Political Shadow Remains Over Key Bank

The following article was published in the latest edition of Inside Iraqi Politics, and it is reproduced here with the publisher’s permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Full Text of Inside Iraqi Politics Issue No. 18 (PDF)

Prime Minister Nuri al-Maliki’s dramatic in persona raid of the Trade Bank of Iraq on June 2 and the flight abroad of its director remains unresolved. While raising wide attention in political circles as TBI became a set piece in a fight between Maliki and Ahmad Chalabi, the abrupt change of management in the country’s premier financial institution also raises questions about broader issues of corruption and transparency.

On June 2, Iraqi security raided Iraq’s preeminent bank in what the government alleged was a move against corruption. Corruption is ubiquitous in Iraq, but what made the raid unusual is that Maliki carried it out in person. TBI’s director, Hussein al-Uzri, quickly fled to Lebanon. While basic facts and Uzri’s countercharges against Maliki have been reported in international media, most fail to mention the possible link between Maliki’s raid and his fight with Uzri’s famous uncle, Ahmad Chalabi.

IIP No. 16 introduced the Uzri-TBI scandal and Uzri’s flight in the context of Maliki’s most recent attack in a months-long rift with Chalabi – Maliki’s Shia rivals had put forward Chalabi as a candidate for interior minister, but only as a spoiler. Then Chalabi moved to grab headlines by organizing a “relief ship” for Bahraini Shia – whose cause Maliki had himself championed – and Maliki blocked it on June 3 – just one day after the TBI raid. Then on June 8, Maliki issued an order removing Chalabi as head of the debaathification commission, a move he probably lacks the authority to make, but which is unlikely to face legal challenge all the same.

Chalabi responded vociferously, alleging that Maliki was ignoring other corruption cases and had a political vendetta, while Maliki allies – including his Chief-of-Staff Ali Allaq – have publicly alleged massive theft by Uzri. Since then additional facts have come to light, or least been alleged. According to Uzri, Maliki came to the bank at first like it was a business meeting to ask for $6 billion in financing for deals he had signed with a Korean company to build power generators. Only when Uzri demanded a government guarantee did Maliki begin making allegations. Maliki demanded a meeting with the full management, but seeing the heavy security presence, Uzri decided to slip away, although he wouldn’t say how he got out of the country.

Additionally, according to reports published on a number of Iraqi newsites, Uzri hid for two days in Baghdad before traveling to Irbil and from there to Beirut, where his wife and children have been living. In this regard remember Chalabi’s long relationship with Kurdish leadership going back into the 1990s. In addition to loans for the Korean projects, al-Jeeran claims sources say that Maliki also demanded commercial contracts for some of his allies. The same also quoted government sources as saying that while they were aware of Uzri’s “political relationship” with Chalabi, they were unaware the two were related. If this is an accurate representation, the claim is not credible.

Expanding on Uzri’s claims, the Iraqi writer Sabah al-Baghdadi has made broader allegations about tie-ins to electricity and housing deals, claiming that Maliki’s actions violate legal rules on project financing (but note the source’s bias; Maliki’s security are “Dawa Party militia”). IIP will return to this potentially explosive issue if anything like definitive information becomes available.

Although Uzri does not appear to have much support in parliament – whether due to belief in his culpability or just for being Chalabi’s nephew – some MPs have asked how Uzri could have been allowed to get away given previous flight cases. Most prominently, former interior minister and member of the Transparency Committee Jawad al-Bolani hit out at Maliki on June 20, complaining that they still didn’t know what had happened. At the same time the committee questioned Finance Minister Rafia al-Isawi, but he claimed to have no authority over the matter. Maliki had announced an official investigation on June 2, but it hasn’t released any information yet. Moving forward, Maliki has appointed Hamdiya al-Jaf, a finance ministry functionary, as the new director.

In mid-June, Sir Claude Hankes, a British banker who has served as a long-time advisor to TBI, spoke out and wrote an open letter to President Talabani warning that Maliki’s raid was pure politics and that it threatened Iraq’s banking system. So assuming the truth of the claim that Maliki simply wanted control of the bank, this might explain the fact that Uzri was allowed to escape, and the fact that the warrant for his arrest was not issued until he had arrived in Lebanon. If Maliki had arrested him, Uzri is too famous to have him simply disappear; there would have to be a trial.

The core problem therefore is the lack of transparency. As noted, the government has released no new information recently, and neither the official al-Sabah or the government’s official news website have reported any. (We have noticed over time that the official newspaper typically does not report politically controversial legal cases.) During the preparation of this report, we noted that TBI had no Arabic-language website, and reviewing its English website noted that just yesterday (July 13) did it update data on the new directors. It still lists advisor Hankes at the top despite his vocal support for Uzri, and provides is no information on recent events. The last dated news release is from 2010, and it refers to Uzri as the chairman.

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