Australia bribe scandal sheds light on Iraq oil corruption

The scandal erupted when Australian police arrested a man in connection with US$78 million in bribes used to secure lucrative Iraqi oil contracts linked to an alleged international corruption ring.

Wednesday 18/11/2020
An Iraqi labourer works at an oil refinery in the southern town Nasiriyah managed by Iraq’s South Oil Company (SOC). (AFP)
An Iraqi labourer works at an oil refinery in the southern town Nasiriyah managed by Iraq’s South Oil Company (SOC). (AFP)

BAGHDAD – A bribe scandal involving an Australian man, officials from Iraq’s oil ministry and government officials in the South Oil Company of Iraq, revealed on Wednesday the extent to which corruption plagues the Arab country and its state institutions.

The scandal erupted when Australian police arrested a man in connection with $78 million in bribes used to secure lucrative Iraqi oil contracts linked to an alleged international corruption ring.

Local media named the man as former Leighton Offshore managing director Russell Waugh.

Police claim his company paid bribes through contractors including Unaoil — a Monaco-based firm which last year had two former senior executives plead guilty to being part of a scheme to bribe foreign government officials in several countries including Azerbaijan, Syria and Iraq.

Investigators believe the payments were used to secure contracts to build oil pipelines worth roughly $1.5 billion.

“The key targets of the bribery scheme were Iraqi Ministry of Oil officials and government officials within the South Oil Company of Iraq,” Australian Federal Police said in a statement announcing the arrest of a 54-year-old in Brisbane.

They said the investigation, which spanned nine years and involved US and UK authorities, was a “painstaking process” of piecing together a worldwide jigsaw of “alleged corruption.”

Police also announced they had issued two further arrest warrants for men living overseas.

Since last year, hundreds of thousands of Iraqi protesters have been taking to the streets in Baghdad and the predominantly Shia south to call for an end to endemic corruption by a political class that is largely seen as having squandered Iraq’s resources through greed and mismanagement over the past years.

The protests were met with a heavy military crackdown and hundreds were killed.

Graft is endemic across Iraq, which ranks among the world’s worst offenders in Transparency International’s annual Corruption Perceptions Index.

Since 2004, a year after the US-led invasion that ousted Saddam Hussein, almost $450 billion of public funds have vanished into the pockets of shady politicians and businessmen, according to parliament.

In 2018, Iraq gathered $30 billion in pledges from international donors in Kuwait to rebuild the ruined province, but virtually none of the funds have been disbursed.

The lack of progress has been widely blamed on the country’s infamous bureaucracy and rampant corruption.