Corruption Sidetracks Projects Intended to Make Baghdad a ‘Capital of Arab Culture’

Editor’s note: This article was first published in Arabic on the pan-Arab news site Daraj and support by Arab Reporters for Investigative Journalism (ARIJ).  A translated and edited version appears here under an agreement with Daraj and with the author’s permission.

The rubble has been piling up on al-Rasheed Theater’s stage in central Baghdad for nearly 16 years. The stages that once displayed theatrical performances by leading Arab and foreign artists are now a dumping ground for shattered chairs and rickety furniture.

Al-Rasheed Theater, the capital’s most famous theater in the late 20th century, has deteriorated since it was damaged and looted during the chaos that followed the 2003 U.S.-led invasion of Iraq. Despite repeated government promises to rehabilitate it and the allocation of $31 million for its reconstruction, out of $500 million allocated for projects connected with Baghdad’s selection as the “Arab Capital of Culture” for 2013, the theater remains the same: nothing more than the “ruins of war.”

The Beginnings of Wasting Money

The failure to rehabilitate al-Rasheed Theater mimics the fate of many projects aimed at restoring theaters, cinemas and art galleries in preparation for the celebration of Baghdad’s year as the Arab Capital of Culture, an honor conferred by the Arab League and Unesco. In 2011, the Iraqi government, then headed by former Prime Minister Nuri al-Maliki, allocated 579 billion Iraqi dinars ($517 million) for the project, with the funds to be disbursed over four years. Although the Ministry of Culture’s website announced that it was responsible for spending 133 billion Iraqi dinars (about $112 million) of the allocated amount, the project started and ended without the restoration or reconstruction of these cultural centers.

This investigative report looks into hidden instances of corruption and waste associated with carrying out the project, and how contracts were approved and funds were disbursed without proper documentation, while monitoring institutions, including the Iraqi Integrity Commission and the judicial system, have failed to bring those involved in this case to account, despite the lapse of five years since the closure of the project. Started in 2011, these projects ended with a three-day closing ceremony in April 2014.

“Senior officials in the Ministry of Culture are all involved, whether those who have since left the ministry or those who have retained their posts so far,” said Aliya Nassif, a member of Parliament and a former member of the parliamentary Integrity Committee, summarizing the magnitude of the corruption that marred that project.

Unfinished Projects

A senior official at the Ministry of Culture described how the ministry handled the funds allocated to the Baghdad project. “The budget of the ministry was very poor, and not enough to run its work, and therefore it relied on project allocations to support the budget,” he said.

“Nevertheless, huge funds have been returned to the Ministry of Finance,” added the official, who requested anonymity, without specifying their sum. As for the projects that have not been completed, the money allocated to them has been misused in one way or another amid a complete lack of monitoring. In short, there was no control over the disbursement of funds in this project.

The lack of monitoring acknowledged by the senior official, who holds one of the top four positions in the ministry, was the most prominent feature in case files alleging corruption followed by this reporter. The files involve contracts for unfinished projects, projects for the restoration of archaeological monuments that have not started yet, or the transfer of funds unaccounted for after their transfer. The investigation also tracked the production of dozens of films, most of which did not reach the cinemas, and the process of printing hundreds of books, most of which remained in stores.

A $21 Million Pit

A deep excavation and a foundation stone with the name of the former acting minister of culture, Saadoun al-Dulaimi (2010–2014), is all that remains of a project to build an opera house, which was promoted by the Iraqi government as a major achievement of the celebration of Baghdad as the capital of Arab culture for 2013.

In September 2011, the Ministry of Culture screened 16 Iraqi, Arab and international companies out of 141 companies that submitted bids to design and build the opera house and cultural complex. At the next stage, Rotam, a Turkish corporation, was chosen for the $146 million contract, even though the company had established its branch in Iraq only in March 2011, just six months before its selection.

According to the documents obtained for this investigative report, the corporation met only four of the 11 conditions set by the ministry in the instructions for bidding.

However, al-Dulaimi signed the contract, No. 21 of 2011, with Rotam, which received 10 percent of the contract value ($14.6 million) as operating advances, and 5 percent for performance improvement ($7.3 million). This came to $21.9 million, equivalent to 4.3 percent of the total allocated for projects under the Arab Capital of Culture celebration. Under the contract, the company was supposed to complete and deliver the project within a period of 540 days, or by mid-2013.

Most officials at the Ministry of Culture have avoided responding to this investigation’s requests for comment on the corruption cases the ministry has been accused of.

Al-Dulaimi, the acting minister of culture during the project period, avoided responding to the reporter’s calls for more than a year. By accident, a meeting took place in the Iraqi House of Representatives on March 27, 2019. His comment then was that he refused to respond to any allegations against him regarding the Baghdad project. “I am proud of what I have done in this project,” he said. “I was the minister of defense and not the minister of culture.”

The reporter also sought to interview Feryad Rawanduzi, who was the minister of culture after al-Dulaimi, from 2014 to 2018,  through his media office. However, he avoided responding to repeated attempts over three months, despite having announced his desire to refer corruption allegations to the judiciary upon receiving his post in the ministry.

In October 2015, Rawanduzi announced to the media that his ministry had referred four corruption files to investigators, one of which contained issues related to the Baghdad cultural capital project. However, he admitted that he had no power to punish any employees or directors in the ministry who were involved in these cases, because they had “immunity” and had been appointed through the “quota.”

Despite Rawanduzi’s refusal to comment, the reporter obtained a document from Firas Khudhair Turki, who was then the inspector general of the Ministry of Culture, addressed to the minister’s office on December 24, 2014, about six months after the due time to complete the opera house project, confirming that the work was suspended there and that the company had not submitted the project designs yet. He pointed out that the number of people on the construction site did not exceed five people.

On December 29, 2014, the Ministry of Culture withdrew the project from Rotam and asked the United Bank for Investment in Iraq to confiscate the letters of guarantee submitted on behalf of the Turkish corporation and to return the $21.9 million to the ministry. However, the bank declined to pay the amount to the ministry at that time. On November 9, 2016, the ministry won a legal victory in a ruling from the Iraqi Appeal Commission ordering the bank to confiscate the letters of guarantee. Still, the bank had not paid the amount as of June 21, 2017, according to a report issued by the ministry at the time, and still has not as of the day of writing of this report, according to the senior official in the ministry.

Rotam’s managing director, Vasim Celebi, denied any involvement in any alleged corruption in the opera house project. Although the Court of First Instance in Baghdad dismissed the lawsuit filed by Rotam against the ministry on June 5, 2016, Celebi vowed to file a new lawsuit against the ministry, accusing it of “violating the terms of the contract” and stressing that “the facts on this issue will appear clearly.”

Rotam’s director also denied the assertion of Firas Khudhair Turki, the former inspector general at the Ministry of Culture, that the Iraqi judiciary had settled the matter by ruling on confiscating the letters of guarantee and returning the money to the ministry. The ministry brought the case again to issue a new decision to oblige the bank to return the funds through the executive bodies.

The reporter was unable to obtain a response from the United Bank for Investment in Iraq. Bank officials avoided responding to her attempts, especially with the emergence of financial problems that resulted in putting the United Bank for Investment under the supervision of the Central Bank of Iraq on November 5, 2018.

Judge Ezzat Tawfiq, a longtime member of the Integrity Commission who was serving as its chairman at the time of his death in a car crash this past March, told the reporter of a document in the case of the opera house, regarding the receipt of an illegal commission from the contracting company to design the opera house. “However, a decision was made to close the case and release the defendant for insufficient evidence,” Judge Tawfiq added, without further comment.

 A Tent Rented for $2 Million

In addition to the failed opera house project, another controversy arose in 2014 over the high cost of a tent rented for the celebration ceremony of Baghdad’s cultural capital year. The Ministry of Culture contracted the Lebanese company Sun Gates to erect and furnish the tent in al-Zawra public garden in central Baghdad, at a cost of more than $2 million for three days only.

The suspicions of corruption are not about the value of the contract alone, but also on how the contract was awarded to Sun Gates. Contractors contacted by the reporter argued that the cost of renting the tent exceeded the construction of a 4,000-square-meter ballroom, assuming the cost of building  would be $500 per square meter, as is now the case.

Documents obtained by the reporter show that the contract was awarded to Sun Gates—registered in Lebanon as a commercial radio station a year before it won the tender—in a process that spanned just three days. This included inviting, receiving the bid and forming committees to study the project and hold meetings. According to the dates on the documents, the Ministry of Culture sent a direct invitation on December 10, 2012, to one company only, without any competitor, to submit its bid within two days, specifically on December 12, 2012. On that day, the Tender Opening Committee met with a membership of nine officials and recommended accepting the company’s offer. The following day, the Committee of Analysis and Study held a meeting with a membership of nine officials, reviewed the offer and discussed its financial, legal and technical details, and recommended that the contract be offered to the company. On the same day, a committee chaired by al-Dulaimi held a meeting with the under secretary of the ministry and the inspector general, and decided to offer the contract to the company. Two days later, al-Dulaimi and the company’s director signed the final contract for 2.4 billion Iraqi dinars (about $2 million). On the same day, the company received the down payment of 10 percent of the contract value.

According to the same documents, the company’s bid did not provide most of the required documents, such as the priorities of the tender, the identity of the contractors’ union, a letter of identification to the company, similar works to the project it was to carry out, the identity of the contractor’s classification, a clearance from the General Tax Authority, and the name and address of the bank it deals with.

Commenting on the quick pace of awarding the contract, Turki, the former inspector general at the Ministry of Culture, said that the tent project was “marred by many administrative irregularities. Therefore, it was referred to the Integrity Commission to investigate the charges.”

The reporter tried to contact the management of Sun Gates Company by calling the Lebanese telephone number recorded in the contract, and found that it was out of service. The company website link given on the contract, http://www.sungates.com/, does not work.

Judge Tawfiq said only that the case was “still under investigation.” The interview I conducted with him took place on January 28, 2019, six years after the tent contract was awarded to the company, five years after the end of the “Baghdad, Arab Capital of Culture” project, and four years after opening an investigation by the Integrity Commission. 

A Legal Loophole

There is a legal loophole for the possibility of inviting companies directly to submit bids, based on Article 4, Paragraph 5, of the Instructions for the Execution of Government Contracts in accordance with Law No. 1 of 2008. This loophole contributed to facilitating the approval of several contracts for inflated amounts, as is the case in the ministry’s contract with Telloh Company for General Contracting to buy an outside broadcasting vehicle (OBV) for al-Hadhara TV channel of the Ministry of Culture, for $1 million.

The reporter contacted two Iraqi companies specialized in providing television production and live broadcasting equipment. Based on the specifications stipulated in the contract, they offered to provide the same vehicle for less than $ 250,000.

One year later, al-Hadhara TV channel was closed, and we could not determine the fate of the outside broadcasting vehicle. 

Futile Movies

In September 2013, Fares Tohmeh Al-Tamimi, the director of the Film Selection Committee, asked to be exempted from the committee’s membership, criticizing the ministry’s procedures for selecting films that would be financed within the budget of the cultural capital project. Al-Tamimi said he believed that the committee’s opinion was completely marginalized, and that the Ministry of Culture adopted films previously rejected by the committee. He asserted that among 20 films, some were not very good, and some did not deserve to be called a movie at all.

Al-Tamimi attributed the approval of financing for these films to “nepotism,” which he said controlled the acceptance or rejection of the proposed films. He cited the committee’s rejection of two films produced by artists with family ties to al-Dulaimi. They were soon approved by the Alternative Film Selection Committee for $1.7 million.

The critic Mehdi Abbas, chairman of the project management committee, confirmed what his colleague al-Tamimi said, pointing out that “only eight out of 37 films had the characteristics of cinema films, while the rest are far from that, both in terms of used technology, theme or processing.”

“Some of the films were only documentary films that were given the characteristics of feature films with a pen stroke on paper,” said Abbas. He argued that “one of the films that had gotten an allocation of about one million dollars did not cost a quarter of this amount, according to real estimates.”

According to a guide issued by the Ministry of Culture in 2014, the cost of producing 37 films within the project amounted to 16,448 billion Iraqi dinars ($13.7 million).

Abbas explicitly accused the majority of artists, intellectuals and production companies that participated in the cultural capital project of “complicity in passing this corruption for material gain.” 

The reporter documented various testimonies from directors and authors, including mutual accusations about estimating production costs and the reality of disbursements. The charges extended to theft of literary and intellectual copyrights and the conversion of short series or dramas into films within the Baghdad project. 

Qahtan Abdul Jalil, director of the cinema and theater department, complained that his department “has not been able to meet its financial obligations to produce the films of the Baghdad, Arab Capital of Culture project.” Abdul Jalil asserted that his department was obliged to pay about $ 1.7 million as part of the delay penalties resulting from the failure to pay dues on time.

This department did not have a voice in how the disbursement list of the produced films was classified, it was only asked to approve it. Abdul Jalil summarized the scene at the time as “chaotic,” with things going “randomly” because there was no specific production plan. 

$3.8 Million for Books Unknown to the Public

The Ministry of Culture allocated $3.8 million to print 600 books on arts and cultural topics, with 2,000 copies per publication. By dividing this sum by the number of publications, it seems that the ministry allocated $6,333 per publication, regardless of the number of pages. The reporter asked three local publishing houses about the cost of printing 2,000 copies of a 300-page book, and the answer was that the highest print price was only $3,000.

This difference in prices was also seen in other contracts awarded by the Ministry of Culture within the same project, including a contract signed in October 2012 with “Mesopotamia Publishing House” to print 65 books, with 2,000 copies of each title, at a cost of 650 million dinars; that is, the cost of printing one book hit $8,500. The ministry contracted with another house to print three books for the ministry’s Research and Studies Center, for $11,000 per book. Similar examples occurred in many contracts reviewed by the reporter.

Thaer Abtan, a member of the project’s assessment committee, said that the committee had “no real authority to reject or accept a certain book, it only had the right to pass it, like any executive, while the official signature is the responsibility of the minister or one of the under secretaries.”

The price of printing a book hit $4,500 for a thousand copies, while printing in Beirut, for example, does not cost more than $1,500, according to Abtan. He recalled how he dared to “make a formal objection to the office of the minister and the general directors of the ministry regarding the status of the assessment committee and the methods of selecting and printing the books.” The response came in the form of “obscure threat” from one of the directors’ offices: “The under secretary tells you to eat without noise,” a common Iraqi expression that means you should get paid and keep quiet.

Uncontrolled Excess

Firas Khudhair Turki, the former inspector general at the Ministry of Culture, attributed the spread of excesses to the lack of checking the expenditure and the projects of the ministries by the inspectors general unless there are complaints or information that the regulatory authorities want to check. “Only here, they are entitled to scrutinize them, and if they find evidence of corruption documented, an investigation is opened within the ministry before submitting the results of the investigation to the Minister of Culture for approval,” he said. The case file is then referred to the Integrity Commission, which in turn checks the evidence and refers the case to the judiciary.

However, Judge Tawfiq summarized the penetration of corruption in Iraq and the immunity of officials as being “stronger than the Commission of Integrity as a whole.”

“Corruption is much stronger and higher,” he said, raising his hands up.

The same statement was repeated by Ammar al-Shibli, a member of the Parliament’s Integrity Committee. Al-Shibli said that only six judges follow corruption cases in Iraqi courts. Compared to the number of corruption cases, which exceed 3,000 to 4,000 cases per year, each judge would seem to have the difficult task of following more than 500 cases per year.