Tamara Kamhawi, a Middle East program coordinator for Transparency International, an anticorruption watchdog, says corruption is rampant in Iraq.
"Well, if you have a look at our website [http://www.transparency.org], there is a new perception index that came out; and Iraq is in the lowest [position], with the highest corruption from all the Arab countries," Kamhawi says.
The United States acknowledges the problem.
Stuart Bowen, special inspector general for Iraq reconstruction, said in a report to Congress on 30 October that it is crucial for the United States to strengthen Iraq's new domestic anticorruption agencies.
The report noted that the Iraqi government loses more than $2 billion each year as corrupt officials and allied criminal groups steal from state-controlled gasoline and diesel fuel supplies.
The report quoted Iraq's Bureau of Supreme Audit as saying that more than $1 billion from some 90 contracts was lost from June 2004 to February 2005 because deals were given to "favored suppliers." Awards to favored suppliers can involve kickbacks to the officials involved in the contracting process.
In the beginning of October, Iraqi authorities issued warrants for the arrest of five former ministers and 22 former Defense Ministry officials on criminal corruption charges.
Yahia Said, a researcher at the London School of Economics in Britain, says the overall lack of security creates favorable conditions for corruption.
But Said says the general instability in Iraq poses a bigger problem for reconstruction efforts.
"People tend to say that corruption is a bigger problem [than insurgency] because it is harder to get rid of," Said says. "But in reality, of course, people dying is a bit more serious problem and I think the corruption is thriving in an atmosphere of insecurity."
New statistics compiled in Bowen's report also reveal a jump in deaths and injuries of contract workers in Iraq, many of then working on reconstruction projects. At least 412 contractors and other civilian workers have died since the U.S.-led invasion, 147 of them Americans.
Said says the current insecure situation strongly encourages corruption. Officials are reluctant to implement the laws properly as they fear being killed or kidnapped.
"You can use the insecurity to intimidate prosecutors, get rid off, you know, intrusive judges and investigators," Said says. "So there is an interest among those who benefit most from corruption to maintain an unstable situation."
Said says that corruption helps the insurgency to function more effectively and there is a possibility that some reconstruction money finds its way to insurgent groups.
Though nearly all the $30 billion of U.S. reconstruction money for Iraq is now committed, many schemes originally planned are not yet under way.
Of the 2,784 projects started, 1,887 have been completed and 897 are ongoing.
The projects include water treatment plants, oil-pumping stations, electricity generators and power lines, police stations, border posts, schools, clinics, roads, and post offices.