UPDATE ON ANTI-CORRUPTION DEVELOPMENTS IN IRAQ

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 001601

SIPDIS

E.O. 12958: DECL: 06/17/2019
TAGS: PGOV KCOR KDEM IZ
SUBJECT: UPDATE ON ANTI-CORRUPTION DEVELOPMENTS IN IRAQ

REF: A. BAGHDAD 1454 ET AL

B. BAGHDAD 1282

C. BAGHDAD 1355

Classified By: ACCO Joseph Stafford, reason 1.4 (b and d)

SUMMARY
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1. (C) The investigation of former Trade Minister Al-Sudani
and subordinates over corruption allegations is continuing,
amidst parliamentarian's claims of interference in the
inquiry by Prime Minister Nouri Al-Maliki's Dawa party. There
are uncertain prospects for the Council of Representatives'
early passage of assorted anti-corruption bills. The GOI's
anti-bribery campaign has yet to receive much publicity; we
are told that the Commission on Integrity has established an
"operations center" to oversee the campaign. END SUMMARY

INVESTIGATION OF CORRUPTION ALLEGATIONS AT TRADE MINISTRY
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2. (C) Following last month's arrest of recently-resigned
Trade Minister Abdul Falah Al-Sudani and other senior Trade
Ministry (MOT) officials over corruption allegations (ref a),
the Commission of Integrity (COI) is continuing its
investigation, in cooperation with the investigating judge in
Muthana province, where the arrest warrants originated.
Al-Sudani is currently free on bail, and we have been unable
to verify his whereabouts. A senior Trade Ministry official
told Emboffs that Al-Sudani had fled to Syria, but COI
contacts said they believed he was still in Iraq. Two MOT
officials and a brother of the Minister remain in custody,
and seven other MOT officials sought in the case are still at
large. It is not clear when the investigative phase will
conclude and trial proceedings get underway. In fact, it is
uncertain whether the former Minister himself will actually
face trial; a senior GOI official following corruption issues
confided to us June 17 that investigators had yet to find
enough evidence of wrongdoing by Al-Sudani to warrant
prosecution. He said that unless other accused MOT officials
provided more information on the ex-Minister's actions than
they had to date, he would likely end up escaping
prosecution. Our source did go on to predict that most, if
not all of the other MOT officials implicated in the case
would end up being tried and convicted.

PRIME MINISTER/COR SKIRMISHING OVER CORRUPTION DOSSIER
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3. (C) The GOI official spoke of efforts by Prime Minister
Nouri Al-Maliki's Dawa Party to block the investigation of
the MOT officials. He stated that, following former Minister
Al-Sudani's arrest, a delegation of senior Dawa party
officials visited COI Judge Rahim Al-Ugaili, who parried
their appeal to halt the inquiry by stating that he lacked
the authority to do so as it was being directed by the
judiciary (i.e., the investigating judge in Muthana
province). The head of the Council of Representatives (COR)
Integrity Committee, Sheikh Sabah Al-Saedi, a long-time
critic of the former Minister, recently accused Prime
Minister Nouri Al-Maliki himself of "intimidating" COR
members in an effort to prevent them from questioning
Ministers over corruption issues. He also charged Al-Maliki
with attempting to block the prosecution of Al-Sudani.
Al-Saedi went on to allege that the Prime Minister was behind
a move to investigate and suspend the Iraqi Airlines Director
General in retaliation for his arranging the return to Iraq
of the passenger aircraft that Al-Sudani had boarded in an
attempt to avoid arrest. (COMMENT: Besides Sheikh Sabah's
latest criticisms of the Prime Minister, the ongoing
skirmishing between the COR and Prime Minister over the
corruption dossier is reflected in the failure to date of the
Qcorruption dossier is reflected in the failure to date of the
Oil and Electricity Ministers to appear before the COR for
questioning on corruption issues. Following the COR's
grilling of Al-Sudani May 16-17, COR members had announced
that the Oil and Electricity Ministers would also be
questioned (ref c). END COMMENT)


STATUS OF ANTI-CORRUPTION BILLS
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4. (C) Prospects for the Council of Representatives' early
passage of anti-corruption legislation are doubtful. The
legislative proposals cover (a) reform of Iraq's principal
anti-corruption bodies, COI, Board of Supreme Audit (BSA),
and corps of Inspectors General (IG),(b) an omnibus
anti-corruption measure, and (c) a measure aimed at
strengthening Iraq's anti-money laundering (AML) apparatus.
While the latter two bills remain in the early stages of the
legislative process and have yet to be formally debated by
the COR, the trio covering the anti-corruption bodies were

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initially submitted to the COR a year ago, but were
subsequently withdrawn by the GOI before the COR could act on
them. In May, an alternative text of the COI bill, drafted
by COI head Judge Rahim Al-Ugaili, received a first and
second reading in the COR, but opposition by numerous MP's as
well as the Prime Minister's office prevented final action.
In a June 15 meeting with Anti-Corruption Coordinator and
staff (ACCO),Minister of State for COR Affairs Safa Al-Safi
indicated that the GOI planned soon to submit revisions of
the BSA and IG bills for the COR's action, but declined to
say when the COI bill might be submitted. In a separate
meeting, another senior GOI official ruled out passage this
year of the COI bill, but thought the COR might act on the
BSA and IG bills "within a few months." He declined to
estimate prospects for passage of the omnibus and AML bills.
(COMMENT: Our sense remains that overall, the various
proposed laws represent a step forward in terms of
strengthening Iraq's anti-corruption regime -- but we lack
full details on the latest texts in order to assess just how
much of a step forward they represent. END COMMENT)

ANTI-BRIBERY CAMPAIGN
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5. (C) The GOI's anti-bribery campaign, which formally opened
June 1, has yet to receive much publicity, and what concrete
steps have been taken so far are unclear. As previously
reported (ref C),the campaign, envisioned as a joint effort
by the COI and IGs, was initially to focus on selected
offices in three Ministries -- Justice, Interior, and
Finance. In a recent meeting with ACCO, deputy COI head
Judge Ezzat Jaafer said that the campaign was intended to
cover all Ministries and that overall supervision would be
provided by the COI. According to Judge Ezzat, the COI has
established an "operations center," initially staffed by
himself and three other COI personnel. He readily
acknowledged that the staff of the "operations center" would
need to be substantially increased in order to direct and
monitor the campaign adequately; he stated that additional
employees would be detailed to the "operations center" in due
course. (COMMENT: COI sources tell us that the COI workforce
is currently under severe strain, as many employees have been
assigned to the MOT investigation. END COMMENT)
FORD