Iraq to launch investigation into millions of dollars 'missing' from public bank

Central bank blames heavy rain for damaged bills and legislators ask for evidence

Ali Al Alaq, the Governor of the Central Bank of Iraq. (Photo: Antonie Robertson/The National) 

Iraq's parliament is expected to launch a probe to determine how $6 million worth of local currency stored in public bank coffers was damaged by heavy rain.

Central Bank Governor Ali Allaq appeared in front of lawmakers in parliament on Monday to answer questions on the case which dates back five years.

"At the end of 2013, the vaults of the Rafidain Bank were flooded because of huge rains at the time, damaging the bills that were stored there," Mr Allaq said, adding that they were worth around seven billion Iraqi dinars.

Lack of transparency and unreliable governance has been at the heart of Iraq's woes, made worse by the effects of a costly three-year war against ISIS that coincided with a dip in oil prices.

Mr Allaq said the central bank reprinted new bills to replace the soaked ones but, since the money had not been in circulation, the only real "loss" was the cost of printing.

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His comments however did not reassure Iraqi politicians that attended the six-hour parliamentary session. A number of lawmakers requested evidence and data confirmation that the damaged was caused by water from heavy rainfall.

"The information that was presented to us indicates that the damaged currency is 12 billion Iraqi dinars, not seven billion," Ahmad Hama Rashid, a member of the Iraqi parliament's finance committee said.

Mr Rashid said during the next parliamentary session Mr Allaq will be questioned and will have to provide solid evidence to the cabinet.

Former politican, Hanan Al Fatlawi, called on Prime Minister Adel Abdul Mahdi to hold Mr Allaq accountable for the loss of funds.

"The Central Bank governor and director of Rafidain Bank need to be held accountable for negligence," Ms Al Fatlawi said on Twitter.

According to parliament, corruption, shell companies an "phantom" public employees who receive salaries but do not work have cost Iraq the equivalent of $228 billion dollars since 2003. The figure is more than Iraq's gross domestic product and nearly double the annual budget.

Iraq is ranked 169 out of 180 countries in Transparency International’s corruption perception index, with the lowest state being the most corrupt.