Corruption


KRG PM Barzani receives Lebanese Delegation

KRG Prime Minister Nechirvan Barzani received Lebanese Minister of Foreign Affairs Gebran Bassil, Minister of State for Combating Corruption Nicolas Tueni, and their accompanying delegation.

In the meeting, also attended by Kurdistan Regional Government ministers and senior officials, they discussed the political situation in Iraq including the post-election process, and the formation of the new Iraqi government and new Kurdistan Regional Government cabinet.

Minister Bassil thanked the Kurdistan Regional Government for its assistance and support to the Lebanese community. He emphasized the desire of Lebanon to strengthen relations with the Kurdistan Region, especially in the fields of investment, trade, tourism and culture.

Prime Minister Barzani reaffirmed the KRG’s support to Lebanese businessmen and investors. He praised the activities of the Lebanese community in the Kurdistan Region.

The political situation in the wider region was also discussed.

(Source: KRG)

Former Trade Minister sentenced for Corruption

By John Lee.

A former Minister for Trade and two former State Directors of the Ministry have been sentenced in absentia to seven years in prison for corruption.

A statement from Iraq’s Commission of Integrity said the three committed offenses in two contracts between the State Company for Trading Grain and a company supplying basmati rice, with “damage to public money in the two contracts” of $14.3 million.

Middle East Online names the former minister as Malas Abdulkarim al-Kasnazani [Mlas Mohammed Al-Kasanzan] (pictured), who was dismissed from Haider al-Abadi’s cabinet in 2015.

(Sources: Commission of Integrity, Middle East Online)

Prison for Bribery in Iraq War Contracts

A former business partner of a U.S. military contractor was sentenced today to 18 months in prison for his role in a years-long scheme to bribe U.S. Army contracting officials stationed at a U.S. military base in Kuwait during the Iraq War.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Matthew J. DeSarno of the FBI’s Washington Field Office’s Criminal Division, Director Frank Robey of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit and Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office made the announcement.

Finbar Charles, 62, a citizen of Saint Lucia most recently residing in Baguio City, Philippines, was sentenced by Chief U.S. District Judge Karon O. Bowdre of the Northern District of Alabama.  Chief Judge Bowdre also ordered Charles to forfeit $228,558 in illicit gains.  Charles pleaded guilty in July 2018 to one count of bribery of a federal official.

According to admissions made in connection with his guilty plea, Charles was a business partner of a former U.S. military contractor, Terry Hall.  As Hall’s business partner, Charles admitted that he facilitated Hall and others in providing millions of dollars in bribes in approximately 2005 to 2007 to various U.S. Army officials in exchange for preferential treatment for Hall’s companies in connection with Department of Defense (DOD) contracts to deliver bottled water and construct security fencing to support U.S. troops stationed in Kuwait and Iraq.

As part of his role in this criminal conspiracy, Charles admitted that he managed bank accounts in Kuwait and the Philippines that he used to receive Department of Defense payments and transfer illegal bribes to various U.S. Army contracting officials, including Majors Eddie Pressley, James Momon, and Chris Murray.

All of those individuals, as well as at least 10 other coconspirators, have pleaded guilty or been convicted of crimes relating to this scheme.  Charles admitted that he falsified loan and consulting agreements to conceal the true nature of the bribe payments to the Army officers, and that he personally received over $228,000 in illicit gains as a result of his participation.

This case was investigated by the DCIS, the U.S. Army Criminal Investigation Command, the FBI and the Special Inspector General for Iraq Reconstruction.  The Criminal Division’s Office of International Affairs provided substantial assistance in this matter.  The case was prosecuted by Trial Attorneys Peter N. Halpern and Robert J. Heberle of the Criminal Division’s Public Integrity Section.

(Source: US Dept of Justice)

Iraq Recovers Property “Unlawfully Sold” to Politician’s Wife

By John Lee.

The Iraqi government has retaken ownership of a property in Baghdad, after it said it was unlawfully sold to “the wife of a senior official in the previous [Abadi] government“.

The Commission of Integrity said in a statement that “the property was sold by the official to his wife in violation to the legal controls stipulated in the Law of Sale and Rent of State Properties No. 32 of 1986, and without conducting a public bid.

The official was not publicly identified.

(Source: Commission of Integrity)

Outgoing Abadi signs blow to Turkish Imports

By Fehim Tastekin for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

While Turkey was eagerly anticipating a new government in Baghdad to sort out many problems with Iraq, a last minute decision by the outgoing prime minister has added a fresh item to the list of ongoing disagreements between the two countries.

Haider al-Abadi unexpectedly signed a decree to set up three new checkpoints in government-controlled areas in northern Iraq that will effectively slash Turkey’s trade with it.

The trucks that enter the country normally pass through the sole border crossing that is controlled by the Kurdistan Regional Government (KRG) and will now also have to pass at least one of these additional checkpoints.

Click here to read the full story.

Outgoing Abadi signs blow to Turkish Imports

By Fehim Tastekin for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

While Turkey was eagerly anticipating a new government in Baghdad to sort out many problems with Iraq, a last minute decision by the outgoing prime minister has added a fresh item to the list of ongoing disagreements between the two countries.

Haider al-Abadi unexpectedly signed a decree to set up three new checkpoints in government-controlled areas in northern Iraq that will effectively slash Turkey’s trade with it.

The trucks that enter the country normally pass through the sole border crossing that is controlled by the Kurdistan Regional Government (KRG) and will now also have to pass at least one of these additional checkpoints.

Click here to read the full story.

Corruption now “Biggest Threat to Iraq”

Corruption has become the biggest threat to the future stability of Iraq following the defeat of Islamic State, Britain’s ambassador in Baghdad has told the Evening Standard newspaper in London.

Jon Wilks said that although there were “remnants” of IS still present, the country was “settling down ahead of expectations” and starting to recover from decades of war and insurgent attacks.

But he warned that corruption — which this month sparked violent protests in Iraq’s second city Basra — still posed a significant risk because of the negative effect that it had on business investment and public confidence.

Full report here.

(Source: Evening Standard)

Minister to Brief Parliament on Duty-Free Contracts

In May of this year, we reported claims that Iraq’s anti-corruption bodies were investigating the contract to operate the duty-free shops at Baghdad and Basra airports, following reports of corruption from Al-Ahad TV.

According to a new report from Al-Ahad TV, and to documents recently received by Iraq Business News (see below), the Iraqi Parliament has recently written to the Minister of Transport asking him to appear in parliament to answer questions in relation to a varitety of matters, including apparent irregularities in the extention of the contracts with Iraq Duty Free, which is owned by Financial Links.

The report alleges that the provision of 5 busses, 200 passenger trollies and other items to the Iraqi Civil Aviation Authority (ICAA) amounts to bribery and corruption, contrary to Iraqi Law.

The Parliamentary Anti-Corruption Bureau has also written to the Inspector General for the Ministry of Transport asking him to investigate the contract.

Iraq Duty Free denies any wrongdoing.

We’ll report more details as the story unfolds.

Additional information:

New report from Al-Ahad TV (in Arabic):

https://www.youtube.com/watch?v=OeoCezS5QNc

Original article:

http://www.iraq-businessnews.com/2018/05/15/were-duty-free-contracts-illegally-granted/

 

 

Former Defense Ministry Official Jailed for Corruption

By John Lee.

A former deputy general secretary at Iraq’s Ministry of Defense has reportedly been sentenced to six years in prison corruption.

According to Rudaw, Ziad al-Qattan was conviced in relation to three contracts to supply the Ministry with light weaponry and military equipment.

He held the position during the Iraqi Transitional Government of May 2005 to May 2006.

More here.

(Source: Rudaw)

Pharma Firm pays $25m to Resolve Corrupt Payments

The US Securities and Exchange Commission (SEC) announced that Paris-based pharmaceutical company Sanofi has agreed to pay more than $25 million to resolve charges that its Kazakhstan and the Middle East subsidiaries made corrupt payments to win business.

According to the SEC’s order, the schemes spanned multiple countries and involved bribe payments to government procurement officials and healthcare providers in order to be awarded tenders and to increase prescriptions of its products.

In the Middle East, various pay-to-prescribe schemes were used to induce healthcare providers to increase their prescriptions of Sanofi products.

In Iraq, for example, a healthcare professional (HCP) requesting samples of Taxotere in 2012 was also provided with consulting, speaking, and clinical trial fees over a period of years despite the lack of documentation of other support to demonstrate the services had been provided. Sanofi paid to the HCP the equivalent in local currency of USD 28,900 in consulting fees and, USD 5500 in speaking fees.

Sanofi also paid to the HCP USD 125,997 in clinical trial fees. The consulting fees were purportedly related to hosting events and training for HCPs in Iraq. No supporting documentation was found for any of the purported consultancy services. While the clinical trial fees were approved by Medical Affairs, the HCP has never provided reports of findings or observations.

The HCP, who provided the ostensible speaking, consulting, and clinical trial services to Sanofi, requested that the consulting and clinical trial fees be paid by check to an unrelated individual.

Sanofi accommodated the request to pay the unrelated individual without explanation or justification.

“Bribery in connection with pharmaceutical sales remains as a significant problem despite numerous prior enforcement actions involving the industry and life sciences more generally,” said Charles Cain, FCPA Unit Chief, SEC Enforcement Division. “While bribery risk can impact any industry, this matter illustrates that more work needs to be done to address the particular risks posed in the pharmaceutical industry.”

The SEC’s order finds that Sanofi violated the books and records and internal accounting controls provisions of the federal securities laws. Without admitting or denying the findings, Sanofi agreed to a cease-and-desist order and to pay $17.5 million in disgorgement, $2.7 million in prejudgment interest, and a civil penalty of $5 million.

The SEC appreciates the assistance of Fraud Section of the Department of Justice, the Federal Bureau of Investigation, and the Autorité des marchés financiers in France.

(Source: SEC)