VZCZCXRO5797
RR RUEHBC RUEHDA RUEHDE RUEHKUK
DE RUEHIHL #0009/01 0271112
ZNR UUUUU ZZH
R 271112Z JAN 09
FM REO HILLAH
TO RUEHC/SECSTATE WASHDC 1140
INFO RUCNRAQ/IRAQ COLLECTIVE
RUEHIHL/REO HILLAH 1213

UNCLAS SECTION 01 OF 02 HILLAH 000009 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KCOR PGOV ECON IZ
SUBJECT: CORRUPTION ENDEMIC IN BABIL PUBLIC WORKS CONTRACTS 
 
HILLAH 00000009  001.2 OF 002 
 
 
¶1. (SBU)  Summary: Big ticket corruption in Babil province 
involves tens of millions of dollars of public works contracts 
reportedly steered to a contracting company owned by the brother 
of Governor Salim Saleh Al-Muslimawi, who Provincial Council 
members tell us sits at a nexus of corruption.  Systematic 
bureaucratic corruption and taking advantage of specific targets 
of opportunity are particularly pronounced in land transactions. 
 
 
 
A Nexus of Corruption 
 
--------------------- 
 
 
 
2.(SBU)  Provincial Council (PC) members told the PRT that 
Governor Salim Saleh Al-Muslimawi sits at the center of a nexus 
of corruption for public works contracts.  Working with his 
closest cronies, technical assistant Abdul Razak and chief of 
staff Lieutenant-Colonel Thamir (Abu Huda), the Governor has 
reportedly steered tens of millions of dollars of lucrative 
contracts and sub-contracts to political allies, associates and 
family members, in particular to through the Almuraba'a company 
owned by the Governor's brother Sheikh Ne'ama Saleh Al-Muslimawi 
according to local politicians and businessmen. Businessmen have 
complained to the PRT that steering public works contracts to 
selected firms reduces the quality of infrastructure because 
after officials take their cut less remains for the actual work; 
creates a culture of corruption in which contractors are forced 
to pad bids on public sector projects and; undermines public 
confidence in the government. 
 
 
 
3.(SBU)  PC members and local construction companies have told 
the PRT that the contracts for building two street-bridge 
contracts in Babil's capital Al-Hillah are good examples of the 
way the Governor operates.  In the 80th street-bridge project 
the contract reportedly went to a company with no experience for 
USD 3.5 million over the original estimate because it agreed to 
give Almuraba'a a lucrative sub-contract.  In the 60th 
street-bridge project the Abdullah Uwaiz company (not owned by 
the Governor or his relatives) had its low bid rejected on a 
technicality so the project could be awarded to Almuraba'a  at a 
higher price.  When Abdullah Uwaiz complained, Almuraba'a 
reportedly paid it USD 225,000 to drop the issue. 
 
 
 
4.(SBU)  The Almuraba'a company has lost contracts, but even 
that has raised questions.  The PC reportedly stopped a contract 
with Almuraba'a for the construction of five water processing 
plants based on a finding that the company lacked the capacity 
to do the work.  The Albu'd Alrabe'a company won the second bid 
at a price USD 8.5 million less than that the price Almuraba'a 
had won the bid for the first go-round.  PC members have 
questioned how Almuraba'a could have received the first bid at a 
price that was so much higher than a later bid. 
 
 
 
5.(SBU)  Governor Salim Saleh Al-Muslimawi reportedly has 
demanded kick-backs for projects that are not done by 
Almuraba'a.  Foreign companies were reportedly discouraged from 
bidding on sewer and water expansion projects by being falsely 
told the projects were already bid out: the Governor wanted them 
to go to local companies that would give him a kickback. 
Reportedly a project for a new five-story Government Center was 
held up because no contractor wanted to pay the governor the USD 
350,000 kick-back he insisted on. 
 
 
 
Rigging Contracts 
 
----------------- 
 
 
 
6.(SBU)  Different techniques are used to rig contracts.  One 
method is to provide requests for bids only to a preselected 
company which then submits multiple bids under different names. 
This was the method reportedly used to ensure that one company 
got the bids for building Water Department warehouses.  Arguably 
the most brazen method is to simply change competitors' bids. 
Reportedly the fix was in for the Al Kifil hospital construction 
project to go to a company in which some PC members had an 
interest: when the bids were opened a PC member simply took the 
lowest bid and added a 0 making the bid appear ten times higher 
than it was so that the selected company then had the lower bid. 
 When the company whose bid was multiplied learned what happened 
 
HILLAH 00000009  002.2 OF 002 
 
 
they complained to the Governor to no avail. 
 
 
 
7.(SBU)  Another method to rig bids is for a contractor to 
submit a bid with a blank price.  Colluding officials then fill 
in a bid price after they have opened the other bids to ensure 
that the preselected bid is the lowest.  A variant leaves blanks 
for sub-items but has a total price.  Officials fill the blanks 
in and recalculate the total bid price to ensure that it is 
lower.  The advantage of this method is that the company can 
wait until after it has been awarded the contract and then claim 
the initial higher bid price should be used. 
 
 
 
Administrative Corruption: Baksheesh 
 
------------------------------------ 
 
 
 
8.(SBU)  Institutional corruption in which government employees 
require payment for services, baksheesh, is particularly 
pronounced in offices dealing with registering lands or persons. 
  When land is transferred its value is estimated and a new tax 
rate is established based on the estimate.  Booths of land-value 
facilitators line the streets in front of the land registration 
building and, for a fee, use their connections to get a lower 
tax rate.  Facilitators are well organized: they recently came 
to a common agreement to double their standard rates from about 
USD 150 to USD 300 because land values in the province had 
increased dramatically in the past year. 
 
 
 
9.(SBU)  Renewing resident cards and obtaining passports often 
costs more than the official price.  Muktars in Babil reportedly 
ask for 5,000 ID for the initial certification for resident 
cards and police (who issue the card) demand 25,000 ID to 
accelerate the process.  Police may feel some justification in 
demanding baksheesh since they reportedly have to pay their 
first two months salary to the selection committee to get a job. 
 Getting a passport can also cost an extra USD 100, especially 
if the applicant needs it quickly. 
 
 
 
Targets of Opportunity 
 
---------------------- 
 
 
 
10.(SBU)  Land issues create numerous targets of opportunity. 
Employees of the government Land Department have reportedly been 
forging ownership documents when owners are dead.  Land is 
either put in the name of their relatives or people willing to 
pay the employees a price.  A senior surveyor in the office has 
reportedly been charged with taking bribes to forge land 
registration documents and fake surveys. 
 
 
 
11.(SBU)  Criminal cases also create the potential for 
corruption.  The murder trial for the assassination of Babil's 
police chief Maj. Gen. Qais Hamza Mamouri has been repeatedly 
postponed due to a failure to bring the defendants from 
Baghdad's detention center to the Central Court.  One excuse was 
that police could not locate the defendants in the jail.   The 
sergeant responsible for bringing the defendants to court was 
recently spotted driving a 2009 Toyota sedan worth about two 
years of his salary according to an Iraqi journalist. 
 
 
 
12.(SBU)  Comment:  The level of corruption in public works 
construction controlled by the provincial government, endemic in 
Babil province, may be an unintended consequence of 
decentralization.  It may also help explain why Babil has almost 
1,500 PC candidates (more than any province outside of Baghdad). 
 One local construction contractor told us that almost all PC 
members are busy getting a piece of the action. 
HILLAS