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Corruption rampant in oil-rich Kurdistan

Stephen Beard Jul 2, 2009

Corruption rampant in oil-rich Kurdistan

Stephen Beard Jul 2, 2009


Kai Ryssdal: Later this month Iraq’s northern region of Kurdistan is going to hold parliamentary and presidential elections. The Kurds have been largely independent since the Iraqi Army was basically forced to withdraw after the 1991 Gulf War. The region sits on billions of dollars worth of oil and natural gas. So there’s keen interest in who wins those elections. But Reese Erlich reports from the city of Sulaimaniya in Kurdistan that not everything seems to be on the up and up.

REESE ERLICH: For centuries, they fought off outside powers. Now finally, they are running their own affairs in Northern Iraq. But critics of the autonomous regional government say corruption is rife; the ruling parties are ripping off hundreds of millions of dollars from a system intended to provide legitimate political funding. I asked Kurdistan Democratic Party leader Mohammad Qadir how much his party gets from the government.

MOHAMMAD QADIR: I don’t know. I’m not in charge of financial matters in the KDP.

So I asked Fuad Hussein, chief of staff to Kurdistan’s President Massoud Barzani.

FUAD HUSSEIN: I don’t know. Ask the parliament.

But the information isn’t exactly secret. Opposition leader Mohammad Tofiq read it in an investigative newspaper a few weeks ago.

MOHAMMAD TOFIQ: The speaker of the parliament confirmed that it’s true KDP and PUK each receive $35 million.

That’s $35 million a month. The Kurdish government gives the parties $840 million in subsidies every year. Tofiq says the money is used to build fancy homes for party bigwigs. It also pays for the parties’ employees, TV stations, newspapers, private militias, and even their own security services.

Tofiq: To maintain control, they interfere in the market; they interfere in the companies; they interfere in contracts.

Asos Hardi, who heads an independent newspaper company, says party officials also make big profits from government contracting. He says they frequently insist private companies take on a sham partner who puts up no money but receives half the profits from government contracts.

ASOS HARDI: If you are not ready to do that, you will not get that project. Or you will get it, but they will make problems for you, and you can not finish it. And you will lose money; maybe you will be bankrupt.

The president’s Chief of Staff Fuad Hussein admits corruption is a problem in Kurdistan, where the vast majority of the population is Kurdish and where bonds of friendship and clan have always meant a lot. He says change won’t come quickly here or in any other part of Iraq.

HUSSEIN: Corruption in Iraq was part of the culture. When there are wars, of course, you try to survive. Any ethics will disappear. To fight the corruption is not so easy.

The Kurdish government has asked the International Monetary Fund and an American accounting firm to help curb corruption by implementing stricter controls and electronic record keeping. The opposition Change List hopes to win parliamentary seats based on its anti-corruption platform. But analysts here say the two major parties seem likely to maintain control.

In Sulaimaniya, Kurdistan, Iraq, I’m Reese Erlich for Marketplace.

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