Iraq: State Of Corruption

Editor's Note: After receiving a request from the Iraqi government, Interpol no longer considers former electricity minister Aiham Alsammarae a fugitive. He was removed from the Interpol Web site April 29, 2008.

Electricity is still in short supply, medicines are available mainly through the black market, and there are long lines for fuel in a country that has the third largest oil reserves in the world. One of the biggest problems is corruption, which is robust even by Middle Eastern standards. According to U.S. and Iraqi officials, bribery and outright theft are flourishing in virtually every Iraqi ministry, and some of those ill-gotten gains are being used to kill American troops.

Judge Radhi told Kroft that he estimated that "more than half" of the $1.3 billion had been stolen. "As we hear from some friends abroad, that they never heard of such corruption and embezzlement to such a degree," he said.

Radhi, who was imprisoned and tortured under Saddam Hussein, obtained arrest warrants for the former minister of defense and his top aides, who all fled the country. As Iraq's commissioner of public integrity, Radhi had one of the most dangerous jobs in the country. He launched investigations against 20 current and former ministers, alienating the political establishment to the point that parliament tried to fire him. He had 30 body guards and received constant death threats.

To the remark that lots of people would like to see him dead, Radhi told Kroft, "I don't care. That's their problem."

That was in 2006.

Today he's living with his extended family living in a small apartment with donated furniture in the suburbs of Washington, D.C. The most public figure in Iraq's battle against corruption had finally been driven out of his job and his country and is now a refugee seeking asylum in the United States.

He showed Kroft pictures of some of the 31 members of his staff who were murdered. One was killed with his pregnant wife; the father of his security chief was found hanging on a meat hook.

"When we first interviewed you, I said, 'Look. There are all sorts of people that want you dead.' And you answered, 'I don't care,'" Kroft remarked.

"But this threat is now against my family too," Radhi said, with the help of a translator.

Asked what made him believe that his family was in danger, Radhi said, "At the end of July, a missile was fired at my home. It fell about five meters away. It hit another house next to mine, and of course my family was terrified."

"And it got to the point where his adversaries were left with few other options. But to possibly remove him, period," explained James Mattil, who was the chief of staff of the State Department's Office of Accountability and Transparency in Iraq.

It was his job to assist Judge Radhi to clean up corruption in Iraq. And Mattil believes Radhi did a good job given the resources at Radhi's disposal and the scope of the problem, which was outlined in a draft report prepared by the State Department.

"According to the report, these are some of the ministries where corruption seemed to be rampant: the Ministry of Interior, the Ministry of Defense, Ministry of Trade, Ministry of Health, Ministry of Oil, Ministry of Education, Ministry of Water Resources, Finance, Electricity, Labor, and Social Affairs, Displacement and Migration, Science and Technology. I mean, what's left?" Kroft asked.

"I was gonna ask you that. Okay? It's pretty much across the board in every ministry," Mattil replied.

Mattil says shortly after the unclassified report was leaked to the press last summer, the State Department decided to make it classified.

Asked for what reason it was classified, Mattil said, "The embarrassment factor, I would think."

But the State Department's decision to try and bury the report didn't change the facts in Iraq. In some cases, Mattil says the corruption involves outright theft of government funds, or bribery, with some of the money finding its way into the hands of insurgents or Iraqi militias.

"In other cases, it is the militias and insurgents themselves who control some of the ministries, who are involved in the corruption and funding their activities through these actions," Mattil said.

Asked if this is known and condoned by Prime Minister Maliki, Mattil said, "It's known and tolerated by the prime minister and other officials within the government."

"And they're aware of the level of corruption?" Kroft asked.

"Yes," Mattil said. "They would have to be."

"The point that must be clear is that that the American and the Iraqi funds are now going to the militias. And both Iraqis and the Americans are being killed with that. And this is the big problem," Radhi told Kroft.

The situation got so bad, Radhi says his investigators could not even enter certain government buildings.

Asked if his investigators were allowed Ministry of Health, Radhi said, "They entered the ministry and they conducted their investigations. But they were threatened to be kidnapped."

So they stopped, and Radhi said the same thing happened with the Ministry of Oil.

"These are ministries of the Iraqi government," Kroft pointed out.

"This is the reality," Radhi replied.

Another reality is there are few deterrents to corruption at the highest levels. Former Defense Minister Hazem Shaalan and his deputy Ziad Cattan were both convicted in absentia for their role in the Ministry of Defense scandal. And both are now living comfortably abroad.

Back in 2006, Kroft interviewed Cattan in Paris and played him recordings in which he discussed what sounded like a pay-off to someone described as a representative of the president and prime minister of the interim government.

"He wants to know...," Cattan said on the audio recording.

"He wants to know how much they are going to place in his account …?" the associate asked.

"Yes, of course," Cattan replied.

"How much?" the associate asked.

"45 million," Cattan said.

"He wants to know how much money is gonna be placed in his account and you say …'45 million,'" Kroft told Cattan.

"Yes. But not dollar. I don't say dollar," Cattan replied.

Asked what currency or units he was talking about, Cattan told Kroft "I don't remember."

"Well, you're gonna give him 45 million of something," Kroft pointed out.

"Yes," Cattan acknowledged. "But, I don't remember what the matter was."

Warrants for the arrest of Cattan and former Defense Minister Shaalan have been sent to police agencies around the world, but there is not much chance of them being picked up and sent back to Iraq.

"I'm sitting here looking at a wanted poster from Interpol for Aiham Alsammarae, born 1951, Baghdad. Height: 1.9 meter, 75 inches, weight: 200 pounds,. This looks very much like you," Kroft said.

"Well it is me, but it is wrong because it is issued by Iraqi government based on false information," Alsammarae replied.

"You're not expecting the U.S. marshals to come in here and arrest you some day and send you off to Iraq to stand trial?" Kroft asked.

"Well, I will be so surprised if that happen in the States. Did I do anything wrong in United States? No. Did I pay my taxes, every penny, every year? Yes," he replied.

"Well, you're an international fugitive," Kroft remarked.

"The world is full of innocent victims. I am innocent and I will prove it," he vowed.

But there are indications that Alsammarae may have some problems here in the U.S.: his name has surfaced in connection with the corruption trial of his old friend, Chicago real estate developer Tony Rezko.

In a closed-door session, federal prosecutors reportedly accused Rezko of bribing Alsammarae in order to obtain an Iraqi electricity contract. Alsammarae denies the charges and says he's doing everything possible to clear his name, short of going back to Baghdad where he says he will be killed, perhaps by Iraqis who are only getting a few hours of electricity every day, despite billions of dollars of investment from the U.S. and Iraqi governments.

In the months before he left Iraq, Judge Radhi and his commission on public integrity began getting more and more interference from Prime Minster Maliki.

"He wrote a memo saying we could not recommend pressing charges against anyone from the president's office or from previous or current ministers," Radhi explained. "Who is corrupt in the ministries if it's not the ministers themselves? If we don't recommend they be tried, then corruption will stay as it is."

According to James Mattil, Radhi's former advisor at the State Department, the memo prohibited investigations of current or former high level Iraqi officials without the permission of the prime minister himself.

"It basically put a stop to any anti-corruption activities within the Iraqi government. And it came directly from the prime minister's office," Mattil said.

"So the only way the prime minister could be investigated for corruption would be if he signed off on his own investigation?" Kroft asked.

"Correct," Mattil said.

"So he'd have to be corrupt and stupid?" Kroft asked.

"Yes," Mattil replied.

Mattil told Kroft he had seen the memo and shared the information with his colleagues at the State Department immediately.

Asked what the reaction was when he showed it to them, Mattil said, "None, that I am aware of."

But it did get some reaction in the U.S. Congress when Radhi, seeking asylum in the United States, was called to testify before the House Oversight Committee.

Chairman Henry Waxman grilled Secretary of State Condoleezza Rice about Radhi's allegations.

"Well, this is a big deal. This is the prime minister of the country," Waxman said.

"I agree with you; it's a big deal," Secretary Rice replied.

"It's his government that we are propping up with the lives of our soldiers and the billions of dollars of our taxpayers' money," Waxman said. "Prime Minister Maliki has issued an order saying that he may not be investigated, nor may his minister be investigated for corruption, which means they are immunized from the investigation. Are you aware of that order? And does it trouble you that such an order has been issued?"

"Well Mr. Chairman, I will have to get back to you. I don't know precisely what you are referring to," Rice said.

Six months later, Waxman's staff was still waiting for an answer. But a State Department official and a representative of the Iraqi government told 60 Minutes corruption is not condoned and fighting it remains a top priority.

After Radhi left Iraq, the prime minister went on TV and accused him of corruption.

"Did you bring a lot of money with you when you came from Iraq?" Kroft asked.

"Nothing but my last salary," Radhi replied.

Asked how he was getting by, Radhi said, "Actually with the help of American friends."

Until Radhi's asylum application is approved, he's unable to work. These days, he is getting most of his news on Iraq from television. The Maliki government said 2008 would be the year of fighting corruption.

"You don't think this is gonna be the year of fighting corruption?" Kroft asked.

"I think that this year will be more corrupt," Radhi predicted.
Produced by Andy Court and Keith Sharman