Broadly defining corruption in this context, which is the misuse of public offices or resources for personal gains, then it is not hard to see how big the bulk of corruption. However, quantifying the cost of corruption is actually difficult due to the vague definitions of the term and complex nature of its effects. In addition, it is very hard to observe corruption because people who are committing it tending to hide and avoid accountability. This issue is much bigger in a developing country like Iraq due to lack of transparency, inefficient bureaucracy, and malfunctioning institutions that do everything to prevent reaching to accurate information and data. For instance, the KRG has not ratified any budget law since 2013 and publish no data on its oil sector that generates more than half of its revenues.Lack of an Anti-Corruption Political Willingness
Since 2003, a group of political parties has governed Iraq (including Kurdistan Region) through several coalition governments. The political parties are Islamic Dawa Party, Supreme Islamic Iraqi Council, Sadrist Movement, Iraqi Islamic Party, Kurdistan Democratic Party, Patriotic Union of Kurdistan, Gorran Movement, Iraqi National Accord, Badr Organization, Asayb Al Ahl-haq, Fazila Party, and dozens more smaller parties and tribal groups. They are still playing the driving force in PM Adbul-Mahdi’s Cabinet in Baghdad and Masrur Barzani’s upcoming Cabinet in Erbil.
Contrary to the trendy anti-corruption rhetoric, none of these parties have shown any intention to stop misusing power and public offices by their patronage networks and attached militias. They actually increased their pressures on FGI, trying to manipulate it for their special and personal gains, according to PM Abdul-Mahdi. What the parties and their blocs in Iraqi Parliament are seeking is contradicting the government agenda they voted for. Here, it is clear that PM Abdul-Mahdi, in his counter-corruption efforts, has no supports of the parliamentarian factions who brought him to the office and ratified his cabinet-agenda.
As a result, the bulk of corrupt deals, acts, and malfunctioning bureaucracy in Iraq’s public sector and within the same political elite has increased to an unprecedented level. Now, and for the first time in the history of Iraq, public offices and government positions are sold and bought between the same political elite. Therefore, whoever has criminal money and militias’ support can pay more and get the office regardless of who won majority in elections, which usually suffer lots of fraud, intimidation, attacks on polling stations, economic threats, electorate manipulation in Iraq.
Challenges as misusing of public institutions, money laundering, oil smuggling, election fraud, and widespread bureaucratic bribery have pulled Iraq to the bottom of international corruption rankings in the past 16 years. Data from Corruption Perceptions Index (CPI), published annually by Transparency International, shows how Iraq’s position has kept low and exacerbated since 2003, when the ruling parties took office after the fall of Saddam Hussein’s regime as a result of the US invasion.
The CPI currently ranks 176 countries on a scale from 100 (the least corrupt countries) to 0 (the most corrupt countries). As the following chart shows, Iraq’s score is 22nd in 2003, and it lowered to 18th in 2018.
The figures show how the Iraq’s political elite has failed to provide a strong integrity system to reduce corruption while anti-corruption initiatives have always been popular since 2005. Almost all Iraqi leaders, more or less, have raised the flag of combating corruption, but the data and the reality shows the opposite. They have exacerbated the situation.
Political interference in anti-corruption bodies, politicization of corruption cases, weak civil society, and security instability severely limit government’s capacity to efficiently curb corruption. Many of these parties have active patronage networks in the state institutions, and they misuse public institutions to their own benefits. For instance, in the both FGI and the KRG there are still about one million of ghost employees, who receive public sector salaries but doing nothing or just working for the political parties.
The political parties’ patronage networks currently push the Federal Government of Iraq to respond to their partisan demands. In Iraqi Parliament, they have also blocked PM Abdul-Mahdi from completing his cabinet; appointing justice, interior, and defense ministers. In Erbil, the Kurdistan Democratic Party (KDP), The Patriotic Union of Kurdistan (PUK), and Gorran Movement are forming the KRG’s 9th cabinet, hopping to reform the region’s governing institutions while they have had hard time to surpass their internal rivalry over the positon of Kirkuk governor and several other issues.
The Cost of Corruption in Iraq
In practice, working definitions of corruption are too vague to be quantifiable, while measuring it needs to be as precise as possible. Here, the definition will quantify corrupt observed actions and their direct, or indirect, consequences. Of course, it can’t capture all what happened in Iraq. It is an attempt to calculate effects of corrupt deeds about which there are some evidences and officials’ statements.
In May 2018, the Iraqi parliament’s Integrity Committee announced that the cost of corruption has reached $350 billion since 2003. However, a basic ICPAR’s calculation shows that the number is actually more than $785 billion until January 2019. For this calculation, dozens of officials’ statements, formal documents, and media reports on the bulk of Iraq’s corruption are verified, hopping to reach the most accurate estimates of Iraq’s corruption-damages. The following table (1) shows the ICPAR’s roughly calculating corruption damages in Iraq’s post 2003 regime.
When Iraqi MPs and leaders estimate cost of corruption, they ignore the damages of ghost (phantom) employees, who receive monthly salaries from public sector but do not work at all. The total number of ghost employees is around 900,000 people in the FGI and 200,000 people in the KRG. The KRG reduced this issue by 2017, thanks to its newly introduced biometric system and the financial crisis that hit the region. Most of the ghost employees are in defense and interior-affairs ministries while the political parties’ patronage networks still work in all other ministries.
For this calculation, no conventional aggregate corruption measure is used since there is no reliable statistics or public data about the bulk of money Iraq has lost since 2003 due to corruption. For instance, nobody has any accurate information about the amount of oil militias used to steal in Basra, Kirkuk, and Salahadin between 2003 and 2014. While several bureaucrats, MPs and political leaders give contradicting information about the cost of the oil smuggling to Iraq. For this calculating, ICPAR multiplied the amount of crude oil Iraq lost due to smuggling operations by average prices of Iraq’s oil in each year.
In Iraq and elsewhere, there is always some lost-utilities that can’t be quantified such as erosion of public confidence, deteriorating government-legitimacy, worsening of public services. But in Iraq there is more complexity. “Corruption is one of the three main reasons that led to emerging Da’ish [ISIS,] according to Hakm al-Zamli, former head of Iraqi Parliament’s defense committee. This is another corruption cost that would be too complicated to quantify given the causality between the war of driving ISIS in Iraq and corruption.
Likewise, lost investment opportunities due to corruption and the expensive prices ordinary people have to pay for some public services are also not included in this study due to lack of data. For instance, the average cost Iraqis pay to the private electricity generators is four times more expensive than what customers pay in Germany, according to Fatih Birol, head of International Energy Agency.
Who Fights Corruption?
Recently, a Baghdad based news website reported a money-laundering scheme by a private bank. Right after publishing the news article, the reporter received assassination threats from the money laundering mafia. This is just an example to show how corruption has deep organized criminal supports in Baghdad. To take preventative measures against corruption, PM Abdul-Mahdi has tried to mobilize all his government’s resources to limit corruption opportunities. However, he is quite alone in what he is hoping to do against corruption.
In his weekly speech on June 10th, PM Abdul Mahdi said, “The Political parties have been putting pressures to distract the government from its agenda, which is ratified by the same political parties.” He also stressed that it was not the duty of these parties to bring his cabinet’s members to accountability but the duty of Iraqi Parliament.
Abdul-Mahdi, who has no political party and militia to support him, was the accepted candidate expected to satisfy everyone. Now, the political parties that elected him to the office do not support him in his counter corruption efforts. The reason is that some of the parties and their attached militias feed on public money and shady contracts. Reducing corruption means reducing their advantage and popularity. For instance, he can’t stop many Hashd al-Shabi groups (Popular Mobilization Units – PMU) from smuggling oil crudes and forcing donations in exchange for allowing businesses to operate in Mosul, Tuz-Khurmatu, Kirkuk, and Salahadin.
In fact, Iraq’s public institutions are controlled by these political parties’ patronage networks, and most of what they are doing could be labeled as corruption; from money laundering and smuggling oil to stealing public money and trading government positions. The same political parties, after reaching a deadlock in forming government, brought PM Abdul-Mahdi to office. Now, they are pressing his government to keep their illegal influence and expand it based on their partisan agendas, which contradict the government’s agenda.
Mohammed Rahim al-Robai’i, head of Al-Nahrain for Transparency and Integrity, Iraqi counter corruption NGO, believes that Iraqi laws are too old to be suitable for today’s efforts in combating corruption. He also stated that Iraqi government’s judiciary branch can’t handle the issue since it is not able to prosecute corrupt officials because the Iraqi Parliament has given them amnesty for the crimes they commit.
The Iraqi Parliament’s amnesty and political interventions in courts annuls efforts that have been made to reduce corruption. When government officials know that they would not be held accountable for whatever they will be doing, they have zero-incentive not to take opportunity for accumulating illegal wealth and influence. Saddam Hussein’s regime passed the Law Number 120 in 1994, which prevented releasing any prisoners with corruption charges before paying back for all the damages they caused. Iraqi Parliament canceled out this law, so it has created a disastrous legal gap for counter corruption efforts, according to Al-Rubai’i.
The KRG situation is more hopeless. Kurdistan parliament is not active as the Iraqi Parliament and there is basically no strong opposition party to help holding corrupt officials accountable, according to Farman Rashad, director of STOP, an Erbil based counter corruption NGO.
“Since 2004, the Kurdish leaders have launched several counter corruption campaigns and made countless big promises to reform the region’s governing institutions, but they were not successful. All these unfulfilled promises and frustration in the background have reduced optimism about the Kurdistan’s 9th cabinet’s counter-corruption efforts.” Rashad added.
The Kurdish leaders’ promises to combat corruption are too general and vague. They have not showed any realistic and concrete plan about what they will be reforming and how will they combat corruption. But, the KRG’s Prime Minister designate Masrur Barzani is expected to launch limited reform efforts in some institutions and at least to come up with a budget law to provide basic forecasts for revenues and expenditures.
However, political instability and the deteriorated relation between the region’s two main ruling parties, KDP and PUK, would hinder any comprehensive reform plan. The both parties are still preserving their partisan control on governing institutions in their traditional controlled areas, known as KDP’s Yellow Zone and PUK’s Green Zone. Politburos of these parties are still much stronger than any governing institution.
“There might be limited and partial reforms in some institutions based on the Party [KDP] and Gorran agreement to form the government and launch a reform project. They already have a legislation project to reform the region’s payroll and pension system. They will change somethings, but it is not going to be a structural reform in any way.” Rashad said, in an interview with ICPAR.
Desperate Counter-Corruption Combat
The core problem is endemic in the current Iraqi political system and accompanied all post-2003 governments. Since 2003, no political party has won majority in any of the elections, so the federal governments have been formed based on power-sharing deals (locally called Muhasasa) between the same political parties. The coalition governments had to consider all partners’ interests and demands. These partners have had different and sometimes conflicting agendas. In such a broad-based coalition government, it is hard to hold corrupt officials accountable without hurting the government’s fragile stability since many of these political parties have their own militias.
In Kurdistan Region of Iraq, the picture is further gloomy. The region’s weak institutions created opportunities for the two main ruling parties, KDP and PUK, to shape agenda of the KRG. Besides, Kurdistan lacks independent media, strong opposition party, strong counter corruption NGOs, and functional and independent judiciary branch. As Rashad said, “In Kurdistan, all the factors that are supposed to play some roles against corruption are too weak. They can’t keep pressing decision makers to reduce corruption.”
Therefore, there is no strong political and institutional support for any counter corruption bet in the IFG and the KRG, while the political parties’ patronage networks and militias, key corrupt actors, are quite strong and well organized. This is what made PM Abdul-Mahdi’s efforts just catch low-level corruption cases and government officials not leaders of political parties, ex-ministers, and head of political blocks in Iraqi parliament. Without holding these top corrupt officials accountable, it will be difficult to reduce opportunity of corruption, according to Aqeel Al-Rdeni, member of opposition Nasr Coalition.
A Real Push Against Corruption
Several conventional and new anti-corruption measures could be used by both Baghdad and Erbil governments to efficiently reduce corruption. For instance, e-governance and one-stop-shops could increase public institutions’ efficiency and ultimately reduce corruption opportunities. For instance, without the new biometric system the KRG was not able to reduce the number of its ghost employees.
Some legislations and legal reforms can help fighting corruption better. There should be a legal punishment to those who are convicted of corrupt acts, so it is going to create incentives for the rest of people to avoid abusing their power and public offices.
Reforming Iraq’s security forces and law-enforcement institutions also help better handling corruption. Strong state institutions always needed to implement laws and prevent an environment in which militias and criminal bands grow. For instance, only security institutions can prevent oil smuggling since organized and powerful bands and militias usually commit this type of crime.
Protecting NGO activists and encouraging free press would provide great support for counter corruption efforts. No reform plan and neither counter-corruption goals can be achieved just by depending on government staff. They desperately need supports of NGOs and free press. To let the later function well, they should provide free and secured environment for activists and journalists.
Corruption can’t be reduced by media campaigns, it would be rather by strengthening the legal and law-enforcement institutions to follow the media reports and data. In addition, anti-corruption efforts should not be mixed with political rivalry through demonizing alleged corrupt officials in social media. Specialized integrity courts can play great role to holding corrupt officials accountable.
(1). Most of the figures in this table are taken from direct interviews with government leaders, members of parliamentarian Integrity Committees in Baghdad and Erbil, unclassified –government documents, and some government leaders’ published statements. Most of the government officials seek anonymity while talking about the amount of money lost in each sector due to political and security reasons. ICPAR tried to verify their estimate-numbers, statements, and documents with relevant sources and officials to fine the most realistic estimate number.