Iraq PM orders legal action over oil bribery report

Former ministers implicated in Huffington Post report on dealings by Monaco-based firm.

Iraqi higher education minister Hussein Al Shahristani, who formerly held the oil portfolio, denies corruption allegations against him  at a press conference in Baghdad on April 2, 2016. Khalid Al Mousily / Reuters
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Baghdad // Senior Iraqi officials face investigation and possible prosecution after allegations that they took millions of dollars in bribes to help big companies secure oil contracts.

Prime minister Haider Al Abadi on Saturday ordered Iraq’s anti-corruption commission to take legal measures and called for the judiciary to pursue prosecutions connected to the scandal.

The corruption allegations were published last week by The Huffington Post and the Australian newspaper The Age after they reviewed thousands of documents from Unaoil, an oil-industry company based in Monaco but incorporated in the British Virgin Islands, a tax haven.

The allegations “related to oil contracts during the period of previous governments”, the prime minister’s office said.

Iraq, which relies on oil exports for most of its revenue, has been plagued by corruption and mismanagement for years, ranking 161 out of 168 on Transparency International’s corruption perceptions index last year. Graft continues to eat at the government’s resources as it struggles with high spending due to the costs of the war against ISIL and a steep drop in global oil prices.

The report alleges that Unaoil agreed to pay millions of dollars to influence Iraqi officials, including oil ministers Hussein Al Shahristani and Abdul Karim Luaibi, to help secure contracts for its clients. Mr Al Shahristani was also deputy prime minister for energy affairs.

Unaoil clients in the Middle East included Rolls-Royce, Weatherford, Petrofac, Clyde Pumps, Cameron/Natco, FMC Technologies, Saipem, SBM Offshore, Man Turbo and Leighton Offshore, according to the report.

Mr Al Shahristani, who is minister of higher education, on Saturday denied having had contact with Unaoil.

A leader in Iraq's ruling National Alliance coalition, Mr Al Shahristani urged the government to investigate everyone named in the report, including himself. He called on The Huffington Post to provide all the documents it referenced.

The report on oil sector corruption has already sparked action in Europe.

Authorities in Monaco searched Unaoil’s headquarters and the homes of company officials and questioned leaders of the company at the request of Britain’s serious fraud office as part of “a major corruption case with international ramifications”.

Last week, Mr Al Abadi presented a new cabinet of technocrats for parliamentary approval, the latest in a series of reform measures aimed at reducing the government waste and corruption that triggered mass protests last August. The move followed weeks of pressure by cleric Muqtada Al Sadr, whose followers staged a sit-in outside Baghdad’s green zone where government buildings and embassies are situated.

Mr Al Abadi had called for his cabinet of party-affiliated ministers to be replaced with technocrats, but faced resistance from powerful blocs and their ministers, who rely on ministries for patronage and financial gain.

He has proposed Nizar Al Numan as oil minister, prominent Shiite politician Ali Allawi as finance minister and Sharif bin Al Hussein, a relative of Iraq’s king deposed in 1958, as foreign minister.

The defence and interior ministers will remain the same for because of the country’s battle against ISIL, Mr Al Abadi said.

However, Mr Al Numan, who is a Kurd, withdrew his candidacy on Friday because he had not been formally put forward by the main Kurdish groups.

“Because there is no political agreement over the form of the future government, I withdraw my candidacy for the ministry of oil position,” he said.

Hoshiyar Zebari, departing finance minister and a fellow Kurd, said Mr Al Abadi’s proposed cabinet lacked the formal approval of the Kurdish groups.

“The Kurdish alliance has one position: we are for the respect of the constitution and we won’t allow the Kurds’ representatives be imposed on us.”

* Agence France-Presse and Reuters