A New Dispute Over Missing Funds in Iraq
A recent controversy has emerged in Baghdad concerning the fate of approximately $140 billion in public revenues. This dispute comes as Iraq continues its investigations into corruption involving high-ranking officials within the oil and electricity ministries. The allegations suggest that millions of dollars and billions of Iraqi dinars may have been lost through contracts that are suspected to be fraudulent.
The situation is unfolding against a backdrop of increasing financial and political pressures on the Iraqi government. With Prime Minister Ali al-Zaidi set to visit the United States in mid-July, the administration is under scrutiny for its ability to manage both domestic and international challenges. These include efforts to bring weapons under state control, finalize the formation of the government, and address financial strain caused by a decline in oil exports following the closure of the Strait of Hormuz.
In response to these challenges, Baghdad is exploring alternative ways to ensure that state employees receive their salaries for the next three months.
The Missing $140 Billion
During a televised interview two days ago, Masoud Haider, the former undersecretary of the Finance Ministry, revealed that the state treasury had received about 455 trillion dinars over the past three years of the previous government. According to Haider’s estimate, this amount is equivalent to roughly $345 billion. He noted that operating expenses and public-sector salaries accounted for about $205 billion, leaving a significant gap of $140 billion unaccounted for.
Haider, a member of the Kurdistan Democratic Party, pointed out that expenditures on infrastructure projects, such as overpasses in Baghdad, could not explain this discrepancy. He accused the Finance Ministry of restricting his access to data from the accounting and budget departments during his tenure as undersecretary. He claimed this restriction was imposed due to his ethnic and party affiliation and presented an official document stating that the two departments were not allowed to deal with him without the minister's approval.
Haider informed former Prime Minister Mohammed Shia al-Sudani about what he described as a legal violation but stated that no action was taken. In response, former Finance Minister Taif Sami denied the accusations, calling them "baseless and not supported by any reports or official documents issued by the relevant oversight authorities."
Sami emphasized that oil revenues are monitored and audited by the Federal Integrity Commission and the Federal Board of Supreme Audit, as well as by international auditing systems that track oil exports and reconcile exported volumes with collected revenues. She argued that the disappearance of the cited sums would be "impossible" without appearing in official records and reports.
She also highlighted that non-oil revenues have increased in recent years due to reform measures, including the introduction of point-of-sale systems and follow-up with public companies to collect dues and transfer them to the public treasury after audit by the Federal Board of Supreme Audit.
Regarding revenues from the Kurdistan Region, Sami explained that this file differs from other federal revenues. She stated that the region’s revenues had not been transferred to the federal treasury in a way that would allow them to be included in the accounts cited.
Sami stressed that maintaining public trust in financial and oversight institutions requires accuracy and reliance on facts and official documents, not estimates or accusations unsupported by evidence.
Major Budget Changes
Lawmaker Hussein al-Daraji commented on Iraq’s severe financial crisis, noting that there is not enough time left this year to prepare and pass a 2026 budget draft in parliament. He mentioned that the government is instead preparing a draft 2027 budget, which he expects to be sent to parliament in October or November.
Daraji said the government plans major changes to the 2027 budget law, making it different from previous budgets in terms of how it is prepared, the structure of its tables, and the setting of spending. He attributed the decision to bypass the 2026 budget to accounting issues stemming from the advanced stage of the fiscal year.
According to the parliamentary finance committee, the government and parliament have agreed to focus technical efforts on preparing the 2027 budget in an economic format with new spending tables. The draft is expected to be referred to parliament before the end of the year, aiming to reduce the deficit and pass it before the start of the new fiscal year.
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