A huge corruption scandal is looming in Iraq: unknown persons have stolen the equivalent of almost 2.6 billion euros from the Iraqi tax authorities' account. The theft was announced by Oil Minister Ihsan Abdul-Jabbar at the weekend and has since been confirmed by Prime Minister-elect Mohammed Shia al-Sudani.

Jabbar said an investigation by the Treasury Department, which he headed until his resignation this week, found that "a certain group," without specifying details, had the money stolen from an IRS bank fund at Rafidain Bank.

Earlier, the Iraqi Treasury released a document showing the alleged theft. The letter caused a stir: it shows that the money had been withdrawn between September 2021 and August 2022. It was deposited using 247 checks into the accounts of five different companies and withdrawn immediately. Rafidain Bank said it had nothing to do with the theft. Its job was limited to "disbursing the General Tax Administration's bonds in its branches after verifying the validity of their issuance," according to the largest Iraqi bank, which also has branches in Cairo, Beirut and Abu Dhabi.

Federal court freezes PM's budget

The Treasury Department has now called the government's anti-corruption agency into the case. This announced that it had launched an investigation and would provide all information and documents to the judiciary. Prime Minister al-Sudani, who was commissioned by new President Abdul Latif Raschid to form a new government on Thursday, promised to fight endemic corruption in the country. "We will not allow Iraqis' money to be stolen," he wrote on Twitter. Iraq's outgoing Prime Minister Mustafa al-Kadhimi also spoke out, describing the scandal in a statement as a "misuse of public funds" due to widespread corruption in Iraq. In the case, his government initiated investigations months ago and handed over relevant documents to the judiciary, al-Kadhimi asserted. The Iraqi federal court temporarily frozen his ministry's budget on Monday.

Ranked 157th in Transparency International's Corruption Index

Iraq has been struggling with corruption for years. The country ranks 157th out of 180 in Transparency International's corruption index. Critics see Iraq's proportional representation system as one of the reasons for this. Central offices are divided up in such a way that all relevant political groups are involved. This regulation has existed since the overthrow of long-term ruler Saddam Hussein in 2003 by the invasion of the United States. "Widespread corruption is one of the main causes of dysfunction in Iraq," UN special envoy Jeanine Hennis-Plasschaert told the UN Security Council in early October. In 2019 and 2020, hundreds of people were killed by security forces during months of anti-corruption protests in the country.