Iraq’s anti-corruption chief sat in his office, waving his hands in exasperation. “There is no solution,” he said. “Everybody is corrupt, from the top of society to the bottom. Everyone. Including me.”
Coming at the start of a conversation about Iraq’s ailing governance, and what was being done to turn things around, Mishan al-Jabouri’s admission was jarring. “At least I am honest about it,” he shrugged. “I was offered $5m by someone to stop investigating him. I took it, and continued prosecuting him anyway.”
Jabouri heads one of two anti-graft agencies tasked with protecting public monies in post-war Iraq. Both have more work than they can ever hope to deal with – even if they wanted to.
Now, with plunging oil prices leaving Iraq’s revenues in more jeopardy than at any time since the US invasion, attention is shifting to what the custodians of public funds have done over more than a decade with tens of billions of dollars that could otherwise be a buffer from such a budget shock.
If, as projected, global oil prices remain at historic lows, Iraq will be unable to pay some of its civil servants, or honour pledges to build roads and power stations in the next financial year. The gravity of the crisis has created uncomfortable reckonings for Iraq’s political class, military leaders and some senior religious figures, who have led a staggering 13-year pillage that has left Iraq consistently rated as one of the top five least transparent and most corrupt countries in the world.
“Believe me, most of the senior names in the country have been responsible for stealing nearly all its wealth,” said Jabouri. “There are names at the top of the tree who would kill me if I went after them. When people here steal, they steal openly. They brag about it. There is a virus here, like Ebola. It is called corruption. There is no hope, I am sorry to say.”
Across all levels of society, a realisation is sinking in that Iraq is now entering a phase that could prove every bit as destabilising – perhaps even more so – than the war against Islamic State. Jamal al-Bateekh, a senior tribal leader with the ear of the political class, said: “For 12 years we have gone through the process of opening the budget in the parliament. But we have never closed it. There has never been a reckoning. All that time, they have been dividing the carcass into pieces.”
“This is existential,” said former deputy president Ayad Allawi, whose office was abolished late last year in a cost-saving drive. “There are organised corruption syndicates running the country, let alone militias. I tell you very frankly, no Iraqi power can take action on this.”
Over the past four months, some of Iraq’s top office holders, led by prime minister Haider al-Abadi, have tried to do just that. Emboldened by Iraq’s highest religious authority, Ayatollah Ali al-Sistani, Abadi has tried to launch an anti-corruption drive designed to weed out the most guilty and introduce meaningful accountability processes across all levels of business and politics.
Sistani, who has remained taciturn throughout most of his career, had been unusually strident during his Friday sermons, delivered through a spokesman until he stopped them in protest in January. “We spoke so much until our voices were hoarse, yet nobody listened,” he said at the time.
“He was more strong, more fierce and in-depth than he’d ever been,” said Allawi of Sistani’s increasingly forthright interventions. “He knows how serious this is.”
Across Baghdad, the finance minister, Hoshyar Zebari, has been tasked with finding ways around a profound budget shortfall that Sistani, Abadi and others fear could soon lead to civic unrest and even retribution.
“We are 93-95% dependent on oil revenues,” said Zebari. “This year, our situation is far more difficult than in any other year,” he said. “We have exhausted our domestic borrowing. We need to go through a soul-searching process. We need to lose our dependability on oil. We need to prepare the public for change; on things such as VATs and other new measures. It is a question of a change in attitude. Here people are not accustomed to this.”
Iraq’s budget is modelled on an oil price of about $45 per barrel. However, oil had been hovering at $27 per barrel in recent months, before rallying by 14% over the past week. Nevertheless, oil experts across the Middle East believe that the recent fall in prices is structural, not cyclical, with very serious consequences for economies that are largely driven by old energy.
Zebari said that in early February he took Iraq’s full financial accounts to Sistani in the Shia city of Najaf for the 85-year-old ayatollah to inspect. “He is very serious about turning things around,” he said. “But he is frustrated.”
Iraq has one of the biggest per capita public payrolls in the world, roughly 7 million people from a population of just over 21 million, and it is here that Zebari believes much of the systemic corruption is hidden. “Our biggest issue is ghost soldiers,” he said. “There are maybe $500-$600m in salaries being paid to soldiers who don’t exist. There are so many outlets for this money to go without any accountability.”
In such cases, the salaries are instead collected by officers. In other cases, soldiers pay officers half their salaries so they don’t have to show up for duty.
The former chief of staff of Iraq’s army, General Babakir Zebari, who retired last year, conceded that the issue of ghost soldiers had bedevilled the military, along with vastly inflated tenders for weapons. “I warned about this all the time,” he said. “Everybody knew my views.
“The tenders are an issue that needed a lot of focus. It is my understanding that a lot of money went missing there.”
Hoshyar Zebari estimates that there as many as 30,000 ghost soldiers in Iraq’s military and that corrupt officers are pocketing their salaries. The impact is even more significant than the bottom line. The fall of Mosul, Iraq’s second city, in mid-2014 was in part blamed on there being far fewer soldiers in position to defend the city than there were on the books. Generals and other senior officers accused of running the scam have yet to be brought to account.
“They were protected,” said Jabouri. “We only go after the easy targets here. Recently a Christian businessman was jailed for two years for stealing $200,000 to build his house. That is nothing. It doesn’t even register as a crime compared [with] what else is going on.”
“We have paid out $1bn for war planes that never arrived. In Tikrit there have been budgets paid for courthouses that have never been built. It is the same with road projects all over the country, the port at Umm Qasr near Basra. If I had 50 staff to help me, we could barely scratch the surface.
“The problems here are social as much as everything. You are seen as weak if you don’t steal. Everyone wants to claim power, because they know that nobody else is going to share power with them.”
Allawi said he had taken a plan to Abadi to invite forensic auditors to examine Iraq’s books. “I was met by silence and blank stares,” he said. “It was like a bomb went off in the room.”
Abadi has placed much of his political stock on his reform drive, which he sees as essential to holding the country together. Sistani’s full throated sponsorship has given his moves an impetus that they would not otherwise have had. However, so far he has been unable to slow a plunder that has crippled Iraq’s governance.
“He is a good guy,” said Jabouri. “He is cleaner than all people in the parliament. But he cannot do this. Nobody can.”
And what of the self-declared corrupt anti-corruption chief, Jabour? “I did it because I am daring people to come after me,” he said. “No one will dare to. I have files on them all.”