Oct 15 2012

Commission orders arrest of Iraqi Central Bank Governor on corruption charges

By Kareem Abedzair

Azzaman, October 15, 2012

In a surprise move, the Commission of Integrity has ordered the arrest of Central Bank Governor Sinan al-Shabibi, his deputy Mudher Aref and 15 other officials, the Central Bank has revealed.

The commission says the arrest orders come following its investigations which have shown that the governor, his deputy and the other officials are implicated in corruption.

The decision comes as Shabibi and some other officials are attending an international forum in Japan.

The commission has yet to produce the evidence it has gathered to justify its decision. In the absence of good evidence it will be hard for it to present its case at the court.

But the sudden and shocking orders, as everything else in Iraq, have led to rumors that the commission’s decision is politically motivated.

Some analysts say the commission is working on behalf of Prime Minister Noori al-Maliki who wants to have a stronger say on the accumulating Iraqi hard cash reserves estimated at $65 billion.

Maliki has been pushing to place the Central Bank under the control of the cabinet. The parliament has already turned down a draft resolution supported by Maliki that will have dented Central Bank’s independence.

Maliki’s opponents say Shabibi has rejected a government request to dip into the reserves, fearing the move may weaken the Iraqi currency vis-à-vis the U.S. dollar.

But government opponents say Maliki probably would like to extend a helping hand to his allies, Syria and Iran, as they confront tough sanctions by the U.S. western countries.

Traders in Baghdad fear that the row might impact market stability as the dinar has been stable for so long despite volatile  economic and political circumstances within the region.

The Central Bank has issued a statement saying corruption charges against its governor are unfounded.

The commission says its decision is based on evidence, though it has not yet brought it to light.

The row will continue and Maliki is known not to yield easily. The commission, analysts say, will proceed with the case, unless Shabibi gives in at least part of the authority he has carved out for himself.

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