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Washington Should Apply Magnitsky Act Sanctions to Former Iraqi Ally

Twenty years after the Iraq War, Iraq is a peaceful place. The days of daily or even monthly bombings and terror attacks are in the past. Militia violence is also increasingly rare. Firebrand cleric Muqtada al-Sadr’s attack on the Green Zone last August was not only brief but also backfired as it increased revulsion among Iraqis exhausted by violence. Sectarianism has declined to the point where Iraqis take Careem’s, the local Uber, without regard to the ethnicity or religion of their drivers. 

Clean Up Iraq

The greatest problem facing Iraq today is not violence but corruption. While Prime Minister Mustafa Kadhimi cultivated an image in the United States as a pro-Western liberal willing to stand up to Iran-oriented militiamen, this sharply converged to the way Iraqis saw him: a thin-skinned chameleon as deferential to Tehran as Washington. Whether or not he had direct involvement, he also presided over the government during the “heist of the century,” an audacious $2.5 billion theft of state funds, Iraq’s greatest corruption scheme since Saddam Hussein milked the United Nation’s Oil-for-Food program for more than $10 billion. 

Iraqis are split about whether Kadhimi was involved in the heist or simply negligent. What is more certain is the direct participation of some of his closest aides. Prime Minister Muhammad Shia’ al-Sudani has issued arrest warrants for three close Kadhimi aides against whom evidence seems solid, as well as former Finance Minister Ali Allawi, whose inclusion more Iraqis question. Either way, Kadhimi’s opponents relish exposing his team’s corruption, while his friends lament Kadhimi’s soiling of liberalism. Investigations are just beginning.

The source of Washington’s original embrace of Kadhimi was a belief he would stand up to Iranian influence. Even if he were sincere in this, his actions have trapped his greatest supporters. For Washington to circle the wagons around those involved in the corruption scheme is to allow Tehran and its Iraqi proxies to depict themselves as more interested in clean governance. 

That Washington engages in the same pattern in Iraqi Kurdistan only projects an image that the United States is not serious about good governance and punishes corruption for cynical rather than principled reasons.

Biden Can Play a Role Here

This is why the Biden administration should consider applying Global Magnitsky Act sanctions to those involved in diverting Iraqi state funds, even if they are nominal allies. In 2019, the Treasury Department designated four Iraqis involved in human rights abuses against minority communities. 

Secretary of State Mike Pompeo designated militia leaders Qais al-Khazali, Laith al-Khazali, and Husayn Falih ‘Aziz al-Lami for their human rights abuses under the Global Magnitsky Act for their crackdown on peaceful protests. In the final days of the Trump administration, the Treasury Department designated former Iraqi National Security Advisor Falih al-Fayyadh for both corruption and human rights abuses under the Global Magnitsky Act. All these figures deserve sanctions, but they are not alone or even the worst offenders on the spectrum of Iraqi corruption.

Biden’s team has also applied Global Magnitsky Act sanctions to punish corruption and human rights abuses against senior officials in other countries. 

Two months ago Biden designated Paraguay’s former president and current vice president for amounts that paled in comparison to Iraq’s theft. 

On International Anti-Corruption Day, the Biden administration announced sanctions against 40 individuals from nine countries. The Biden administration has also levelled Magnitsky sanctions against senior figures in the George Weah administration in Liberia, and rumors persist the Treasury Department will soon drop more sanctions against Weah himself as he undercuts democracy and his team loots the West African state founded 200 years ago by freed American slaves.

Corruption is a cancer in Iraq. While the United States is right to target Iranian-directed militia leaders in Iraq, it undercuts the strength of the tool and undermines the moral utility of the Global Magnitsky Act itself with such selective enforcement. 

From an Iraqi perspective, there is no difference between corruption perpetrated by Khazali and Fayyadh on one hand, and Kadhimi’s entourage and the Barzani family on the other. If the United States truly wants to help Iraq and deny Iranian-backed groups a cudgel to beat America’s image, Washington must fight corruption perpetrated by its friends with the same fervor with which it targets its adversaries.

Now a 1945 Contributing Editor, Dr. Michael Rubin is a Senior Fellow at the American Enterprise Institute (AEI). Dr. Rubin is the author, coauthor, and coeditor of several books exploring diplomacy, Iranian history, Arab culture, Kurdish studies, and Shi’ite politics, including “Seven Pillars: What Really Causes Instability in the Middle East?” (AEI Press, 2019); “Kurdistan Rising” (AEI Press, 2016); “Dancing with the Devil: The Perils of Engaging Rogue Regimes” (Encounter Books, 2014); and “Eternal Iran: Continuity and Chaos” (Palgrave, 2005).



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