October.  Also good are July and August, if you’re tolerant of the colder weather that winter brings.

Do not underestimate the importance of kit. Even if you’re travelling at a relatively pleasant time, be geared up for the cold and the rain.

Indika
%3Cp%3E%3Cstrong%3EDeveloper%3A%3C%2Fstrong%3E%2011%20Bit%20Studios%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Odd%20Meter%3Cbr%3E%3Cstrong%3EConsole%3A%3C%2Fstrong%3E%20PlayStation%205%2C%20PC%20and%20Xbox%20series%20X%2FS%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

How to avoid crypto fraud
  • Use unique usernames and passwords while enabling multi-factor authentication.
  • Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
  • Avoid suspicious social media ads promoting fraudulent schemes.
  • Only invest in crypto projects that you fully understand.
  • Critically assess whether a project’s promises or returns seem too good to be true.
  • Only use reputable platforms that have a track record of strong regulatory compliance.
  • Store funds in hardware wallets as opposed to online exchanges.
From Zero

Artist: Linkin Park

Label: Warner Records

Number of tracks: 11

Rating: 4/5

MATCH INFO

Bayern Munich 2 Borussia Monchengladbach 1
Bayern:
 Zirkzee (26'), Goretzka (86')
Gladbach: Pavard (37' og)

Man of the Match: Breel Embolo (Borussia Monchengladbach)

ESSENTIALS

The flights 
Fly Etihad or Emirates from the UAE to Moscow from 2,763 return per person return including taxes. 
Where to stay 
Trips on the Golden Eagle Trans-Siberian cost from US$16,995 (Dh62,414) per person, based on two sharing.

Classification of skills

A worker is categorised as skilled by the MOHRE based on nine levels given in the International Standard Classification of Occupations (ISCO) issued by the International Labour Organisation. 

A skilled worker would be someone at a professional level (levels 1 – 5) which includes managers, professionals, technicians and associate professionals, clerical support workers, and service and sales workers.

The worker must also have an attested educational certificate higher than secondary or an equivalent certification, and earn a monthly salary of at least Dh4,000. 

Results

1. Lewis Hamilton (Mercedes) 1hr 32mins 03.897sec

2. Max Verstappen (Red Bull-Honda) at 0.745s

3. Valtteri Bottas (Mercedes) 37.383s

4. Lando Norris (McLaren) 46.466s

5.Sergio Perez (Red Bull-Honda) 52.047s

6. Charles Leclerc (Ferrari) 59.090s

7. Daniel Ricciardo (McLaren) 1:06.004

8. Carlos Sainz Jr (Ferrari) 1:07.100

9. Yuki Tsunoda (AlphaTauri-Honda) 1:25.692

10. Lance Stroll (Aston Martin-Mercedes) 1:26.713,

WHAT%20MACRO%20FACTORS%20ARE%20IMPACTING%20META%20TECH%20MARKETS%3F
%3Cp%3E%E2%80%A2%20Looming%20global%20slowdown%20and%20recession%20in%20key%20economies%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Russia-Ukraine%20war%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Interest%20rate%20hikes%20and%20the%20rising%20cost%20of%20debt%20servicing%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Oil%20price%20volatility%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Persisting%20inflationary%20pressures%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Exchange%20rate%20fluctuations%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Shortage%20of%20labour%2Fskills%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20A%20resurgence%20of%20Covid%3F%3C%2Fp%3E%0A
The specs

Engine: 6.2-litre V8

Transmission: seven-speed auto

Power: 420 bhp

Torque: 624Nm

Price: from Dh293,200

On sale: now

Recipe: Spirulina Coconut Brothie

Ingredients
1 tbsp Spirulina powder
1 banana
1 cup unsweetened coconut milk (full fat preferable)
1 tbsp fresh turmeric or turmeric powder
½ cup fresh spinach leaves
½ cup vegan broth
2 crushed ice cubes (optional)

Method
Blend all the ingredients together on high in a high-speed blender until smooth and creamy. 

Springtime in a Broken Mirror,
Mario Benedetti, Penguin Modern Classics

 

Essentials

The flights

Emirates and Etihad fly direct from the UAE to Geneva from Dh2,845 return, including taxes. The flight takes 6 hours. 

The package

Clinique La Prairie offers a variety of programmes. A six-night Master Detox costs from 14,900 Swiss francs (Dh57,655), including all food, accommodation and a set schedule of medical consultations and spa treatments.

Desert Warrior

Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley

Director: Rupert Wyatt

Rating: 3/5

The White Lotus: Season three

Creator: Mike White

Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell

Rating: 4.5/5

How much do leading UAE’s UK curriculum schools charge for Year 6?
  1. Nord Anglia International School (Dubai) – Dh85,032
  2. Kings School Al Barsha (Dubai) – Dh71,905
  3. Brighton College Abu Dhabi - Dh68,560
  4. Jumeirah English Speaking School (Dubai) – Dh59,728
  5. Gems Wellington International School – Dubai Branch – Dh58,488
  6. The British School Al Khubairat (Abu Dhabi) - Dh54,170
  7. Dubai English Speaking School – Dh51,269

*Annual tuition fees covering the 2024/2025 academic year

Greatest Royal Rumble results

John Cena pinned Triple H in a singles match

Cedric Alexander retained the WWE Cruiserweight title against Kalisto

Matt Hardy and Bray Wyatt win the Raw Tag Team titles against Cesaro and Sheamus

Jeff Hardy retained the United States title against Jinder Mahal

Bludgeon Brothers retain the SmackDown Tag Team titles against the Usos

Seth Rollins retains the Intercontinental title against The Miz, Finn Balor and Samoa Joe

AJ Styles remains WWE World Heavyweight champion after he and Shinsuke Nakamura are both counted out

The Undertaker beats Rusev in a casket match

Brock Lesnar retains the WWE Universal title against Roman Reigns in a steel cage match

Braun Strowman won the 50-man Royal Rumble by eliminating Big Cass last

Common OCD symptoms and how they manifest

Checking: the obsession or thoughts focus on some harm coming from things not being as they should, which usually centre around the theme of safety. For example, the obsession is “the building will burn down”, therefore the compulsion is checking that the oven is switched off.

Contamination: the obsession is focused on the presence of germs, dirt or harmful bacteria and how this will impact the person and/or their loved ones. For example, the obsession is “the floor is dirty; me and my family will get sick and die”, the compulsion is repetitive cleaning.

Orderliness: the obsession is a fear of sitting with uncomfortable feelings, or to prevent harm coming to oneself or others. Objectively there appears to be no logical link between the obsession and compulsion. For example,” I won’t feel right if the jars aren’t lined up” or “harm will come to my family if I don’t line up all the jars”, so the compulsion is therefore lining up the jars.

Intrusive thoughts: the intrusive thought is usually highly distressing and repetitive. Common examples may include thoughts of perpetrating violence towards others, harming others, or questions over one’s character or deeds, usually in conflict with the person’s true values. An example would be: “I think I might hurt my family”, which in turn leads to the compulsion of avoiding social gatherings.

Hoarding: the intrusive thought is the overvaluing of objects or possessions, while the compulsion is stashing or hoarding these items and refusing to let them go. For example, “this newspaper may come in useful one day”, therefore, the compulsion is hoarding newspapers instead of discarding them the next day.

Source: Dr Robert Chandler, clinical psychologist at Lighthouse Arabia

Dubai World Cup draw

1. Gunnevera

2. Capezzano

3. North America

4. Audible

5. Seeking The Soul

6. Pavel

7. Gronkowski

8. Axelrod

9. New Trails

10. Yoshida

11. K T Brave

12. Thunder Snow

13. Dolkong 

GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

The National Archives, Abu Dhabi

Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.

Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en

Updated: December 30, 2022, 3:10 AM