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RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #1039/01 1061309
ZNR UUUUU ZZH
R 161309Z APR 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 2711
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 02 BAGHDAD 001039 
 
SIPDIS 
SENSITIVE BUT UNCLASSIFIED 
 
E.O. 12958: N/A 
TAGS: KCOR PGOV EFIN IZ
SUBJECT: ERBIL RRT: DEPUTY ANTI-CORRUTION COORDINATOR VISITS 
KURDISTAN REGION 
 
REFTELS: (a) 08 Baghdad 2731 
      (b) 09 Baghdad 796 
 
This is an Erbil Regional Reconstruction Team cable. 
 
¶1. (SBU) SUMMARY:  Deputy Anti-Corruption Coordinator 
(D/ACC) Lynn Gurian traveled to the Kurdistan Region (KR) to learn 
more about the ways in which corruption manifests itself in the KR, 
steps being taken to combat corruption, and determine best "next 
steps" for USG-funded anti-corruption efforts in the KR. Chief among 
concerns cited by interlocutors were alleged misdirection of public 
funds, nepotism and cronyism in public sector hiring, government 
interference in contracting and private commercial activities, and a 
lack of transparency in public administration and budget execution, 
all of which converge to provide an environment conducive to 
corruption.  Numerous ad hoc governmental committees have been 
created to investigate corruption, but none of these are independent 
from the executive branch of government.  There is currently no USG 
anti-corruption or budget execution assistance reaching the 
Kurdistan Region. We believe that supporting a recently launched 
UNDP budget execution project would be an effective means to improve 
transparency and accountability in the region.  END SUMMARY 
 
¶2. (U) Regional Reconstruction Team Erbil (RRT) hosted 
Embassy Baghdad Deputy Anti-Corruption Coordinator (D/ACC) Lynn 
Gurian from April 4 - April 9.  During her visit, D/ACC met with 
government officials, businessmen, political party leaders and civil 
society representatives to discuss perceptions of corruption in the 
Kurdistan Region (KR) and learn what steps are being taken to combat 
corruption. 
 
WHERE CORRUPTION LIVES AND HOW IT MOVES 
--------------------------------------- 
 
 
¶3. (SBU) With varying degrees of candor, contacts expressed the view 
that corruption has permeated most aspects of life in the KR.  Chief 
among concerns cited by interlocutors were alleged misdirection of 
public funds, nepotism and cronyism in public sector hiring, 
government interference into contracting and private commercial 
activities, and a general lack of transparency in public 
administration and budget execution, all of which converge to 
provide an environment hospitable to corruption.  Contacts 
highlighted the close connection of the two dominant political 
parties, the Patriotic Union of Kurdistan (PUK) and the Democratic 
Party of Kurdistan (KDP), to all aspects of the government and the 
private sector, as a contributing factor to corruption. 
 
¶4. (SBU) Independent journalists in the KR confirm that 
they continue to face legal pressure and intimidation from  the 
Kurdistan Regional Government (KRG) for reporting on corruption and 
asked for continued USG support of free media.  Attorneys and civil 
society organization leaders claim that no cases of corruption have 
been brought before the courts because the populace is afraid to do 
so and requested the USG work to strengthen the KRG judiciary. 
Contacts in the private sector and minority political parties 
admonished the USG for not having done more to pressure the KRG to 
become more transparent.  "Now is not the time to congratulate the 
government.  It is the time to push them to change," said Kamaran 
Hussein, a member of the Kurdistan Businessmen's Association.  "Just 
as the U.S. military attacked terrorism, so should the U.S. 
government attack corruption," said Salahaddin Bahaddin, Secretary 
General of the Kurdistan Islamic Union. 
 
Lack of independent anti-corruption institutions 
--------------------------------------------- --- 
 
¶5. (U) Government contacts briefed D/ACC on government 
oversight/audit institutions (none of which are independent from the 
Qoversight/audit institutions (none of which are independent from the 
executive branch).  There are seven ad hoc anti-corruption 
committees in the KR, including:  a committee to follow up on 
judicial issues, a committee for project management, a committee for 
public administration reform, a committee on corruption in the 
media, a committee to follow up on allegations of corruption and a 
special committee to follow up on legislative affairs.  Each of 
these committees reports to the KRG Council of Ministers. 
 
¶6. (SBU) In addition to these ad hoc committees, there are 
two Bureaus of Supreme Audit in the KR (one for the KDP and one for 
the PUK).  Dr. Giorgis Hassan, president of the KDP-affiliated BSA, 
reported to D/ACC that the BSA is currently unable to audit the 
Office of the Prime Minister, the Ministry of Finance, public banks, 
or customs checkpoints.  In a separate meeting, Dr. Nouri Sinjari, 
(Chief of Staff to KRG Prime Minister Nechirvan Barzani) told D/ACC 
that once the KDP and PUK Ministries of Finance officially unite, so 
too will the two BSAs, and that a recently-passed KRG audit law will 
empower the BSA to audit all governmental entities - including the 
Minister of Finance.  (Comment: Why the recently-passed law - which 
attaches the BSA to the Iraqi Kurdistan Parliament (IKP) and 
provides the mandate for the BSA to conduct audits of all government 
offices - including the Minister of Finance, customs checkpoints, 
 
BAGHDAD 00001039  002 OF 002 
 
 
etc - must wait for unification to be implemented is not clear.  End 
comment). 
 
¶7. (U) D/ACC was also informed that a committee within the Ministry 
of Finance (the Financial Inspection Committee) which reports to the 
Minister of Finance has the authority to investigate all matters 
pertaining to public finance. 
 
HOW USG CAN HELP SUPPORT THE FIGHT 
---------------------------------- 
 
8.(SBU) In meetings with D/ACC, opinions varied on what, if 
anything, can be done to effectively combat corruption in the KR. 
Some contacts, notably Mala Bakthiar (PUK Politburo Director) and 
Dr. Nouri Sinjari, called for long-term anti-corruption training for 
government personnel.  But contacts unaffiliated with the KRG 
believe that any such efforts are will not be effective until there 
is a definitive separation between the political parties and the 
government and until there is transparency in KRG public 
administration. 
 
9.(U) Currently, there are no USG-funded anti-corruption initiatives 
in the KR.  The KRG has, on its own initiative, contracted with 
private international companies (Price Waterhouse Coopers) and 
international organizations (UNDP) to assess the current system of 
public administration and provide some direction for future reform. 
The preliminary PWC assessment is expected in the next month or so. 
In February 2008, the UNDP rolled out a 54-page plan for "Budget 
Execution Support" that will target the KRG Ministry of Finance, KRG 
Ministry of Planning, Bureau of Supreme Audit, the Iraqi Kurdistan 
Parliament (IKP), and the three provincial governors.  This project 
will be presented to donors for funding at an Erbil Donors' 
Conference May 5-7. 
 
¶10. (U) The UNDP project comprises a comprehensive series of 
concrete steps designed to increase the efficacy and transparency of 
public procurement procedures, increase the accountability of 
payment and treasury operations, and "improve the efficiency of 
non-wage recurrent and capital expenditures, by setting priorities 
across key sectors and ensuring that spending within sectors is 
efficient and reaches front-line service delivery units." 
 
¶11. (SBU) COMMENT: The RRT believes that the UNDP project provides 
an effective vehicle for USG-funded efforts to assist the 
development of transparent, accountable government institutions in 
the Kurdistan Region.  This project is in line with USG priorities 
for Iraq and consistent with Iraqi obligations under the UN 
Convention against Corruption.  We also strongly support high-level 
outreach to the Kurdistan Region leadership, pressing them to: 
 
 
-- enact a code of conduct for public employees; 
-- provide greater disclosure of Ministerial salaries and 
emoluments; 
-- divulge information relating to public subsidies for political 
parties; and 
-- ensure a public tender process for government-funded projects. 
 
The KRG should also be encouraged to publicize the results of the 
PWC study and the findings of the ad hoc committees.  And finally KR 
leadership should also be urged to fully respect the mandates of the 
independent non-executive branch anti-corruption bodies such as the 
Bureau of Supreme Audit.   END COMMENT 
 
Butenis