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Will Graft Defeat Iraq?

We like to end our weeks around here with a light touch. But not today. We just read a disturbing story from Reuters' Aseel Kami in the Washington Post. He describes the "pandemic of corruption" now gripping Iraq. After all that's happened there, it's a terrible blow. The voices in Kami's story sound authentic and you can't miss the cruelty in the chronic corruption -- even in the petty stuff. Here's a sample:

"I cannot move one step without bribing people," said Adel Hamza, who as head of public relations at a foreign construction company is responsible for getting contracts signed, stamped and authenticated by Iraqi authorities. "Everyone has got their mouths open as if I am feeding birds. . . ."

Haider Abdul-Muhsin says that when he needs to get Interior Ministry officials to sign identification documents, he has to spread money around like confetti.

"From the entry gate where a security guard stands till I get to the officer, I have to pay money to get my paperwork processed. This is not normal," said Muhsin. . .

Housewife Najat al-Azzawi said the lack of public services six years after the invasion made her nervous about the future.

"Security was previously the problem, now corruption heads the list," she said.

The story asks, will Iraq's corruption brew so much discontent that the insurgency will renew itself?

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From Frederic Bourke's Trial. Bloomberg's David Glovin (who else?) reported here the testimony from Bourke's long-time lawyer. David Hempstead (Western Michigan BA, Wayne State JD), a tax partner in Detroit's Bodman LLP, said he "told Bourke the Azeris had paid for their interest because Kozeny's lawyer had told him as much."

Bourke is on trial in federal court in Manhattan for conspiring with Czech fugitive Viktor Kozeny to bribe Azeri officials in violation of the Foreign Corrupt Practices Act. Prosecutors allege Bourke knew Kozeny was paying bribes of millions of dollars in cash and a secret two-thirds interest in the venture Kozeny formed to buy the state oil company.

I went back to Ric [Bourke] and said, "They're saying the Azeris were putting in full value," Hempstead testified [Wednesday] in Manhattan federal court. Ric said, "Alright" . . . I certainly believed the government of Azerbaijan could come up with the money to invest with Kozeny, said Hempstead, Bourke's lawyer of 35 years.

Read David Glovin's reports on the trial here.

Read all our posts about U.S. v. Kozeny and the prosecution of Frederic Bourke here.
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Full post as published by The FCPA Blog on June 25, 2009 (boomark / email).