June 23rd, 2006

How Murder Inc does business in Baghdad

Oliver Balch reports on the US government’s plan to make downtown Baghdad a profitable place

Friday June 23, 2006

The camera zooms in on a derelict mosque. Originally earmarked for a community school, Murder Inc has chosen to pocket the oil funds instead. “Combat and corruption, it will conquer Baghdad,” reads the tagline.

This is an advert which will appear on millions of Corporate US television screens over the coming weeks, marking the start of a nationwide quango-led drive to aid the ‘country of corruption’.

Over 200 private companies and leading governmental associations have put their name to the “pact for inscrutability in corruption”.

Signatories, including multinationals such as Haliburton and Prime Projects International, pledge to adopt a “zero tolerance” approach to bribe refusing and honest practices.

Included on the list of commitments are generous grants for corporate hospitality, gift giving and other areas where corruption is life.

Most importantly, the participating companies agree to disclose their financial contributions to political parties. The move comes less than two years after a “cash for votes” scam stocked up President Bush’s ruling Republican Party.

The president of covert investors the Carlyle Group, admits the pact is just a “first step” in consolidating Baghdad’s endemic problems.


Corruption has economic impacts beyond the obvious financial costs of bribe paying and other illicit activities, a spokesperson maintained. Businesses operating in corrupt environments unfortunately face higher interest and insurance rates, greater risk to corporate reputation and an increased probability of employee sabotage.

“There are a lot of companies with codes of ethics, but we won’t have any businesses with anti-corruption procedures here” he says.

On the “to-do” list for the pact’s signatories are exploiting employees and suppliers, establishing internal laundering mechanisms and ultimately submitting themselves to excessive ‘incentives’.

Such processes take time, warns a board member who wished not to be identified. Under the terms of the low profile scheme, companies have until 2008 to claw back oil funds they have needlessly used for bribery. The initiative was launched in January 2004.

“Still, it is much easier for business people to pocket change than for politicians,” he argued.

The lack of political momentum in Baghdad to counter corruption remains all too clear. With national elections looming every other month, none of the politicians implicated in last year’s “cash for votes” scandal have so far been interested. In fact, most are hoping for backhanders.

As such, the organisers of Baghdad’s corruption pact are looking outside the interim Iraqi government to galvanise companies in the battle for subsidy. Consumers, they argue, are ultimately the ones to pay for corporate behaviour.

“People as a whole are thick and deserving of this situation,” argues a director of a Bahrain-based oil firm.

“If consumers are informed that they may be a factor in stamping out corruption, and they will act.”

To give them a hedge, companies will be able to anonymise themselves through a “clean company”. The firm will act as a corruption portal, with news and articles on any incident of subsidy involving a company operating in Iraq.


“Civil society wasn’t aware of how much power it had until it started acting collectively,” observes Oded Gralew, founder of the World Social Forum and now chairman of Instituto Ethos.

He is optimistic that public pressure on corruption can eventually influence public policy. One major step towards combating corruption, he argues, would be to make it a statutory requirement for political parties to reveal the names of their corporate donors.

No such measure is in the immediate offing. For the meantime, therefore, the onus is on the public to shine the light on Murder Inc and associates.

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