Auditors in Iraq have uncovered a massive scheme in which a network of businesses and officials embezzled about US$2.5 billion from the country’s tax authority.
Iraqi Prime Minister Mohammed Shia al-Sudani has vowed to crack down on corruption.
The scale of the embezzlement — which was about 2.8 percent of the state budget for last year — is remarkable, even for an oil-rich country where corruption has been rampant for decades.
Photo: AFP / HO / IRAQI PRIME MINISTER’S OFFICE
Transparency International, a global watchdog, last year rated Iraq 157th out of 180 countries on its index for clean governance.
The auditors’ report suggests that the theft was orchestrated by a broad network of officials, civil servants and businesspeople.
“It was a very organized and agreed-upon process of theft,” said Jamal al-Asadi, a legal expert and retired judge familiar with corruption cases.
Three officials confirmed details of the scheme.
All spoke on condition of anonymity, fearing reprisals.
The scheme came to light last month when an internal audit by the Iraqi Ministry of Finance alleged that the Iraqi General Commission for Taxes had fraudulently paid about 3.7 trillion dinars (US$2.5 billion) to five companies.
The payments were made through 247 checks cashed between Sept. 9 last year and Aug. 11 from a branch at the state-run Rafidain Bank within the tax commission.
The account held billions of dollars in deposits made by companies that were supposed to be returned to them once taxes had been deducted and the companies had presented updated financial statements.
The five companies are alleged to have fraudulently drawn refunds without depositing anything.
An audit was launched by then-Iraqi acting minister of finance Ihsan Abdul Jabbar, who discovered the theft after receiving complaints from an oil company unable to retrieve its tax deposits, a senior official close to the investigation said.
When Jabbar asked about the remaining balance in the account, the tax authority said it held about US$2.5 billion, but further inspection showed the actual balance was US$100 million, the official said.
That was the first indication of the massive theft. A subsequent audit presented to the Iraqi parliament’s finance committee revealed the rest.
The audit found that the companies, three of which were established just weeks before the payments were made, submitted fake documents to be able to claim the payouts.
Auditors were unable to follow the money further because it was withdrawn in cash.
BACK IN THE NEIGHBORHOOD: The planned transit by the ‘Baden-Wuerttemberg’ and the ‘Frankfurt am Main’ would be the German Navy’s first passage since 2002 Two German warships are set to pass through the Taiwan Strait in the middle of this month, becoming the first German naval vessels to do so in 22 years, Der Spiegel reported on Saturday. Reuters last month reported that the warships, the frigate Baden-Wuerttemberg and the replenishment ship Frankfurt am Main, were awaiting orders from Berlin to sail the Strait, prompting a rebuke to Germany from Beijing. Der Spiegel cited unspecified sources as saying Beijing would not be formally notified of the German ships’ passage to emphasize that Berlin views the trip as normal. The German Federal Ministry of Defense declined to comment. While
‘UPHOLDING PEACE’: Taiwan’s foreign minister thanked the US Congress for using a ‘creative and effective way’ to deter Chinese military aggression toward the nation The US House of Representatives on Monday passed the Taiwan Conflict Deterrence Act, aimed at deterring Chinese aggression toward Taiwan by threatening to publish information about Chinese Communist Party (CCP) officials’ “illicit” financial assets if Beijing were to attack. The act would also “restrict financial services for certain immediate family of such officials,” the text of the legislation says. The bill was introduced in January last year by US representatives French Hill and Brad Sherman. After remarks from several members, it passed unanimously. “If China chooses to attack the free people of Taiwan, [the bill] requires the Treasury secretary to publish the illicit
A senior US military official yesterday warned his Chinese counterpart against Beijing’s “dangerous” moves in the South China Sea during the first talks of their kind between the commanders. Washington and Beijing remain at odds on issues from trade to the status of Taiwan and China’s increasingly assertive approach in disputed maritime regions, but they have sought to re-establish regular military-to-military talks in a bid to prevent flashpoint disputes from spinning out of control. Samuel Paparo, commander of the US Indo-Pacific Command, and Wu Yanan (吳亞男), head of the People’s Liberation Army (PLA) Southern Theater Command, talked via videoconference. Paparo “underscored the importance
CHINA POLICY: At the seventh US-EU Dialogue on China, the two sides issued strong support for Taiwan and condemned China’s actions in the South China Sea The US and EU issued a joint statement on Wednesday supporting Taiwan’s international participation, notably omitting the “one China” policy in a departure from previous similar statements, following high-level talks on China and the Indo-Pacific region. The statement also urged China to show restraint in the Taiwan Strait. US Deputy Secretary of State Kurt Campbell and European External Action Service Secretary-General Stefano Sannino cochaired the seventh US-EU Dialogue on China and the sixth US-EU Indo-Pacific Consultations from Monday to Tuesday. Since the Indo-Pacific consultations were launched in 2021, references to the “one China” policy have appeared in every statement apart from the
RSS