The Guardian: How was $2.5 billion of Iraqi state money stolen?

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[size=52]The Guardian: How was $2.5 billion of Iraqi state money stolen?[/size]

[size=45]Translated by / Hamed Ahmed[/size]
[size=45]The Iraqis called it the “theft of the century.” The brazen looting of several billion dollars from state coffers has cast a shadow over the country.[/size]
[size=45]And the British Guardian newspaper indicated in a report that, according to sources and a series of official government books published in the summer of 2021, it is clear that the theft of $ 2.5 billion was facilitated by some of the highest official institutions in the country. The documents, signed by several different government institutions including the office of the prime minister at the time, nullified the audit of withdrawals from the accounts of the Iraqi Tax Commission.[/size]
[size=45]The Guardian says that these official books did not draw attention to this issue at the time. Iraq had been shocked by two years of turmoil as it headed for early elections. Parliament has been adjourned. The eyes of the media and the international community were directed towards the ballot boxes for the 2021 elections, which came as a result of popular protests calling for the elimination of the corrupt ruling elites.[/size]
[size=45]But behind the scenes, the ground was prepared for the theft of tax revenues in a process that appeared as the largest corruption scandal in the time of the previous government, a prominent event for a country approaching the bottom of the list of the most corrupt countries in the world in the Transparency International Index. According to a 41-page internal investigation report, seen by the Guardian, the $2.5 billion tax money was withdrawn by shell companies with no official registration, with the help of corrupt officials, and this money was laundered, according to several sources, through the purchase of real estate. In the finest neighborhoods of Baghdad.[/size]
[size=45]The Guardian newspaper revealed in its report that the mastermind of this theft is a businessman with wide connections and it was carried out by members of the Tax Committee who enjoy support from a political party with an armed faction.[/size]
[size=45]According to leaked documents and interviews with more than a dozen officials, businessmen, and bank owners familiar with the details of the case, the theft of such an amount of money cannot take place without the knowledge of a wider range of institutions, including the Prime Minister's Office, the bank that issued the withdrawals, the Integrity Commission, and the Central Bank.[/size]
[size=45]A former member of the Finance Committee in Parliament, who asked not to be named, said, “It is a large network behind which senior politicians from influential entities lead the country. Department managers cannot steal such an amount on their own. There is an agreement and each party takes its share.”[/size]
[size=45]Ahmed Najati, the former director of Kadhimi’s office, told the Guardian, “The claim that the prime minister’s office agreed to cancel the account statement process and that it facilitated the theft is a misrepresentation of the truth. Canceling the account statement is not a justification for theft.[/size]
[size=45]The former Prime Minister, Mustafa Al-Kazemi, lacked a political base and became subject to pressure from parties and their armed factions, which sought to strengthen their grip on attractive government positions.[/size]
[size=45]A member of the Integrity Commission, who says that it enjoyed more independence before Al-Kazemi’s era, said, “The sharing of positions has become more popular in Al-Kazemi’s time. It was the only way to stay in power.” Al-Kazemi's office denied these allegations.[/size]
[size=45]A proposal had preceded the theft by the former head of the Parliament’s Finance Committee, Haitham al-Jubouri, in which he recommended the abolition of the role of auditing that reveals withdrawals from the accounts of the Tax Authority, on the pretext that there were “many complaints” regarding its lengthy procedures. A few months later, Al-Jubouri was appointed as an advisor to Al-Kadhimi. The Guardian says Jubouri did not respond to a request for comment.[/size]
[size=45]The former member of parliament's finance committee said the proposal to scrap the audit was supposed to be a red flag for a government committed to fighting corruption. Instead, the Audit Department and the Prime Minister's Office each issued a letter expressing no opposition. "It was all part of the plan," he added.[/size]
[size=45]Execution of the theft hinges on accomplices within the tax authority that signs, authorizes and releases checks and cashiers. According to four sources within the Ministry of Finance, that network was composed by the former director of the authority, Shaker Mahmoud. According to a document seen by the Guardian, based on a letter issued by the prime minister's office and a phone call to the Financial Supervisory Authority, Mahmoud ordered the accounts statement to be cancelled. Shortly thereafter, Mahmoud was transferred to the Customs Authority, where many suspect a similar process is taking place. The Guardian says it was not possible to contact Mahmoud for comment.[/size]
[size=45]The Prime Minister's Office denied any responsibility for the theft. “The entire process took place inside the Ministry of Finance,” said Kadhimi’s former office manager. The process began with the Tax Authority and ended with the governmental Rafidain Bank, both of which are within the responsibility of the Ministry of Finance.[/size]
[size=45]In July 2021, the Tax Authority began issuing sukuk, each worth millions of dollars. No less than 247 bonds were issued to five companies over a period of 14 months. The checks were issued through one branch of the Rafidain Bank located within the Tax Authority, where the amounts were deposited in the companies’ accounts and then withdrawn immediately, which affected the liquidity in the bank.[/size]
[size=45]The Guardian says the theft was not unnoticed. Former Finance Minister Ali Allawi issued a decree in November 2021 prohibiting withdrawals without his approval, but they continued behind his back. The Anti-Money Laundering Unit of the Rafidain Bank has repeatedly sent letters to the Remittances Notification Department, but it seems that no action has been taken by the Rafidain Bank or the Central Bank, which are supposed to supervise the banking sector.[/size]
[size=45]"The fact that an amount of this size is being withdrawn from one branch should raise very serious questions," said one of the bank officials.[/size]
[size=45]The Guardian newspaper indicates that this case represents a test for the new government, Mohamed Shiaa Al-Sudani, to pursue influential people who are believed to be involved in the theft.[/size]
[size=45]Al-Sudani said in a press conference, “What happened was not done only by a group of people working in the private sector or small employees. There was political and official cover from influential state officials. We pledge to bring anyone who proves his involvement to account, whether they are politicians or state officials.”[/size]
[size=45]Few Iraqis believe there will be actual accountability. "They will blame a few small officials, and the others will run away," said a former member of the Finance Committee[/size]
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