The Cable

Report: Iraqi corruption at all-time post-invasion high

Corruption in Iraq is at an all-time high and several other major indicators of progress in the country are on a downward trend, according to a new U.S. government report.

Earlier this month, the Iraqi government fired Central Bank of Iraq (CBI) Governor Sinan al-Shabibi amid allegations of corruption, a move that is both a symptom and a consequence of increased corruption in Iraq and also a possible power grab by Iraqi Prime Minister Nuri al-Maliki, according to the report, published Tuesday by the Office of the Special Inspector General for Iraq Reconstruction.

"This peremptory and constitutionally questionable move occurred as an audit of the CBI's foreign currency auctions surfaced. The audit purportedly found that perhaps 80% of the $1 billion purchased at weekly CBI-managed auctions was tied to illegal transactions, with the funds subject to those transactions potentially lost abroad to money laundering," the report reads.

It continues: "This development is symptomatic of a troubled year in Iraq, evidenced by increasing corruption, resurgent violence, deepening ethno-sectarian strains, growing apprehensions about the conflict in Syria, and widening divides within the coalition government."

Special Inspector Stuart Bowen, in an interview with The Cable, said it's unclear whether the firing of Shabibi was a direct power grab by Maliki, but it does open up the possibility that Maliki will now have greater access to the vast capital reserves the bank holds.

"The facts are that Governor Shabibi was widely respected around the globe amongst financial ministers for building up Iraq's reserves to about $65 billion. And I did know from my discussions in Iraq there was some desire in Iraq to access some of that money for capital expenditure purposes and Shabibi had exerted a firm hand in preventing its use," Bowen said. "The government of Iraq wanted to access some of those reserves."

The Iraqi government's public explanation is that Shabibi was not diligent enough in combatting the money laundering that was going on at the bank, mostly through weekly auctions of dollars for Iraqi dinars. Bowen said that Abdul-Basit Turki, the head of the Board of Supreme Audit, made that money-laundering determination. Basset is now the acting governor of the Central Bank of Iraq.

"The matter of corruption was brought to me by a number of ministers, who noted to me that it's as bad as it's ever been," Bowen said.

The report points to several other negative indicators. For example, Iraq suffered its worst day of violence in more than two years when Vice President Tariq al-Hashimi was sentenced to death in absentia last month, charges that are widely viewed as political in nature. Iraq's relationship with Turkey is deteriorating, the ongoing violence in Syrian presents both political and humanitarian problems for Iraq, and a temporary resolution of Baghdad's oil revenue sharing dispute with the Kurds has not solved the overall problem, the report said.

Official numbers for staffing at the U.S. Embassy in Baghdad, America's largest, have actually gone up despite State Department claims that the embassy was in the process of being downsized. Apparently, the number of staff had been underreported in the past.

"U.S. Embassy-Baghdad reported that 16,035 persons supported the U.S. Mission in Iraq at the end of the quarter, including 1,075 U.S. government civilian employees and 14,960 contractor personnel. The Embassy said the discrepancy was due to earlier underreporting of certain staff categories," the report stated.

"My expectation is that it will be shrinking. We had conflicting reporting about the size of the staff at the embassy," Bowen said. "We'll just have to wait to see how that evolves over the next couple of quarters."

SIGIR also announced in its report the conclusion of several investigations that resulted in either guilty pleas or convictions of persons abusing U.S. taxpayer funds in Iraq, including the guilty plea of the former chief of party in Baghdad for USIP of wire fraud.

Earlier this month, two former employees of the contractor Parsons were sentenced to prison for terms of 27 and 15 months for "conspiring to commit kickbacks, wire fraud, and mail fraud, and for filing false tax returns" and will pay about $2 million in restitution to the U.S. government. And Monday, UK-based Iraqi subcontractor Ahmed Sarchel Kazzaz was sentenced to 15 months in prison and ordered to pay about $1 million in restitution and forfeit another $1 million.

The U.S. government has obligated $60.5 billion to Iraqi relief and reconstruction since 2003.

In January, the SIGIR office will release its final lessons report and three more audits, and then the office will begin to roll up its operations unless Congress sees fit to extend its funding past March. If not, the hope is to take about 20 staffers from SIGIR's investigative unit and move them over to the Office for the Special Inspector General for Afghanistan Reconstruction (SIGAR), Bowen said.

"We have over 80 cases ongoing... the Hill has expressed in continuing the investigative part of SIGIR after the office officially closes down," he said.

The Cable

Waterboarding critic named co-chair of Romney’s intelligence transition team

Republican presidential candidate Mitt Romney has often endorsed the idea of using "enhanced interrogation techniques" if he is elected and doesn't believe that waterboarding is "torture," but he chose the GOP's most fervent critique of such methods to be the co-chair for intelligence personnel in his transition team.

Philip Zelikow, the long-time diplomat and former counselor to Secretary of State Condoleezza Rice, has been named one of two officials in charge of planning for the intelligence side of a potential Romney administration as part of the Romney campaign's "Project Readiness," multiple sources with direct knowledge of the project confirmed to The Cable. Zelikow, who was also the executive director of the 9/11 Commission, co-chairs the intelligence team with former New Jersey Governor and 9/11 Commission co-chairman Tom Kean.

Zelikow is another GOP senior foreign-policy hand from the realist camp in the top ranks of the Romney transition team. The head of the national security team is former Deputy Secretary of State and former World Bank President Bob Zoellick, a pick that roiled neoconservatives and hawks inside the Romney campaign when it was announced in August. But there are also hawks on the transition team, including former U.N. official Rich Williamson and former Undersecretary of Defense for Policy Eric Edelman.

Zelikow ran afoul of many of his colleagues inside the George W. Bush administration in 2005 when he wrote an internal memo expressing opposition to the Office of Legal Counsel's findings that allowed the use of enhanced interrogation techniques, including waterboarding. He wrote about how his dissenting view was received in a 2009 post on Foreign Policy's Shadow Government blog.

"My colleagues were entitled to ignore my views. They did more than that: The White House attempted to collect and destroy all copies of my memo. I expect that one or two are still at least in the State Department's archives," Zelikow wrote.

He was right. In April 2012, the State Department released Zelikow's memo pursuant to a Freedom of Information Act request. Here's what he wrote at that time:

In looking to objective standards to inform a judgment about evolving standards of decency or interrogation techniques that shock the conscience, three sources stand out:

  • American government practice, by any agency, in holding or questioning enemy combatants -- including enemy combatants who do not have Geneva protection or who were regarded at the time as suspected terrorists, guerrillas, or saboteurs. We are unaware of any precedent in Wold War II, the Korean War, the Vietnam War, or any subsequent conflict for authorized, systematic interrogation practices similar to those in question here, even where the prisoners were presumed to be unlawful combatants
  • Recent practice by police and prison authorities in confining or questioning their most dangerous suspects. This practice is especially helpful since these authorities are governed by substantively similar standards to those that would apply under the [Convention Against Torture], given the Senate's reservation. We have not conducted a review of American domestic practice. From the available cases, it appears likely that some of the techniques being used would likely pass muster; several almost certainly would not.
  • Recent practice by other advanced governments that face potentially catastrophic terrorist dangers. [REDACTED]...governments have abandoned several of the techniques in question here.

It therefore appears to us that several of these techniques, singly or in combination, should be considered "cruel inhuman, or degrading treatment or punishment" within the meaning of Article 16.

The techniques least likely to be sustained are the techniques described as "coercive,'" especially viewed cumulatively, such as the waterboard, walling, dousing, stress positions, and cramped confinement.

Zelikow's position on enhanced interrogation techniques and waterboarding stands in contrast to Romney, who has made it clear on several occasions that he is not opposed to enhanced interrogation techniques and he does not believe waterboarding constitutes torture.

President Barack Obama signed an executive order early in his presidency limiting interrogation techniques to those specifically allowed in the Army Field Manual, which effectively outlawed waterboarding.

The New York Times reported last month that Romney aides had prepared an internal memo for the candidate that advised him "rescind and replace President Obama's executive order" and permit secret "enhanced interrogation techniques against high-value detainees that are safe, legal and effective in generating intelligence to save American lives."

Following that report, when asked by a reporter if he classifies waterboarding as torture, Romney said, "I don't."

Last November, Romney spokesperson Andrea Saul also said that Romney does not classify waterboarding as torture and would not specify which "enhanced interrogation techniques" he would be open to using if elected.

Last December, Romney said he supported "enhanced interrogation techniques which go beyond those that are in the military handbook right now."

In a 2007 primary debate, Romney refused to classify waterboarding as torture when asked about it directly.

"I oppose torture. I would not be in favor of torture in any way shape or form. As a presidential candidate I don't think it's wise to describe specifically which techniques we would or would not use," he said.

His primary opponent at the time, former prisoner of war Sen. John McCain (R-AZ), shot back at Romney in that debate insisting that waterboarding is in fact torture.

"I'm astonished that you haven't found out what waterboarding is," McCain said. "Governor, let me tell you if we are going to get the high ground in this world and we're going to be the America that we've cherished and loved for more than 200 years, we're not going to torture people."

Multiple requests for comment were not returned by the Romney campaign. Zelikow did not respond to a query by deadline.

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