MESOPOTAMIA NEWS : A MIDEAST WORLD OF TOTAL CORRUPTION / THE BARZANI’S

 Where Do the Millions Go in Iraq?

Luqman Hma Salih | Exclusive to Ekurd.net 10 May 2020

During October 2019 to January 2020, protesters were loud, “Where is my share of the oil profits?” When the protesters took to the streets of Baghdad and reached the microphone with a heavy-handed response talking about the corruption of oil. But most politicians who visited them have not been hoping to solve oil corruption because the real problem in Iraq now is not just corruption itself, but rather it is trying to legitimize the corruption.

In “Iraq is dying: oil flows freely but corruption fuels growing anger” Ghaith Abdul-Ahad demonstrates that ordinary Iraqis have seen no benefit from this national wealth while the profits of the oil industry are multi-billion dollars, even though oil production in Iraq is picking up. He describes the zone in Bani-Mansour clan north-east of Basra that has a lot of oil but funds for them rarely materialize. He claims that one of the richest companies in the world is Exxon Mobil that is pilfering oil in the north-east of Basra. Instead, people inhale the black smoke in the area. Abdul-Ahad says, “Ordinary Iraqis have seen little or no benefit from the proceeds of the country’s multibillion-dollar oil industry, much of which has been siphoned off by corrupt politicians”. Abdul-Ahad shows that in the eyes of the people of the region, militias with links to political parties have created their own companies, which have lucrative contracts with subsidiaries of foreign oil firms. The author says that corruption will not be solved even if this political elite took control of the authority of Iraq. His opinion matches with Representative Dr. Jamal Al-Mohammadawi.

Al-Mohammedawi is from Basra, a region that has a lot of wealth in oil. He is a member of the Energy Committee of the Iraqi Parliament with a Ph.D. in energy management. Al-Mohammedawi stressed the necessity of preserving evidence of the corruption of oil and wasting public money in the office of the Inspector General of the Ministry of Oil. He works to collects all the evidence then transfers them to security agencies to prevent their destruction. Al-Mohammedawi was worried that most of the richest and most strong personalities in governments and companies throughout Iraq have been corrupt for years because corruption cases have no statute of limitations.

In “Pipe Dreams: The Plundering of Iraq’s Oil Wealth.” Erin Banco thinks that it is significant to realize the corruption of oil in Iraq because it originates from two separate parts of Iraq. Kurdistan is ruled by the Kurdish Regional Government that is more developed than the central government in Baghdad. But both have similar issues of corruption and the plundering of oil. Also, she believes there were certain executives of international oil companies that they took advantage of this corruption. Banco thinks that if these two Kurdish parties continue power corruption will continue.

Ashti Hawrami (R) with the Barzanis in U.S. Photo: KRG

Banco argues that Iraqi Kurdistan’s oil only makes up a small part of Iraq’s total oil, but it has more corruption than Iraq’s oil. Due to this bad policy, Iraqi Kurdistan locals have suffered tremendously. The people who indeed benefited from this oil sector system are the political parties, those who lead the political parties.

The Barzani family, the Talabani family, and those in between, those who work in the Ministry of Natural Resources, and Ashti Hawrami profited the most. A lot of international oil companies have had disappointing results and have pulled out of that region because they weren’t able to make a profit. Along with Banco’s opinion, Kawa Muhammad is a member of the Iraqi Council of Representatives for Gorran that was a Kurdish Party and desires to reform Iraq and Kurdistan. Muhammad focused on solving corruption in the Iraq oil industry. He has many experiences in parliamentary work because he was elected to a second term by the Kurdish people. Muhammad says the whole political system in Iraq is responsible for the corruption in oil. “Oil Ministry, Control Bureau, Council of Representatives, Federation Council, Council of Ministers, Higher Judicial Council, Supreme Court, the Court of Cassation, Public Prosecution Department, the Judiciary Oversight Commission are responsible for the corruption in the oil,” he says.

Muhammad is angry about the Kurds, Sunni, and Shia leadership of Iraq because they do not authorize legislation of oil and gas laws in the Iraq Council of Representatives. He says, “It was a barrier of this law from the Iraqi political elite. Sometimes we would have sessions about it and made some progress but suddenly some party’s leadership imposes their desire to continue on corruption”. Muhammad also believes there is corruption in oil now more than there was in the Saddam Hussein era. “Not just in Baghdad but in Erbil, capital of the Kurdistan Regional Government (KRG), rampant cronyism and nepotism plague not just the higher levels of the parties themselves but also multiple tiers of the KRG infrastructure,” he says.

As a reply to Kawa Muhammad, in “Why Iraqis Cannot Agree on an Oil Law?” Lionel Beehner and Greg Bruno explore that the bill currently languished in parliament because Iraq’s Kurds and Sunni Arabs oppose the draft law for different reasons. Beehner and Bruno say that the draft hydrocarbon law does not delve into specifics of revenue sharing, though a companion bill that does also is stalled within parliament. They say, “Disagreements over oil production, exploration, and revenue sharing threaten to unravel hopes for a political breakthrough and national reconciliation in Iraq. A draft oil law has drawn criticism from Iraq’s Sunnis, who prefer a stronger role for the central government, and from Kurds, who prefer a stronger management role for the regional authorities. The majority Shiites have sought to mollify the Sunnis by keeping control of Iraq’s oil sector primarily in Baghdad, not the regional governorates…….Yet output has fallen short of Baghdad’s production targets, mostly due to corruption, poor security, and lack of investment”.

Nick Butler has an unorthodox view of the corruption of the oil in Iraq. In “The dangers of Iraq’s oil law.” Butler explains that is difficult to visualize the scale of corruption of the oil in Iraq. He focuses on Iraq which is 169th out of 180 countries in Transparency International’s corruption index. Butler is an economist and author of Financial Times energy and power blog and Visiting Prof at King’s College London, and confirms petroleum law was passed by the Iraqi Council of Representatives that will change the relationship between the government and operating companies.

According to this article, the Iraq National Oil Company will control all hydrocarbon revenues and will be the only authority to sign with international companies investing in oil and gas. But the author is not optimistic because he says that all the political parties will not support the petroleum law. Butler’s rationale is that each political party in Iraq has shares in the embezzlement of oil. “Inconceivable behavior for the corruption of oil, so representatives need to devise a policy for attracting law to avert corruption of oil,” he says.

Munir Chalabi is an Iraqi oil and political analyst living in the UK that investigates the history of corruption in the Saddam Hussein and post-Hussein era. In “Iraqi Oil: Transparency and Corruption” Chalabi also has the same opinion of Kawa Muhammad, a member of the Iraqi Council of Representatives, who says, “Corruption goes hand in hand with all dictatorial regimes as seen with the old Ba’athist regime in Iraq and also is after April 2003”. He describes that corruption within most of the government ministries, and specifically in the Ministry of Oil is widespread. Chalabi illustrates Transparency International that the detection of international operations of International Oil Companies and National Oil Companies that is the lower level score of transparency. He also argues multinational drilling companies obtain billions of dollars from the new petroleum activity in Iraq. As a result, Chalabi is disappointed about the solution to the corruption of oil in Iraq.

Tariq Al-Zubaidi holds a Ph.D. in corruption in the Middle East and he has taught in the College of Political Science, University Baghdad-Iraq. He is also a member of the Future Center for Strategic Studies. He pays attention to the real problem in Iraq now that is not just corruption itself, but rather it is to try to legitimize the corruption. Al-Zubaidi reinforces his opinion that corruption is not new in Iraq. He says, “It is illogical to say that corruption as a phenomenon has existed since 2003 in Iraq. Rather, this phenomenon has existed for as long as a person who has no infallibility has found errors and advantages. Corruption as a phenomenon has been present in Iraq since 1921”. Based on his experiences to add to the large amounts of money that entered Iraq after 2003 due to the rise in oil prices at the global level, in addition to some taking advantage of the available freedom and the absence of state authority increases corruption.

Al-Zubaidi suggests some proceedings to solving the corruption of oil. He points out a significant point that is the appointment of seven or nine judges in the Independent High Anti-Corruption Court for life or until the end of its work, following professional standards to give them immunity. But when listening to his opinion Samya Kullab, did not think the corruption will end. In “Iraq’s protests raise a question: Where does the oil money go?” Kullab says the corruption of oil in Iraq is not ending until this leadership of corruption is discontinued.

Kullab shows that Iraqi people are angry over an economic boom with oil money while it has not fulfilled their wishes. He also explains the federal budget evaluates $79 billion in oil money based on exports of 3.88 million barrels per day. According to Kullab, these financials are rarely seen by the middle class because of bureaucratic inefficiency and corruption. However, he states that the resources of Iraq are shared among political leaders, so this corruption must bulge the public sector and drains Iraq’s oil-financed budget.

In conclusion, all Iraqi are sad and declamatory in general. However, the expert analysis concludes production shortages of money over the past few years are mostly due to poor maintenance, corruption within the oil ministry, and a lack of security that has fueled smuggling and sabotage. Protesters have gone so far as to blame Iran for illegally pumping Iraqi crude oil. Since last October, COVID-19 ended the protest in Iraq, it did not end the corrupt politicians.

Luqman Hma Salih, a Kurdish writer and student in the Minnesota State Community and Technical College in USA. Salih is a senior contributing writer for Ekurd.net, see below.