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DE RUEHGB #1787/01 1831411
ZNR UUUUU ZZH
R 021411Z JUL 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 3780
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS BAGHDAD 001787 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV KCOR KDEM IZ
SUBJECT: THE USG'S ANTI-CORRUPTION STRATEGY IN IRAQ: 
PROGRESS REPORT 
 
REF: A. BAGHDAD 101 
     ¶B. BAGHDAD 393 
     ¶C. BAGHDAD 329 
     ¶D. BAGHDAD 240 
     ¶E. BAGHDAD 1235 
     ¶F. BAGHDAD 1528 
     ¶G. BAGHDAD 1495 
     ¶H. BAGHDAD 1176 ET AL 
 
SUMMARY 
-------- 
 
¶1. (SBU) Since the submission of our anti-corruption (AC) 
strategy, aimed at strengthening Iraq's AC regime, an array 
of USG agencies have continued to work to implement it. Our 
dialog with the GOI on AC issues centers on promoting Iraq's 
compliance with the United Nations Convention Against 
Corruption (UNCAC), as does our assistance to the Commission 
on Integrity (COI) and Council of Representatives (COR) to 
reform Iraq's legal framework. USG capacity-building efforts 
aimed at Iraq's AC institutions are extensive, and our 
provincial-level engagement on AC is expanding. Our AC 
efforts include numerous public diplomacy activities, while 
USAID, under its Tatweer program, has taken the lead on 
various AC-related capacity-building and economic reform 
initiatives. Paras 16 - 19 contain metrics, along with 
baselines and targets covering 2008-11, to be used in 
assessing the impact of our AC efforts on Iraq's performance. 
 END SUMMARY. 
 
 
 
OVERVIEW 
--------- 
 
¶2. (SBU) Ref A, submitted in January, outlines a long-term 
USG strategy for supporting the GOI's efforts to develop the 
capacity to combat effectively the widespread corruption 
plaguing Iraq.  The elements of that strategy center on two 
broad objectives: (a) promoting Iraq's compliance with the 
United Nations Convention Against Corruption (UNCAC), which 
the GOI ratified in 2008 and which imposes on states-parties 
the requirement to establish a strong, wide-ranging 
anti-corruption regime, and (b) fostering economic reform so 
as to reduce opportunities for corruption.  The purpose of 
this message is to provide a progress report on the 
implementation of the twelve action items contained in our 
anti-corruption (AC) strategy since its submission six months 
ago. 
 
PROMOTING COMPLIANCE WITH UNCAC 
------------------------------- 
 
¶3. (SBU) ACTION ITEM: As part of our dialog with senior GOI 
officials on AC issues, underscore the importance of 
achieving compliance with UNCAC requirements.  We also need 
to highlight for the GOI at all levels USG efforts to combat 
corruption by American officials and others to counter any 
perceptions by Iraqis that the USG presses them on corruption 
but ignores abuses by its own citizens and firms. 
 
STATUS: ACCO has taken the lead on this item, using its 
expanding contacts with the heads of the principal AC 
institutions -- Commission on Integrity (COI), Board of 
Supreme Audit (BSA), corps of Inspectors General (IGs) -- and 
other senior officials to review highlights of the UNCAC and 
urge compliance.  Other elements of the U.S. Mission in 
Baghdad, civilian and military, have also promoted UNCAC 
compliance in their dialog with upper-echelon GOI officials. 
To drive home to Iraqi contacts the USG's commitment to 
bringing corrupt USG officials to account for corruption, 
ACCO has widely distributed materials issued by the USG's 
Special Inspector General for Iraq Reconstruction (SIGIR), in 
particular, SIGIR's list of U.S. officials and others 
convicted on corruption charges in U.S. courts as a result of 
SIGIR's investigations into implementation of USG-funded 
reconstruction projects in Iraq (see ref. B for GOI reaction 
to SIGIR material). 
 
¶4. (SBU) ACTION ITEM: Institute periodic consultations with 
the Joint Anti-Corruption Council (JACC) and affiliated AC 
bodies to identify UNCAC requirements and assess progress 
toward compliance. 
 
STATUS: ACCO and other USG Reps -- MNSTC-I among them -- meet 
QSTATUS: ACCO and other USG Reps -- MNSTC-I among them -- meet 
regularly with representatives of the three AC bodies (COI, 
BSA, IGs) represented in the JACC as well as with the 
latter's chairman, Council of Ministers Secretary General Ali 
Alaq; the UNCAC dossier is typically on the agenda in our 
discussions (see ref. C for sample report of our 
consultations).  ACCO has also attended workshops and 
 
conferences designed to familiarize Iraqi AC officials with 
UNCAC requirements; UNDP and UNODC have organized these 
gatherings under an ACCO-funded program.  To promote 
AC-related cooperation under the bilateral Strategic 
Framework Agreement, ACCO has proposed to the JACC chairman, 
Ali Alaq, the establishment of a joint JACC/ACCO working 
group; Alaq has our request under consideration. 
 
¶5. (SBU) ACTION ITEM: Assist the COI and Council of 
Representatives (COR -- parliament) in reforming Iraq's 
existing legal framework -- including repeal of Article 
136(b) of the Iraqi Criminal Procedure Code -- so that it is 
fully compliant with UNCAC requirements.  The COI is mandated 
to develop AC-related draft legislation for the COR's action, 
and hence both institutions should be the focus of our 
intervention in this respect. 
 
STATUS: ACCO has used its periodic consultations with the COI 
and the COR's Integrity Committee chairman, Sheikh Sabah 
Al-Saidi, to promote reform of Iraq's AC-related legal 
framework as required under UNCAC -- including, inter alia, 
repeal of Article 136(b), the controversial Criminal Code 
provision that authorizes a Minister to block the prosecution 
of officials in his Ministry for corruption and other crimes 
(see, for example, ref. D).  In addition, ACCO, working 
through POL/CLA, has funded a project, implemented by the 
University of Utah, that involves, inter alia, providing 
legislative drafting assistance to the COR on UNCAC-related 
measures.  At present, though, prospects for the COR's early 
passage of various pending AC-related bills (i.e., omnibus AC 
law, reform of COI, BSA, IGs, upgrading of Iraq's anti-money 
laundering (AML) are uncertain, as are prospects for repeal 
of 136(b).  The uncertain prospects are due in large part to 
the slow pace of the legislative process generally; in the 
case of 136(b) repeal, a key factor is opposition within the 
Council of Ministers to relinquishing the powers granted by 
this provision.  However, in a positive development, 
knowledgeable sources recently claimed to us that Prime 
Minister Nouri Al-Maliki had prevented now-resigned Trade 
Minister Abdel Falah Al-Sudani from using 136(b) to prevent 
prosecution of senior officials in his Ministry on corruption 
charges (ref. E). 
 
¶6. (SBU) ACTION ITEM: Engage in capacity-building with the 
COI's three principal AC bodies (BSA, COI, IGs), the JACC, 
the judiciary, the Central Bank of Iraq (CI), and the COR's 
Integrity Committee so that they are capable of implementing 
an effective AC regime as provided for under UNCAC. 
 
STATUS: An array of USG agencies are engaged in AC-related 
capacity building efforts, i.e., identification of needs, 
technical assistance, mentoring, exchanges, and workshops 
(see ref. F for overview of AC Programs).  Among these 
agencies, USAID, under its Tatweer program, continues to 
provide extensive training to IGs and their staffs; in 2008, 
nearly 2,000 IG personnel received training, and in 2009 the 
ongoing USAID/Tatweer training features increasingly complex 
courses in such areas as Advance Auditing, Procurement, and 
Human Resources.  Other 2009 innovations in the USAID/Tatweer 
program include, inter alia, working with the Association of 
Inspectors General (AIG) to launch an IG website with a 
public site generating public support for AC efforts, and a 
secure site for use by IGs thereby providing them with a 
professional audit management tool.  USAID/Tatweer also plans 
to introduce a "train the trainer" component for IG 
personnel. 
 
The DOJ, under its INL-funded ICITAP program, continues to 
train COI personnel in areas ranging from development of a 
Qtrain COI personnel in areas ranging from development of a 
national training plan to the conduct of polygraph testing to 
the establishment of a computerized system for tracking 
casework (GOCASE system). BSA personnel have benefited from 
GAO training programs in the U.S.  On the military side, 
MNSTC-I maintains robust capacity-building programs for the 
Defense and Interior Ministries' Inspectors General and 
staffs.  The Embassy's Rule of Law office oversees various 
programs, administered by DOJ/ICITAP, in particular, designed 
to develop the capacity of the judiciary to process 
corruption-related and other cases.  USAID/Tatweer, in 
support of the USAID Legislative Strengthening Project, plan 
an initiative with the COR's Integrity Committee aimed at 
developing its oversight capacity of the Ministries.  This 
project will also stregthen COR compliance with disclosure 
and transparency laws.  At present, there are no USG programs 
targeting the JACC as such; the Council itself has only a 
miniscule executive staff (three employees) and serves 
primarily as a framework for consultations by the constituent 
organizations listed above. 
 
Combating money laundering is a crucial element of any 
state's AC regime, and Treasury, through its cooperation with 
the CBI and COI as well as private banks, is playing a 
growing role in promoting Iraq's AML capacity.  Among the 
initiatives by Treasury: providing technical assistance to 
the CBI's Money Laundering Reporting Office MLRO) and 
conducting workshops on AML for COI investigators and 
investigating judges.  The Embassy's Treasury Attache has 
arranged a visit to Iraq, tentatively scheduled for late 
July, by a USG Financial Sector Assessment Team (FSAT) to 
consult with the CBI on its AML regime. (Ref G provides an 
update on the GOI's AML-related cooperation with other donors 
-- UNODC, in particular.) 
 
¶7. (SBU) ACTION ITEM: Promote AC efforts at the provincial 
and local levels, maintaining contact with sub-national 
offices of BSA, COI, and IG as well as with local 
authorities, ensuring that local government plans feature an 
AC component. UNCAC calls for a vigorous nationwide AC 
effort, with authorities at all levels fully engaged. 
 
STATUS: Provincial and local governments enjoy increased 
authority under the federalism scheme enshrined in the 
Provincial Powers Law (PPL) of 2008, and USG assistance -- 
spearheaded by the PRT's and their military counterparts -- 
is expanding accordingly so as to enable  sub-national 
authorities to use their enhanced powers effectively.  In 
June, USAID/Tatweer launched a new provincial-level program, 
initiating AC training programs in provincial ministerial 
offices in four provinces. As this initiative develops, it 
will cover all 18 provinces and feature six training teams 
working with not only provincial ministerial offices but also 
the Provincial Councils (legislative bodies) elected in 
January.  USAID's Local Governance Project is supporting 
improved transparency and accountability at the provincial 
level through the roll-out of the Governorate Accounting and 
Provincial Tracking System (GAPTIS).  This system helps 
provincial governments track progress on projects from 
feasibility, to payment of contractors and on to the final 
acceptance of the project.  Indicative of the growing 
commitment to AC by sub-national authorities, various 
Councils have established Integrity Committees.  The 
ACCO-funded UNDP/UNODC program cited above includes a 
provincial capacity-building component.  In addition, ACCO 
has submitted a proposal for another sub-national AC project, 
including, inter alia, assistance to each Provincial Council 
to establish the official gazette mandated by the PPL. As 
part of its provincial outreach effort, ACCO has also 
submitted proposals under MNF-I's CERP program to provide 
badly-needed office equipment to COI's provincial offices. 
 
¶8. (SBU) ACTION ITEM: Conduct a multi-pronged public 
diplomacy effort to raise Iraqis' awareness of corruption's 
negative impact on the country's politics, economy, and 
society, and also assist the GOI in developing public 
outreach programs.  UNCAC envisages an active public 
awareness campaign by governments to build popular support 
for AC initiatives. 
 
STATUS: The Embassy's Public Affairs Section (PAS), in 
coordination with ACCO, has undertaken numerous initiatives, 
among them: organizing AC investigative training for 
journalists and GAO presentation to IG personnel, working 
jointly with Mission Information Support Team (MIST) to 
assist the COI's public affairs unit, e.g. providing AC 
materials for television spots, and arranging local and 
Western media interviews for ACCO.  PAS and ACCO will 
collaborate on an AC conference for Iraqi NGO's planned for 
August/September.  ACCO routinely distributes to Iraqi 
contacts AC-related public diplomacy materials in Arabic, 
e.g., items contained in the America.gov website.  ACCO has 
Qe.g., items contained in the America.gov website.  ACCO has 
expanded its public speaking activities, recently giving 
presentations at a conference hosted by the Defense 
Ministry's IG, a workshop for Iraqi contractors hosted by 
MNF-I, and USAID/Tatweer-sponsored senior leader AC seminar. 
ACCO also addressed a recent AC conference for Iraqi security 
force IG personnel hosted by MNSTC-I.  The ACCO-funded 
UNDP/UNODC program cited above includes assistance to Iraq's 
anti-corruption bodies in mounting a sustained public 
awareness campaign on AC.  As instructed by the Commanding 
General, MNF-I is developing material for an AC public 
outreach initiative. 
 
¶9. (SBU) ACTION ITEM: Promote the introduction of an AC 
component in Iraqi schools at all levels and assist the 
Ministry of Education and the COI in devising an AC element 
for schools. UNCAC envisages that states, as part of their 
public awareness campaigns on AC, will include AC material in 
schools' curricula. 
 
STATUS: The COI's Education and Public Affairs Office has the 
lead in promoting AC in Iraqi schools, but so far has made 
limited progress due to lack of coordination with the 
 
Education Ministry; a recent meeting of COI and Ministry 
officials, attended by ACCO, suggests the two sides' 
recognition of the need for improved collaboration.  PAS and 
ACCO have consulted in the past with COI on possible 
assistance in this area and plan follow-up discussions with 
both COI and the Education Ministry in order to crystallize a 
project proposal. 
 
PROMOTING ECONOMIC REFORM 
------------------------- 
 
¶10. (SBU) ACTION ITEM:  Assist the GOI in standardizing and 
making transparent the tender and procurement process for all 
spending ministries. 
 
STATUS: USAID/Tatweer has taken the lead on this item, 
working with officials at the Oil Ministry's State Company 
for Oil Projects (SCOP) to upgrade procurement and 
contracting processes in accordance with best international 
practices.  As part of its effort, USAID/Tatweer is advising 
SCOP officials on development of a SOP manual for procurement 
procedures. It is also working with other offices in the Oil 
Ministry to reform procurement practices.  The Ministry of 
Planning with USAID/Tatweer assistance has developed a 
Contractor Classification Application (CCA) that is a 
web-based software application that allows private firms to 
register on-line and submit a contractor application so that 
they may do business with the Government of Iraq.  The new 
Contractor Classification Application will help in reducing 
corruption through issuing contractor identifications by the 
CCA which are virtually impossible to forge.  Another USG 
actor in this area is DOD, whose Task Force for Business 
Support Operations (TFBSO) assists GOI institutions as well 
as local private firms on procurement and contracting 
operations. 
 
¶11. (SBU) ACTION ITEM: Assist the GOI in improving management 
of the Public Distribution System (PDS) and the Social Safety 
Net (SSN) programs. 
 
STATUS: These two nationwide social welfare programs -- one 
involving food allotments supplied by the Trade Ministry 
(PBS) and the other payments by the Labor and Social Affairs 
Ministry (SSN) -- are generally regarded as rife with 
corruption.  The Embassy, led by the Economic Section, 
continues to urge reform of the PDS in its consultations with 
Iraqi officials in the Agriculture and Trade and Investment 
Working Groups established under the Strategic Framework 
Agreement. The Economic Section and USDA representatives, in 
particular, have used a recent corruption scandal over PDS at 
the Trade Ministry to reinforce our push for PDS reform (see 
ref. H for background on scandal).  The Embassy is also 
supporting an initiative by the World Food Program (WFP) to 
get the GOI to allow the WFP to take over PDS procurement for 
the most vulnerable Iraqi recipients. Under this scheme, the 
WFP would take responsibility for as much as 30 percent of 
the offshore procurement of key commodities in an effort to 
reduce siphoning off of PDS resources due to corruption and 
ensure that the poorest Iraqis actually receive their 
rations.  To date, however, the GOI has been largely 
resistant to our and other donors' lobbying on PDS reform. 
 
As for the SSN program, USAID/Tatweer has taken the lead, 
working with the Labor and Social Affairs Ministry (MOLSA) to 
install a new electronic system that would improve management 
of the program's data base of beneficiaries so as to reduce 
fraudulent and duplicate payments.  The World Bank estimates 
that, under MOLSA's current SSN payment system, 30 percent or 
more of SSN benefits are siphoned off through irregularities. 
 
¶12. (SBU) ACTION ITEM: Complete the installation of a 
financial management information system (IFMIS). 
Qfinancial management information system (IFMIS). 
 
STATUS: USAID's Economic Growth has the lead on the 
installation of IFMIS, a web-based system designed to 
modernize budget execution by the GOI's over 250 "spending 
units," i.e., elements of the GOI (e.g., an office in a given 
ministry) identified in the GOI's overall budget. Treasury 
has also provided IFMIS-related technical assistance to the 
ministries. IFMIS, which replaced an out-of-date manual 
system, is  now essentially installed within the GOI's 
ministries and other institutions.  While some elements in 
the GOI have expressed reservations in the past about IFMIS, 
in January the Finance Minister issued an instruction 
requiring all GOI institutions to use the system. 
 
¶13. (SBU) ACTION ITEM: Work to ensure the GOI installs 
functioning oil meters and automated accounting systems at 
all critical production and distribution points within Iraq. 
 
STATUS: With assistance from USAID/Tatweer, the Oil Ministry 
 
has made progress on this item, as meters and automated 
accounting systems are being installed at most oil production 
and distribution points within Iraq. The installation of such 
equipment is a key factor in the declining level of 
corruption in the oil sector, with reduced opportunities for 
officials to engage in corrupt practices, e.g., permitting 
oil smuggling in return for bribes. 
 
¶14. (SBU) ACTION ITEM: Encourage laws and regulations that 
bring transparency to the distribution of revenues from 
Iraq's natural resources. 
 
STATUS: Various elements of the U.S. mission in Iraq, the 
Economic section, in particular, provide such encouragement 
to the GOI. With USG support, Iraq has applied to join the 
Extractive Industry Transparency Initiative (EITI) and 
attends EITI meetings.  The GOI will require technical 
assistance to achieve compliance with the obligations imposed 
on full-fledged EITI members in terms of developing a 
transparent system for the management and expenditure of the 
country's oil-based revenues. 
 
 
MEASURING THE IMPACT OF OUR AC EFFORTS ON IRAQ'S PERFORMANCE 
--------------------------------------------- --------------- 
 
¶15. (SBU) In an effort to assess the impact of the USG's AC 
efforts in Iraq, this message concludes by proposing four 
metrics with baselines and targets for 2008-11.  These 
metrics include an overall yardstick to measure Iraq's 
progress -- compliance with UNCAC -- plus ones covering the 
three basic elements of anti-corruption efforts: 
accountability (existence of laws against corrupt practices), 
enforcement (sanctioning violations of laws), and 
transparency (public's access to information regarding 
government's actions). 
 
¶16. (SBU) Metric 1:  Overall: Compliance with UNCAC (adopted 
from Embassy's Mission Strategic Plan). 
2008 Baseline:  GOI ratifies UNCAC. 
2009 Target:  GOI issues updated AC strategy, consistent with 
UNCAC. 
2010 Target:  GOI in compliance with at least half the 
requirements of UNCAC. 
2011 Target:  GOI in compliance with all major provisions of 
UNCAC. 
 
¶17. (SBU) Metric 2:  Accountability: Status of Iraq's 
AC-Related Legal Framework. 
2008 Baseline:  Iraq's legal framework contains numerous 
gaps. 
2009 Target:  Draft AC laws are finalized. 
2010 Target:  Omnibus AC law and Long-pending laws to 
strengthen COI, BSA, IG are enacted. 
2011 Target:  Additional AC laws (e.g., new AML measure) 
enacted and 136(b) is either repealed or amended to limit its 
use; no major remaining gaps in legal framework. 
 
¶18. (SBU) Metric 3:  Enforcement: Number of Convictions 
(Cases) Nationwide for Corruption. 
2008 Baseline:  97 Convictions (per COI's annual report for 
2008). 
2009 Target:  120-150 Convictions. 
2010 Target:  200 Convictions. 
2011 Target:  250 Convictions. 
 
¶19. (SBU) Metric 4:  Transparency: Public's Access to 
Government Information. 
2008 Baseline:  Iraqi public's access to government 
information is severely limited. 
2009 Target:  The GOI's revised national AC strategy 
enshrines enhanced public access to government information as 
a key objective. 
2010 Target:  All new laws and regulations are gazetted at 
national or provincial levels, as applicable. 
2011 Target:  Enactment of a Freedom of Information Act. 
 
 
 
 
HILL