Iraqi authorities launched an investigation on 17 October on the alleged “theft” of 2.5 billion dollars from the bank account of the Iraqi tax commission, highlighting the pervasive level of corruption on all government levels.

The Ministry of Finance confirmed that the large sums of money were held in the custody of the Rafidain Bank, Iraq’s largest bank.

This new case of corruption has caused great controversy at a time when the country is going through a severe economic crisis, while the state is unable to provide electricity to its citizens or pay the salaries of public servants.

Details leaked from the General Tax Authority reveal that the $2.5 billion were withdrawn between September 2021 and August 2022. The transactions involve five companies who cashed cheques that add up to the exact amount missing. 

Alia Nasif, a member of the Iraqi Integrity Committee, said in a statement that “the stolen amount was withdrawn in cash by the executive directors of five companies”, which she described as “phantoms”.

She also accused the tax commission to be directly involved in the scheme, arguing that it was impossible to withdraw such large amounts without the knowledge “from the body or the banking entity.”

The case is being investigated and has been transferred to the judiciary, which has already summoned several senior officials of the Ministry of Finance “regarding the loopholes that led to this major breach and outrageous abuse of public money,” according to a statement from the Iraqi integrity committee.

Additionally, the acting Finance Minister Ihsan Abdul Jabbar was removed from his position by the Iraqi parliament over mismanagement claims.

Following a political deadlock that lasted over one year, the Iraqi parliament named Kurdish politician Abdullatif Rashid as President of the Republic of Iraq on 13 October in an attempt to begin the formation of a new government and put an end to the political division and street chaos that has led to many victims. 

Following his election, Rashid immediately named the Coordination Framework (CF) nominee, Mohammed Shia al-Sudani, as the country’s new prime minister.

However, on 15 October, Sadrist officials in Iraq announced that they intend to boycott attempts by the new Prime Minister Mohammed al-Sudani to form a government cabinet.

Salih Mohammed al-Iraqi, a prominent figure in the Sadrist movement, said that the bloc expresses their “categorical, clear, and explicit rejection” of the formation of a cabinet by Sudani.

The movement, led by Muqtada al-Sadr, won 73 out of 329 seats in early elections last October, but all resigned after failing to form a new government.

On the other hand, an ad-hoc group of Shia parties united under the Coordination Framework (CF) umbrella has been leading the talks to form a government since Sadr’s ninth retirement from political life.

The lack of an official government for the past year has hindered the possibility for officials to carry out proper, long-term decisions to stabilize various sectors of the country, chief among them the economy.