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Cablegate: Anti-Corruption Laws On Hold

VZCZCXRO1012
RR RUEHBC RUEHDA RUEHDE RUEHDH RUEHIHL RUEHKUK
DE RUEHGB #2785/01 2881542
ZNR UUUUU ZZH
R 151542Z OCT 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 5108
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 03 BAGHDAD 002785

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV KCOR ECON IZ
SUBJECT: ANTI-CORRUPTION LAWS ON HOLD

REF: (A) BAGHDAD 2576, (B) BAGHDAD 2766; (C) BAGHDAD 2695

1. (SBU) SUMMARY AND COMMENT. As Iraq anticipates the release of a
new anti-corruption strategy (Ref A), three statutes that would
strengthen institutional frameworks remain pending in parliament,
while a separate, general anti-corruption statute is still being
reviewed by the Council of Ministers. These four draft laws were
introduced in 2008 and, if passed as a package, could help anchor
the strategy, if not fully define it. Their strong emphasis on
enforcement fits well with UNCAC's approach, but complementary
statutes (on governance, economics, education and media) are
necessary to truly entrench the strategy. We do not anticipate
movement on these statutes in the near term, as parliament focuses
on amending and approving the national elections law and questioning
ministers (refs B and C). Should they pass, the anti-corruption
laws would represent some major advances -- such as the introduction
of plea bargaining and improved liaison with international partners
and expanded abilities to pursue cases. They may also portend
possible administrative weakening and a reconfiguration of the
Commission of Integrity that could make it more like a U.S.
prosecutor's office and less like an Iraqi FBI (i.e., a passive
recipient, rather than an initiator, of cases). END SUMMARY AND
COMMENT.

2. (SBU) Iraq's ratification of the UN Convention against
Corruption (UNCAC) in March 2008 highlighted the need to strengthen
the institutional foundations for anti-corruption efforts. Leaders
of Iraq's anti-corruption institutions -- the Commission of
Integrity (COI), the Inspectors General (IG's), and the Board of
Supreme Audit (BSA) -- negotiated four draft laws to provide a basic
framework of oversight and enforcement. Three of these laws were
packaged together and submitted to the Council of Ministers in June
2008. They seek to replace CPA Orders 55, 57, and 77, which
governed operations of the COI, IG's, and BSA respectively. The
fourth statute -- presented in November 2008 -- seeks to broaden the
definition of corrupt acts and add teeth to enforcement.

COI Draft Law is a Mixed Bag on Enforcement
-------------------------------------------

3. (SBU) From 2003-06, the COI enjoyed substantial legal powers and
strong leadership but lacked manpower and training. Nonetheless, in
that period it attempted to press several cases against powerful
politicians. This activism and poor security in Iraq brought
threats that forced the emigration of then-COI Commissioner Judge
Radhi. In response to Judge Radhi's activism, unwelcome in some GOI
quarters, the June 2008 draft sought to weaken the Commission's
investigative powers by requiring that COI first loop in ministry
IG's to supervise all investigations. At present, the COI is not
required to loop in IG's but may conduct investigations on its own
and then submit the findings to an investigative judge for further
disposition. The proposed draft also would permit the COI to
dismiss a corruption case if it determines the case lacks merit.

4. (U) While the June 2008 draft weakens COI's prosecutorial
powers, it would potentially strengthen enforcement by permitting
COI to investigate sudden enrichment of a broader range of family
members of government officials than current law permits. The June
draft also introduced a new administrative structure, adding a
second deputy commissioner for COI. A second COI draft was
introduced in March 2009, revising the administrative structure of
COI to include a board of directors that would further flatten
governance of the institution.
Qgovernance of the institution.

5. (SBU) COMMENT: On enforcement, both the 2008 and 2009 drafts
would moderately circumscribe the COI's powers. On the
administrative side, the 2009 draft appears to mirror power-sharing
structures that have arisen elsewhere to establish a quota or
"muhassasa" arrangement for Iraq's three main ethnic/sectarian
groups. The second draft would dilute power structures even
further. Efforts to flatten governance show continued mistrust of
the COI by some GOI elements as officials try to insert additional
nodes of influence. On balance, while the COI would emerge under
either draft law with some expanded powers of investigation, it
would also confront additional decision-making and enforcement
turnstiles that could reduce its independence. Of the three
institutional statutes being considered, the COI drafts would have
the greatest impact, effectively making COI more like an American
prosecutor's office than the FBI in that it would then receive cases
from others rather than launch the inquiries on its own. END
COMMENT.


Inspectors General or General Inspectors?
------------------------------------------

6. (SBU) Prior to the fall of Saddam, several ministries had a
"General Inspector" who acted as an "administrative enforcer" for
the Ba'ath party. CPA Order 57 therefore created a new system of
"Inspectors General" to provide internal oversight as practiced in
the West. The 35 Inspectors General today possess widely divergent
skill levels and resources, ranging from the Ministry of the

BAGHDAD 00002785 002 OF 003


Interior's IG office (with 80 well-trained investigators per
approximately 400,000 employees) to that at the Ministry of
Education (2 investigators for an agency of 500,000). The June 2008
draft IG law would designate IG's as the principal agents for
uncovering and conducting initial investigations in federal
ministries, taking over those authorities from COI. The IG's would
also gain power by being accorded higher rank (equivalent to deputy
ministers) and protection from ministerial dismissal by requiring
the Prime Minister's consent for such action. (NOTE: At present,
the power to dismiss IG's rests with their respective ministers.
END NOTE.)

A Super-Inspector General?
--------------------------

7. (SBU) In July 2008, Dr. Adel Moshin (then PM Advisor on
anti-corruption and also IG for Health) introduced a competing IG
bill that provided for a new stand-alone body for a "Super-Inspector
General." This Super IG would supervise the IGs, establish a common
IG policy, and report to the Prime Minister. He would also oversee
the IG reports and assure that IG recommendations would be
implemented. This draft supplanted the earlier draft during
parliamentary review.

8. (SBU) COMMENT: On balance, the first draft IG law would
enhance the anti-corruption regime by strengthening the IG's; in the
context of highly fractured government, it also gives the Prime
Minister new leverage over ministers by giving him both appointment
and dismissal power over IG's. The second draft appears to overdo
those controls by subsuming IG independence into the orbit of an
official appointed by the Prime Minister. END COMMENT.

Auditors with Badges
--------------------

9. (SBU) For most of its history, the Board of Supreme Audit (BSA)
had the power to investigate and submit findings to an investigative
judge. Saddam removed the investigative powers in the early 1990s
to diminish oversight of his government. CPA Order 77 did not
restore BSA's investigative power, but instead transferred it to the
COI. (NOTE: CPA officials saw BSA as Iraq's GAO and COI as Iraq's
FBI.) The current draft BSA law restores some investigative powers
to the BSA.

10. (SBU) COMMENT: Allowing BSA to have some investigative powers
-- along with COI and the IG's -- potentially boosts anti-corruption
efforts by allowing more than one agency to have real teeth. If,
however, the three investigative agencies are coopted by different
parties or sects to target one another, anti-corruption efforts are
distorted. In any event, the equilibrium achieved by submitting
parallel COI, BSA, and IG statutes was disrupted by Adel Mohsin's
super IG initiative, as noted. Lawmakers have also been quite
divided on the issue of new administrative structures for COI. The
BSA law -- seemingly the least controversial -- has not received any
Council of Representatives (COR) readings, pending resolution of the
COI/IG controversy. END COMMENT.

Omnibus Law Broadens Penalties,
Incentives, Structures and Authorities
--------------------------------------

11. (SBU) A fourth draft law would serve as an omnibus
anti-corruption law, consistent with UNCAC requirements. It would
strengthen existing anti-bribery laws making it illegal to offer a
bribe to private sector officials, and for public officials to
accept gifts or misuse their office. (COMMENT: Some of these
provisions would be considered under U.S. system as overly broad or
too vague. END COMMENT.) The statute would also empower the COI to
offer rewards for turning in corrupt actors. In a major departure
from Iraqi jurisprudence, the draft would also permit plea
Qfrom Iraqi jurisprudence, the draft would also permit plea
bargaining. The draft strengthens the conflict-of-interest
provisions and allows the anti-corruption institutions to engage
international partners without direct MFA involvement. The draft
contains provisions for a specialized court to hear corruption
cases. The draft also gives statutory authority for the Joint
Anti-Corruption Council (a coordinating body chaired by the Council
of Ministers Secretary General, that includes the three main
anti-corruption bodies and the head of the Iraqi Higher Tribunal) to
coordinate a national anti-corruption strategy and a new corruption
monitoring center.

12. (SBU) COMMENT: The omnibus provision to appoint the JACC to
oversee the UNCAC may be a mixed blessing; on the one hand, it would
cement the anti-corruption concept in the Iraqi body politic, on the
other, it could provide an opening for leverage by the Prime
Minister. And while provisions to introduce plea bargaining and
direct links to international enforcement are solid gains for
anti-corruption efforts, the omnibus bill has virtually no strong
advocates and remains stalled in the Council of Ministers. Indeed,
none of the four bills are likely to become law before January
elections.


BAGHDAD 00002785 003 OF 003


13. (SBU) COMMENT CONTINUED: Overall, the changes proposed in
these laws indicate Iraq intends to treat corruption principally as
a law enforcement matter, reflecting UNCAC's main focus and the
mandates of those bodies that shaped Iraq's strategy. They offer
only minor reinforcement of current efforts to promote transparency,
accountability, and public awareness, other elements of most
anti-corruption regimes. For those, Iraq will need other
legislative and regulatory measures to complement its core
anti-corruption statutes. END COMMENT.

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