<DOC>
[110th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:43601.wais]
ASSESSING THE STATE OF IRAQI CORRUPTION
=======================================================================
HEARING
before the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
OCTOBER 4, 2007
__________
Serial No. 110-64
__________
Printed for the use of the Committee on Oversight and Government Reform
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
http://www.house.gov/reform
----------
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
HENRY A. WAXMAN, California, Chairman
TOM LANTOS, California TOM DAVIS, Virginia
EDOLPHUS TOWNS, New York DAN BURTON, Indiana
PAUL E. KANJORSKI, Pennsylvania CHRISTOPHER SHAYS, Connecticut
CAROLYN B. MALONEY, New York JOHN M. McHUGH, New York
ELIJAH E. CUMMINGS, Maryland JOHN L. MICA, Florida
DENNIS J. KUCINICH, Ohio MARK E. SOUDER, Indiana
DANNY K. DAVIS, Illinois TODD RUSSELL PLATTS, Pennsylvania
JOHN F. TIERNEY, Massachusetts CHRIS CANNON, Utah
WM. LACY CLAY, Missouri JOHN J. DUNCAN, Jr., Tennessee
DIANE E. WATSON, California MICHAEL R. TURNER, Ohio
STEPHEN F. LYNCH, Massachusetts DARRELL E. ISSA, California
BRIAN HIGGINS, New York KENNY MARCHANT, Texas
JOHN A. YARMUTH, Kentucky LYNN A. WESTMORELAND, Georgia
BRUCE L. BRALEY, Iowa PATRICK T. McHENRY, North Carolina
ELEANOR HOLMES NORTON, District of VIRGINIA FOXX, North Carolina
Columbia BRIAN P. BILBRAY, California
BETTY McCOLLUM, Minnesota BILL SALI, Idaho
JIM COOPER, Tennessee JIM JORDAN, Ohio
CHRIS VAN HOLLEN, Maryland
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
JOHN P. SARBANES, Maryland
PETER WELCH, Vermont
Phil Schiliro, Chief of Staff
Phil Barnett, Staff Director
Earley Green, Chief Clerk
David Marin, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on October 4, 2007.................................. 1
Statement of:
Butler, Ambassador Larry, Deputy Assistant Secretary for Near
East Affairs, U.S. Department of State..................... 88
Rosett, Claudia, journalist in residence, Foundation for the
Defense of Democracies..................................... 112
Walker, David, Comptroller General of the United States, U.S.
Government Accountability Office; Judge Radhi Hamza Al-
Radhi, Commissioner of Public Integrity in IRAQ; and Stuart
Bowen, Special Inspector General for IRAQ Reconstruction... 26
Al-Radhi, Judge Radhi Hamza.............................. 43
Bowen, Stuart............................................ 54
Walker, David............................................ 26
Letters, statements, etc., submitted for the record by:
Al-Radhi, Judge Radhi Hamza, Commissioner of Public Integrity
in IRAQ, prepared statement of............................. 56
Bowen, Stuart, Special Inspector General for IRAQ
Reconstruction, prepared statement of...................... 45
Butler, Ambassador Larry, Deputy Assistant Secretary for Near
East Affairs, U.S. Department of State, prepared statement
of......................................................... 91
Davis, Hon. Tom, a Representative in Congress from the State
of Virginia, prepared statement of......................... 24
McHenry, Hon. Patrick T., a Representative in Congress from
the State of North Carolina, prepared statement of......... 129
Rosett, Claudia, journalist in residence, Foundation for the
Defense of Democracies, prepared statement of.............. 117
Sali, Hon. Bill, a Representative in Congress from the State
of Idaho, prepared statement of............................ 141
Walker, David, Comptroller General of the United States, U.S.
Government Accountability Office, prepared statement of.... 29
Watson, Hon. Diane E., a Representative in Congress from the
State of California, prepared statement of................. 131
Waxman, Hon. Henry A., a Representative in Congress from the
State of California:
Prepared statement of.................................... 14
Staff memorandum......................................... 4
ASSESSING THE STATE OF IRAQI CORRUPTION
----------
THURSDAY, OCTOBER 4, 2007
House of Representatives,
Committee on Oversight and Government Reform,
Washington, DC.
The committee met, pursuant to notice, at 10:05 a.m., in
room 2154, Rayburn House Office Building, Hon. Henry A. Waxman
(chairman of the committee) presiding.
Present: Representatives Waxman, Davis of Virginia,
Cummings, Tierney, Clay, Watson, Lynch, Higgins, Yarmuth,
Braley, Cooper, Van Hollen, Hodes, Murphy, Sarbanes, Welch,
Burton, Shays, Mica, Platts, Turner, Issa, and Sali.
Staff present: Phil Schiliro, chief of staff; Phil Barnett,
staff director and chief counsel; Karen Lightfoot,
communications director and senior policy advisor; David
Rapallo, chief investigative counsel; Roger Sherman, deputy
chief counsel; John Williams, deputy chief investigative
counsel; David Leviss, senior investigative counsel; Suzanne
Renaud and Steve Glickman, counsels; Earley Green, chief clerk;
Teresa Coufal, deputy clerk; Matt Siegler, special assistant;
Caren Auchman and Ella Hoffman, press assistants; Leneal Scott,
information systems manager; Kerry Gutknecht and William
Ragland, staff assistants; Sheila Klein, assistant to staff
director and office manager; David Marin, minority staff
director; Larry Halloran, minority deputy staff director; A.
Brooke Bennett, minority counsel; Christopher Bright, minority
professional staff member; Nick Palarino, minority senior
investigator and policy advisor; Patrick Lyden, minority
parliamentarian and member services coordinator; Brian
McNicoll, minority communications director; Benjamin Chance,
minority clerk; and Ali Ahmad, minority deputy press secretary.
Chairman Waxman. The committee will come to order.
Today's hearing is one of the most important that we will
have this year.
President Bush has made Iraq our Nation's top foreign
policy priority. We all know that has meant extraordinary
sacrifices from our troops and their families. Over 3,800 of
our soldiers have been required to make the ultimate sacrifice
in Iraq and another 28,000 have been wounded, and we have
already spent over $450 billion on the war with hundreds of
billions of more still to come.
The Iraq War is the No. 1 issue in all of our congressional
districts and the issue that we have spent the most time
debating here in Congress.
Most of our attention has been focused on military
questions. Is the surge working? Can we reduce the number of
troops? Should we set a redeployment date?
These are all important questions, but they aren't the only
ones that matter. As General Petraeus has observed, ``There is
not a military solution to a problem like Iraq.'''
Political reconciliation is the key to achieving lasting
peace in Iraq, and one of the keys to political reconciliation
is combating corruption. That is why we are holding today's
hearing. An honest assessment of corruption in Iraq will
provide insight into whether political progress is possible.
We are very fortunate that David Walker, the Comptroller
General of the Government Accountability Office, and Stuart
Bowen, the Special Inspector General for Iraq Reconstruction,
will share their expertise with us this morning.
I want to give special thanks to Judge Radhi Hamza al-Radhi
for agreeing to testify. Judge Radhi was the commissioner of
Iraq's Commission on Public Integrity. He was appointed to this
post by Ambassador Bremer, and his job was to identify and
prosecute corruption in Iraq.
Judge Radhi knows too well the horrors of life under Saddam
Hussein. He was one of Saddam's torture victims, and he never
hesitated when our government asked him to take the dangerous
job leading the fight against corruption in Iraq.
Christopher Griffith, the Senior Advisor to the U.S. Office
of Accountability and Transparency, told our committee that
Judge Radhi is ``the most honest government of Iraq official
that I have met in my 21 months in this country.''
Another senior Embassy official told us that Judge Radhi
has a reputation as ``courageous, honest and effective.''
From everything I can tell, Judge Radhi did exactly what we
asked the Iraqis to do. He stood up for freedom, he stood for
democracy, and he stood up for honest government.
Now he finds himself without a country. Judge Radhi is
under attack by the Maliki government and he and his family are
the targets of serious and persistent death threats. Thirty-one
of Judge Radhi's employees and 12 of their family members have
been assassinated. He can't return to Iraq, and he is seeking
asylum in the United States.
Judge Radhi will tell us there is an epidemic of corruption
in Iraq. While he served as the head of the Commission on
Public Integrity, he opened 3,000 corruption cases. He found
extensive corruption throughout the government, especially in
the Ministries of Defense, Interior and Oil. In all, his
efforts identified $18 billion, a staggering sum, lost to
corruption.
Judge Radhi will tell us that corruption is undermining
political reconciliation, turning ordinary Iraqis against the
government and fueling the insurgency.
The Maliki government is our ally in Iraq, but we need to
ask: is the Maliki government too corrupt to succeed? If the
Maliki government is corrupt, we need to ask whether we could
in, good conscience, continue to sacrifice our blood and tax
dollars to prop his regime.
These are important questions, but they are questions that
Secretary Rice and the State Department do not want us to
raise.
For the last several weeks, the committee staff has been
interviewing the State Department officials in charge of anti-
corruption efforts in Iraq. What we have learned is that these
efforts appear to be in a complete state of disarray. The
committee's investigation has revealed that anti-corruption
efforts are dysfunctional, underfunded and a low priority.
The officials we interviewed told us on the record that the
State Department has no coordinated strategy for fighting
corruption. At key meetings of the Embassy's Anti-corruption
Working Group, almost no one shows up. One official told us:
``I would like to be able to say that we have done quite a bit
in this area, but unfortunately we have not.''
Another officials, Judge Arthur Brennan, the former
Director of the Office of Accountability and Transparency at
the U.S. Embassy in Baghdad, said, ``I think Ambassador Crocker
was serious about going forward on this, but I don't think
everybody is serious about it, and if they are serious about
it, then somebody else should have been doing their job.''
Incredibly, Secretary Rice directed these officials not to
answer any questions about the extent of corruption in Iraq and
its effect on political reconciliation and the insurgency. Her
position is that all information that reflects poorly on the
Maliki government is classified.
At one point, my staff asked an official whether he agreed
with a public statement of Secretary Rice praising the anti-
corruption efforts of the Iraqi Interior Ministry. The official
told us, and this is a U.S. official, ``I cannot discuss this
in an open forum.''
The State Department even retroactively classified memos
about corruption in Iraq after the committee requested them.
These efforts to silence debate are an absolute embarrassment.
My staff prepared a memorandum that summarizes both what
these officials told us about the state of U.S. anti-corruption
efforts and what they could not tell us about the state of
corruption in Iraq, and without objection, I will make this
memorandum part of today's hearing record.
[The information referred to follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Waxman. Sometimes this committee breaks down along
party lines during hearings, and I hope that won't be the case
today. Whether one supports or opposes the President's policy,
we can't ignore the reality of corruption in Iraq, and we can't
ignore the reality that corruption is undermining the political
progress our troops are fighting and dying for.
If we are going to invest more lives and billions more
dollars in Iraq, we need to know whether there is a political
will in Iraq to succeed. That is why today's hearing is so
essential.
I want to recognize the ranking member, Tom Davis, for his
opening statement.
[The prepared statement of Chairman Henry A. Waxman
follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Davis of Virginia. Thank you, Mr. Chairman.
It is a sovereign responsibility of every democratic
government to root out and prosecute official corruption.
Sustaining the trust and confidence of the governed requires
proactive visible programs to deter and punish those who would
plunder the public resources for private gain.
We need to be vigilant about fighting corruption here at
home as the chairman often reminds us, and we should help
emerging democracies build their capacity to combat for
pervasive deep-rooted malfeasance.
This hearing an important and timely opportunity to assess
U.S. Government efforts to nurture anti-corruption capabilities
in the fledgling government of Iraq, but I have some concerns
about the majority's stated intention to investigate the status
of Iraqi corruption and the functioning of Iraqi government
ministries.
Good government and, small d, democrats in Iraq don't need
to be lectured by this committee on the extent of corruption in
their country. They need our help in building the structures,
policies and processes to fight it, and we can't afford to be
naive or wear cultural blinders when looking at ways to address
a longstanding, deeply ingrained problem.
We didn't bring corruption to Iraq, and it won't stop when
we leave. Saddam Hussein's looting of the United Nations Oil
for Food Program was emblematic of the leaky economic systems
and corrupt habits the current government inherited.
Coalition Provision Authority Order 55, establishing the
Iraqi Commission on Public Integrity, acknowledged the battle
against corruption is a long term struggle that requires
lasting commitment to change behavior at all levels of
government. Today, despite creation of national enforcement
systems in Iraq and U.S. Embassy programs to mentor inspectors
and judges, it seems that commitment has yet to materialize
either in their government or ours.
According to the same CPA order, anti-corruption programs
in Iraq have long been viewed as arbitrary and intermittent.
Apparently, they still are. The former head of Iraq's main
anti-corruption investigatory body, Judge Radhi, joins us this
morning to describe the many challenges he faced trying to
investigate corruption claims in a society splintered by
sectarian violence and political score-settling.
Our efforts so far don't appear to have helped much. A very
cogent Embassy-consolidated anti-corruption strategy was put
together but just a year ago. It looks good on paper, but like
other capacity-building programs in Iraq our anti-corruption
assistance has suffered from missed deadlines, shifting
priorities, structural instability and lack of strong
leadership.
In fact, evidence of that organization disarray triggered
this hearing. A draft statistical report commissioned by the
U.S. Embassy Office of Accountability and Transparency on
corruption investigations by Iraqi agencies was embellished
with hearsay and anecdotes about blocked cases and official
favoritism.
Before being vetted or finalized, it was leaked to the
media. The State Department then turned light comedy into high
farce by classifying the report which was already on the
internet because it said things everyone had already heard
about lax anti-corruption enforcement in Iraq.
But there are serious questions we need to address today.
What should we do to help the Iraqis fight corruption, mindful
that they are a sovereign nation? What can we do, given the
current security environment, and what will we do to implement
an effective strategy to help the Iraqis help themselves?
The answers matter, not just to accountants and lawyers,
but to all Iraqis and every American there. Funds stolen from
the people of Iraq sap the growth of civil society and fuel
lawlessness and violence.
Finally, there is no avoiding the unmistakable subtext of
this hearing, the premise that a corrupt Iraqi government
doesn't merit further American sacrifice or life or treasure.
By that measure, some would have the United States cede our
sovereignty to groups like Transparency International and
disavow anyone too far down their annual list of corrupt
states, but that is far too narrow a view of how the most
powerful Nation on Earth determines who to befriend and where
to pursue our interests.
As one political veteran observed, having discovered an
illness, it is not terribly useful to prescribe death as a
cure. We can help the Iraqis treat the disease of official
corruption without killing their chance to stand as an
independent sovereign nation.
Let me thank you, Mr. Chairman, for agreeing to our request
to invite Ms. Claudia Rosett to testify. We are disappointed
that she is not in the first panel, and we have to go to a
third panel to hear her.
All our witnesses today bring important information to this
discussion, and their unique perspectives will add depth and
context to our oversight.
Thank you.
[The prepared statement of Hon. Tom Davis follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Waxman. Thank you, Mr. Davis.
For our first panel, we have Judge Radhi Hamza al-Radhi,
former head of the Iraqi Commission on Public Integrity.
Mr. Mica. Mr. Chairman.
Chairman Waxman. Yes. Does the gentleman seek recognition?
Mr. Mica. Point of order, I would ask regular order so that
Members be allowed to present opening statements. I did have
one if I could be allowed.
Chairman Waxman. Well, I am sorry the rules do not require
that Members give opening statements. The practice of this
committee under Chairmen Burton and Davis was not to give the
right to all Members to offer opening statements, so we will
proceed under the rules.
Judge Radhi Hamza al-Radhi, former head of the Iraqi
Commission on Public Integrity, Mr. David Walker, Comptroller
General of the United States, and Mr. Stuart Bowen, Special
Inspector General for Iraq Reconstruction, we are pleased to
welcome all of you to our committee today.
The practice of this committee is to take all testimony
under oath. So if you would please rise and raise your hands. I
would like to administer the oath to you.
[Witnesses sworn.]
Chairman Waxman. The record will reflect the fact that each
of the witnesses answered in the affirmative.
Mr. Davis of Virginia. Mr. Chairman, could we have the
translator identified for the record please?
Chairman Waxman. Yes. Could the translator identify
herself?
Ms. Behrens. Nina K. Behrens, the Department Interpreter.
Chairman Waxman. Thank you very much.
I would like to suggest that when we get to questions,
because we do have a translator, that each Member be given 7
minutes because it will take time for translation.
Mr. Davis of Virginia. Mr. Chairman, I would just insist on
regular order. We had asked that our witness be put in the
first panel which would have expedited and, I think, allowed
for that, but since we are not going to get to our witness
until the third panel, we want to move things along.
Chairman Waxman. OK, then we will go to 5 minute intervals.
We did accommodate the minority at their request for the
witness, but apparently not exactly where they would like to
have her.
We would like to hear from each of you, starting with
General Walker if we might.
STATEMENTS OF DAVID WALKER, COMPTROLLER GENERAL OF THE UNITED
STATES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; JUDGE RADHI
HAMZA AL-RADHI, COMMISSIONER OF PUBLIC INTEGRITY IN IRAQ; AND
STUART BOWEN, SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION
STATEMENT OF DAVID WALKER
Mr. Walker. Thank you, Chairman Waxman, Mr. Davis. Pleasure
to be back before the House Oversight and Government Reform
Committee.
I am pleased to be here today to discuss the GAO report
that we issued today on U.S. Efforts to Build the Capacity of
Iraqi Ministries. It is my understanding it has been provided
to this committee.
The development of competent and loyal government
ministries in Iraq is critical to stabilizing that country.
Iraq's 34 ministries are responsible for ensuring security
through the armed forces and police and providing essential
government services such as electricity, water and health care.
The ministries are Iraq's largest employer with an estimated
2.2 million government workers.
U.S. efforts to build the capacity of Iraqi ministries
include programs to advise and help Iraqi government employees
to develop the skills to plan programs, execute budgets, and
deliver effective services.
In 2005 and 2006, the United States provided $169 million
for programs to help build the capacity of key civilian and
security ministries. The administration received an additional
$140 million fiscal year 2007 and requested $255 million for
fiscal year 2008.
In doing this report, we traveled to the region including
Baghdad, interviewed officials from U.S. Government and other
international organizations and collected other information
that was available for us to review.
In summary, we found the following: U.S. efforts to help
the capacity of the Iraqi national government have been
characterized by, first, multiple U.S. agencies leading efforts
without overarching direction from a lead agency or a strategic
plan that integrates these various efforts and, second,
shifting timeframes and priorities in response to varying and
sometimes deteriorating conditions in Iraq.
U.S. efforts to develop Iraqi ministerial capacity face
four key challenges that pose risk to their success and long
term sustainability. These include significant shortages of
Iraqi ministry employees with the necessary skills and
knowledge to conduct key tasks, sectarian influence over the
militia infiltration of some ministries, corruption within the
ministries and poor security conditions that endanger employees
and cause skilled workers to leave the country.
The U.S. Government is beginning to develop an overall
strategy for ministerial capacity development although agencies
have been implementing separate programs since 2003.
GAO's work in this area shows that the overall strategy for
capacity development should include, first, a clear purpose,
scope and methodology; second, a delineation of U.S. roles and
responsibilities in coordination with other donors including
the United Nations; third, clear goals and objectives linked to
Iraqi priorities; and, fourth, performance measures and
milestones; and last, fifth, the costs, resources needed and
assessment of program risk.
Individual U.S. capacity development efforts have included
some but not all of these components. All are necessary for
sustainable success.
We, therefore, have recommended to the State Department
that it, in conjunction with the Iraqi government, complete an
overall strategic and integrated strategy for U.S. capacity
development efforts. Congress, we believe, should also consider
conditioning future appropriations on the completion of such a
strategy.
Two other things, Mr. Chairman, first, we at GAO are
attempting to lead by example in providing capacity-building
assistance to our counterpart organization, the Board of
Supreme Audit in Iraq. I have met with my counterpart on more
than one occasion, both in Iraq and in the United States.
We are providing a lot of technical support and training,
and we are also encouraging other countries in the region to be
able to provide support to the Board of Supreme Audit as well.
I am pleased that progress has been made there.
Second, I think it is also important to recognize that
while it is unrealistic to expect that the United States is
going to have more allies provide troops in Iraq, that it is
very important and appropriate that our allies do more to try
to help with regard to this capacity-building effort,
especially with regard to civilian ministries because there is
significant expertise available among our allies and among
international organizations, and hopefully that will be
forthcoming in the future.
Thank you very much, Mr. Chairman.
[The prepared statement of Mr. Walker follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Waxman. Thank you very much, Mr. Walker.
Mr. Bowen, let's hear from you next.
STATEMENT OF STUART BOWEN
Mr. Bowen. Thank you. Good morning, Chairman Waxman,
Ranking Member Davis, members of the committee. Thank you for
this opportunity to testify before you today on the important
subject of this hearing, the State of Iraqi Corruption.
This past August, I visited Iraq for the 17th time since my
appointment 3\1/2\ years ago as the Special Inspector General
for Iraq Reconstruction. While in Baghdad, I met with key
Coalition and Iraqi officials on the subject of corruption
within the government of Iraq.
SIGIR has regularly reported on this issue over the course
of our 14 quarterly reports, and we conducted 2 audits on the
subject of U.S. support for Iraqi anti-corruption and, in a
word, found that support has been disappointing.
Corruption within Iraq's government is a significant and
serious problem. It is an Iraqi problem which the government of
Iraq has recognized. A recent report submitted by Iraq pursuant
to the requirements of the recently enacted International
Compact for Iraq identified ``high levels of corruption and an
immature accountability framework'' within the government of
Iraq. So it is something that the Iraqi government on the
record recently has recognized.
As the ranking member pointed out, we did not bring
corruption to Iraq, and it will not be gone whenever we leave,
but it is an issue that fundamentally can undermine our efforts
to build a democracy, a fledgling democracy.
Since mid-2003, Iraq has struggled against a violent
insurgency. Corruption has concomitantly afflicted the Iraqi
government, exerting a corrosive force upon its growing
democracy.
SIGIR has described that force as a second insurgency.
Prime Minister Maliki recently echoed that sentiment when he
referred to the struggle against corruption as ``the second war
in Iraq,'' and Deputy Prime Minister Barham Salih told my
office that corruption ``threatens the state.''
So there is a recognition, but is there a response?
That is the subject, I think, of an important aspect of
this hearing. What response is forthcoming, both within the
U.S. program and within the Iraqi government?
Within the Iraqi government, there are three key entities
who have charge of fighting this second insurgency. The Board
of Supreme Audit has been around since 1927. It is the analogue
to the Government Accountability Office and its focus is on the
audit of Iraqi ministries.
The Commission on Public Integrity and the Iraqi Inspector
General system was created in 2004 by the Coalition Provisional
Authority. Judge Radhi, who was the commissioner until recently
of the CPI, is someone with whom I have met on every trip I
have made to Iraq, virtually every trip, and his office and my
office work very closely on our investigations and exchange
information as relevant.
His office along with the 29 IGs and the Board of Supreme
Audit comprise 4,000 officials assigned to fight corruption,
but the tide of corruption continues to rise, and the problem
is as bad today as it has ever been although they may have
deterred some crime and there have been some prosecutions. Over
the past year, the number of corruption cases under
investigation by the CPI has increased by 70 percent.
Similarly, individual Iraqi ministries have reported dramatic
increases in corruption cases.
There are three significant challenges confronting the
effort of Iraqi ministries, these Iraqi corruption-fighting
entities, to fight corruption within their ministries:
security, politicization of the rule of law and capacity.
Security afflicts and inhibits everything that Iraqi tries
to accomplish in recovering from the attack. The first
president of the Board of Supreme Audit was murdered 2\1/2\
years ago.
President Abd el-Basit succeeded him, but his office itself
has also been under direct attack. This last May, Ministry of
Interior guards came and had a standoff with President Basit's
security guards. It resulted in a peaceful resolution, but that
is the kind of intimidation that is going on in Iraq.
At least 31 employees of the CPI have been killed, and
judges and judicial investigators are also subject to threat.
This last trip I met with a chief judge of a district in Iraq,
and he complained to me that his investigators are not
permitted to carry weapons. Thus, his judges and the judges
across Baghdad are subject to continual threat and attack for
that matter.
The politicization of the rule of law reflected in
provisions like Article 136(b) of the Iraqi Criminal Code which
permits any minister to exempt any employee accused of
corruption from prosecution for that crime, and also that same
provision protects any member of the military and any member of
the police force. That sort of provision is incompatible with a
growing democracy.
Exacerbating that legal provision is the directive from the
Prime Minister's Office issued this spring that required Judge
Radhi with the Commission on Public Integrity to seek
permission from the Prime Minister's Office before instituting
any investigation of any minister or former minister.
U.S. assistance to the anti-corruption effort in Iraq
amounts to around $65 million as our audit last year pointed
out, less than one half of 1 percent of the Iraq Relief and
Reconstruction Fund. This is a disappointing investment.
More important, notwithstanding the funds invested, the
planning has been weak, and that is what the core finding of
our audit of last July pointed out.
We had 12 recommendations. Out of that audit, the Office of
Accountability and Transparency was formed. There has been some
progress. An advisor to the IGs was appointed. An advisor to
the Board of Supreme Audit was appointed.
Those are good steps, but more needs to be done. Most of
those recommendations stand open, and we continue to work and
hope to work with the CPI under its new leadership with the
Inspectors General and the Board of Supreme Audit. I will meet
with each of them in November when I return to Iraq.
Thank you for this time to address you, and I look forward
to your questions.
[The prepared statement of Mr. Bowen follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Waxman. Thank you very much, Mr. Bowen.
Judge al-Radhi, there is a button on the base of your mic.
STATEMENT OF JUDGE RADHI HAMZA AL-RADHI
Mr. al-Radhi. Thank you, Mr. Chairman and Members of the
U.S. Congress.
I would like to read my statement to you in English so you
can hear it directly from me.
I am Judge Radhi Hamza al-Radhi, commissioner of the
Commission on Public Integrity [CPI], Republic of Iraq. I have
the honor to be here among you today to discuss with you the
most important problems facing Iraq after the elimination of
the dictator, Saddam Hussein.
I want to thank the American people who have given their
lives and money in order to achieve noble goals in Iraq such as
ending the suffering and spreading democracy. Thank you
thousands of times.
In my written testimony, I highlighted the reasons for an
Iraqi Commission on Public Integrity, my appointment as
Commissioner and my background and discussed much of our work.
Our work has been noteworthy, but I must report that
corruption in Iraq today is rampant across the government,
costing tens of billions of dollars, and has infected virtually
every agency and ministry including some of the most powerful
officials in Iraq.
Corruption has stopped possible advances by the government
on the political level, on economic reconstruction, on basic
services, amenities and infrastructure, and on the rule of law.
Corruption has contributed to the failure of the government
of Iraq to control the militias that control parts of the
government. In fact, corruption has helped fund sectarian
militias and violence even from those in the Iraqi military and
police who are supposed to maintain order and protect the Iraqi
people.
Unfortunately, today in Iraq, corruption has infected our
biggest source of money: oil. Corruption has also infected
those who have the guns to restore law and order and the
leadership who promise a new, better Iraq.
I have led my life governed by these few words: law is
above all, no one is above the law.
This guiding principle should apply to all government
departments and ministries neutrally, fully and without regard
to sect, ethnic or party affiliation, tribe or religion. That
is how we have tried to operate the Commission on Public
integrity in Iraq. Unfortunately, we have been met with great
problems. First and foremost is the violence and personal
attacks directed on us.
Since the establishment of the Commission on Public
Integrity, 31 employees have been killed as well as at least 12
family members. In a number of cases, my staff and their
relatives have been kidnapped or detained and tortured prior to
being killed.
Many of these people were gunned down at close range. This
includes my staff member, Mohammed Abd Salif who was gunned
down with his 7 month pregnant wife.
In one case of targeted death and torture, the security
chief on my staff was threatened with death many times. His
father was recently kidnapped and killed because of his son's
work at CPI. His body was found hung on a meat hook.
One of my staff members who performed clerk duties was
protected by my security staff, but his 80 year old father was
kidnapped because his son worked at CPI. When his dead body was
found, a power drill had been used to drill his body with
holes.
Waleed Kashmoula was the head of CPI's Mosul branch office.
In March 2005, a suicide bomber met with Waleed in his office,
wearing a suicide vest. He greeted Waleed and then set off his
vest, killing Waleed. This was a targeted killing of CPI
leadership.
These are just a few examples. There are many more which
were directed to my staff, me and our families. Personally, for
example, my family's home has been attacked by rockets. I have
had a sniper bullet striking near me as I was outside my
office.
We have learned the hard way that the corrupt will stop at
nothing. They are so corrupt that they will attack their
accusers and their families with guns and meat hooks as well as
counter charges of corruption. I and many of my people have
been so attacked, so too have others who have tried to stop the
corruption.
It is a sick method when the person fighting corruption is
falsely accused of corruption. Justice loses and corruption
wins.
The Prime Minister and his government have refused to
recognize the Commission's and the Judiciary's independence
under the law to investigate corruption in a non-sectarian and
non-political manner.
Further, the government did not appoint leaders,
particularly ministers and inspectors general, that would fight
corruption within ministries. In order to promote sectarian
agendas, professional technocrats who were qualified to perform
vital government services and administration were not
appointed.
Worse, the government has formally blocked actions against
the Presidency, the Council of Ministers and former and current
ministers; used the executive law to allow ministers and the
Prime Minister to stop specific corruption cases against their
own corrupt employees and officials; and has promoted sectarian
agendas over the rule of law.
Importantly, it has been impossible for the Commission on
Public Integrity to safely and adequately investigate oil
corruption where Sunni and Shia militias had control of the
metering, transport and distribution of Iraqi oil. This has
resulted in the Ministry of Oil effectively financing terrorism
through these militias.
And, my small group of investigators investigated the
largest number in the Ministry of Defense and Ministry of
Interior. As you might imagine, investigating the security
forces of Iraq is very difficult but necessary for an Iraqi
future of transparency and the rule of law.
Thank you for your attention and patience and feel free to
ask any questions.
[The prepared statement of Judge al-Radhi follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Waxman. Thank you very much, Judge Radhi.
I am going to start off the questions, and then we will
follow the regular order.
I want to thank all three of our witnesses for your
presentation in this panel.
I think it is very important for us to understand that
corruption is a problem in Iraq, and it is not a problem that
we can think is only unique to their culture and we should
dismiss, but it is undermining our very mission in Iraq. It is
keeping the possibility of a political reconciliation from
taking place which is the only way we are going to end this war
in Iraq successfully.
Judge Radhi, I want to specially thank you for coming here
today. It is not easy to come to speak before a foreign
country's representatives in a foreign language, and I
appreciate your taking the time to read your statement in
English, but I know that in response to questions you will want
to answer us in Arabic and have it translated.
It is very courageous for you to be here. You have already
told us that your life and the lives of your family members
have been threatened, and you can't take that casually when you
have already seen 31 people that work for you already killed
for the anti-corruption efforts that your commission has
undertaken.
You have undertaken this effort at the U.S.' request.
Ambassador Bremer asked you to take on this responsibility. The
United States understood from the very beginning that it was
essential to stop corruption in order to have Iraq succeed as a
stable and independent country.
Let me ask you this question. You have been there for a
number of years in this position as head of the Commission on
Public Integrity. Based on your experience over the last 3
years, is corruption in Iraq getting better or worse?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes, it is
getting worse because of the sectarianism in the country and
the lack of the rule of law in the country.
Chairman Waxman. You indicated in your statement that $18
billion is a sum that you feel has gone to the costs of
corruption; $18 billion is a lot of money. It could have gone
to electricity projects, hospitals, police training or a lot of
things that could have helped the Iraqi people.
How much does corruption affect the reconstruction efforts
in Iraq?
Mr. al-Radhi. [Translated by Ms. Behrens.] I believe that
it has stopped the process of reconstruction in Iraq.
Chairman Waxman. You have indicated that some of the money
has gone to the sectarian militias. How would that have
happened?
Mr. al-Radhi. [Translated by Ms. Behrens.] In areas where
oil is present, such as Bayji and it is a Sunni-controlled area
and Basrah which is a Shia-controlled area, the militias do
control these areas, and they sell oil and take the revenues of
oil to finance the purchase of weapons to the militias,
respective militias.
Chairman Waxman. I would think that the Iraqi government
would want you to investigate money that would go from the sale
of its oil. After all, this is a revenue for the government of
billions of dollars. Yet, you are not allowed to investigate
corruption relating to the sale of oil.
Why would the national government stop you from stopping
the corruption of oil sales which then go to the militias that
are fighting the government?
Mr. al-Radhi. [Translated by Ms. Behrens.] Because these
militias are from the parties, from the blocks, and therefore
this is a financial source or financial revenue for them, and
that is why they forbid us from investigating such cases.
In addition, that those who manage who direct these
directorates are from their own political affiliations.
Chairman Waxman. So it is your statement to us that around
$18 billion, maybe more, has been used for corruption instead
for proper purposes like reconstruction, hospitals, electricity
and fighting against terrorism in Iraq. Is that your statement?
Mr. al-Radhi. [Translated by Ms. Behrens.] Can you repeat
the question, Mr. Chairman?
Chairman Waxman. Is it your view that $18 billion is not
being used for hospitals, reconstruction, electricity and to
even fight terrorism because it is being siphoned off by
corruption? It is going to corruption?
Mr. al-Radhi. [Translated by Ms. Behrens.] All these
amounts were spent over the 3-years, but when you go to the
field or you go to the ground, you don't see signs of
reconstruction. You only see 2 percent to 5 percent of
reconstruction happening.
When you go to the field and you don't find water nor
electricity nor fuel and Iraq is the country of oil, then Iraq
is importing oil now. So you don't see reconstruction.
Chairman Waxman. Thank you.
General Walker, you feel so intense about this corruption
issue that you have even recommended to us that we should limit
our money to Iraq, requiring them before they get the money to
stop the corruption. Is that your view?
Mr. Walker. Slightly different, Mr. Chairman. The United
States has been trying to help fight corruption and build
capacity in the Iraqi ministries since 2003, but we haven't had
a strategic and integrated plan. We haven't had appropriate
metrics and milestones. We haven't had appropriate
responsibility and accountability noted.
Therefore, we believe that the Congress should consider
conditioning future appropriations for this effort to making
sure that plan is done and effectively implemented so that we
can achieve some results rather than just have more efforts.
Chairman Waxman. Thank you.
Mr. Bowen, do you agree from your observations in Iraq that
corruption is increasing rather than decreasing in Iraq?
Mr. Bowen. That is what I said. The rising tide is in part
attributable to the politicization of the rule of law,
specifically the directive from the Prime Minister's Office
requiring permission to be obtained before initiating
prosecutions of any minister, former minister and the like.
One distinction I want to draw here, though, is that Judge
Radhi is talking about his oversight of Iraqi money and the $18
billion in the Iraq Relief and Reconstruction Fund is taxpayer
money that is not within his jurisdiction, within mine.
Chairman Waxman. As I understood his statement, he thought
over a 3-year period, there has been a waste of $18 billion of
Iraqi funds.
Mr. Bowen. Right. I just want to be sure that the $18
billion, it is the same number as the Iraq Relief and
Reconstruction Fund.
Chairman Waxman. Just happens to be the same number.
Mr. Bowen. Yes, I want to draw the distinction between the
two so there is not confusion as has occurred in the past. On
the U.S. side, corruption has not been a significant component
to date that we have uncovered.
Chairman Waxman. If I asked how high up in the Iraqi
government this corruption goes, Judge Radhi, does it go all
the way to the Prime Minister? Do you think that Prime Minister
Maliki is involved in corruption himself?
Mr. al-Radhi. [Translated by Ms. Behrens.] As a judge, I
cannot say that someone is engaged in something unless I have
evidence and proof. However, Maliki has protected some of his
relatives that were involved in corruption endeavors and
especially some of his relatives.
Chairman Waxman. And he has allowed other ministers to
protect their employees from any investigation?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes, and for
that reason the Council of Ministers, the Prime Minister has
closed cases related to 100 billion Iraqi dinars and, in Iraqi
currency, such an amount is not a small amount.
Chairman Waxman. Thank you very much.
Mr. Davis.
Mr. Davis of Virginia. Thank you, Mr. Chairman.
First of all, let me ask unanimous consent that all Members
have 5 legislative days to submit opening statements for the
record.
Chairman Waxman. Without objection, that will be the order.
Mr. Davis of Virginia. Mr. Walker, the GAO report released
today discusses corruption in Iraq and references to a State
Department Embassy report from December 2006.
Mr. Walker. That is correct.
Mr. Davis of Virginia. Can you tell us anything about this
2006 report which is now classified?
Mr. Walker. What I can tell you is that the 2006 report,
based upon publicly available information, noted serious
concerns with regard to the nature and extent of corruption in
Iraq, also noted that there had been significant diversion of
oil and fuel, both fuel and oil that is produced within Iraq as
well as that is purchased from outside of Iraq, and then stolen
and sold on external markets.
So the bottom line is that the State Department report
noted that the United States is trying hard to try to build
capacity, including to try to fight corruption, but corruption
is a serious problem involving large sums of money.
Mr. Davis of Virginia. Do you know what data were used to
prepare the report?
Mr. Walker. I don't have that available to me, Mr. Davis,
but I am happy to try to find out for you.
Mr. Davis of Virginia. Would it surprise you to learn that
during our committee interviews of staff, we learned that this
report ``was started as a statistical analyses, and then the
drafter said let's go interview the CPI investigators and get
their subjective reactions of what it is like in the various
ministries and that some of the conclusions were, you know, it
was pulled out of the air. So it is not statistically based,
that discussion about particular cases were added by the sole
drafter for ``flavor?''
It is not the practice of GAO to reply upon reports
embellished for flavor, is it?
Mr. Walker. No, not at all. I might note for the record we
were not asked nor did we assess the methodology that the State
Department used in preparing that report.
Mr. Davis of Virginia. According to the State Department,
this report was a working draft and it was not a formal Embassy
report, that neither this report nor the followup in July 2007,
was vetted by any senior staff at the Embassy.
Let me just ask this. Corruption in Iraq is not a new
phenomenon. Do you agree?
Let me start with Judge al-Radhi. Do you agree that Iraq
has a culture of corruption going back many years?
Mr. al-Radhi. Yes.
Mr. Davis of Virginia. Do you think that corruption is
pervasive throughout the Middle East?
Mr. al-Radhi. Yes.
Mr. Davis of Virginia. Mr. Bowen, would you agree with
that?
Mr. Bowen. I would say that Iraq has a history of
corruption, absolutely. That characterized Saddam's regime.
Mr. Davis of Virginia. Let me, during my time here, yield
to Mr. Issa.
Mr. Issa. Thank you.
Judge, I commend you for your diligence at great personal
risk. I think Ranking Member Davis said it very well, that we
are not surprised that a country that was run by a corrupt
dictator who doled out moneys in order to maintain power would
have a pattern of corruption.
How much of the corruption in your opinion, do you believe,
comes from that legacy of Saddam in how corruption was part of
the structure of maintaining authority and power?
Mr. al-Radhi. [Translated by Ms. Behrens.] Corruption is
corruption whether it was under Saddam's regime or under the
current government. Corruption is bad, and it is undermining my
country.
Mr. Issa. Thank you.
I am going to call your attention to a letter, but while it
is being brought up, I want to ask are you aware that there are
about 750,000 Iraqi refugees in Jordan at this time?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes.
Mr. Issa. And probably another 500,000 or more in Syria, is
that your understanding?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes, sure.
Mr. Issa. To your understanding, in both of those countries
in general, are Iraqis safe when they are living there?
Mr. al-Radhi. [Translated by Ms. Behrens.] It is better
than the daily killing that takes place in their original
country.
Mr. Issa. I appreciate that.
I want to call your attention, Judge, to a letter written
on September 20th to the U.S. Citizenship and Immigration
Service concerning your family and their welfare, naming some
nine members of your family. Have you seen this letter before?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes, this is a
private matter, and I do not wish to talk about it, especially
that my family is subject to private circumstances.
Mr. Issa. Now I certainly understand that, but in order to
understand the workings of this committee, I think it is
important that we ask some very limited questions.
We are not going to name any names other than to note that
the letter is signed by Chairman Waxman, Chairman Lantos,
Chairman Conyers and Chairman Thompson, Bennie Thompson, the
Chairmen of Homeland Security, House Judiciary, House
Government Oversight and Reform and the Foreign Affairs
Committees.
Chairman Waxman. The gentleman's time has expired. Is there
a question pending?
Mr. Issa. Yes, very briefly. When were you first involved
in the request for this letter to ask that your family, your
entire family, be brought to the United States as a refugee and
particularly was that prior to or after you came here under a
diplomatic visa?
Mr. al-Radhi. [Translated by Ms. Behrens.] I came to the
United States under the auspices of the U.S. Department of
Justice on a workshop, on a training workshop along with 10 of
my employees.
The Prime Minister, to get rid of me, so I don't return to
my country, has put forth this issue, this issue of prosecuting
me.
Chairman Waxman. Please, if you have more to say.
Mr. al-Radhi. [Translated by Ms. Behrens.] I love my
family. I love my country. I love to serve my country. However,
these threats have been an obstacle for me.
Chairman Waxman. Thank you very much.
Mr. Cummings.
Mr. Cummings. First of all, I want to thank you, all the
witnesses, but you, Judge Radhi, thank you very much for your
bravery and your integrity.
Can you tell us about the threats that you and your family
have faced, briefly?
Mr. al-Radhi. [Translated by Ms. Behrens.] After I referred
several cases pertaining some of the political blocs governing
there to the courts in corruption cases, they referred me to
the Parliament, charged me with this issue, and I would say
that I was successful in combating corruption there.
They were unable to remove confidence in me in front of the
Parliament.
They also accused me in courts with the same charges, and
again in courts they were unable to successfully get something
against me.
Mr. Cummings. Judge Radhi, let me ask you this.
Mr. al-Radhi. [Translated by Ms. Behrens.] In addition to
what I said in my testimony, in my deposition.
Mr. Cummings. Judge Radhi, who is Salam al-Maliki? Was he
the former Iraqi Minister of Transportation?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes, he is the
former Iraqi Minister of Transportation. He is a relative of
the Prime Minister. We had referred this person to the courts
for corruption. However, the Prime Minister has resorted to
closing this case.
Mr. Cummings. You got a letter in regard to that, did you
not?
I am going to show you a document on the screen. What does
this letter tell you to do in regards to the investigation of
Prime Minister Maliki's cousin, Mr. Salam?
Mr. al-Radhi. [Translated by Ms. Behrens.] Not to followup
on the case and not to investigate, and there was a request to
close the case.
Knowing that Salam had violated the constitution and the
Prime Minister has approved that.
Mr. Cummings. Did he ever grant you permission to reopen
the case?
Mr. al-Radhi. [Translated by Ms. Behrens.] No. We have
attempted to move the case forward, but the Prime Minister had
closed it.
Mr. Cummings. Why do you think he closed it?
Mr. al-Radhi. [Translated by Ms. Behrens.] First, because
Salam al-Maliki is affiliated with one of the parties of the
Shiite alliance or coalition and, second, because this
gentleman is one of his relatives.
Mr. Cummings. Mr. Walker, when Judge Radhi testified a
little bit earlier, he basically said he didn't even have the
power to audit the oil revenues. Is that correct?
In other words, he has the power, but he doesn't get the
opportunity to do so.
Mr. Walker. Well, my understanding is that the judge's
responsibility is not to conduct audits. It may be to conduct
investigations. Audits typically are done by the Board of
Supreme Audit which is our counterpart organization, and Dr.
Abd el-Basit is President of that organization.
Mr. Cummings. Are you able to do it? You said it comes
under you.
Mr. Walker. Well, we cannot audit Iraqi funds. We can only
get involved where it involves U.S. funds, and obviously the
Special Inspector General for Iraq has been set up to try to be
able have an on the ground presence in Iraq to do certain types
of activities. But we do do audit work in Iraq, but it is on
U.S. funds, not Iraqi funds.
Mr. Cummings. Thank you.
Mr. Walker. I might note that, as I said before, Mr.
Cummings, we have worked very closely, meaning GAO, with our
counterpart organization in Iraq, and corruption is rampant in
Iraq. It is a serious problem. It has been for a while,
continues to be a problem.
We have a situation, as was mentioned by Stuart Bowen, that
while there hasn't been massive corruption that he has found
with regard to U.S. activities in Iraq, there is huge waste
there.
I might also note that security is a real concern. When I
went to visit my counterpart in 2006, we couldn't meet where we
were supposed to meet because a U.S. bomb-sniffing dog found a
bomb in the area where we were supposed to meet.
The United States also, U.S. Army, went into the home of my
counterpart in November 2006 and took the weapons of his
security guards, without any explanation, and I have been
trying to get an explanation for that for him. So there is real
challenging situations that exists in that country.
Mr. Cummings. Thank you.
Chairman Waxman. Thank you, Mr. Cummings. Your time has
expired.
Mr. Mica.
Mr. Mica. Thank you.
We didn't get a chance for opening statements, but I just
wanted to put on the record a couple of comments, first of all,
about the conduct not only of today's hearing but the conduct
of yesterday's hearing. I did get a chance yesterday when I
moved to adjourn the meeting, it was based on request by the
Department of Justice and also the Department of State to ask
us not to not hold a hearing but to delay a hearing.
It brought to mind my request to Mr. Davis. This is during
the Sandy Berger incident when we found out that he had taken
classified documents, stuffed them in his trousers or whatever
and just actually destroyed them. I requested Mr. Davis--Mr.
Davis may recall this--that we undertake an investigation.
Department of Justice asked us not to do that, and he did not
do that.
Then we came back, and I asked him during the sentencing
time to conduct an investigation and hearing in this committee.
You might recall, Mr. Davis, that you also denied that because
of the Department of Justice request.
That is a difference in the way this committee operated
with Mr. Davis and the current Chair.
Additionally, I have been on the committee for 15 years. I
have never received, and my staff gave me this. They said the
majority memo for today's hearing given to the minority was
received 9 minutes before the hearing.
I don't mind participating. In fact, I enjoy participating
in this. I think this is one of the most important
responsibilities in Congress. But to have the minority receive
this memo and our information about the hearing 9 minutes
before, in my knowledge, is unprecedented, let alone isolate
our witness at the end. I just have never seen anything like
the conduct today.
Mr. Walker, corruption is a problem not only in Iraq but
just about every democratic society and throughout the Third
World, is that correct?
Mr. Walker. Corruption is a problem in much of the world,
in some places, a lot more than others.
Mr. Mica. I asked the staff. Well, of course, I am in the
Congress, the U.S. Congress, one of the most respected
institutions in the world. Right now, we have probably more
Members of Congress under scrutiny, criminal investigation,
than any other body and probably more in prison.
Then I said, corruption. I said, what about some of the
past administrations, and I have the record from the Clinton
administration.
We have the record set: the only President ever impeached
on grounds of personal malfeasance, the most number of
convictions and pleas guilty by friends and associates, the
most number of cabinet officials to come under criminal
investigation, the most number of witnesses to flee the country
to refuse to testify, the most number of witnesses to die
suddenly, the first President sued for sexual harassment. The
list goes on and on of the last administration.
Now let me be fair. Forty Government officials were
indicted or convicted in the wake of Watergate.
Another number, 47 individuals in business association with
the Clinton administration were convicted or pleaded guilty to
crimes, with 33 occurring during the Clinton administration
itself.
Now, this also talks about the Reagan administration. There
is a total of 31 Reagan administration convictions. So my point
is that no administration is left without corruption.
Additionally, I want to ask the Judge a question. Mr.
Clinton gave a pardon to a gentleman by the name of Mr. Rich.
Mr. Rich was involved in an Oil for Food scandal which I
understand that money went to prop up the Saddam Hussein
regime.
Are you aware of any of the Oil for Food scandal incidents
or Mr. Rich?
Mr. al-Radhi. [Translated by Ms. Behrens.] Corruption is
found all over the world, and I have heard about corruption in
the file of the Oil for Food program. Iraqi is cooperating with
other countries to gather information about this issue.
However, I believe the issue is different in Iraq for many
reasons. First, the infrastructure in Iraq is almost equal to
zero. Services in the country are almost equal to zero.
Iraq is a wealthy country. Imagine that the budget of 2007
is $41 billion and $30 billion is what remains from the
previous and earlier years. Don't you think that $71 billion,
such an amount that can build an entire country, don't you
think that it deserves a followup and attention?
Corruption is corruption in all times, and I am a
professional and I fight corruption because this is my
profession to do so.
Mr. Mica. Thank you. I appreciate it.
Chairman Waxman. Thank you very much, Judge Radhi.
I just wanted to inform the gentleman. I don't want to make
any comments, although I would like to make comments, but I
won't make comments on his round of questioning. When we were
requested by the Justice Department not to inquire with
Blackwater's recent episode in September, we honored that
request. We have always honored requests from the Justice
Department.
Mr. Lynch.
Mr. Lynch. Thank you, Mr. Chairman.
First of all, I want to thank the chairman and the ranking
member for holding this hearing.
I also want to thank Comptroller General Walker and also
Inspector General Bowen for your great work on our behalf, and
I also want to thank the Judge. I appreciate the risk to
yourself, and I offer the prayers of our country for 31
employees of your ministry that have been killed and also their
families.
Judge Radhi, your testimony says that your investigators
identified about $18 billion as the estimated cost of
corruption in Iraq. There is so much to go on here. I have to
pick just one case so I can ask some questions about it.
This is a case involving Aiham Alsammarae. I hope I have
that right. He was the head of or very high in the electricity
industry. The Ministry of Electricity, I guess it is called.
I want to ask you. Do you recall the facts surrounding
Aiham Alsammarae?
Mr. al-Radhi. [Response in foreign language.]
Mr. Lynch. Just briefly, I am trying to get the facts. You
don't need a long explanation. Just basically tell me what he
was being investigated for. What were the allegations against
Mr. Alsammarae?
Mr. al-Radhi. [Response in foreign language.]
Mr. Lynch. How about a leading question? How much money was
Mr. Alsammarae accused of embezzling, stealing?
Mr. al-Radhi. [Translated by Ms. Behrens.] It is not
embezzlement. It is a waste of public money.
Mr. Lynch. OK. Corruption involving how much money,
hundreds of millions?
Mr. al-Radhi. [Translated by Ms. Behrens.] In each
ministry, a particular, a certain amount of money, and the
total across all ministries is $18 billion; for electricity, $2
billion.
Mr. Lynch. $2 billion, OK.
Mr. Alsammarae, I understand, was arrested and held in
prison inside the Green Zone, but he somehow escaped. Do you
know the facts surrounding that?
Mr. al-Radhi. [Translated by Ms. Behrens.] I know some of
the facts that surround this case, and I know that a U.S.
protection company has helped him get away.
Mr. Lynch. Do you know what the name of that U.S.
protection agency might have been?
Mr. al-Radhi. [Translated by Ms. Behrens.] I believe it is
DynCorp.
Mr. Lynch. OK, Blackwater.
Now, with the assistance of Blackwater, do you know where?
Chairman Waxman. He said DynCorp.
Mr. Lynch. Oh, DynCorp, I am sorry. I am sorry, DynCorp.
Thank you for that correction. So DynCorp, a U.S. contractor,
helped this person get out of jail in the Green Zone.
Do you know where Mr. Alsammarae is right now?
Mr. al-Radhi. [Translated by Ms. Behrens.] This is not
important to me. What matters to me is there is absentia order
or court order against this man, and that is a sentence for 3
years.
Mr. Lynch. It may not be important to you, but it is
important to this committee.
Is it your understanding that this gentleman is in Chicago,
in the United States right now?
Mr. al-Radhi. [Translated by Ms. Behrens.] Three years
sentence awaiting him, and there are 11 other charges against
him fielded through the Interpol.
Mr. Lynch. All right, my understanding, and I will offer it
for testimony, is that our staff did talk to this gentleman. He
is in Chicago.
I will yield back, Mr. Chairman.
Chairman Waxman. Thank you very much, Mr. Lynch.
Let me explain that on the House floor, we have votes, and
we have a number of votes. So we are going to recess now for
around 40 minutes. I would request that Members come back here
as quickly as possible after the last vote, so we can continue
the questions.
We thank you for your patience.
We stand recessed.
[Recess.]
Chairman Waxman. Before Mr. Burton arrives because he is
next, Mr. Lynch, you were asking a question and you were in the
middle of your question. Do you want to complete your last
question?
Mr. Lynch. Thank you, Mr. Chairman.
I am going to ask Mr. Bowen. I have tried to establish that
the former Iraqi Electricity Minister was accused of corruption
of potentially hundreds of millions of dollars. He was
arrested. He was brought to the Green Zone. I believe it was a
DOD facility. We are talking the Unites States Military.
He was then broken out of that jail or removed from that
jail by a U.S. contractor. We have evidence it was DynCorp or
testimony that it was DynCorp.
Mr. Bowen, is that your understanding of the facts of this
case?
Mr. Bowen. Yes, but with the one additional fact that he
was convicted by that Iraqi court and was awaiting sentencing.
Mr. Lynch. Is there an investigation ongoing relative to
the handling of this case?
Mr. Bowen. I can't comment on our ongoing investigations.
Mr. Lynch. OK, so if it is an ongoing investigation, it
must be ongoing.
Can you tell, Mr. Bowen? Look, I have followed your work in
Iraq, and I appreciate greatly what you are doing tremendous
work, and I appreciate.
Can you tell me, the allegation that this gentleman is in
Chicago, is that correct? Is that your understanding?
Mr. Bowen. That is what I have heard, yes.
Mr. Lynch. OK, I will let it go at that.
Thank you, Mr. Chairman.
Chairman Waxman. Yes, Mr. Lynch.
Mr. Burton, I think you are next.
Mr. Burton. Thank you, Mr. Chairman.
Was there any corruption under Saddam Hussein?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes, sure. Oil
was for Saddam and for Saddam's family only.
Mr. Burton. Were you ever prosecutor when Saddam Hussein
was in power?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes.
Mr. Burton. How long were you a prosecutor when Saddam
Hussein was in power?
Mr. al-Radhi. [Translated by Ms. Behrens.] After I
graduated from the Judicial Institute, he did not consider as a
member of the prosecution, but he dealt with me as a regular
employee.
Mr. Burton. You were not a prosecutor from 1979 to 1992?
Mr. al-Radhi. [Response in foreign language.]
Mr. Burton. It shouldn't be that difficult to answer.
Either you were or you weren't.
Mr. al-Radhi. [Translated by Ms. Behrens.] I graduated from
the Institute as a prosecutor.
Mr. Burton. So you were a prosecutor from 1979 to 1992.
Mr. al-Radhi. [Translated by Ms. Behrens.] Only the last 3
years.
Mr. Burton. What did you do before that from 1979 to 1992?
Mr. al-Radhi. [Translated by Ms. Behrens.] I was managing
the funds of the juveniles or the orphans. Those were under 18
years old.
Mr. Burton. You were a prosecutor for over 3 years under
Saddam Hussein. How did you get appointed to these positions?
Mr. al-Radhi. [Translated by Ms. Behrens.] I have worked as
an attorney until the change.
Mr. Burton. But you were a prosecutor for the government.
Mr. al-Radhi. [Translated by Ms. Behrens.] In the court of
misdemeanors, yes.
Mr. Burton. How did you get that job?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes, when I
graduated from the Judicial Institute, they did not appoint me,
but because I was a non-Baathist. But afterwards because of my
work managing the funds of the orphans, I was appointed to
that. Then in 1992, because of great pressure, I left.
Mr. Burton. Well, the record shows that you were in the
Saddam Hussein regime from 1979 to 1992 and that you were a
public prosecutor and that you did work under Saddam Hussein.
Now it is laudable that you worked for the children that were
damaged during the Iran-Iraq War, but you were in fact an
official of Saddam Hussein, were you not?
Mr. al-Radhi. [Translated by Ms. Behrens.] What was your
last question, Mr. Burton?
Mr. Burton. You were an official in the Saddam Hussein
regime and how did you get those jobs?
Mr. al-Radhi. [Translated by Ms. Behrens.] I obtained those
jobs with my hard work, my studying and my work at the Judicial
Institute.
Mr. Burton. Well, let me just finish, Mr. Chairman. I know
you have given others just a little bit of extra time.
Saddam Hussein was a brutal dictator who even cut people up
and put them in chippers. They did everything, buried hundreds
of thousands of people in mass graves. If you had been an
opponent of Saddam Hussein, I cannot figure out how you got
those jobs.
Mr. al-Radhi. [Translated by Ms. Behrens.] Of course, under
Saddam Hussein, I refused to do what he was asking, and
therefore they put me in prison and they broke the bones of my
head.
Mr. Burton. Thank you, Mr. Chairman.
Chairman Waxman. Thank you, Mr. Burton.
Mr. Issa. Mr. Chairman, point of inquiry, under our rules,
I believe from my past experience, those who are advising,
specifically providing testimonial input, are also supposed to
be identified and sworn. Could we at least have the
identification of those who are obviously contributing
considerably to the answers.
Chairman Waxman. We did have the translator identify
herself.
Mr. Issa. No, no, the gentleman behind.
Chairman Waxman. Oh, the attorney?
Mr. Issa. Yes, and the one next to him. They are obviously
providing a significant amount of these answers.
Chairman Waxman. I don't recall that is the practice of the
committee to ever ask who is advising people. They are not
testifying.
Ms. Watson.
Mr. Burton. Mr. Chairman, parliamentary inquiry.
Ms. Watson. Yes, thank you so much, Mr. Chairman.
Mr. Burton. May I make a parliamentary inquiry, Mr.
Chairman?
Chairman Waxman. Just a minute, Ms. Watson.
Yes, you have a parliamentary inquiry?
Mr. Burton. Yes, Mr. Chairman. It is a fact, is it not,
that when we were doing investigations under my leadership that
we did identify the people behind those who were testifying?
Chairman Waxman. I understand that was not the general
practice. I know of no rule that requires it. If you want to
find out, I don't have any reason why you shouldn't find out,
but that hasn't been the way this committee has operated in the
past.
Mr. Burton. You have selective memory loss like the White
House did.
Ms. Watson. Resuming my time.
Chairman Waxman. No, you haven't started your time, but you
will now.
Ms. Watson. Thank you so much, Mr. Chairman. I appreciate
that.
Judge Radhi, were you tortured under Saddam Hussein?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes, I was
tortured twice, in 1970 and in 1977.
Ms. Watson. Do you still bear the marks of that torture on
your body?
Mr. al-Radhi. [Translated by Ms. Behrens.] A break in my
head skull is still visible.
Ms. Watson. Thank you so very much.
Judge Radhi, in your written testimony, you said that Prime
Minister Maliki has refused to recognize the independence of
the Public Integrity Commission.
You also said that officials and agencies in the Iraqi
government sent us formal letters forbidding us to take any
action ``against the Presidency, the Council of Ministers and
former or current ministers,'' is that right?
Mr. al-Radhi. [Translated by Ms. Behrens.] This is right
and this is a letter that would demonstrate to you in front of
you that they prohibited us from conducting investigations
touching the Presidency, the Council of Ministers, current and
former ministers.
Ms. Watson. Yes, that letter is up on the screen. The press
might want to get a copy of it.
The document says, and I will read it because the wording
is so small: ``It has been decided not to refer any of the
following parties to the court until approval of His
Excellency, the Prime Minister, is obtained: Presidential
Office, Council of Ministers, current and previous ministers.''
This is a secret order from Prime Minister Maliki's office
saying that you cannot investigate the Iraqi President, the
Prime Minister or any current or past Iraqi ministers without
the Prime Minister's position, is that right?
We have a copy of it here, both in your language and
English. You are nodding that is correct.
Is this order allowed under the Iraqi constitution?
Mr. al-Radhi. [Translated by Ms. Behrens.] This is an
illegal order and the Iraqi, that goes against the
constitution, and the constitution considers the CPI an
independent entity, and that would only be subject to orders of
the Parliament.
Ms. Watson. Thank you.
Judge, did you have any cases that you were investigating
that were stopped by this order?
Mr. al-Radhi. [Translated by Ms. Behrens.] Tons of cases
were stopped because of this letter would go to the courts and
the courts would stop looking into examining the cases.
Ms. Watson. Did you have cases that involved current and
past ministers?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes, current and
former ministers.
Ms. Watson. I would say that this letter, this secret
letter, illustrates and demonstrates to me that there are
violations of your own constitution going on under this
administration.
Mr. al-Radhi. [Translated by Ms. Behrens.] That is true.
Ms. Watson. To me, I interpret it as corruption.
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes.
Ms. Watson. If this is a new developing democracy, we need
to attack corruption wherever we find it, and that is the
reason for this hearing today.
I appreciate your response. Maybe you want to translate
that.
Mr. al-Radhi. [Translated by Ms. Behrens.] Thank you.
Ms. Watson. I appreciate one of your responses to one of
our Members when you said corruption is corruption and I am a
professional, and I go after corruption wherever it may be.
Mr. al-Radhi. [Translated by Ms. Behrens.] Thank you.
Ms. Watson. Thank you so much for your testimony today.
I yield back the balance of my time, Mr. Chairman.
Chairman Waxman. Thank you very much, Ms. Watson.
We now turn to Mr. Cooper.
Mr. Cooper. Thank you, Mr. Chairman. Thank you for holding
this hearing, and I appreciate the bravery, particularly, of
Judge Radhi.
As Members of Congress know and hopefully the public knows,
General Jones, the Marine Corps General, issued a bipartisan
report just last month. It was called the Report of the
Independent Commission on the Security Forces of Iraq. Of
course, there are two missions we have been training the Iraqi
folks for, military and police.
I trust all the witnesses are familiar with this report
because it says, ``Sectarianism and corruption are pervasive in
the Ministry of Interior and cripple the ministry's ability to
accomplish its mission to provide internal security of Iraqi
citizens.''
Things are apparently so bad at the Interior Ministry that
this report by General Jones, the Marine Corps General,
recommends that the entire national police be disbanded.
Here is exactly what the report concluded: ``Conclusion:
The national police have proven operationally ineffective.
Sectarianism in its units undermine its ability to provide
security. The force is not viable in its current form. The
national police should be disbanded and reorganized.''
That is a pretty damning conclusion.
Mr. Bowen, as the Inspector General, what is your opinion?
Have corruption and sectarianism really gotten to this point
that the Jones' recommendation is appropriate, to scrap the
national police and start all over?
Mr. Bowen. I am very familiar with that issue and that
report, and indeed I met with members of the Multinational
Security Transition Command-Iraq that is in charge of training
the national police, and they independently confirmed to me the
problem of infiltration in the national police, as well as
other problems in the IPS and other Iraqi security forces and
the facility protection services as well.
But the national police is a very serious issue. It is
managed quite directly from the MOI. The corruption that grew
within it, which is really a sectarian infiltration that was
condoned over several years, has produced the situation that
General Jones quite accurately addressed, and his solution, I
think, is on point.
Mr. Cooper. Judge Radhi knows the situation better than any
of us do. One of the most disturbing elements of this
conclusion of the report was that the previous Minister of the
Interior was a man named--forgive me if I mispronounce it--
Bayan Jabr.
Mr. al-Radhi. [Translated by Ms. Behrens.] Bayan Jabr.
Mr. Cooper. Bayan Jabr, it was under his leadership that
the ministry became so heavily politicized.
The report, for example, says that Mr. Jabr gave key
ministry posts to members of the Badr Brigade, and the Badr
Brigade Militia infiltrated Iraqi police units throughout Iraq.
Judge Radhi, to your knowledge, was Mr. Jabr, a member of
the Badr Organization?
Mr. al-Radhi. [Translated by Ms. Behrens.] This issue, of
course, I know about it from the media because I do not have a
political relationship with them.
However, I can say that these security ministries are now
divided among the sectarianism and the sectarianism influence,
and therefore you see that their performance is not a good
performance.
Mr. Cooper. The amazing thing to me is it is my
understanding, even though Mr. Jabr, was the previous Minister
of Interior, instead of being punished or reformed or in any
way changed, now it is my understanding he has been promoted to
be Minister of Finance, which is truly astonishing.
Judge Radhi, given Mr. Jabr's record at the Interior
Ministry, do you have any concerns about what he is doing as
Minister of Finance?
Mr. al-Radhi. [Translated by Ms. Behrens.] My concern is
toward the ministries themselves because the sectarian quotas
are ongoing, and therefore these ministries are not protecting
the Iraqi people. Therefore, you see that the security is
continuously deteriorating.
Mr. Cooper. Thank you.
Chairman Waxman. Thank you, Mr. Cooper.
Have you completed what you wanted to say?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes.
Mr. Sali. Are you not going to go at this time?
Mr. Sali. Can I yield my time to Mr. Issa?
Mr. Issa. The gentleman yields his time to me, I guess.
A couple of quick questions, Mr. Bowen, has the Iraqi
government, at any time, given us authority, the United States,
the executive branch or the Congress authority over corruption
of the use of Iraqi funds?
Have we asked Iraq to allow us to investigate the use of
their funds?
Mr. Bowen. No.
Mr. Issa. So we have never asked?
Mr. Bowen. No, sir.
Mr. Issa. Have we ever asked any government whether we
could investigate the corruption in their government to your
knowledge?
Mr. Bowen. No, not to my knowledge.
Mr. Issa. Is it unusual for the U.S. Congress to
investigate a sovereign nation's utilization of their own
resources in your experience?
Mr. Bowen. This is the first time I have been at a hearing
on that matter.
Mr. Issa. Do you think it is appropriate in your own
judgment?
Mr. Bowen. I think addressing, assessing the state of Iraqi
corruption is appropriate for oversight and review because it
amounts to an economic undermining of this fledgling democracy.
Corruption is the abuse of public office for private gain, and
it has occurred on a large scale in Iraq.
Mr. Issa. I appreciate that. The question really isn't do
we analyze it. The question is what do we do about it after we
all agree on this dais that it was rampant under Saddam and it
is rampant under Maliki and that, in fact, it goes far, far,
far down?
It doesn't flow just to the top the way it once did where
you only stole with the permission of top. Now you have little
fiefdoms that are stealing all along.
I guess one of my questions is has the GAO ever
investigated another sovereign nation's utilization of its
resources?
Mr. Walker. No. The only thing that would be close is you
recall the Coalition Provisional Authority was set up by the
United States. The Coalition Provisional Authority had access
to both U.S. funds as well as Iraqi funds.
Mr. Issa. Your organization oversaw how we spent their
funds while we were in control.
Mr. Walker. Actually not. What we did was we were involved
in expenditure of U.S. funds, and we facilitated the release of
records from the U.S. Government to the Board of Supreme Audit
of Iraq so that they could hopefully do the audit work with
regard to Iraqi funds. So we have not audited Iraqi funds, but
we facilitated the Board of Supreme Audit hopefully being able
to do the same.
Mr. Issa. So that the record be complete on one thing, I
know you are not going to find one person on the dais, under
any circumstances, that is satisfied with the level of
integrity, transparency or lack of corruption in Iraq. That is
something that, from the chairman going both directions on the
dias, it is very clear that this is not a government that works
to the best interest of their people, particularly if they are
Sunnis in Anbar or Kurds in the north.
Mr. Bowen, your written testimony states the number of
corruption cases under investigation by the Iraq Commission on
Public Integrity was 1,861 in 2006 and 3,158 in 2007. Can you
describe essentially how we got to this increase?
It looks good on paper. Tell me about it.
Mr. Bowen. One is an increased effort under Judge Radhi's
leadership to push forward, try to push back the tide of
corruption that has been rising, as he testified today. It is
also indicative of that rising tide itself, that the corruption
efforts have increased because the work is to be done.
Mr. Issa. I appreciate that.
To your knowledge, how many convictions have there been in
Iraq?
Mr. Bowen. I don't know what the total number is. There
have been hundreds of convictions.
Mr. Issa. So they do get convictions.
Mr. Bowen. Yes.
Mr. Issa. What is the typical penalty when convicted? Are
they the equivalent of a U.S. felony conviction?
Mr. Bowen. It depends on the nature of the crime, of
course. The challenge in Iraq, especially with the ministries,
is that there is selective prosecution because there is by
fiat, the authority with every minister to protect any ministry
employee from any corruption investigation.
And so, I am aware of some cases wherein most of the
defendants were protected under Article 136(b), but one of the
lower level ones was permitted to be prosecuted and imprisoned
because of their sectarian identity.
Mr. Issa. Always please your boss, I guess, is the rule in
Iraq.
Judge, one question I have for you is when did you decide
that you needed to leave Iraq and get your family out of Iraq
to a permanent place such as the United States for safety?
Mr. al-Radhi. [Translated by Ms. Behrens.] For 2 years,
there were continuous threats, and I did send letters and
petitions to the Parliament about this issue of threats, and
then they started hitting my residence with missiles. Then it
has become very difficult for me.
Mr. Issa. I only wanted a date if that could be provided,
just a calendar date, if possible, for the decision.
Chairman Waxman. You can submit it for the record if you
don't recall a date at the moment.
Mr. al-Radhi. [Translated by Ms. Behrens.] I decided only
when the Prime Minister warned me through an interview on
[phrase in foreign language].
Mr. Issa. And the date?
Mr. al-Radhi. [Translated by Ms. Behrens.] The beginning of
September this year.
Mr. Issa. Thank you.
Chairman Waxman. Thank you, Mr. Issa.
Mr. Tierney.
Mr. Tierney. Thank you, Mr. Chairman.
I want to thank all of our witnesses here this morning for
their testimony, for their consistent help with the committee,
and Judge Radhi, particularly, I want to thank you for the
courage that you have shown and integrity of coming forward.
Mr. Chairman, just for the record, I don't know as I had to
go in and out of other meetings, but if nobody has brought it
up yet, I think that we ought to make a statement that the
State Department's attempt to indicate that even broad
statements and assessments that anyone might make
characterizing the quality of Iraqi governance or corruption
and saying that shouldn't be discussed, I think is a little bit
bizarre, if nothing else, given the fact that there is $600
billion of the United States invested in that country and the
importance of the Iraqi people of having those investments come
out to reconstruction and safety and security and other things.
So this is a very germane issue that we are investigating and
talking about here this morning and important to delve into.
Judge Radhi, we have talked about your statement that some
$18 billion has been lost as a result of corruption, but if we
can take just a minute to talk about corruption at the Ministry
of Oil, an area where I understand that you have not yet been
able to even have an audit on that basis.
You made a statement: ``It has been impossible for the
Commission on Public Integrity to safely and adequately
investigate oil corruption where Sunni and Shia militias have
control of the metering, transport and distribution of oil.''
So we are talking about billions and billions of dollars
worth of Iraqi oil revenues, basically the lifeblood of the
country, and a central obstacle to obtaining any political
reconciliation. Are you saying, sir, that given that importance
you have not been able to have audits or investigations into
that ministry?
Mr. al-Radhi. [Translated by Ms. Behrens.] Out of this $18
billion total amount, only half a billion is related to issues
pertaining to the Ministry of Oil.
With respect to the Ministry of Oil, the Inspector General
of that ministry had issued a report that contains three
sections. The Inspector General of that ministry spoke about
trafficking in oil, about the amount of funds of these revenues
and about the amount of oil that was involved in this in
addition to the reports by U.S. and British authorities.
There were two cases about a current and former minister,
and these cases were closed.
Mr. Tierney. Let me back up a second. The reports on the
Oil Ministry would have added to that $18 billion or were
already incorporated in the $18 billion figure?
Mr. al-Radhi. [Translated by Ms. Behrens.] It would have
added.
Mr. Tierney. Mr. Bowen and Mr. Walker, is it your
understanding also that militias are likely in control of a
substantial amount of money from the oil industry?
Mr. Bowen. There are a number of sources that report that,
yes, sir.
Chairman Waxman. Yes. There is more information available
on a classified basis, Mr. Tierney.
Mr. Tierney. Thank you, Mr. Walker.
Judge Radhi, in your statement, you say, ``This has
resulted in the Ministry of Oil effectively financing terrorism
through these militias.''
Can you tell us what you mean by that? Are you saying that
these oil revenues were given directly to the terrorists?
Mr. al-Radhi. [Translated by Ms. Behrens.] Yes, such as in
Bayji in the central part of Iraq, there are Sunni militias
that control this region, and they take a great share of these
revenues, and they use some of the amounts to finance their
militias. The same goes to Basrah where the region is under the
control of the Shiite militias.
Mr. Tierney. Thank you very much.
My time is up, Mr. Chairman. Thank you.
Chairman Waxman. Thank you, Mr. Tierney.
Mr. Sarbanes.
Mr. Sarbanes. Thank you, Mr. Chairman.
I am sort of reeling here because the testimony from
everybody is such that I have virtually no hope left that any
meaningful progress is being made in terms of rebuilding the
infrastructure in Iraq in a way that represents true progress,
and I think everyone's testimony puts a lie to assertions that
progress is being made.
I would ask the Judge, whose testimony is courageous but he
is clearly a man of courage innately, what can you point to
that would give me hope that real progress is being made in
combating the corruption that you are talking about today?
Mr. al-Radhi. [Translated by Ms. Behrens.] As I said in my
testimony, that the government has closed many cases and
intervened in our matters, and that goes against the
constitution. That was the thing that impeded concrete, good
results in fighting corruption.
Mr. Sarbanes. So you really can't point to anything that
would give me hope.
Let me ask Mr. Walker or Mr. Bowen to take that question.
Maybe if you could just, either one of you, start by
describing where you have seen a comparable level in your
experience or from what you know or have studied, if you could
cite a comparable level of corruption in terms of the impact
that it is having on infrastructure and services within any
society that you have looked at in the recent past. What can I
look to get a frame of reference on what we are talking about
here?
Mr. Walker. I don't know if I can give you a frame of
reference, Mr. Sarbanes, but I would have some comments that
are directly relevant to your line of inquiry. First, I think
we have to keep in mind that corruption, as has been mentioned,
involves the abuse of public office for private gain.
Corruption happens all over the world in differing degrees. It
has happened in Iraq for a long time.
There is, however, a difference. The United States is
dedicating a lot of lives and a lot of money in Iraq and, in
general terms, I don't think it is any of our business to
investigate corruption of other sovereign nation's money.
However, when the United States has 160,000 troops on the
ground and billions of dollars invested, I think we need to be
concerned with it, not to investigate it, to be concerned with
it because I think it can have a direct impact on the ability
of the Iraqi government to achieve the 18 benchmarks that have
been laid out for political, security and economic progress in
Iraq.
So that is why I think it is important, but I think there
is a line that ought to be drawn as to how far we should go.
Mr. Sarbanes. You cited four elements that are impacting
progress. One was employee shortage. The other was sectarian
influence. The third was the corruption within the various
ministries, and the other was security.
Let's take employee shortage. Any prospects any time soon
that the employee shortage aspect of this will be fixed or
remedied or progress much in a positive direction from what you
have seen?
Mr. Walker. Well, there are several angles there, one of
which there has been a brain flight outside of the country
because the security situation. The question is whether and to
what extent that might be able to be reversed. I think it is
going to take a more stable security question for that to be
reversed in any significant numbers.
Second, you have the de-Baathification policy and if
political progress can be made on that such that there might be
a possibility to be able to tap some expertise from the former
regime that may have been Baathist but not hard line Saddamist,
if you will, you might be able to achieve some progress there.
But then I would ask Mr. Bowen whether he has any
perspective because he is on the ground.
Mr. Bowen. First of all, it is an employment issue. The
real problem in Iraq is unemployment which ranges up to 40
percent by some estimates, and that provides a breeding ground
for insurgent recruitment.
With respect to the corruption effort or the attempt to
stem the tide, we have issued two audits in the last 13 months
that have found that the U.S. effort has not been well planned,
well coordinated or well funded. Notwithstanding that, we
created two thirds of the anti-corruption bulwark, the IGs and
the CPI.
I spent a good portion of the first third of my time in
this job taking on the support of the IGs because of a vacuum
of support and pushing their growth, pushing their interest,
trying to. I pushed for an anti-corruption summit which
Ambassador Khalilzad held in November 2005.
But, notwithstanding those efforts, the plan, the
coordination, the funding never came about, unfortunately. It
is disappointing as our audits point out.
Mr. Sarbanes. My time is up. I want to thank the witnesses,
and I just want to highlight a comment that the Judge made
which was to suggest that the infrastructure in Iraq is almost
equal to zero and that the key services being provided by
ministries in Iraq are almost equal to zero, which I think is a
very damning assessment of where things stand.
Thank you, Mr. Chairman.
Chairman Waxman. Thank you, Mr. Sarbanes.
Mr. Shays. Let me just ask you, how many Members do you
have, because I came here a little later and I would be happy
to wait a few more. How many more do you have?
Chairman Waxman. There are two more.
Mr. Shays. I would be happy to wait for one more and then I
will go.
Chairman Waxman. There are two more.
Mr. Shays. Then I will go.
First, Judge Radhi, I want to say to you that you honor us
by your presence. You are a very brave and distinguished man. I
have known about you for a number of years, and I try to get to
Iraq every 3 to 4 months. So to have you here is a real honor.
I would like to say your decision to leave Iraq is
understandable, but it is a huge defeat for good government and
my hope of success in Iraq, and I am very sorry that it has
come to a point where you feel you need to leave.
I first want to say to you, Mr. Walker, I get concerned
when we--and to you, Mr. Bowen--from the outside looking in are
passing judgment on circumstances that I think are known and
yet there is recognizably very little solution. I mean one
solution is to give up on Iraq because it is corrupt. That is
one solution, and I don't think you are suggesting that.
No one can blame the U.S. Government for the fact that the
Iraq government is corrupt, no one. You could blame us for
going in.
Let me just ask you, Judge al-Radhi, are you regretful that
Saddam's regime was overthrown by the U.S. Government?
Mr. al-Radhi. [Translated by Ms. Behrens.] As I said in my
opening statements, I thanked the United States because it
removed a dictatorship that oppressed the Iraqi people.
Mr. Shays. Judge Radhi, I know you said it, but it can
never be said too much in an environment where most of Congress
is critical that we did, in fact, do that, and so it is
important for people to know as I see all the time when I go
into Iraq, thank you for coming and getting rid of Saddam. But
I do believe that the people of Iraq could be very critical for
what we did once we were there.
What do you think the biggest mistake was that the American
Government made?
Mr. al-Radhi. [Translated by Ms. Behrens.] I am not a
politician. That is one. The second thing is that the Americans
helped the Iraqi people by removing the dictatorship. What is
happening now in Iraq is really the work of the neighboring
countries.
Mr. Shays. The Iraqi what? I am sorry.
Mr. al-Radhi. [Translated by Ms. Behrens.] The aspirations
of neighboring countries, of regional aspirations.
Mr. Shays. Should we give up on Iraq and leave?
Mr. al-Radhi. [Translated by Ms. Behrens.] Regional
aspirations.
Mr. Shays. Thank you.
I want to ask the Judge, should we give up on Iraq and
leave?
Mr. al-Radhi. [Translated by Ms. Behrens.] In reality, the
Iraqi people would hope that you continue your support to them.
Otherwise, they will be suppressed by the neighboring
countries.
Mr. Shays. You appreciate that the United States came in
and removed Saddam, and you do not want us to leave. So tell me
the bottom line issue of what we can learn by your testimony
that will help make Iraq a better place and not have your
testimony be used by some as an argument that we should leave?
Mr. al-Radhi. [Translated by Ms. Behrens.] In reality, it
is a great endeavor that you came to Iraq and to liberation.
Liberation was a great endeavor. I believe if you help the
Iraqi people to be managed and governed by an honest
government, I believe that the problem will be over.
Mr. Shays. Thank you very much.
Thank you, Mr. Chairman.
Chairman Waxman. Thank you, Mr. Shays.
Mr. Yarmuth.
Mr. Yarmuth. Thank you, Mr. Chairman.
I would also like to thank all the witnesses.
I would like to pursue for a minute the issue that
Congressman Tierney mentioned regarding the efforts of the
administration to muzzle any discussion about corruption in
Iraq, and I would like to address Mr. Walker and Mr. Bowen.
As I know Mr. Walker knows, I was a journalist in my former
life, and so I have a professional as well as personal interest
in efforts to conceal information, a natural resistance to
that.
Last week, the State Department informed this committee
that their officials would not be allowed to provide
information about corruption in Iraq unless the committee
agreed to treat it as classified and withhold it from the
public. The State Department sent an e-mail to committee staff,
confirming that virtually any discussion of Iraqi corruption
was now classified.
Let me show you what the State Department said was
classified. The e-mail said: ``Broad statements or assessments
which judge or characterize the quality of Iraqi governance or
the ability or determination of the Iraqi government to deal
with corruption including allegations that investigations were
thwarted or stifled for political reasons and statements or
allegations concerning actions by specific individuals such as
the Prime Minister or other GOI officials or regarding
investigations of such officials.''
Mr. Bowen, let me ask you first. Is there anything that you
said today that would have passed muster according to this
directive other than good morning?
Mr. Bowen. It is a pretty broad directive, and it was not
and does not apply to me or my testimony today.
Mr. Yarmuth. I understand, but if such a policy did apply
to you or your testimony, what effect would that have on what
you could do?
Mr. Bowen. A significant effect.
Mr. Yarmuth. Would you be able to do your work if this
policy were applied to you?
Mr. Bowen. As testifying before this committee, I would
have to be more circumspect about what I said, but everything I
have said today, virtually everything I have said today, we
have reported on in the past, and so this is not new news. We
first called the problem of corruption in Iraq a second
insurgency over a year ago.
Mr. Yarmuth. Mr. Walker, did you know that the State
Department would consider the broad statement in your report
that characterized the ability of the Iraqi government to deal
with corruption to be classified information?
Mr. Walker. No. Several comments on that, first, my
testimony is based on this report which the State Department
had an opportunity to review and comment on, and they did not
classify any of the information in this report which is the
basis of my testimony.
Second, I can understand why the State Department might
have a concern if you were talking about specific individuals
because, frankly, in our own country, we would probably have
concerns about testifying with regard to ongoing investigations
dealing with specific parties. But with regard to the broader
challenge, itself, I think it would be over-reaching to try to
classify discussions about the broader overall challenge.
Mr. Yarmuth. I was going to ask you, the report that you
submitted, if the State Department were to issue it, this
entire report would have been classified, wouldn't it, under
those guidelines?
Mr. Walker. Well, we did submit it to them both for
comment, which we do under generally accepted government
auditing standards, and second also for sensitive review and
classification review, and what you have before you is
unclassified.
Mr. Yarmuth. As part of this new classification policy, the
State Department also went back and retroactively classified
the reports issued by the Office of Accountability and
Transparency. I understand that both GAO and the Special
Inspector General received copies of these reports when they
were unclassified.
Either of you, did anyone ever tell you that these reports
were classified before you received them?
Mr. Walker. No, and quite frankly I have seen at least two
circumstances within the last 2 months where both the State
Department, this being one, and the Defense Department
attempted to retroactively classify something that had been
made available publicly and in some cases were on the worldwide
Web which is obviously, I think, highly questionable.
Mr. Yarmuth. Thank you very much.
It is pretty obvious, Mr. Chairman, that we all know what
is going on here. There is no real danger to national security
from these reports. The State Department was fine with
circulating them on an unclassified basis throughout the
government, and it wasn't until this committee asked to see the
documents that they took this action. So it is pretty clear
that the administration just wants to muzzle any comments that
reflect negatively on the Maliki government.
Chairman Waxman. Will the gentleman yield to me on that
point?
Mr. Yarmuth. Yes, Mr. Chairman.
Chairman Waxman. We even asked one of the people at the
State Department whether he agreed with a statement by
Secretary Rice when she praised Prime Minister Maliki for his
efforts to stop corruption. She even praised him.
We asked this fellow from the State Department, do you
agree with that, and he said, I am not allowed to discuss that
in an open forum.
I can't believe the attitude that the State Department has
taken in this regard. It is just incomprehensible to me. We are
going to insist on our rights for the Congress of the United
States to be able to get information about corruption in the
Iraqi government. Their only excuse is that it might embarrass
the Maliki government.
Well, I think that the information that is already on the
record, that is public knowledge should be a source of
embarrassment to the Maliki government and a source of concern
to the U.S. Government. The levels of corruption according to
General Walker and Special Inspector General Bowen and Judge
Radhi is that corruption is increasing in Iraq, and the State
Department can't keep us from knowing that and can't censor
that just because they think it might embarrass or hurt our
relationship with the Maliki government. Too many Americans are
over there fighting and dying and too many American are paying
taxes to support the efforts in Iraq for her to pretend
something is not happening when we all know it is happening.
I thank the gentleman for yielding to me.
Mr. Yarmuth. Thank you, Mr. Chairman. I yield back.
Mr. Walker. Mr. Chairman, could I real quickly? I testified
that corruption is a serious problem in Iraq, and it is, but I
can't attest as to whether or not it is increasing or
decreasing based upon our work.
Chairman Waxman. Well, I am not citing you, but both Mr.
Bowen and Judge Radhi.
Mr. Walker. You are correct. The others did. I just wanted
to be clear for the record.
Thank you, Mr. Chairman. I appreciate that.
Chairman Waxman. You covered yourself.
Mr. Braley.
Mr. Braley. Thank you, Mr. Chairman.
Mr. Walker, it is good to see you again. Do you have any
ulterior motive for being here today?
Mr. Walker. I work for the Congress of the United States.
This is our authorization, authorizing committee. I have no
ulterior motive other than to serve my client.
Mr. Braley. Mr. Bowen, likewise, good to see you again. Do
you have any ulterior motive for being here today?
Mr. Bowen. No. I am responding to your invitation and
thankful for the opportunity to testify.
Mr. Braley. I raise that interesting question because one
of the witnesses on the panel with you has had questions raised
by other members of the committee about his ulterior motives
for being here today.
Judge Radhi, you were the top Iraq anti-corruption official
for several years. You investigated thousands of cases
involving Shiites, Sunnis and Kurds. By being so persistent and
evenhanded, you made both friends and enemies.
We have talked with many people in the U.S. Government who
are very proud to be associated with you. For example,
Christopher Griffith is a Senior Advisor to the U.S. Office of
Accountability and Transparency at the U.S. Embassy in Iraq,
and he said this about you, ``I think he is the most honest
government of Iraq official that I have met in my 21 months in
the country. He has never lied to me. He has tried to be
studiously non-sectarian in his efforts, and I have worked
closely with them. To the extent that I would trust a
government of Iraq official, I would trust him.''
Judge Arthur Brennan who is the Director of the Office of
Accountability and Transparency in the Embassy said this about
you, ``Among the people that I have worked with in the U.S.
Embassy, Judge Radhi had the reputation as a courageous, honest
and effective and at least as effective as you could be under
the circumstances as effective Director of CPI.''
Of course, you know Mr. Bowen who is sitting next to you
today. When you resigned your position last month because of
escalating death threats against you and your family, Mr. Bowen
stated, ``It is a real blow to anti-corruption efforts in Iraq.
He was the most prominent anti-corruption enforcer.''
Mr. Bowen, do you stand by that statement today?
Mr. Bowen. Yes, I do.
Mr. Braley. Last month, you were attacked by the Maliki
government.
Mr. Bowen, from what you know about Judge Radhi and his
work in Iraq on these very important anti-corruption issues, do
you believe there was any merit to those accusations?
Mr. Bowen. I found Judge Radhi to be my most reliable
partner in carrying out my mission in Iraq. Accusations are
commonplace within the Iraqi government, and I don't have any
information about the merits of them.
Mr. Braley. Well, Judge Radhi, I just want to join the rest
of the committee in thanking you for making the difficult
journey here to share your important testimony with us. No one
here understands what you have been through as a true and
courageous person standing up for truth, standing up for
justice, and we appreciate your efforts and thank you for
joining us.
Mr. al-Radhi. [Translated by Ms. Behrens.] Thank you.
Chairman Waxman. Thank you very much, Mr. Braley.
First, I want to ask unanimous consent that the documents
that were referred to in questioning which the majority and
minority have looked at be admitted to the record.
Mr. Issa. It has been mutually agreed to.
Chairman Waxman. Without objection, that will be the order.
Mr. Issa, you wanted to ask a few more questions.
Mr. Issa. Yes. I am going to be very brief. Believe or not,
this is my first round, but if enough people yield to you, it
seems like you have been here forever.
I just want to followup on a question that I asked earlier,
and I asked the question for a reason. We are putting in $6
billion a month into Iraq by anyone's rounding error. It is
great or it is less. It is huge.
That huge amount of money, approaching a trillion dollars
that has been spent in this theater so far, why wouldn't we
treat, and this is for General Walker first and then for Mr.
Bowen. Why wouldn't we treat Iraq oversight of their corruption
and of their use of their funds as we treated the Marcos
government, as we dealt with the post-Soviet Russian period, as
we have dealt with Colombia and other countries in which drug
money has had an adverse influence?
Why wouldn't this committee look at it in terms of the
leverage of U.S. money?
I ask that because, although I don't believe we have yet
made the case, I hope by the time we adjourn in a few minutes,
we will have made the case that, in fact, this committee in
both an unclassified and, with the chairman's indulgence,
hopefully, in a classified setting, should be learning much
more than any one individual can tell us.
I would go to General Walker first. In your opinion, your
experience, is it appropriate for us to have oversight over the
billions of dollars being spent of U.S. dollars and not see the
effects of the other dollars? Because I would presume that for
every dollar that we don't spend, the Iraqis would have to find
a way to come in many cases with those dollars, and for every
dollar we contribute, we relieve their obligation to use their
oil money wisely.
General Walker.
Mr. Walker. Well, first, I think this committee has a
responsibility to aggressively oversee expenditure of U.S.
funds, especially when it deals with contracting and other
related activities in Iraq. Second, I believe that in general
terms it is not the U.S. Government's responsibility nor is it
appropriate for us to investigate Iraqi sovereign money.
However, I do believe it is in the interest of this
committee, the Congress and our country to understand the
nature and extent of corruption overall and to what extent does
that undermine the ability of the Iraqi government to deliver
on its promises with regard to funding and the ability of the
Iraqi government to meet the 18 benchmarks that are necessary
in order to achieve ``success.''
Mr. Issa. Right. The second part of the question, in your
opinion, would that require a followup in a classified setting
for this committee to fully understand some of what you and the
State Department and other sources could give us?
Mr. Walker. I clearly think it is in the committee's
interest to obtain access to as much information as possible
and to the extent that there is information available that is
classified, then I would encourage you to avail yourself of
that classified information as I did in connection with the
Iraqi 18 benchmark report that we issued.
Mr. Issa. Mr. Bowen.
Mr. Bowen. Yes, Mr. Issa, the classified hearing makes
sense since those reports are now classified, and I have read
them, and they are full of details about corruption within the
Iraqi Ministries, specifically cases, case details. So I think
that would be useful for the committee.
As to the first part of your question, the United States
has enormous interest in the success of democracy in Iraq,
clearly. Iraqi corruption, by the Iraqi government's own
admission, threatens that state today.
The Coalition Provisional Authority, essentially a U.S.
entity, created two thirds of the anti-corruption effort, the
CPI, which Judge Radhi headed for the last 3 years, and the
Iraqi Inspectors General, and by creating them took on the
burden to build their capacity. They were new entities. They
did not sustain that burden as our audits have shown either
through effective strategic planning or appropriate funding.
The way ahead, implicit in your question on that front, I
think is engaging those with expertise in the issues you
alluded to, international corruption and the fight against it.
That is the World Bank. They have two people in Iraq right
now. I met with them in August. They have good ideas. They have
no capacity themselves to address the issue. They need to lean
forward and deploy and, more broadly, other United Nations
efforts. UNAMI needs to engage, needs to be a presence,
ultimately.
As with everything in Iraq, multi-lateralizing the solution
will improve the likelihood of success of this fledgling
democracy.
Mr. Issa. Thank you.
Judge, just in closing, I want to thank you for your
courageous work over the last several years. Hopefully, you
understand that even though tough questions are always asked by
this Congress, it is with great appreciation for the work that
you have done in Iraq on behalf of your country.
I yield back, Mr. Chairman.
Mr. al-Radhi. [Translated by Ms. Behrens.] Thank you.
Chairman Waxman. Thank you very much.
Thank you, all of you in this panel, for your
participation.
We have votes on the House floor. We will respond to those
votes and be back here in 10 minutes because we still have
Ambassador Larry Butler from the State Department and Ms.
Claudia Rosett from the Foundation requested by the
Republicans.
So we stand in recess to respond to the votes, which I
think we should be back here in 10 minutes.
[Recess.]
Chairman Waxman. The meeting of the committee will please
come back to order.
For our next witness, we are pleased to welcome Ambassador
Larry Butler. He is a Deputy Assistant Secretary for Near East
Affairs at the U.S. Department of State.
Mr. Butler, it is the practice of this committee that all
witnesses that testify take an oath.
[Witness sworn.]
Chairman Waxman. Your prepared statement will be in the
record in full, and I would like to ask you to proceed in
around 5 minutes.
STATEMENT OF AMBASSADOR LARRY BUTLER, DEPUTY ASSISTANT
SECRETARY FOR NEAR EAST AFFAIRS, U.S. DEPARTMENT OF STATE
Mr. Butler. Mr. Chairman, Ranking Member Davis, members of
the committee, thank you very much for the opportunity to
appear before you today.
Just to digress a little bit, in the course of my 31 years
with the State Department, I have served in countries like
Finland and Denmark where corruption is virtually unheard of.
In fact, this year, Transparency International's Corruption
Index lists those two countries in first and second place as
the least corrupt countries in the world.
I have also served in countries that figure a little
further down in the list, namely, the countries that emerged
from the breakup of the former Yugoslavia where corruption had
long been a way of life. Thanks to sanctions, conflict and
transition from totalitarian Communist regimes, corruption and
law-breaking were essential for survival at every level of
society.
Politicians sought elected and appointed office precisely
to access public resources not just for personal but also for
partisan benefit. The shift from socialist to private ownership
was frequently characterized as brazen daily robbery by
insiders, organized crime and regime cronies.
I may have contributed to coining the term crony capitalism
to describe Milosevic's kleptocracy during my service in
Belgrade in the mid-1990's.
We can, therefore, by extension and without knowing any
facts, presume that corruption should also be a serious problem
in Iraq as it is in practically every other country in the
throes of emerging from dictatorship and conflict situations.
None of us should underestimate the challenges of establishing
strong and transparent government institutions in the wake of a
dictatorship where corruption was woven into the very fabric of
governing, and none of us should underestimate the challenge of
rooting out corruption in a combat zone, even one where
violence is diminishing as we have seen over the past 6 months.
The Department of State has devoted considerable effort and
resources to helping courageous Iraqis establish mechanisms and
procedures to investigate and prosecute corruption. This is
paralleled by efforts to build the technical capacity of public
institutions to execute their budgets in transparent and
accountable ways.
It is fair to say we probably do not have a program in the
ministerial capacity development area that does not seek to
build an environment in which corruption is less prevalent.
There have been, as we say, negative impacts due to the
immutable law of unintended consequences. Mid and senior level
bureaucrats have become gun shy about signing off on tenders
and contracts for fear they may later be prosecuted. A well
intentioned but clumsily administered anti-corruption system
can be used to punish the wrong persons.
Our assistance ranges across a spectrum, a comprehensive
spectrum, inter alia: providing training to Iraqi anti-
corruption teams, securing armored vehicles and body armor for
them, recommending changes in specific laws that we believe
would help stem corruption. We are encouraged by what has been
achieved to date while fully cognizant that much more needs to
be done before Iraq's own anti-corruption effort is self-
sustaining.
This year, the Embassy established an Office of
Accountability and Transparency with responsibility for
overseeing our anti-corruption programs. We continue to add
staff including specialists in anti-corruption. We have urged
the government of Iraq to establish its own interagency body to
coordinate anti-corruption efforts and to share best practices,
and they have done so by creating the Joint Anti-Corruption
Council.
We have welcomed the recommendations of Mr. Bowen of the
Office of the Special Inspector General for Iraq Reconstruction
and are taking steps to implement them.
Although I represent the Department of State at this
hearing, it is important to note that many other U.S.
Government agencies, including the Department of Justice and
the Agency for International Development, have also made
combating corruption an important part of their missions and
programs in Iraq.
We pursue these efforts across the country and not just in
Baghdad. At the grassroots level, for example, the Department
of State funds a number of non-governmental organizations that
target corruption and are seeking to create a civil society
where government transactions are transparent and subject to
the rule of law.
In conclusion, I would be happy to answer your questions. I
know you appreciate that some of the details, if discussed
outside of a classified setting, can endanger the lives of
those involved as well as impede our ability to work with the
government of Iraq.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Butler follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Waxman. Thank you very much.
Ambassador Butler, the problems of corruption in Iraq have
enormous implications for our efforts in Iraq. It is
undermining Iraqi confidence in their own government. It is
funding the insurgency, and it is fostering sectarian
divisions. All of those are major questions when it comes to
what is going on in the Iraqi government and the extent of
corruption that is taking place.
I believe it is essential for Congress and the American
people to understand the extent of corruption and its impact on
our policy in Iraq.
Our committee staff tried to ask the State Department
officials about the corruption issue, but the State Department
refused to allow them to provide any answers unless the
committee agreed that all answers would be considered
classified information and not discussed in public.
I am going to read to you some of the questions we tried to
ask Vincent Foulk who is a Senior Consultant for the Office of
Accountability and Transparency in the Embassy.
We asked him, what effect does corruption have on the
progress of the Iraqi government and their ability to move
toward political reconciliation? He was instructed that he
could not answer this question in an open forum.
We asked him whether Prime Minister Maliki or his
associates obstructed any anti-corruption investigations in
Iraq to protect his political allies. He said, I cannot answer
that question in an open forum.
He and other State Department officials were also
instructed not to answer questions about whether the Iraqi
government has the political will to root out corruption and
whether corruption is funding the insurgency.
Ambassador, we live in a democracy. Our system of
government depends on an informed public. What would be the
rationale for preventing these officials from answering the
committee's questions in an open forum?
Mr. Butler. Mr. Chairman, it is a fair question, and permit
me to say that every foreign service employee at the State
Department in their annual evaluation is required to, is
evaluated on his or her performance in protecting sensitive
national security information and system.
Chairman Waxman. I understand that. Is that sensitive
national security information to ask the questions that I just
reported we asked?
Mr. Butler. We heard earlier today, Mr. Chairman, graphic
testimony from Judge Radhi about the risks, the very real risks
and the price that he and his associates have paid in Iraq in
pursuing and attempting to deal with the corruption that exists
in Iraq.
The programs that we have contain two elements which are
nationally sensitive. One is some of them are operational.
Chairman Waxman. We are not asking specific questions. We
are asking general questions. What I understand is that the
State Department people told us that to ask questions that were
critical of the Maliki government would undermine our
relationship with them, and therefore it would be contrary to
our foreign policy interests.
Does that make it classified?
Mr. Butler. That very much falls under one of the
provisions in the Executive order that provides the basis for
classification which is where revelation of information would
damage bilateral relationships. It is intended to be kept
confidential, Mr. Chairman.
Chairman Waxman. Well, let me ask you some of these
questions, and you tell me if this is something that you think
has to be kept confidential.
Has Prime Minister Maliki or his associates obstructed any
anti-corruption investigations in Iraq to protect his political
allies?
Mr. Butler. I would be unable to answer that question in an
unclassified setting, Mr. Chairman.
Chairman Waxman. Why is that?
Mr. Butler. This goes to the nature of our relationship
with the government of Prime Minister Maliki, and we have
repeatedly on many occasions offered to the committee and to
staff to provide answers to questions like this in a classified
setting.
Chairman Waxman. The American people want to know whether
the government of Iraq currently has the political will or the
capability to root out corruption within its government. Do you
believe that the government of Iraq has that will?
Mr. Butler. I am in a position to detail many of the anti-
corruption efforts undertaken by the government of Prime
Minister Maliki.
Chairman Waxman. No, no, that is not the question I asked
you.
Do you believe that the government of Iraq currently has
the political will or the capability to root out corruption
within its government?
Mr. Butler. Mr. Chairman, questions which go to the broad
nature of our bilateral relationship with Iraq are best
answered in a classified setting, and we are very prepared to
do that. We are prepared to respond.
Chairman Waxman. That information would be classified?
I mean all the people we have in Iraq getting killed, all
the billions of dollars we are spending in Iraq. The American
people are asking, what are we doing and what are the chances
for success?
How are we going to have any chance of success if there is
corruption going on in the Maliki government?
If I, as a representative of over 600,000 people and
chairman of this committee, ask you from the State Department
whether he has a chance to succeed, you can't answer that?
Mr. Butler. Mr. Chairman, we have repeatedly made clear our
willingness to meet with you and your committee members in a
closed session.
Chairman Waxman. Well, Mr. Ambassador, I think that
Secretary Rice is going to have a confrontation with this
committee because we are not going to accept the idea that if
you say something that could be negative about the Maliki
government, it is classified; if you say something about them
positive, it is OK. That seems to be what we have been told by
the State Department.
I consider that completely unacceptable, and we are going
to have a confrontation on this because the executive branch
must answer the questions of the legislative branch if we are
to do our job.
I just think that this business that this cannot be
answered, even a broad question, in a public forum or a hearing
of the Congress is absurd.
Mr. Butler. Mr. Chairman, we are prepared at any time in
the appropriate setting to answer your questions to the best of
our ability.
Chairman Waxman. Is it inappropriate for me to ask you
whether you think the Maliki government is working hard to
improve the corruption situation so that he can unite his
country?
Mr. Butler. A broad assessment along that line, I would
prefer to address in a closed setting, Mr. Chairman.
Chairman Waxman. You would prefer, but do you feel that you
have the right to say that you won't answer that question?
Mr. Butler. My experience in 31 years of dealing with the
Soviet Union and dealing with Milosevic's Yugoslavia, this is,
I would prefer to address, be able to respond to that question
in appropriate circumstances, Mr. Chairman.
Chairman Waxman. Do you think it would be appropriate if I
asked you whether we should approve billions more for the Iraq
War if the Maliki government is not doing its best to stop
corruption?
Mr. Butler. Mr. Chairman, clearly, corruption is a fact of
life on the ground in Iraq as it is in any of the countries in
the former Yugoslavia, and unfortunately, as we find in our own
country, this does not mean that we can give up on our efforts
to root our corruption with the best of our abilities in, in
this case, a sovereign country. Iraq deserves the best.
Chairman Waxman. You talked about Sweden. You talked about
Yugoslavia. You talked about other countries and how they don't
have a lot of corruption in the Nordic countries. Did you have
authority to make that statement from the State Department?
Mr. Butler. Each foreign service officer, each government
employee, who is entrusted with national security information,
has rather, is required to exercise their judgment as to what
constitutes national security information.
In this particular case, it is well established and on the
record that Finland and Denmark rank one and two on
Transparency International.
Chairman Waxman. Where does Iraq rank?
Mr. Butler. Pretty close to the bottom on Transparency
International's list.
Chairman Waxman. Do you feel you can say that in a public
forum? You said it.
Mr. Butler. I can certainly quote Transparency
International.
Chairman Waxman. Who are below them?
Mr. Butler. I do not know.
Chairman Waxman. Well, I understand it is Myanmar and
Somalia. That has to be way there on the bottom, and Iraq is
right next to them.
Mr. Issa.
Mr. Issa. Thank you, Mr. Chairman.
You know the line of questioning is one that I think it
would be inappropriate to let go of. You do publish. This is a
leading question, but you do publish or do you publish, as you
do with Egypt and other countries, an annual report on Iraq
including its transparency and corruption?
Mr. Butler. We publish quarterly reports that we submit to
the Congress on 2207, I think.
Mr. Issa. Have those been provided to the committee?
Mr. Butler. Those have been provided to the committee.
Mr. Issa. Fully vetted, do those or do those not say, about
many countries, and I have worked the Egyptian desk, so to
speak. So I have read those every year along with all the other
areas, the Lavant.
Iraq, in that report, looks better or worse than Egypt or
other countries in the Lavant, other Arab countries?
Mr. Butler. The 2207 report is very specific to Iraq, and I
would not be able to draw comparisons to other countries.
Mr. Issa. Does it look pretty bad? Does it look like, in
fact, that you have a corrupt government in that report?
Mr. Butler. I cannot recall. In the 2207 report, I don't
think we get very much into the specifics of corruption.
Mr. Issa. OK. So do you think there should be a report that
talks about a direction improvement or dropping off in the
level of transparency and/or corruption in Iraq?
Mr. Butler. The Embassy, under the direction of Ambassador
Crocker, is focused and will continue to be focused on dealing
with the issues involving corruption in Iraq.
We have stipulated; there is corruption in Iraq. How to
measure it, I don't know. This is a country that is undergoing
violence. It is difficult to figure out what are your
definitions.
Mr. Issa. Well, you mentioned the post-Soviet period. Does
it look a lot like Russia did?
Mr. Butler. It looks very similar. Many aspects of that do
look similar.
Mr. Issa. So in a post-dictatorship period, a post-
organization period, an emerging democracy with privatization,
with systems that were previously subsidized in one way that
are not being subsidized the same way now, it, to you--only
wanting your opinion--is it not surprising, even if we didn't
have the violence, even if we didn't have the insurgency, that
this is, in fact, pretty close to a basket case as far as
legitimacy of the institutions of government and delivering
services?
Mr. Butler. I don't, would not. I would not associate
myself with an assessment close to a basket case.
The government of Iraq is in an ongoing process of a
revolution of creating a government in a democracy where one
did not exist before.
Mr. Issa. Is it better than the mid-1990's in Russia?
Mr. Butler. Hard to make comparisons.
Mr. Issa. Does it look reminiscent of the mid-1990's in
Russia?
Mr. Butler. In some areas, there are many similarities.
Mr. Issa. What is Maliki doing as far as you know or key
ministers of his to fight corruption that you can say is being
effective?
Mr. Butler. During the 18 months that Prime Minister Maliki
and his government have been in power, and that is, I think, a
key number to focus on. It has only been 18 months.
He inherited the Commission on Public Integrity as well as
the Board of Supreme Audit that were established prior to him
assuming power, becoming the first democratically elected Prime
Minister of Iraq subsequent to 2003.
He created the Joint Anti-Corruption Council in May 2007.
The Prime Minister has provided crucial support to the JACC's
creation which is an Iraqi solution to an Iraqi problem.
Part of the Joint Anti-Corruption Council's agenda is to
formulate recommendations, and this is one of the areas that I
know came up earlier in the day, and this has to do with
Paragraph 136(b) of the Iraqi Criminal Procedures Code. That is
on their agenda to deal with.
They are also working with the Inspector Generals to create
an association to coordinate strategic goals.
Mr. Issa. OK. My time is going to run out, and I appreciate
the long list, but let me just ask one question.
The President has openly said that he is--I will
characterize--disappointed in this government's movement toward
passing certain almost universally agreed on need for reforms,
such as carbon sharing, such as these corruption laws. To the
extent that they are on the agenda, you get no points.
Do you see the likelihood that in a timely fashion they are
going to be passed and enforced? I want your opinion, your
assessment on that.
Mr. Butler. I would need to take the so-called benchmark
legislation which doesn't include anti-corruption measures
specifically, but they are all built in there. Ambassador
Crocker, working with Prime Minister Maliki, continues to work
toward achieving the legislative goals.
In the meantime, two things I would like to throw out there
is that Prime Minister Maliki did something back in March which
dramatically improved one aspect where there had been
corruption, and he put the Iraqi Army around the Bayji
refinery.
Mr. Issa. He started watching the oil.
Mr. Butler. He started watching the refined oil,
specifically, which was literally going out the front and back
gate and was ending up on the black market.
The second thing the Prime Minister did, and I think this
is an important point, was followed an IMF recommendation to,
on two occasions, increase the price of fuel in Iraq which
reduced the disparity between the black market price and the
street price, which has taken a huge bite out of the black
market. Some of that money was going into criminal networks,
some of it was going to feed the insurgency. These are very
important steps to drain the swamp that insurgents and
organized crime are operating.
Chairman Waxman. The gentleman's time has expired, but how
can you say all those positive things about Iraq but you can't
admit to any of the negative things?
Ambassador Butler. Mr. Chairman, we acknowledge there is
corruption in Iraq, and corruption, by necessity, is defined as
when government officials at every level are not discharging
their jobs. We recognize that this is a rapidly changing
environment and we have an Embassy which is rapidly changing
and evolving to meet and respond to the threat, if you would--
--
Chairman Waxman. I am talking about what you are able to
say in this meeting. You are able to say all the things that
you think are positive that he is doing, but you are not able
to talk about the failures of the Iraqi government, even though
we had a panel that has given us very clear indication that
this government is riddled with corruption. Why can you talk
about the positive things and not the negative things?
Shouldn't we have the whole picture?
Ambassador Butler. Mr. Chairman, I would be very pleased to
answer those questions in an appropriate setting.
Chairman Waxman. An appropriate setting for positive things
is a congressional hearing, but to say anything negative has to
be behind closed doors?
Ambassador Butler. This goes, as you know, to the very
heart of diplomatic relations and national security. This is
our ability to----
Chairman Waxman. No, it goes to the heart of propaganda.
Ms. Watson.
Ms. Watson. Thank you, Mr. Chairman.
Stuart Bowen and David Walker testified earlier today about
the lack of leadership undermining the anti-corruption efforts
at the U.S. Embassy in Iraq. Mr. Bowen and Mr. Walker are
certainly not alone in that sentiment, and as I sit here--and
you know I have been there out in the field, at a post, and any
area of corruption I reported to the Secretary of State
immediately. So on my watch I would not allow it to go on
without at least making a statement about it, and I would go
any place at any time to say that American taxpayers' money was
being abused and misused. So over the past few weeks committee
staff have interviewed several Embassy officials involved with
U.S. Embassy anti-corruption efforts and they uniformly told us
that no single official has been put in charge of U.S. efforts
to combat Iraqi corruption and that there is no coordinated
strategy for fighting corruption in Iraq.
Judge Arthur Brennan, who served as the Director of the
Office of Accountability and Transparency for part of 2007 was
asked whether there was an overall U.S. strategy for combating
Iraqi corruption, and let me read an excerpt from his
transcript: ``During the time you were there, were you aware of
any coordinated U.S. strategy to fight corruption in Iraq?''
The answer was ``No.''
James Santelle, Rule of Law Coordinator at the U.S.
Embassy, told committee staff the following: ``The Embassy,
over time, developed what are called stovepipe institutions.
There is not coordination, as I have said before. You have a
system where the coordination is lacking.''
Anti-corruption efforts are supposed to be a cornerstone of
the U.S.' effort to bring political reconciliation in Iraq. How
is it possible that these efforts can be in such disarray?
Ambassador Butler. Ambassador, to take a moment and
describe Embassy Baghdad and the environment it is in, and to
pay tribute to the men and women of the United States, as well
as their counterparts in the Iraqi government who have stood up
to tackle the very real challenges presented to the development
of a market-based economy and a real democracy, Embassy Baghdad
is an Embassy where it endures nearly 100 percent turnover
every year and in a rapidly changing external environment----
Ms. Watson. May I stop you there, Ambassador Butler?
Because our time runs out. But we have a fundamental
responsibility to do something about the corruption. We were
told in the beginning--of course, I didn't support this war,
but we were told that the moneys from oil would support the
war. We are waiting--and not breathlessly, because I intend to
vote against it--for another supplemental to put billions of
dollars of money in there. I don't see even a light at the end
of the tunnel, and I know how long it has been going on. I know
how long this government has been set up. But I don't see the
effort on the part of the--I think we are at the point now it
is going to take politics and diplomacy, not guns and bullets.
We can't kill everybody. We don't know what the enemy or the
insurgents look like, so we are going to kill everybody that we
think looks like or supposedly is. I think it is time for
diplomacy, and we can't get from you on the ground, you know,
what is going on. Is there a coordinated effort? How are you
going after?
And I know we have a relationship. It is a puppet
government, as far as I am concerned, but we ought to model the
right way to--at least that is the way I was trained in the
State Department. I am very proud of it. We had to model the
right thing to do, and I spent my time going from island to
island out there in Micronesia, trying to get them to do the
right thing because they were using our dollars. And I don't
hear from the State Department what I am expecting to hear. We
have a fine tradition there. So what are these people, who are
new, coming in and doing? Are we going after corruption? Are we
pointing it out to Maliki? Are we saying, you know, you have to
show us that you are going after this corruption. These are
taxpayers' dollars. And if we want support for the----
Anyway, can you respond? I am really disappointed in what I
am hearing.
Ambassador Butler. Ambassador, I would like to say I agree
with what you just said. Both the GAO nor SIGIR have found any
evidence of corruption in the expenditure of U.S. taxpayer
moneys in Iraq, for which I derive a certain amount of
satisfaction, and also----
Chairman Waxman. Well, that is not an accurate statement.
Ms. Watson. $9 billion to Haliburton was missing. Bremer
was sitting right there at the table and he didn't know where
the money went.
Ambassador Butler. The SIGIR reports that I have looked at
have in the last couple of years that I went through show that
we have pretty good marks on our programs. Regarding----
Chairman Waxman. We have contracted----
Ambassador Butler. Ambassador Crocker takes fighting
corruption very seriously. He has, as we do on a regular
basis----
Ms. Watson. Excuse me, Ambassador. Ambassador Bremer sat
there and said he did not know where that $9 billion went. So
for you to say that you did accounting, there was no
accounting. That money went in one way and there was no
accounting. There was testimony on the record. We would be
happy to send that. And that was Ambassador at the time Bremer,
and he certainly didn't oversee that we had an accounting. $9
billion would do a lot in this country for our children.
Chairman Waxman. Time has expired.
Ms. Watson. Excuse me. I know my time is up.
Chairman Waxman. Unless you want to say something, we are
going to move to Mr. Davis.
Mr. Davis. Thank you. Yes, I heard something different in
the testimony. I remember Ambassador Bremer saying that we gave
it to people who gave it out. There weren't accounting systems
further on down the line, but we gave it to the appropriate
authorities. As you know, it was an emergency situation at the
time; you had to start paying people and the like.
I gather that is your testimony.
Ambassador Butler. These were CPA days, yes?
Mr. Davis. Yes.
Ambassador Butler. With accountable taxpayer money--and if
I am wrong on that one, sir, I do apologize--IIRF money and
others----
Mr. Davis. This was Iraqi money, I think is what she is
talking about.
Ambassador Butler. I believe that is correct. And it was
CPA time, as opposed to U.S. taxpayer money. We take our
responsibility to look after taxpayers' money very carefully,
very seriously. I just wanted to take a moment----
Mr. Davis. Well, let me do this, because I have 5 minutes,
and I don't want you answering her questions in my 5 minutes, I
am sorry.
Ambassador Butler. Yes, sir.
Mr. Davis. Page 1 of the strategy says that the basis of
the problem of corruption in Iraq is market distortions,
cultural tolerance, intimidation militias, undeveloped civic
culture, lack of government capacity. What market distortions
enable or foster corruption?
Ambassador Butler. First and foremost, when you are selling
subsidized or under-market priced fuel. We saw gasoline and
diesel fuel being diverted all over the place into the hands of
militias and organized crime networks who were selling it on
the black market and pocketing the difference. And that has
been taken care of.
Mr. Davis. OK, so we have fixed that problem?
Ambassador Butler. It is being fixed.
Mr. Davis. Describe an example of cultural tolerance of
corruption.
Ambassador Butler. For 35 years, the people in Iraq lived
under a system where you had to play by the rules of the
Bathist party and Saddam Hussein. That would be the cultural.
If you wanted to survive, you paid whatever you had to to the
boss on top of you and do things that were for the regime and
not for the benefit of the broad public.
Mr. Davis. So it was like a little tip to get things.
Ambassador Butler. And something we see in the former
Soviet Union and in the former Yugoslavia.
Mr. Davis. Well, it is not uncommon, in fact, around the
world, is it?
Ambassador Butler. No.
Mr. Davis. What are some elements of civic culture that
would reduce corruption?
Ambassador Butler. The lack of NGO's, civic associations,
societies that serve as public watchdogs who are able to come
in and say money has been wasted on this particular project and
effectively become whistleblowers and can lobby in Baghdad or
in the provincial governments.
Mr. Davis. What would you say is the key government
capacity that is most important in establishing fighting
corruption, would it be the IGs, the CPI, the BSA? And how do
we prioritize?
Ambassador Butler. I wish I could point to one thing that
fights corruption. Corruption is a lot like a football game,
you have to play defense with the IGs and the other
investigative bodies, but you also have to play offense, and
that means you put in place the mechanisms, the technical
capacity to reduce the ability of people to put money in their
pockets or steer contracts to cronies or family.
Mr. Davis. We have heard a lot of questions about the
classification of documents. I guess really what I want to know
is allow you to say what steps the U.S. Embassy is taking to
assist the Iraqi government's counter-corruption. How are the
anti-corruption offices organized? What is the strategic plan
to assist in countering corruption? How many people do we have
involved with that and how much funding are we allocating?
Ambassador Butler. Over the last 4 years we have dedicated
significant Iraq reconstruction rehabilitation funds to support
Iraq anti-corruption----
Mr. Davis. What is significant? Can you give me an idea,
what is significant?
Ambassador Butler. I don't think I have a number for you.
Mr. Davis. To me, $1,000 is significant, but in a case like
this, what is--for some in government salary. What is a
significant amount, ball park, is it tens of millions?
Ambassador Butler. I would have to come back to you on that
one in writing, sir.
Mr. Davis. OK, I think we need to know that. OK.
Ambassador Butler. I will come back for the record, please.
Mr. Davis. OK. Keep going.
Ambassador Butler. That was to support both the CPI and the
board of the supreme auditors. As a result of the USG
assistance to the Commission on Public Integrity, the CPIs
conducted over 4,000 investigations and made several high
profile arrests, including the former minister of electricity
and minister of labor and a number of officials of the ministry
of oil, and referred more than 2,000 cases for prosecution to
the Central Criminal Court. INL also funds Department of
Justice resident legal advisors. These are U.S. prosecutors who
advise and mentor criminal court justices in all manners of
serious cases. We have also funded Department of Justice ISITAP
advisors and specialists to train and mentor the investigators
from the Commission on Public Integrity. There were 11 of these
investigators who came back with Judge Radhi to learn how to do
polygraphs. Every one of those investigators went back to Iraq
to get back to work with their new skills. IRF also works to
enhance investigative capacity of the CPI, as well as provide
equipment for their investigators.
And, most recently, we have just signed a grant with the
Organization for Economic Cooperation and Development for, I
think, about $1.3 million to complement efforts on the
international compact for Iraq--I am sorry, $1.6 million--to do
the business side of anti-corruption efforts, and this is
precisely our efforts to multi-lateralize a problem that we
have been attacking just by ourselves.
Mr. Davis. OK. Thank you.
Chairman Waxman. Thank you, Mr. Davis.
Mr. Lynch.
Mr. Lynch. Thank you, Mr. Chairman.
I want to thank the witness for coming forward. Look, I
know you said we get high marks for our job, but I am trying to
find evidence of that in the record here. We have an assessment
that currently there is no single office that has the authority
or responsibility for oversight, and to assure that all anti-
corruption efforts are focused on a common goal or that efforts
are being performed in an efficient manner. We have evidence
here that the Office of Accountability and Transparency has
been hampered from the beginning by a lack of support and
leadership. The office has only had one permanent director,
Judge Brennan, and he lasted a month. I heard he was doing a
good job, but, again, he was only there for a month.
Now, I know that the Inspector General, Stuart Bowen, had
recommended that you appoint a senior leader from the
Department of State to run the office, and yet we have evidence
that, actually, by default, the acting head over there was
actually a paralegal doing administrative work. So instead of
an experienced senior Department person, you have an
inexperienced paralegal. Hey, some paralegals are great, not to
run this critical agency.
There is a lot of testimony here that you are not getting
high marks, to be honest with you. And then when we ask you
about the level of corruption here, we are getting answers like
we don't want to talk about any broad statements or assessments
to judge the level of corruption in Iraq, and yet I think we
have sent over $450 billion over there so far. How does that
square with your constitutional responsibility and ours?
Ambassador Butler. The Embassy, the U.S. Government has
invested heavily in the last couple of years in broad-based
anti-corruption efforts. In the first instance this was the
playing offense side of it, to develop capacities in
ministries, and more recently, through the provincial
reconstruction teams, to develop capacities at the provincial
and municipal levels, which are showing very promising early
days.
Mr. Lynch. Well, let's talk about that. You tell me. You
tell me. You have this refusal here to testify in any detail
about the level of corruption in Iraq that we know is going on.
How do you reassure us in Congress, representing the American
people? They are looking for more money over there and, yet,
you won't even tell us about what you have found in terms of
the level of corruption and whether things are getting better
or worse over there. You won't get into any of the details that
the first panel talked about. How does that square? We have a
problem here. We have a problem of constitutional dimensions
here.
Now, I respect the job that you do, we all do, but it
appears that you don't have the same respect for the job that
Congress must do. We have an oversight responsibility. Not to
sign a blank check, but to find out how progress is being made
in terms of the resources that we have committed to this.
Ambassador Butler. Congressman, two things. One, we have
provided to the committee all the documents from the Embassy
that we were able to find related to corruption. Second, we
have made it clear that we are prepared to answer your
questions in an appropriate setting. We are prepared to do that
at any moment.
Mr. Lynch. Look, I will leave it at this. This is a matter
of transparency. Do you see the irony here? You are saying you
have actually established a Committee on Accountability and
Transparency for the benefit of the Iraqi people, and yet,
here, when we ask you to exercise the same transparency with
respect to your responsibility to the American people, you are
claiming that there is a level of confidentiality that is
required, that we can't actually tell the American people, the
American taxpayer what we are doing with their money. It is
just ironic that you are standing there.
And I know it is not your decision, sir; this decision was
made at the secretariat level. Let's be frank. And I know you
are just here doing your job, but it is totally disrespectful
to the American people.
Ambassador Butler. Mr. Congressman, the issues and the
aspects that are involved in the fight against corruption in
Iraq risks people's lives. You heard that from Judge Radhi
earlier today, what has happened to him and to his colleagues.
It potentially endangers the lives of fellow Americans who are
on----
Mr. Lynch. But, sir, if it wasn't for his testimony, we
would never hear about it, because you have a gag order on at
the State Department. It is his testimony that we are
discussing today. But the State Department has offered no clear
assessment. You haven't really fulfilled your responsibility to
the American people, in my opinion.
Ambassador Butler. We have provided the documents as
requested. We have also provided the witnesses, the individuals
that have been deposed in the last week, and we are prepared,
in a classified setting, to answer questions to our best
ability in detail.
Mr. Lynch. Very disappointed.
I yield back.
Chairman Waxman. Thank you.
Mr. Shays.
Mr. Shays. I am not disappointed with your testimony. In my
judgment, you are being asked to say that individuals in Iraq
are corrupt, and then we have to work with those individuals,
and I don't see how that helps our soldiers win in Iraq; I
don't see how it makes us safer in Iraq. I am accused sometimes
of being a pretty naive person. I don't think I am, but I am
accused of it. But the one thing I am willing to say is Iraq is
corrupt. We knew it under Saddam and we knew just because we
invaded them they wouldn't, all of a sudden, become pure and
uncorrupt. So I am not amazed by it, and I would be pretty
horrified if you started depicting every leader in Iraq that we
thought was corrupt.
I would also like to correct for the record if it is $415
billion or $600 billion. Those dollars are not what we are
talking about. We are talking about Iraqi government officials
ripping off their fellow constituency with their dollars, to
which we do not have control. And I love how we ask people in
Congress to let them have their autonomy and respect their
autonomy, and then when we don't like what they are doing, then
we say we have to step in and criticize them. So this is where
I think there is valid reason for this hearing. It is an
absolute waste of our time if we are, all of a sudden,
discovering that the Iraqis have a corrupt government. That
would be foolish.
The real issue is what are the things we can do to make it
less corrupt. That is the issue. And I think it was valid for
both the Inspector General and the head of GAO to say there
should be one person in the Embassy totally focused on that
issue. And I want to be on record as saying I hope that the
State Department will consider that recommendation. I think it
is constructive and I think it would be helpful.
I would like to ask you about your reaction to Judge al-
Radhi and his testimony. What I know of him is that he is an
incredibly honest and dedicated Iraqi who happens to be a Shia,
and that he has met the point where he doesn't feel that he can
continue. But I also heard him say that he was happy the United
States came in and removed Saddam. I heard him say that it
would be a huge mistake for the United States to leave. Is his
leaving Iraq--first, what is your impression of the job he did,
his testimony, and can you speak to that?
Ambassador Butler. Congressman, thank you. I can only offer
tribute to the courage and the tenacity of the judge, and his
departure from the scene is a blow. It may be a while before
somebody with his capacity and willingness steps in to replace
him.
Mr. Shays. Will it make it harder for Iraq to deal with
corruption when you lose someone who is so brave and so
talented?
Ambassador Butler. It depends. It depends on how the system
responds. It is possible this serves as a shock to the system,
but certainly Ambassador Crocker, this week, has ordered a
review of how the Embassy attacks anti-corruption. One branch
of it is how we develop capacity, and this is the offensive
side; creating systems where it is harder to be corrupt, at the
same time as continuing well-established track record on
developing Iraq's own sovereign ability to deal with
corruption. This is going to take time; there is no hiding
that.
Mr. Shays. Now, it is his testimony, I think, that he
didn't feel he got the help from the Maliki government that he
felt he deserved. Was that your reading of his testimony? I am
not asking you what you think; I am asking you what you heard.
Ambassador Butler. I didn't listen to all of his testimony,
Mr. Congressman.
Mr. Shays. OK. Well, the testimony was fairly clear that he
felt that he was taking a tough stand and was not getting the
support of the government.
Chairman Waxman. Since they offered to kill him, I would
say that is an understatement that they didn't offer to support
him. They threatened his life.
Mr. Shays. His testimony was he was not getting the support
and he felt his life was threatened. And I have met other
people like him, people like Fal al-Alusi, who has done very
brave things and his life is threatened. That is nothing new
for the folks that are trying to work on this government. So I
appreciate that he was here. He thinks it would be helpful if
there was someone within the Embassy that could be more focused
on this issue. I think it is a constructive part of this
hearing to which, Mr. Waxman, I thank you for helping to focus
attention on that issue. But if it is to say that people in
Iraq, the government is corrupt, given 35 years under Saddam,
there would be nothing that would tell me it would be different
now that you have a government, to which I might add is
concerned that we might pull the rug out from under them and
that they may not even exist.
Chairman Waxman. May I ask, Mr. Shays, do you think this is
an appropriate question? Has Prime Minister Maliki or his
associates obstructed any anti-corruption investigations in
Iraq to protect his political allies? Do you think that is an
appropriate question?
Mr. Shays. Of course. Is there anything that you would
think that I would think it wasn't appropriate?
Chairman Waxman. Well, Ambassador Butler refused to answer
it.
Ambassador Butler. Ambassador Butler offered to answer that
in a closed setting, Mr. Chairman.
Mr. Shays. In a closed forum. So I would answer your point.
I think things about the prime minister should be done behind
closed doors and let Congress decide and listen to the
testimony. I don't think we should have government officials be
exposing people in those leadership positions.
Chairman Waxman. Well, how about this question. Do you
believe that the government of Iraq currently has the political
will or the capability to route out corruption within its
government? Do you think that is a legitimate question to get
an answer to?
Mr. Shays. I would hope that the Ambassador would share
with us his sense of that, yes.
Chairman Waxman. Would you like to?
Ambassador Butler. Mr. Chairman, Mr. Congressman, we have
provided an assessment of the concrete examples of the Maliki
government's efforts on anti-corruption, as well as a general
overview of the Embassy's anti-corruption efforts, which is a
very appropriate subject for this hearing And the questions,
the messages intended to transmit back to Ambassador Crocker an
overall assessment of the Maliki government----
Chairman Waxman. How about an answer to that question?
Ambassador Butler. I would prefer----
Chairman Waxman. The question is do you believe that the
government of Iraq currently has the political will or the
capability to route out corruption within its government.
Mr. Shays. That is really a two-part question.
Ambassador Butler. It is an assessment. Again, I would
prefer, because of the nuance involved in it, to do that in a
classified setting, sir.
Chairman Waxman. Mr. Cooper.
Mr. Cooper. Thank you, Mr .Chairman.
Thank you, Mr. Ambassador. During this hearing today, we
have seen a pretty stark contrast. We saw, on the first panel,
Judge Radhi, who is risking his life to tell us the truth, and
here you are in the position of not being willing to risk your
career to tell us the truth. Now, I am not faulting you, most
people wouldn't want to risk their career, but we have the
responsibility of raising money from the American people to pay
for this war, and Judge Radhi told us, in his testimony that,
``The cost of corruption that my commission has uncovered so
far across all the ministries in Iraq has been estimated to be
as high as $18 billion.''
Now, maybe that is Iraqi money. My friend, Mr. Shays, tried
to make that point, but money is fungible. I think total U.S.
appropriations for reconstruction in Iraq has been about $20
billion. And if money is fungible and they can swap Iraqi money
for dollars, we may have been party to taxing American citizens
to pay for massive new levels of corruption heretofore unseen
in Iraq. We have been in the country for 4 or 5 years now; they
haven't exactly pulled out of the bottom of the ratings on the
corruption index.
The dispute we have had over what is an open testimony and
what is classified, the viewers should understand that it is
not what we hear in a classified session--we would like to
learn as much as we possibly can--but by hearing it in that
session, then we are unable to talk about it, so the taxpayers
don't get any new information. If you can't tell us here, they
will not learn a thing, and here, sir, the people rule. And
after 4 or 5 years than this, a longer engagement than World
War II, they are kind of wondering what we should do, and we
need to supply them with answers, and it shouldn't be an
ideological dispute.
Let me ask you. I talked about the Jones Commission before,
an excellent independent, bipartisan commission that reported
last month, led by Marine Corps General James Jones, and he
said sectarianism and corruption are pervasive in the Ministry
of Interior and cripple the Ministry's ability to accomplish
its mission to provide internal security to Iraqi citizens. He
said basically it is so bad we have to disband the whole thing.
What is your opinion of General Jones' view of the Ministry
of Interior's behavior? Is he right or wrong?
Ambassador Butler. Mr. Congressman, in 2004, the U.N.
restored sovereignty to the Iraqi government. The
recommendation as to what happens with the Ministry of Interior
and the police forces would be a decision for the Iraqi people,
the Iraqi Council of Representatives, and the Iraqi government.
Your first comment, my job here is to protect the lives and
the interests of the people that are in Baghdad and throughout
the country, from Irbil down to Basra. Some of the details that
have been alluded to would have the potential of compromising
their relationships and operations. I am sure you will
appreciate that. The military calls it operational security,
OPSEC. And the second part is our ability to have influence and
be able to maintain trust with our interlocutors in Iraq is
something which is very much covered by national security
information. It is a judgment call and I have an obligation to
them; not to my career, but to the people who can't be here to
answer your questions, but have a very hard job to do. Judge
Radhi and his colleagues risked their lives, some lost their
lives. He has left his country and his homeland and done a
courageous thing by coming before the committee. There are
folks still there who have to finish the job, and the job will
take as long as the job takes. I can't predict when it will
end.
I have never seen corruption entirely routed out or
defeated anywhere, but the Iraqis, because it is their country,
have to develop the capacities, and your oversight is more than
appropriate, it is very welcome to make sure that we in the
executive branch are doing what we are supposed to do, what we
can do to support Iraq develop the institutions and the
capability to reduce corruption to the point where it doesn't
affect economic development, where it doesn't fuel sectarian
tensions, and helps this country become a strong and vibrant
democracy.
Mr. Cooper. Marine Corps General Jones is as patriotic as
you are. Mr. Bowen, the SIGIR Inspector General of Iraq, is as
patriotic as you are. They are telling us what sounds more like
the truth than what you are, at least in an open setting.
A final point. I see my time is running out. Secretary Rice
said, in October 2006, ``They, the Iraqis, need to do more of
the kind of thing that apparently the interior ministry is
trying to do.'' So here she is in a public forum complimenting
the same ministry that General Jones tells us is so sectarian,
so corrupt, basically, the Iraqi police need to be disbanded.
Why is our Secretary of State saying things that are so
directly at odds with the Jones Commission?
Ambassador Butler. General Jones and his very distinguished
panel, who spent considerable time in Iraq in August and
September, did so as private citizens with considerable
extraordinary service in uniform to the country and the police
service as well. Chief Ramsey was a member of that Commission.
Certainly respected professional judgments based on what they
saw and heard out there, and we are looking very hard at it.
The Department of Defense, as you know, has primary
responsibility for the Ministry of Interior and the Ministry of
Defense.
Mr. Cooper. I see that my time has expired, Mr. Chairman.
Chairman Waxman. Mr. Tierney.
Mr. Tierney. Thank you, Mr. Chairman. I don't think the
American people would sit by idly and quietly if we were having
secret discussions about $18 billion worth of taxpayer money
going out the door through corruption, and I don't know of any
situation where corruption has ever been defeated or diminished
with secret meetings, as opposed to shining light on it and
bringing it out into the public light and the public coming
forward, whether Iraqi citizens or American citizens, demanding
something be done. I mean, these hearings are about finding out
who is corrupt, how that corruption is playing out, what should
be done to stop the corruption, and to the extent our
government is, what are we doing about it and how is it going.
We are not doing very much, when Judge Brennan, the former
Director of the Office of Accountability over there says he is
not aware of any coordinated U.S. strategy to fight corruption
in Iraq; when James Santelle, who supervises the activities of
that OAT organization and is the Rule of law coordinator for
the Embassy, told us you have a system where the coordination
is lacking; and Michael Richards, the Executive Secretary of
the Anti-Corruption Work Group, says basically he would like to
be able to say that they have done quite a bit in this area,
but, unfortunately, they have not.
Vincent Foulk, a senior consultant in the Office of
Accountability and Transparency, was the primary drafter of two
reports issued by the OAT, in December 2006 and another in July
2007. Those reports assessed the anti-corruption efforts of the
Iraqi government, something you feel now would be a real high
security risk to divulge. According to him, these reports were
not classified when they were drafted, they were not classified
when they were issued. They were, instead, marked sensitive but
unclassified.
Now, both Christopher Griffith, Senior Advisor to OAT,
Judge Arthur Brennan, the former Director of OAT, as I have
said, confirmed that those reports were not classified when
they were issued and they were not classified when they were
drawn. Are you aware of those reports?
Ambassador Butler. Mr. Congressman----
Mr. Tierney. Are you aware of those reports, sir? I have
only got 5 minutes, and I really want answers more than talk.
Ambassador Butler. I have, in the last couple weeks, become
aware of working documents prepared by OAT.
Mr. Tierney. OK. Were you aware that those reports were not
classified when they were drafted and issued by the Office of
Accountability and Transparency?
Ambassador Butler. We only found out 3 weeks ago these
documents, working documents, even existed.
Mr. Tierney. All right. And did you become aware that those
reports have been widely distributed, both within the Embassy
and with other relevant agencies, by e-mail?
Ambassador Butler. They were not widely distributed within
the U.S. Government.
Mr. Tierney. You say they were not?
Ambassador Butler. Well, if we would have been, we would
have known about it in my office.
Mr. Tierney. Did you know that they were apparently
distributed to others, although maybe not your office,
surprisingly so?
Ambassador Butler. I am unaware of the distribution of
these internal working documents of the OAT.
Mr. Tierney. Interesting. Well, Scott Winne, the Acting
Rule of Law Coordinator for the U.S. Embassy in Iraq, told the
committee staff that he was asked to do a classification review
of those reports shortly after this committee went and asked
for those reports to be given to the committee for this
investigation. Mr. Winne then told the committee he had never
even done a classification review before. So why is it that
when we asked for these documents, Mr. Winne is suddenly asked
to review the documents for classification, when he has no
experience in that field at all?
Ambassador Butler. I am reminded of the very first security
infraction and almost the last one I had in the Foreign Service
was as a junior officer. I wrote a message back to Washington
that I marked unclassified, and when it went to my superior, he
upgraded it to confidential. I didn't spot it, tossed it in my
wastebasket when I finished with it, and got a pink slip from
the Marine the next day.
This is the responsibility of classification authority.
These documents were not properly classified and, according to
the Embassy, have subsequently been appropriately classified
given the sensitive nature of the information contained
therein.
Mr. Tierney. This report, the one you thought wasn't
circulated, was first given to Ambassador Saloom and his chief
of staff. Five days later it was given to the Anti-Corruption
Working Group, the entire group; and then it was given to the
Rule of Law Coordinator and others. So apparently you were out
of the loop, but it was distributed broadly within that group
on that basis.
Ambassador Butler. Congressman, every person you have
mentioned is inside the Embassy.
Mr. Tierney. It also went to the GAO and the Special
Inspector General.
Ambassador Butler. It did not come back to Washington. We
were unaware of the existence of that report.
Mr. Tierney. So that is the key, as long as it doesn't come
back to Washington, it can be disseminated around the Embassy,
to the GAO and to the SIGIR?
Ambassador Butler. My understanding is this was an internal
draft working document which had not been blessed as an Embassy
document.
Mr. Tierney. And you thought it was important not to share
it with this committee, to have it accepted as a classified
document?
Ambassador Butler. We provided it. Your committee staff was
able to review it upon us finding out about it, and we provided
hard copies shortly thereafter, sir.
Mr. Tierney. Can you see at all or appreciate at all the
fact that this committee, and probably the public, finds it
bizarre that something gets retroactively classified on a
public hearing about corruption which weighs on the safety of
our men and women over there? The testimony today is some $18
billion--that is without looking at the oil ministry, without
looking at the interior ministry--of money that, according to
testimony today, is going in the hands of militia, those same
militia that are shooting at our troops, and your story is,
well, we can't talk about that publicly, it is embarrassing to
us and it might get the Iraqi government upset when the public
knows that they are engaged in it as well.
Ambassador Butler. Congressman, you phrased that well. The
safety of our men and women in the Embassy and those who are
working on the anti-corruption deserve the protection of the
proper classification of that document.
Mr. Tierney. What they deserve, sir, is a full
investigation so that we understand the depth and breadth of it
so that we can do something about it, instead of having people
say that it is a disorganized department, a system where the
coordination is lacking, where there is no awareness on the
part of the director of OAT of any coordinated U.S. strategy to
fight corruption, and where that money that is being corruptly
taken out of circulation is given to militias who are shooting
at our people. That is why we are having the hearing and that
is why maybe we will wake you all up so that you have a
coordinated effort at OAT and the working group and start doing
something about it, and we will find out who is involved with
it and get it done so that our people aren't being shot with
weapons bought from money as a result of corruption.
Chairman Waxman. Thank you, Mr. Tierney.
Ambassador Butler, Stuart Bowen and David Walker testified
earlier today that there is a lack of leadership undermining
the anti-corruption efforts at the U.S. Embassy in Iraq. Mr.
Bowen and Mr. Walker are certainly not alone in that sentiment.
We have also heard in other interviews from several Embassy
officials that there is no coordinated strategy for fighting
corruption in Iraq. Now, maybe you don't want to talk about
this issue because the U.S. Embassy is not doing its job. How
do you respond to that?
Ambassador Butler. The SIGIR report of July did a couple of
things, and the previous year. One, that there should be a
consolidated anti-corruption strategy, which was prepared in
2006; and then, subsequent to this year's SIGIR report,
Ambassador Crocker has convened and designated a person to
conduct a full anti-corruption internal organization review.
Chairman Waxman. So you are doing better.
Ambassador Butler. We are attacking the problem when we
find the problem, sir.
Chairman Waxman. Well, we learned, a couple days ago, when
we looked at Blackwater, which works for the State Department,
that there was no real oversight that the State Department was
providing with regard to Blackwater troops, and they are a
private military. Now I am wondering what kind of job the State
Department is really doing, with this conflicting testimony, in
oversight in terms of anti-corruption efforts, and I think this
is going to be a serious matter that we are going to have to
review.
I also want to just end by saying that I think your
position is absolutely absurd that you cannot answer questions
in an open forum that the American people are entitled to have
answered before we appropriate more money to put into this war
effort in Iraq. I just cannot understand it. So when I say we
are going to have a confrontation with the Secretary, we want
to know whether the State Department is doing its job of
oversight with the private military that they have employed;
whether they are doing their job of oversight with regard to
anti-corruption efforts, which our Embassy should be supporting
more strenuously; and we want to know why the State Department
is refusing to talk to Congress and give us answers to
questions that ought to be given in a public forum.
So I put that out there not to have you address it, but I
just want to put you on notice and the State Department on
notice that we are going to have to resolve these matters.
Mr. Davis, anything further before we move on?
Mr. Davis. Well, let me just ask what is the long-term hope
over there? We are spending over half a trillion dollars to try
to bring democracy and the rule of law to this country, and the
question I think a lot of us face is are we giving birth to a
democracy or are we babysitting a civil war.
Ambassador Butler. Mr. Davis, that really is the
fundamental question, and my faith is in the people that are
working on this, both in the men and women in uniform under
General Patraeus' command and the men and women who work for
Ambassador Crocker. Democracy is not easy; it is hard. It takes
time, it takes imagination. We have a phenomenal team out
there.
And I very much, Mr. Chairman, value your candor and
appreciate the committee's attention to these issues because
corruption is something that I have had to deal with in just
about every assignment I have had in the last decade. This is
hard. I have never seen anything as complicated as presents
itself in Iraq, with a combat zone going on, the influence of
the neighbors, and add to it the oil resources. I am confident
that Ambassador Crocker is the right leader. He will, together
with Jim Santelle, the head of the Rule of Law Department, get
that part of it organized.
At the same time, what we haven't really emphasized this
very much, Mr. Davis, but the efforts to develop the capacity
of the Iraqis themselves, invest in people, invest in sort of
help us, bureaucracies. They are able to deliver services and
support the democratic institutions that are accountable to the
people and that the Iraqis themselves can be proud of and not
afraid of. I think we share that goal.
Mr. Davis. Thank you.
Chairman Waxman. Thank you for your testimony. Just for the
record, total funding for ongoing and planned anti-corruption
activities through June 15, 2006 was approximately $65 million,
or less than .003 percent of the total Iraqi IIRF funding to
date. That is just so we have a perspective of how much we are
doing financially in that area.
We are now being called for a vote. We will respond to the
vote and then come back and here the last witness.
[Recess.]
Chairman Waxman. For our last witness, we are pleased to
welcome Claudia Rosett, a journalist in residence at the
Foundation for the Defense of Democracies. We are pleased to
have you with us today. It is the custom of this committee to
ask all witnesses to answer questions under oath, so if you
would please stand.
[Witness sworn.]
Chairman Waxman. Thanks. Your prepared statement will be
made part of the record in full. We would like to ask, if you
would, to present your oral statement in around 5 minutes. The
button on the base of the mic you need to push.
STATEMENT OF CLAUDIA ROSETT, JOURNALIST IN RESIDENCE,
FOUNDATION FOR THE DEFENSE OF DEMOCRACIES
Ms. Rosett. Good afternoon, Chairman Waxman, Ranking Member
Davis, and members of the committee, wherever you are. Thank
you very much for the chance to testify here today. I hope I
can be of some help in providing some background and context
for what you have been discussing. These are extremely
important matters.
Is the mic at a good distance here? OK.
In listening to it, there are a few things I want to
mention because I think they may be important, and I could not
agree more with you that corruption is a huge problem, and it
is one that should concern people, whatever side of the aisle,
whatever. A brief story I want to tell you.
I worked in Russia in the mid-1990's; I was the Moscow
bureau chief for the Wall Street Journal, a reporter there
before that. And there were no rules at that point; the Soviet
Union had just collapsed and it was very hard to know what
applied anywhere, except corruption was the way. Anything that
worked worked by corruption. And there came this horrible cold
day and the Iranians down the hall were trying to make the fuse
box work again, and I had to file a story and I couldn't get
anywhere. Finally, in misery and desperation--it was freezing--
I called a man who won a Nobel prize in economics for looking
at the interaction between political institutions and
economies, exactly the nexus where corruption takes place. His
name is Douglass North, back in the States. And I said, how
long is it going to take for them to sort out the institutions
so that this place works. And he said, oh, about 50 years. I
thought, oh my God.
That is, I think, the real time horizon. And if I could
just suggest--what I want to get to is Iraq was immensely
corrupt before the period that you have been discussing, in the
time when Saddam was there, and it is terribly important in
understanding how to address this. I don't think anybody here
who praised the Judge and understands some of the problems
there, wants to simply leave it, but to understand it matters
greatly there are different kinds of corruption, and it is
something that is extremely complicated to clean up. I have
seen it in countries in the Far East, in the former Soviet
Union, and I have spent the past 5 years looking at how it
worked when Saddam Hussein was in Iraq, because it was
intimately entwined with the United Nations Oil for Food
Program, which I have reported on and reported on.
Corruption is something that tends to sort of improve as a
place becomes more democratic, but it is an organic process; it
is not something where you can sort of do it step by step. It
is also not all about fighting it with agencies. There is a
tremendously important component that comes with simply getting
rid of bad rules. It is the difference between, say, a
Bangladesh with very high tariffs, where trading in just normal
goods like soap and socks can be illegal and corrupt, and Hong
Kong, where it is a free market and it is legitimate trade, and
there is not such reason for officials to have their hand out.
Any time you see these levels of corruption as you do in Iraq,
and have for a long time, that is a big part of the problem.
A further item that I think just needs consideration. This
can be discussed and explained in many ways, but corruption
does not necessarily bring down governments. That may be
unfortunate, but I did in fact print out the Transparency
International latest list just out, and in my written testimony
mention that Iraq is third from the bottom. But they are
bunched up, a great, great many countries, way down near the
bottom on the scale of 1 to 9, and if you look, you will also
see that Iran is not so different. Would that it were the case
that enormous corruption would just hollow out and bring down a
regime. It doesn't necessarily follow in that way. One can
deplore it and, yet, countries on this list, sort of very close
to this level of corruption, include some like Russia, Syria,
Azerbaijan, Belarus--where the dictator has been in power for
years--Venezuela, and so forth. So just to say this is a
complex scene.
And in the short time here, something important to
understand in Iraq, under Saddam Hussein it was immensely
institutionalized. Corruption was so much part of the
government that one of the fascinating scenes in a Federal
trial that just concluded with a guilty plea in New York on
Monday was an Iraqi witness who ran the corruption data base
for the oil ministry. In the hundreds of millions of dollars of
kickbacks that poured in when Saddam began collecting kickbacks
on Oil for Food contracts, they actually set up, officially,
inside their state marketing organization, an entire section
data base, cabinets, employees, who did nothing but track
graft. And this really was graft; it had to come through front
companies, it was something that violated the agreements that
Iraq had struck with the United Nations. It was also graft in
the sense that it was skimmed away from money that was supposed
to go for the relief of the Iraqi people. It went, instead, as
we know, for palaces, weapons, convention, but still deadly,
and all the other things that Saddam Hussein liked to do with
it.
When his government fell, in a sense, the same kind of
thing as happened in the former Soviet Union. This corruption
was, in a sense, privatized. It was no longer sort of the
state. The state under Saddam was Saddam, so when he decided to
have a collection for kickbacks, as the Judge said, oil was for
Saddam and his family. That oil was the main source of--that
was almost the only source of foreign exchange for Iraq.
Mr. Waxman. Is it fair to say that what happened is that,
under Saddam Hussein, corruption was centralized, and then when
he was gone, it was like the head cutoff and corruption spread
much further, to others who could be corrupt independently?
Ms. Rosett. It was spread, even at that point, in the sense
that oil was for Saddam, but there is huge evidence,
documentary evidence that I have looked at and is publicly
available from many of the investigations into the U.N. Oil for
Food Program, that the ministries, some of the ones that you
are also concerned with, the Ministry for Sports--if you run
through the list--the ministries, many of them which were
involved in the humanitarian contracts, also had kickback
deals. So it was institutionalized there as well.
What has been inherited by the Iraqis, by everyone who is
dealing with this right now, the Americans, anybody, is a
system in which, really, every part of the system--these were
fractals--had something like this going on. The evidence I have
seen suggests that Saddam had a very, very organized way of
raking in all the oil graft, of the money. The rest of it was
more difficult for him to control. In fact, in my written
testimony I mention the best report put out on the subject in
2002, even before his fall, by the Coalition for International
Justice, which talks about the Uday-Qusay--remember them--
Hussein rackets, and they were jockeying sort of like, you
know, the Sopranos of Iraq, for who would control the turf, who
would have the cigarettes, the----
Mr. Waxman. Do you think that the fact that the corruption
that we are seeing now is making it harder for the Iraqi
government to reconcile the different ethnic groups--the
Shiites, the Sunnis, the Kurds--and do you think that the
corruption that is going on now is making it more difficult for
the Maliki government to have the legitimacy with the people of
Iraq?
Ms. Rosett. I think that it would be a wonderful thing if
the connections were that linear. I am trying to think how to
explain it because it is a more complex set of interactions
that go on.
Mr. Waxman. Well, do you think this is one of the factors
that works against the goals of reconciliation in Iraq and
legitimacy for the government?
Ms. Rosett. Oh, corruption is terrible in any setting,
absolutely.
Oh, and there is one other thing I meant to say to you. I
fully agree that it would be a highly useful thing were the
State Department to be far more open. I would, if anything,
suggest taking it back some years. I think, at this point,
there may be less ability to influence things that way than
there was. On the other hand, what is the point? We go forward.
I think one should go forward. But I share the frustration of
trying to see documents that I think should be publicly
available. My own experience was it took 5 years from the time
I called someone at the U.S. Mission in early 2003 to say I see
generic signs that, in this debate over whether or not the
United States should go into Iraq, the members of the Security
Council have been bribed by Saddam Hussein, because his graft
also radiated out, you know, it affected everything that came
close. When Charles Duelfer said, in testimony 2 years ago, it
poisoned everything it touched, that was the system that Saddam
set up.
And I think there was a moment when we first went in--I am
giving my own view--sort of like the first day on a new job,
when you have a chance to do things, where bringing out what
was, at that point, clear and yet very hard to document might
have helped. It might have said, you know, we won't put up with
this while there was a chance to set some terms. That didn't
happen. It took until the following year, 2004, when an Iraqi
newspaper, Al-Mada, published what we now know as the Al Mada
list, a long list of people on the take simply on the oil side
of the graft, in that program that had become the Iraqi
economy, basically.
Mr. Waxman. Isn't there a problem in Iraq in trying to
figure out how to deal with the sharing of the oil revenues
because it is so much a major part of their economy?
Ms. Rosett. That actually----
Mr. Waxman. Because I know our government has tried to push
them to adopt legislation for greater sharing of those revenues
so people could all feel they have a stake in the future of the
country.
Ms. Rosett. I will give you again my own prescription, and
one I wrote in 2002, but many people wrote many things. I think
they will have this problem, I would actually say I think part
of the problem, corruption is a symptom. Let me back up and try
just an economic slant on this.
Corruption is basically, what is a corrupt deal? There are
many ways and levels in which you can engage in it, but
basically it is putting a price on a transaction. It is saying
you want something done? OK, but I can get that done for you; I
have discretionary power, but there is a price. It is a pricing
mechanism for things that, in a society with integrity, ought
to just happen; the government should do the things for you,
not make you pay for it. And in that sense the oil is one of
the things that makes for immense corruption, as long as it is
in the public domain.
My own recommendation actually has been, from the
beginning, unless it is privatized, I mean, the way it really
should be dealt with is sell it off to private companies and
distribute the revenues, whatever is raised by that to the
people of Iraq. What that does is it removes from the public
domain that endless tempting pot, which I actually think
explains a great deal of the war that is going on there right
now.
Chairman Waxman. That is a very interesting point. I see my
red light is on, so I am going to call on Mr. Davis to ask you
questions.
[The prepared statement of Ms. Rosett follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Davis. Well, thank you very much for your experience
and insights on this. Iraq, right now, is a fledgling democracy
in the middle of war. How do wartime circumstances exacerbate
the corruption?
Ms. Rosett. Well, in a normal economy they would tend to
make it worse because the government would put on regulations
and rationing. But Iraq hasn't had a normal economy in decades.
Mr. Davis. They never did, did they, really?
Ms. Rosett. I think the problem of how are people choosing
to spend their money--this may sound odd, but, again, I am sort
of thinking of the economic view of this. And could I just
suggest we have heard a lot from the State Department today and
from bureaucrats who use phrases like capacity building. I
don't think anyone who uses the phrase capacity building is
going to be able to think past that jargon to figure out what
really needs to be done.
Mr. Davis. Well, do you think the State Department is doing
enough?
Ms. Rosett. Sorry?
Mr. Davis. Do you think the State Department is doing
enough?
Ms. Rosett. Actually, I think they are doing the wrong
things. They are doing too much of what they shouldn't and not
enough of what they should, and I think what they ought to be
doing is, first of all, to whatever extent they can, looking
for ways to reduce all these mechanisms that make it possible
for people to collect graft. What is it that people are selling
when they collect graft, when corruption happens in Iraq? Oil
is one of the things that fuels it. That is what I was going to
say. I think, flip it around. As long as there is oil in the
public domain, it will be extremely difficult to deal with
corruption. That is the reason, if you look at the OPEC lineup,
with the exception, basically, of Norway, they are enormously
corrupt states.
Mr. Davis. Well, that is because the democracies there have
never had to face the contract between being taxed for services
and getting the buy-in because the money has come too easily,
basically, right?
Ms. Rosett. That is exactly right. And when you have to
haggle out with the people you are collecting the taxes from,
you have a great deal more--you know, take a country--I lived
in India years ago, and corruption was----
Mr. Davis. So, basically, the oil exacerbates that
corruption.
Ms. Rosett. Yes. It has done it in Russia; it has done it
in Venezuela; it has done it--where is that transparency list?
It is no accident, yes. I mean----
Mr. Davis. So you were explaining what the State Department
ought to do differently. You were saying they are doing the
wrong things.
Ms. Rosett. I am going to say something that probably will
sound crazy, but let's put it on the record.
Mr. Davis. That is all right.
Ms. Rosett. The biggest favor anyone could do to actually
help end corruption in Iraq would be destroy their oil wells.
Leave them like the people in Hong Kong, who sat on a rock and
thought what can we do with ourselves, or the people in Taiwan,
who ended up there, too many of them on an island, and had to
figure out ways to earn a living, where there wasn't somebody
doling it out or people fighting for this immense source of
wealth. However, I understand the State Department probably
isn't going to go bomb the oil wells of Iraq.
Mr. Davis. No, but that is a good observation. You know,
the fastest growing Arab economy in the Middle East is Jordan,
and they have no oil.
Ms. Rosett. Exactly. And that is no accident.
Mr. Davis. Correct.
Ms. Rosett. It is the great curse. In fact, it is the same
thing--some of the most perceptive Russians said to me when I
was working there, and that is one of the problems here. In
other words, it is so tempting to talk about fighting
corruption in terms of set up an agency, do a study. There are
things that, if we had privatized that oil when we first went
in there--and you could see the complications. There would be
an outcry: oh my God, is that trying to steal it? It would have
been terribly important. If there is ever any political way to
do it--I don't see really how you would, but you are the
politicians, I am not.
What I can see is if there were any way to do it, the money
should go to the people of Iraq. That is the patrimony that
right now, in theory, they own, but in practice what they get
for it is wars. And it is looking for some way to deal with
things like that can actually help. As I mentioned, I am not
familiar enough, right now, with what are the nest of rules of
claims of things that Iraqis have to bribe for. I am much more
familiar with what it was when Saddam Hussein was doing
business. That was quite obvious.
Mr. Davis. Do you know how this operated under the British
mandate? I mean, you know the level of corruption? The British
usually ran a pretty clean area.
Ms. Rosett. Yes. Well, one of the things that was much
harder to buy under the British was any semblance of law. I
mean, any system will have some corruption, but part of--I saw
it at work in Russia. It is frustrating, it is heartbreaking.
You can see what is needed and it is extremely hard to bring
into being. Thus, that answer of 50 years, when Douglass
North--he wasn't kidding. But back up for a minute. Look at
what was going on in Europe just after World War II. Germany
was a disaster. I mean, Graham Greene wrote wonderful novels
about how corrupt things were in those times. That was the
third man, Orson Wells selling tainted penicillin, you know,
laming children so he could live well, the sort of symbol at
the time. You know, it takes a long time.
And I realize the question you have been asking at the
hearing today is, is there a sign of hope. I would suggest
there is in the following sense. Under Saddam Hussein there was
no hope; it was built into the system in ways where, as long as
he and his circle were there, nothing could change. Now there
is some hope and there are some signs that I think matter. That
Al Mada list I mentioned earlier, a Baghdad newspaper at least
could print a list of the corrupt people; they can discuss it
to a degree they could not.
Chairman Waxman. I am going to ask you to hold that and
recognize Mr. Van Hollen. He may be pursuing the same lines of
questions.
Mr. Davis. Mr. Chairman, let me just thank our witness. I
am going to leave, but thank you for being patient and thank
you for adding your observations.
Ms. Rosett. Oh, thank you.
Chairman Waxman. Mr. Van Hollen, do you have questions of
the witness?
Mr. Van Hollen. I just want to thank the witness. I caught
some of your testimony actually on the internal monitors, as
you started off your testimony. I think we can all agree this
is not a partisan issue in terms of the desire to fight
corruption, that Republicans and Democrats alike would like to
join in that effort. And having been a journalist, I would
assume that you think that publicizing or exposing corruption
is one way to fight it. Wouldn't you agree?
Ms. Rosett. It is a pretty good way, yes.
Mr. Van Hollen. I mean, we have a saying around that
sunlight is often the best disinfectant, meaning if you allow
the public to watch what is going on----
Ms. Rosett. I usually call it daylight, but I like that,
yes.
Mr. Van Hollen. Daylight, OK. But, I mean, you would agree
with that general proposition, would you not?
Ms. Rosett. Yes, I would.
Mr. Van Hollen. So I find it very curious that the State
Department has taken the position that even talking about
corruption in Iraq in open is somehow a bad thing, because you
would think one of the best tools we could use to try and clean
it up and make sure that funds were better used would be to
expose the problem in public. Wouldn't you agree?
Ms. Rosett. I would. I think they are making a mistake.
Could I back up, though, and just say one thing I think is
terribly important to put in context, and it is that they
should have been doing it for years. Again, it is what I was
saying before. This thing has deep roots, long legs, and has
morphed as it has gone along. I am not convinced, from the
tangible signs one can see, that there is more corruption in
Iraq than there was, say, during the final years under Saddam,
because I think you need to ask the further question corruption
of what kind. What is it buying, what is it doing?
Mr. Van Hollen. If I could just----
Ms. Rosett. But basically what I am saying is, oh, yes, I
think they should have exposed the documentation they had on
corruption under the U.N. Oil for Food Program. I think they
should have spilled out documents as soon as they went into
Baghdad and began finding them. And, yes, I do think they
should be producing more today.
Mr. Van Hollen. Right. I mean, obviously, the regime of
Saddam Hussein was a terrible regime. It was a regime we did
criticize openly in many, many different ways, for lots of
their actions, but----
Ms. Rosett. No, no, you have no idea. The frustrations that
you have been experiencing I found in trying to get
documentation.
Mr. Van Hollen. I understand. But we did invade Iraq with
the government of Saddam Hussein and now, of course, we are
there. We had the interim government and we had the coalition
authority, and the fact of the matter is we are now, wouldn't
you agree, in a much better position, if we chose to, to affect
the problem of corruption in Iraq than we were under the regime
of Saddam Hussein? You would agree with that, would you not?
Ms. Rosett. Yes.
Mr. Van Hollen. OK. So I guess the question is why we have
spent such a measly amount of money in terms of fighting
corruption.
Ms. Rosett. Wait, no. Actually, no, wait. Can I back up? I
think we would have been--no, I think it would have had,
actually, an extremely salutary effect if we had been--we, who
is we? If the U.S. State Department, if the U.S. Government had
been--I am not with the government, I am a journalist--if the
U.S. Government had been forthcoming at the time, had been
open, had said here are the documents showing what is going on,
who is doing these deals. I think that would have actually
possibly even headed off this war, OK? That is how important I
think it was. But I agree it should happen now.
I would link that to something very important. I think, as
an argument for saying let's abandon Iraq, to me, it doesn't
hold up because what is it we are trying to achieve there? You
know, would it be, then, less corrupt if we left? I don't think
so. I think, again, the Judge put it very well; I think
predatory neighbors would move in and it would be hell, beyond
anything they are seeing now. Should America care about that?
That is a subject for another hearing, I think.
Mr. Van Hollen. But you would agree, would you not, that
the failure of the State Department to sort of publicly address
this issue makes it easier for it to continue. In other words,
if you were to shine a light on this problem and publicly
address the problem, you are more likely to be able to solve
and confront the problem, isn't that the case?
Ms. Rosett. Yes, I agree. I can see a case for hiving off
what is probably the 2 or 3 percent of whatever the actual
documentation or evidence is that does in fact involve mortal
danger to somebody. I am all for that. But the other 80 or 90
percent, yes, put it out there. I think--over and over again we
see, with diplomatic institutions--I see this all the time. My
main focus in recent years has been the United Nations, but the
State Department is in some way akin to that kind of thing. We
see the argument that we can't rock the boat; you mustn't shake
people up; we don't want to disturb anything. Very often people
are not fools. You know, Iraqis know if there is corruption. It
has real effects. It is better to say here is the problem. And
if that needs to be accompanied, for purposes of U.S. politics
or security, by the argument that it is terribly important that
we be able to sustain a government in Iraq one way or another,
fine, but, yes, better to tell the truth.
Chairman Waxman. Is it safe to say that if the State
Department won't talk in an open forum about corruption in
Iraq, the people in Iraq are still going to know whether there
is corruption in Iraq?
Ms. Rosett. Of course. They will not know it in the same
way.
Chairman Waxman. That was a rhetorical question.
Mr. Van Hollen. Let me just close. I think that also raises
the question about why they won't talk about it. People in Iraq
know why they won't talk about it in an open forum here, I
think, frankly, is an attempt to hide a very real problem going
on in Iraq from the American people.
Thank you very much, Mr. Chairman.
Chairman Waxman. From the American people, not the Iraqi
people.
Mr. Shays.
Mr. Shays. Thank you, Mr. Chairman. Thank you for having
this hearing and thank you for the witnesses that you have
asked to step forward.
One of the advantages of missing your testimony, which you
summarized, is I actually read your whole testimony, and it is
pretty stunning, because what you basically say is that Iraq
has been a corrupt country for any number of years, but it had
a unique kind of corruption because it was using the apparatus
of government under Saddam to become even more corrupt----
Ms. Rosett. That is right.
Mr. Shays [continuing]. And that the Oil for Food Program,
which, by the way, our committee exposed, we led the charge on
and you were a witness, and a wonderful witness, the Oil for
Food Program institutionalized the corruption in a very public
way within Iraq.
Where I might disagree with Mr. Van Hollen and my very
distinguished and sincere chairman is that I believe that the
Iraq government is thoroughly corrupt based on what it has
been, and I believe in part it is corrupt because there are
some in the government who, if they thought it would be a
government that would last and so on, that they would be more
willing to invest and say, OK, I will make money in the long
run through a less corrupt way, but if they think that we are
going to pull the rug out from under them, some are just going
to cash in on a government they think is going to fall.
And I will say parenthetically one of the reasons why I
think we need a time line to tell those who think we are going
to pull the rug out from under them we are not, and to tell
those who think we are going to stay forever that we are not
going to stay forever in the way that we are now. That is an
editorial comment.
What I would like you to comment on is just explain in your
words how the Oil for Food Program has created almost a unique
form of corruptness within a government.
Ms. Rosett. Sure. What it did was where, as you heard the
Judge say, Saddam had sort of taken all oil for himself and his
sons and his immediate cronies, this made it an internationally
approved system in which basically he was handed all rights to
dispose of all the oil, to conclude all deals, and this was
under U.N. sanctions. It was a truly poisonous mix, in other
words. Iraq was enormously corrupt, from what one can read,
before sanctions were imposed----
Mr. Shays. So what he did is he undersold his oil and got
kickbacks----
Ms. Rosett. Yes.
Mr. Shays [continuing]. And he overpaid for commodities and
got kickbacks----
Ms. Rosett. Yes.
Mr. Shays [continuing]. And anyone who did business with
him was doing business with the government, which they knew was
corrupt.
Ms. Rosett. Yes. And what happened was--you need to
understand the U.N. Oil for Food Program. Let me just, in very
brief----
Mr. Shays. No, you need to be short because I only have 3
minutes left here. So give us the short version.
Ms. Rosett. OK. Basically, any money he could skim out of
these oil flows, which were meant to buy relief for people in
Iraq, was his to do whatever he wanted with, and this produced
enormous incentives to, in every way possible, set up
clandestine channels, front companies. This created a pool of
talent the same way in Afghanistan.
Mr. Shays. So he couldn't do it by himself; he had to
engage his citizens in this effort.
Ms. Rosett. He had an entire bureaucracy, and that was this
Iraqi who was brought over as a witness for the prosecution----
Mr. Shays. So rather than teaching a government to be
honest, he was basically, you were getting an education under
his government how to work of the state and be corrupt.
Ms. Rosett. That is exactly right.
Mr. Shays. OK. So I am at this point. I go to Iraq a lot
and I meet a lot of people, some who I think are trying to make
it a better place; some who I think are trying to make it a
better place and skim money off of it. If in fact a particular
leader or a number of leaders are corrupt, what is the value in
the State Department, let's just say Maliki. What would be the
value and how would it help us work with Maliki to say that he
is in fact corrupt? How is that going to make our troops safer
and how is that going to make us ultimately help change Iraq?
Ms. Rosett. I am not sure that we need to pronounce him
corrupt. I am speaking as a journalist here. I think that
documentation speaks. I mean, it is not necessarily the job of
the United States; it is the job of Iraqis.
Mr. Shays. Have you met anyone who thinks Iraq isn't
corrupt?
Ms. Rosett. No.
Mr. Shays. Everyone knows Iraq is corrupt, so we know it.
So really the issue is what do we do to make it less corrupt.
That should be our goal. I know it is the goal of the chairman.
The question is how do we do that. Is exposing every leader
that we think is corrupt going to make it less corrupt is my
question.
Ms. Rosett. I don't----
Mr. Shays. Bottom line is we don't know.
Ms. Rosett. Yes. You know what I think? I think that it
does matter to actually see when, the danger here is that you
can start selectively targeting people, who do you want to pick
off----
Mr. Shays. OK, let me----
Ms. Rosett. I think it is not necessarily--I am not going
to make policy----
Mr. Shays. OK, here is the answer that I would have given,
and tell me how you react.
And thank you, Mr. Chairman, for letting me run over here.
What it seems to me is when we see a corrupt act, when we
see a payoff, when we see this, we expose the act and then let
people go to see who performed the act. And it would seem to me
that should be our emphasis, where do we identify a specific
action of corruption.
And I do agree, Mr. Chairman, with this point. I totally
agree with it. If we have a witness that says Mr. Maliki or
someone else--and he was under oath, I believe?
Chairman Waxman. Yes, all witnesses before the committee
are.
Mr. Shays. Is under oath, is saying to us that a specific
person basically told me if I did this my life would be in
danger. Now, if he is saying that someone else is going to make
your life in danger, that is one thing, but if he is saying I
am going to make sure your life is in danger, I think that
needs to be exposed. I do totally agree with that.
Chairman Waxman. Would the gentleman yield to me?
Mr. Shays. Absolutely.
Chairman Waxman. I asked Judge Radhi do you think that
Prime Minister Maliki is corrupt, and he said to me I am a
judge, I can't make a decision on a point like that; I can't
say that. But he said what I do know is that he stopped
investigations of corruption of some of his relatives.
Mr. Shays. And if I could, and that, I think, is the key
point. It is kind of what I am learning from this. The way he
said it is the way I think we ultimately get at it, because he
is basically stating fact and action, to which we then can
respond----
Ms. Rosett. Which is the basis of law, actually, which I
think ultimately is what is needed here, is what Iraq is
desperately missing.
Chairman Waxman. I think you both made very good points.
Do you want to summarize, Mr. Shays?
Mr. Shays. Well, just to thank you, Mr. Chairman, for
having this hearing.
I thought your statement was excellent because the one
thing it has done for me is it has made me realize that there
have been corruptions in lots of governments, but what is
unique about this is, under Saddam, he was actually teaching
his citizens to be corrupt so that he could have the power he
needed, and that was quite enlightening.
Ms. Rosett. May I just share with you for a second a
vision----
Chairman Waxman. Well, we have been here all day and we
have a short business meeting we have to attend to.
Ms. Rosett. Sure.
Chairman Waxman. So maybe you can get together with Mr.
Shays after the official meeting.
Mr. Shays. But anything you want to put on the record in
writing we could submit.
Chairman Waxman. Yes, we would certainly receive it.
Ms. Rosett. This is one scene from a New York courtroom. It
was simply the silver laptop. I wrote an article about it in
the Wall Street Journal yesterday; you can read it. But the
silver laptop on which the entire kickback data base for the
Iraqi oil ministry under Oil for Food had been downloaded, this
data base, and this Iraqi on the witness stand, brought in by
Federal prosecutors to show the jury how it worked, typing in a
name and up would come the whole list of itemized kickbacks and
connected front companies. And I have followed these documents
for years at this point. I have never understood quite that
viscerally until I saw this, how thoroughly institutionalized
it was. It was the way----
Chairman Waxman. You are talking about in the Oil for Food
Program----
Ms. Rosett. Yes.
Chairman Waxman [continuing]. Or today?
Ms. Rosett. No. This was the Oil for Food Program. But this
was----
Chairman Waxman. OK, well, I think people learned some
lessons from that. Thank you very much.
Ms. Rosett. Thank you.
Chairman Waxman. I appreciate that story.
That concludes our hearing for today, so we stand
adjourned.
[Whereupon, at 3:55 p.m., the committee was adjourned.]
[The prepared statements of Hon. Patrick McHenry, Hon.
Diane E. Watson, and Hon. Bill Sali follow:]
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