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2005 April 05 Tuesday
Corruption Seen As Bigger Threat Than Insurgency In Iraq

Transparency International, in their new Global Corruption Report 2005, argues that reconstruction in Iraq faces serious corruption problems.

“Funds being poured into rebuilding countries such as Iraq must be safeguarded against corruption,” Eigen said today. “Transparency must also be the watchword as donors pledge massive sums for reconstruction in the countries affected by the Asian tsunami,” he added. The Global Corruption Report 2005, with a foreword by Francis Fukuyama, includes a special focus on construction and post-conflict reconstruction, and highlights the urgent need for governments to ensure transparency in public spending and for multinational companies to stop bribing at home and abroad.

“The unfolding scandal surrounding the UN sponsored oil-for-food programme in Iraq highlights the urgent need for strict conflict-of-interest rules and transparent and open bidding processes,” said Eigen. As Reinoud Leenders and Justin Alexander write in the GCR 2005, much of the anticipated expenditure on building and procurement in Iraq has not yet been spent. “If urgent steps are not taken,” they write, Iraq “will become the biggest corruption scandal in history”.

Iraqi politics is in large part a fight over the oil money.

"I can see all sorts of levels of corruption in Iraq," says report contributor Reinoud Leenders, "starting from petty officials asking for bribes to process a passport, way up to contractors delivering shoddy work and the kind of high-level corruption involving ministers and high officials handing out contracts to their friends and clients."

The recent elections may help, he adds, but already he notes a tendency for political bargaining indicative of "dividing up the cake of state resources."

Of course! Whoever controls Iraq's government controls the second largest oil reserves in the world. These officials will become less constrained in their mad grabs for money once the US presence winds down. Whichever faction comes out on top gets the spoils.

Most of the money the US has allocated for Iraq rebuilding has not been spent yet.

Willis and other critics worry that with just $4.1 billion of the $18.7 billion spent so far, the U.S. legal stance will open the door to much more fraud in the future.

...

Grassley adds that if the government decides the False Claims Act doesn't apply to Iraq, "any recovery for fraud, waste and abuse of taxpayer dollars ... would be prohibited."

The biggest problem with insufficient oversight in the handling of the US aid money is that the graft and corruption in its spending helps to reinforce the culture of corruption.

Baghdad, Iraq -- "Haramia," or "thieves," is the new name given to local contractors who receive money to fix up schools, then allegedly do such a poor job that they can put most of the money in their pockets, those on a Sadr City advisory committee say.

Ministry of Education officials acknowledge problems but say they're doing everything they can to combat them.

In one case, contractors actually stole light fixtures from the school instead of painting, replacing doors, or doing anything else called for in fix-up plans, said a school teacher who declined to be named. At another school, a man who would identify himself only as Mohammed said contractors threatened him and the principal with death if they did not sign a paper saying shoddy work had been done adequately.

The StrategyPage writers think Bush Administration ambitions in Iraq are more likely to be undermined by corruption than by the insurgents.

When Saddam and his Baath Party were overthrown in 2003, it quickly became apparent that there were not enough trained (and experienced) Shia Arab and Kurdish bureaucrats to run the whole country. So Sunni Arab officials were brought back in. And then the thieving began. Billions of dollars went missing. There were Shia Arab and Kurdish thieves as well, but they were not as experienced, or as ruthless, as the Sunni Arab officials. Case in point is the use of Sunni Arab gangs as hit men, to eliminate honest officials who are trying to crack down on corruption.

Another problem is family relationships. Family ties are important in Iraq, and the families tend to be large and expansive. A Sunni Arab police commander might easily have a cousin working for a terrorist group, and another who’s a banker in Europe or Egypt. The police commander can use these connections to get a corruption investigator murdered, and to get stolen money out of the country and laundered in a foreign bank. There are at least a few thousand Sunni Arabs involved in corruption in a big way (many more in smaller ways), and several billion dollars, at least, that have been stolen so far. Do the math. How do you think people are paying for all those new luxury cars and mansions? The crooks are smart. They spread the money around in the family. That buys protection, and places to hide when the going gets very rough.

StrategyPage does not think Iraq is by any means assured to turn out well.

A happy ending is not assured. If enough Iraqis do not step up for honest government, the country will end up with another Saddam.

Some Iraqis who know Saddam was bad think things were better under Saddam.

But most Iraqis say they can live with gas lines and power outages if they can be assured of safety.

"Yes, some new things are available now, mobile phones, satellite TV, new cars. But the thing that we lost is more valuable," says Basim Majid, the manager of an electronics store. "We are in the middle of chaos and there is no way back. I hope they use force to spread security."

Bassam Henna, who is unemployed, is discouraged. "Frankly, the time of Saddam was better in general," he says. "Not Saddam himself, with all his faults and all his mistakes, but in general, that time was better than now. If we are missing him, imagine what the situation is like."

A feeling of triumphalism has swept over the ranks of some Iraq war advocates in the wake of reduced insurgent attacks in Iraq and the protests in Beirut to remove Syrian troops from Lebanon. My own conservative sentiment remains that humans are not so easily improved and recall that most American attempts to bring democracy and rule of law to foreign lands have beeen failures. The reasons for the absence of democracy in so many Middle Eastern countries are very deeply rooted. Consanguineous cousin marriage is just one of them. There are still other causes for democracy to fail to take root.

By Randall Parker    2005 April 05 02:01 AM Entry Permalink | Comments (9)
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