The story: Iraqi authorities have arrested a key suspect implicated in the embezzlement of some 2.5B USD from state coffers. The massive corruption case has gained major traction on Iraqi social media, with the hashtag “heist_of_the_century” trending on Twitter. This comes amid reports of political pressure to release the suspect, and as Iran’s allies in Iraq are ramping up pressure on outgoing Prime Minister Mustafa Al-Kadhimi—accusing him of involvement in the scandal.

The coverage: Iraq’s finance ministry on Oct. 10 stated that five companies had withdrawn some 3.7T IQD (2.5B USD) from its General Commission of Taxes account at the state-owned Rafidain Bank.

The ministry noted that the five companies cashed 247 cheques from the government account between Sept. 2021 and Aug. 2022.

Judge Dhiya Jaafar of Baghdad’s Al-Karkh appeals court on Oct. 25 stated that Kadhimi advisor Haitham Al-Jubouri had been summoned to appear before the court.

Jubouri, a former MP who once headed the Iraqi parliament’s finance committee, had according to Jaafar recommended “ending oversight over disbursement operations” made by the implicated government account.
Jaafar also noted that legal action had been taken against the director-general of the General Tax Authority and his aide as well as the head of the Authority’s finance department.

The previous day, on Oct. 24, Interior Minister Othman Al-Ghanemi announced the arrest of Noor Zuhair Jassim Al-Muthaffar at Baghdad International Airport, saying that the detention took place “while he was trying to leave the country on a private jet.”

Muthaffar is the acting director of one of five companies accused of having carried out the embezzlement. His arrest came after the judiciary on Oct. 20 issued a travel ban on nine individuals and arrest warrants against three others.

On the same day, the interior ministry dismissed reports of alleged pressure “by any government, partisan or political actors” to have Muthaffar released.

The ministry’s statement came after the first deputy parliament speaker on Oct. 24 expressed support for Muthaffar’s detention “in the face of all the pressures exerted to release him.”
Iraqi journalist Mustafa Saadoon also reported on Oct. 24 that there were alleged “attempts to help him [Muthaffar] escape.” Saadoon added that the suspect nearly fled Iraq, charging that there is “great collusion” in the dossier.

Amid the public backlash, Kadhimi on Oct. 24 asserted his government’s continued efforts to “fight corruption, exposing those responsible and arresting criminals.”

Kadhimi’s remarks came after some members of the Iran-backed Shiite Coordination Framework lashed out at the outgoing premier. MP Falih Al-Khazali of the Fatah Alliance on Oct. 24 stated that “Kadhimi and his advisors should be tried over the 2.5B USD tax scandal.”

The context/analysis: The embezzlement of the state funds was first revealed by Oil Minister Ihsan Abdul Jabbar on Oct. 15. Abdul Jabbar stated that “the outcomes of an investigation” he had led at the finance ministry had proven that the theft was carried out by an “identified group,” without revealing the alleged culprits.

Abdul Jabbar notably made the announcement only days after the Iraqi parliament voted to end his designation as acting finance minister over his reported “implication in corruption.”

Kadhimi had designated Abdul Jabbar as acting finance minister in mid-August following the resignation of former finance minister Ali Allawi.

In a lengthy resignation letter, Allawi had outlined the reasons behind his decision to step down—including the political deadlock over the formation of the next government and rampant corruption among the ruling elites.
Commenting on the 2.5B USD corruption case, Allawi on Oct. 19 issued a 7-page statement in which he charged that he had informed Kadhimi of his concerns about “manipulation” at the “tax trusts” back in Nov. 2021.
Kadhimi’s office had in Aug. 2021 reportedly approved Jubouri’s recommendation to end oversight over disbursement operations at the government account at the center of the scandal, only weeks before the illicit transfers reportedly began.

There is so far no evidence implicating Kadhimi in the corruption case. However, members of the Shiite Coordination Framework are nonetheless capitalizing on the dossier to step up their week-long campaign against the outgoing premier.

MP Ali Turki Al-Jammali, an affiliate of Asa’ib Ahl Al-Haq—a member of the Coordination Framework—on Oct. 22 stated that “billions of dollars were stolen by former and current corrupt officials who are close to Kadhimi.”
Another Coordination Framework MP, Mohammad Al-Sayhoud, on Oct. 21 stated that “motions will be presented in the parliament to impose a travel ban on Kadhimi and his team.”

The future: Mindful of the public backlash, further suspects implicated in the massive corruption case are expected to be arrested in coming days.

The likelihood of further detentions is especially high since “the people will be watching what happens,” noted Iraq analyst Sajad Jiyad, raising questions about those involved in the embezzlement and the “politicians [who] are complicit.”

The campaign against Kadhimi by elements of the Coordination Framework will likely continue, partly with the aim of ensuring that the outgoing premier will not return to his prior position as spy chief.

Mindful that it dates back to Kadhimi’s term, Prime Minister-designate Mohammad Shia’ Al-Sudani will likely allocate significant focus on the corruption case.
Sudani on Oct. 16 vowed that he will “never hesitate to take real measures to curb the corruption that has so brazenly spread,” saying that the dossier has been granted “first priority” in his government’s program.