By Robert F. Worth

Early last October, while working in his office in Baghdad, a businessman named Hussein Laqees got a phone call from a number he’d never seen before. “We need to talk,” the caller said. The man’s voice was gruff and self-assured, a little menacing. He demanded that Laqees come meet him but refused to give his name.

Laqees demurred, and the call ended. He might have forgotten the whole exchange had a colleague not been in touch a few minutes later with worrisome news. The mystery caller, he said, was from Kataib Hezbollah, a powerful Iraqi militia with strong ties to Iran’s Revolutionary Guards. They had a business proposal to discuss.

When the militiaman called again, Laqees reluctantly agreed to a meeting. He gathered a few colleagues, and they all drove to a house off Sadoun Street in downtown Baghdad, arriving near dusk. Inside, he was led into a dim office and introduced to a small, bald man who got right to the point. “You need to work with us, there is no other choice,” the bald man said. “You can keep your staff, but you must do as we say.” He explained that Kataib Hezbollah would take 20 percent of Laqees’s gross revenue — about 50 percent of his profits.

Laqees refused. His company, Palm Jet, had a five-year government contract to run a V.I.P. terminal at Baghdad’s international airport, along with a nearby hotel; it also works routinely with Western aeronautics firms like Lockheed Martin. He could not have any dealings with a group like Kataib Hezbollah, which is listed by the U.S. government as a foreign terrorist organization (as is the unrelated Lebanese group also called Hezbollah). The bald man replied that if Laqees refused, he would seize everything he owned in Baghdad. Laqees looked at him in disbelief. “I’m an investor,” he said. “There is law.” The bald man shot back: “We are the law.” He told Laqees to give him an answer by noon the next day.

The following afternoon, five Chevrolet S.U.V.s rolled up outside the V.I.P. terminal. Twelve men got out, dressed in black paramilitary gear and carrying guns. They found Laqees in the cafe of the airport hotel, smoking and sipping coffee. He had been calling all his government contacts since the night before, along with the airport’s department heads. No one had called back. It was as if they’d been warned — or perhaps paid off. The militiamen took Laqees’s phone and told him to sign a document relinquishing his contract. He stalled for time. One of his employees slipped outside to take a cellphone picture of the militiamen’s vehicles, but they caught him, smashed his phone and beat him up. Laqees, who is Lebanese, had been working in Iraq since 2011. He knew the country was troubled by crime and corruption, but he believed that the airport, with its hundreds of uniformed immigration and security officials, was different. “I wait 20 minutes, maybe someone will come,” Laqees told me later. “Police, something.” Finally, he walked to the departures hall and caught a flight to Dubai. Days later, Kataib Hezbollah installed its preferred contractor in his place. Laqees has not returned to Iraq since.

The airport raid took place just four days after the start of Iraq’s anti-government protests, as thousands of young demonstrators were flooding the streets of Baghdad and other cities, chanting their poignant trademark slogan: “Nureed watan,” or “We want a country.” The protesters quickly took over Tahrir Square in the heart of Baghdad, setting up tents and fighting pitched battles with the police. Although the chaos brought much of the city’s business and government to a standstill, it also won the sympathy of Arabs across the region, igniting an equally powerful protest movement in Lebanon. To those who took part in the rallies, groups like Kataib Hezbollah are not just Iranian proxies; they are the newest faces of a kleptocracy that has enriched itself at the expense of Iraq’s youth, who have been left jobless and destitute in ever-increasing numbers. Some militia leaders, meanwhile, have joined the ranks of Iraq’s richest men, becoming famous for buying upscale restaurants, nightclubs and opulent farms on the Tigris.

The militias have been aided and abetted by a new Iraqi political class whose sole ethic is self-enrichment. Over the years, this cross-sectarian cabal has mastered scams at every level: routine checkpoint shakedowns, bank fraud, embezzling from the government payroll. Adel Abdul Mahdi, who was hailed as a potential reformer when he became Iraq’s prime minister in 2018, hoped to subordinate the militias to the state. Instead, they outmaneuvered and overpowered him. His cabinet included people with ties to some of the worst graft schemes afflicting the country.

The United States is deeply implicated in all this, and not just because its serial invasions wrecked the country and helped ravage the economy. America provides the money that sustains it, even as U.S. officials wink at the self-dealing of Iraqi allies. The Federal Reserve of New York still supplies Iraq with at least $10 billion a year in hard currency from the country’s oil sales. Much of that is passed on to commercial banks, ostensibly for imports, in a process that was hijacked long ago by Iraq’s money-laundering cartels. At the same time, the United States inflicts punishing sanctions on two countries — Iran and Syria — with which Iraq shares notoriously permeable borders. It is the ideal breeding ground for corruption.

The Trump administration may have shocked Iraq’s militias with the unexpected assassination in January of Qassim Suleimani, the powerful Iranian spy chief, at the Baghdad airport. But Iranian proxies like Kataib Hezbollah do not seem overly worried. They know President Trump has little stomach for a war, especially in the Covid-19 era of soaring deficits. Their greatest priority is maintaining an Iraqi system in which literally everything is for sale.

The coronavirus pandemic has now pushed Iraq to the brink of an existential crisis. The global collapse of demand for oil has brought prices to historic lows, delivering a terrible shock to a country whose economy depends almost entirely on oil revenue. But it could also offer the new Iraqi prime minister, Mustafa al-Kadhimi, an extraordinary opportunity to face his country’s most intractable problem. Corruption can now be framed as a life-or-death issue: Iraq must choose between feeding its people and enriching its kleptocrats. Kadhimi has promised to take up this challenge. He is not likely to succeed unless the United States seizes this chance to undo some of the damage it has done in Iraq, and to make common cause with the protesters who are hoping to re-establish their country on a new footing.

In the annals of American diplomacy, corruption has long had an equivocal status: deplored in public but in practice often regarded as a tolerable, even useful vice. The United States has a long history of supporting kleptocrats who were on the “right side” of one geopolitical rivalry or another. The price of these bargains, often paid in blood, has fueled a reappraisal. “Corruption is not just a fundamental political problem but the most significant driver of most of the security problems we are supposed to be trying to address,” Sarah Chayes told me in May. Chayes’s 2015 book, “Thieves of State,” documents the destructive effects of corruption across a range of countries in Africa and Asia. The book grew out of her experiences in Afghanistan, where she lived for years before becoming a Pentagon adviser and saw how the rampant extortion and graft of the U.S.-backed government helped push the local population into the arms of the Taliban.

Iraq may be an even more vivid object lesson. As recently as the 1980s, corruption was rare, and ministries in Saddam Hussein’s autocratic government were mostly clean and well run. The change came during the 1990s, when the United Nations imposed crippling sanctions following Hussein’s invasion of Kuwait. Over a period of just seven years, Iraq’s per-capita income dropped to $450 from about $3,500. As the value of their salaries collapsed, government officials couldn’t survive without taking bribes, which became the currency of everyday life. The rot grew worse after the invasion of 2003, when American officers began handing out bricks of $100 bills in an attempt to make friends and jump-start the economy. They may have meant well, but their clumsy haste was catastrophic. A new group of opportunists, including returning Iraqi exiles, lined up for big government contracts. Billions went missing. The theft expanded in scale after the oil boom of 2008, thanks to a network of oligarchs empowered by Prime Minister Nuri Kamal al-Maliki.

When ISIS surged into northwestern Iraq in mid-2014, the Iraqi forces that rose to defend it were officially 350,000 strong, much larger than the attacking jihadi brigades. In reality, the army had been eviscerated by “ghost soldier” kickback schemes, with commanders pocketing hundreds, even thousands, of salaries. These practices destroyed morale inside the army and fed popular anger among civilians in Mosul, who became more receptive to ISIS than they otherwise might have been. A recent survey of people in the Mosul region, led by the Harvard Humanitarian Initiative, found that they saw corruption as a chief cause of the emergence of ISIS.

Weighing the full cost of what has been stolen from Iraq is not easy. Deals are done in cash, documents are hard to come by and the government’s statistics are often unreliable. Still, the available information suggests that Iraq may have had more of its national wealth illicitly drained abroad than any other nation. One Iraqi elder statesman with long experience in finance recently assembled a confidential assessment for the Atlantic Council, an American think tank, based on conversations with bankers, investigators and contacts in a variety of foreign countries. He concluded that $125 billion to $150 billion is held by Iraqis overseas, most of it “illegitimately acquired.” He noted that other estimates run as high as $300 billion. Some $10 billion in stolen money, he estimated, is invested in London real estate alone. A full reckoning would extend well beyond the financial bill to the damage inflicted on Iraq’s culture and society — a point I often heard older Iraqis make with great sadness during the years I lived there.

Iraqi political life may look like gang warfare to outsiders, but on most days its turbulent surface conceals a calm and cheerful business of looting. At every government ministry, the biggest spoils are allocated by unwritten agreement to one faction or another. The Sadrists have the Health Ministry, the Badr Organization has long had the Interior Ministry and the Oil Ministry belongs to Al-Hikma. Newcomers sometimes have trouble adjusting to this state of affairs. One former cabinet minister — a technocrat who spent decades abroad — discovered, on arriving in his post, that his ministry was procuring vaccines with a $92 million contract. He found another way to buy the same vaccines for less than $15 million. “Once I did this, I faced a great deal of resistance, a fierce campaign against me,” he told me. His priority was addressing the gap between Iraq’s oil wealth and its devastated health system, which lacks access to many basic medicines. To his opponents, the only imperative was their own and their party’s interests. The minister eventually decided that these two philosophies were irreconcilable, and he resigned. (Like most of the people I spoke to for this article, he spoke on condition that I not use his name. Corruption is the third rail of Iraqi politics: Touching it can easily get you or your relatives killed.)

The political bosses who preside over this graft are well known; some are staunch American allies. The Barzani and Talabani families of Kurdistan have used their control over that region’s contracts and its central bank to become immensely rich. Maliki and his ring of powerful cronies still loom over the Iraqi political scene. Moktada al-Sadr, the mercurial Shiite cleric, is another godfather figure whose followers are notorious for demanding hefty kickbacks. This system should have received a jolt in 2014, when its depredations led directly to the country’s near-takeover by ISIS. Instead, the main consequence was the rise of a new breed of parasite: the militias who helped defeat ISIS, known collectively as the Hashd al-Shaabi, or the Popular Mobilization Forces. The Hashd is a loose confederation of armed groups, some of which have been around for decades. In 2016, Prime Minister Haider al-Abadi recognized them as part of the country’s security sector, and they now receive regular salaries just as soldiers and police officers do.

Among the most powerful is Kataib Hezbollah. It was accused of mounting an attack on an Iraqi air base in December that killed an American contractor and led to the assassination of Suleimani — its ultimate patron — a week later. Despite its high profile, it is surrounded by mystery. “We know almost nothing about the leadership,” says Michael Knights, an analyst at the Washington Institute for Near East Policy who has tracked the group since its founding. “It’s like the Masons. You can be in it and be in another movement at the same time.” It has built an economic empire, partly by forcing its way into legitimate businesses and government contracts.

Among the militia’s least-known and most troubling ventures has been its gradual assertion of control over the Baghdad airport. It started several years ago, when Kataib Hezbollah and another Iranian-backed militia called Asaib Ahl al-Haq began stealthily placing workers loyal to them throughout the airport, according to a senior airport official I spoke with. They were also able to get G4S, a British company that has a long-term contract for security at the airport, to hire their people, he said. (G4S did not respond to requests for comment.) As a result, the two militias now have access to all the airport’s CCTV cameras and to a limited-access road called Kilometer One that connects the runways to the airport perimeter, bypassing the security barriers, the official told me. (When Qassim Suleimani and his entourage were struck by an American drone in January, they had just come off this road.) The militias’ efforts became more aggressive about a year ago, the official told me, when its members held the Baghdad airport’s director of civil aviation at gunpoint and forced him to hire a man loyal to them as his nominal deputy. In late October, a Kataib Hezbollah front company received a 12-year contract at the Baghdad and Basra airports, worth tens of millions of dollars a year, even though the firm — the blandly named Gulf corporation — was only two months old and did not have the necessary accreditation or licensing and its founder had been barred from the airport. The contract has since been terminated, but the company that took over the V.I.P. terminal and hotel from Hussein Laqees remains in place.

The Baghdad airport is just one of the economic gateways that the militias now control. They have used the ISIS threat to install themselves at most of the country’s land borders. And the militias have dominated much of the trade through Iraq’s southern seaports for more than a decade. In effect, the militias operate a shadow state, charging importers higher fees in exchange for expedited processing and delivery. They have economic committees with offices in Baghdad, where private companies can make deals that brazenly circumvent the country’s legal channels. “For example, if I’m bringing 100 cars in from Dubai, if I do the legal process it might take two months to clear,” the airport official told me. “If I pay Kataib Hezbollah, say, $10,000 to $15,000, it might take only two days.”

The cash that has fueled Iraq’s descent into kleptocracy originates, for the most part, from a heavily guarded Federal Reserve compound in East Rutherford, N.J. There, every month or so, a truck is loaded with more than 10 tons of plastic-wrapped U.S. currency, a haul worth $1 billion to $2 billion. The money is then driven to an Air Force base and flown to Baghdad. It belongs to the Iraqi government, which routes the proceeds of its oil sales through an account at the New York Federal Reserve. This unusual arrangement is a legacy of the U.S. occupation, when America directly controlled the Iraqi government and its finances. It has remained in place because it suits both sides: The Iraqis get quick, preferential access to dollars, and the United States retains tremendous leverage over Iraq’s economy. Ostensibly, the periodic dollar shipments (a small part of the country’s overall oil revenue) are to meet the needs of Iraqi exchange houses and importers, who require hard cash. In practice, many of the dollars have found their way into the hands of money launderers, terrorist groups and Iran’s Revolutionary Guards, thanks to a little-known ritual run by the central bank of Iraq: the “dollar auction.”

The dollar auction has been called the “sewage system of Iraqi corruption,” but its inner workings have rarely been written about. The fraud schemes that revolve around it have fueled every side in the Syrian civil war, including ISIS. The U.S. Treasury Department has made serious efforts to keep auction dollars out of the hands of ISIS and Iran, but it has often turned a blind eye to other kinds of money laundering. And terrorists have repeatedly found new companies and methods to disguise their participation in the auction, often with the complicity of central-bank officials.

The auction’s name is misleading; it is a daily process in which Iraq’s central bank provides dollars to a limited number of the country’s commercial banks in exchange for Iraqi dinars. The American occupation authorities established it in 2003 to serve two purposes: collecting enough dinars to pay salaries in cash to Iraq’s vast armada of government employees and helping the country pay for badly needed imports in dollars. In principle, the auction is similar to the process used by some other countries to facilitate foreign trade. It was meant to work like this: A company intending to import shoes from India, for instance, would go its local Iraqi bank with an invoice from the Indian shoe company. The local bank would authenticate the transaction and deposit the required amount in Iraqi dinars with the central bank, which would wire dollars to a correspondent account belonging, ostensibly, to the exporter.

The trouble started with a swelling tide of dirty money: Iraqis who had stolen large sums through fraudulent contracts or kickback schemes were hungry to trade their dinars for dollars, so that they could use them abroad. To meet the need, a new class of opportunists began registering fake companies and fabricating the invoices required to simulate an import deal, which would then be funded via the dollar auction. In a matter of days, someone who had defrauded his country of millions could become the owner of a London townhouse. The phony imports left little trace, because they were documented with ID cards and photographs of real people, who would agree to play company officials in exchange for a bribe.

Each time the authorities at the Iraqi central bank or the New York Fed got suspicious, the fraudsters would up their game correspondingly. “There were small offices of young people to produce professional-looking forgeries,” a former Iraqi banker, one of several financiers and former government officials who described the scheme, told me. “Then they cook the whole file around it.” To avoid paying taxes on the phony imports, the launderers would register dozens of companies, abandoning them and creating new ones whenever their taxes were due. They got the border authorities involved, paying officials to provide fake manifests with realistic-looking stamps. The launderers eventually commandeered much of the central bank’s daily dollar sales, which have totaled, according to the central bank’s own figures, well over $500 billion since 2003. (That figure is much higher than the number of physical dollars flown to Iraq from the Fed, because most of the dollars sold by the central bank are electronic transfers from Iraq’s oil revenues.)

The fraud was sometimes laughably obvious. In 2017, Iraq officially imported $1.66 billion worth of tomatoes from Iran — more than a thousand times the amount it imported in 2016. It also listed imports of $2.86 billion in watermelons from Iran, up from $16 million the year before. These amounts would be ludicrous even if Iraq didn’t grow large amounts of its own tomatoes and watermelons. Economists told me these official import numbers — still visible on the Iraqi planning ministry’s website — appear to be a poorly disguised cover for money laundering via the dollar auction.

The auction has also enabled a large-scale embezzlement scheme that has funneled billions of dollars to Iraq’s power brokers. This fraud was based on the difference between the fixed exchange rate offered by the central bank — which is pegged to the dollar — and the fluctuating market rate, which is often much higher. Soon after the auction started in 2003, the money launderers realized that if they could fake an import deal, they could then resell the dollars they’d acquired from the central bank, realizing an instant profit on the rate spread. As soon as Iraq’s political bosses realized how much money was to be made, they seized control of access to the auction. Ordinary companies and banks wanting to do legitimate imports or lending were squeezed out by those with backing from the main political parties and militias. To disguise this takeover, the newly minted plutocrats bought up almost all the remaining commercial banks, turning them into mere vehicles for the auction scheme.

It is impossible to say exactly how many billions have been stolen through exchange-rate arbitrage, but several former bankers and Iraqi officials told me that this kind of fraud accounts for most of the ostensible imports financed by the dollar auction since around 2008. My own estimate, based on figures from the central bank’s website and information from Iraqi bankers and finance officials, is about $20 billion, all of it stolen from the Iraqi people. The businessmen running the scheme are virtually printing their own money, because their costs — paying for fake invoices and bribing bank and government officials — are low. Some of the banks posting enormous profits from the auction are little more than fronts, with dilapidated branch offices and scarcely any employees. One bank bought $4 billion in dollars on the auction, I was told by a member of Parliament who has investigated corruption cases, a total that would correspond to a profit of $200 million. “We checked on this bank,” the lawmaker said. “It has one room, one computer and some guards.”

The damage caused by the auction fraud was not just about illicit profits. As Iraq’s commercial banks transformed into instruments for arbitrage, ordinary businesses were left without access to the loans they needed to grow. Some legitimate importers, unable to get dollars from the auction, were forced to use foreign banks instead. It is hard to know how much harm this did to the economy, but all the analysts I spoke to said it has been devastating, starving the country’s private sector and making Iraq even more dependent on its oil proceeds, which have been cut in half in recent months.

Only one Iraqi leader has made serious efforts to expose the crimes surrounding the dollar auction, and he was an unlikely hero. Ahmad Chalabi, the banker and politician who helped the Bush administration justify its invasion of Iraq, led a parliamentary investigation of the dollar auction starting in 2014. He uncovered documents that implicated some of the country’s biggest banks and their owners in large-scale fraud. Just as he was expected to reveal more about the scandal in November 2015, Chalabi died of a heart attack. (Despite the suspicious timing, autopsies found no evidence of foul play.) The bankers he identified in his investigations suffered no consequences and are still in business.

The auction continues to this day, and so do the money laundering and theft that surround it. On some days in mid-March, the central bank’s website registered dollar sales of well over $200 million — more than $1 billion in a single working week — all of it supposedly to pay for imports. At the time, the coronavirus pandemic was shuttering Iraq’s economy. Some of those imports may be legitimate, but the bankers I spoke to said the numbers suggest the persistence of large-scale money laundering. Another glaring sign of fraud is the daily total of dollars sold by the central bank to Iraq’s exchange houses, which are supposed to be used only by Iraqis traveling abroad. In mid-July, they were still averaging $10 million to $11 million per day, even though Baghdad’s airport was closed from March until July 23 and travel restrictions remain in place. There is also evidence that the auction continues to provide money for terrorist groups. In October, the New York Federal Reserve issued a letter to the Iraqi central bank demanding that it bar two banks and an exchange house from using the dollar auction, stating that it has reason to believe that the three entities are “affiliated with or engaged in material dealings with” ISIS or a group with ties to it. The three entities are owned by a financier named Hassan Nasser Jaafar al-Lami, also known in Iraqi financial circles as “the king of the fake invoices.” In January, an employee at Iraq’s central bank gave an interview to a Lebanese TV station claiming that al-Lami was still using the auction, through other banks than those named by the Fed.

In some cases, the central bank appears to have deliberately circumvented efforts by the Fed or the U.S. Treasury. In 2018, the Treasury Department placed sanctions on Aras Habib Kareem, a political figure charged with funneling money to the Revolutionary Guards and Lebanon’s Hezbollah movement. It also placed sanctions on the bank he ran, known as Al-Bilad Islamic Bank. But instead of freezing Kareem’s assets, the Iraqi central bank in October directed that 40 million shares in Al-Bilad bank owned by Kareem and his family be returned to them, according to a central-bank document I obtained. When I asked Treasury officials about the Iraqi central bank’s action, they provided a canned statement: “Treasury continues to work closely with the government of Iraq on compliance with U.S. sanctions.”

Iraq is a cautionary tale for the rest of the world, illustrating how quickly the rawest forms of corruption can catch on and how hard it is to reverse that process. It doesn’t take long for the dust of complicity to cover almost everyone, much as it has in Afghanistan, Somalia or Venezuela. “It becomes a self-sustaining system,” says Richard Messick, who has spent decades studying the subject and is the senior contributor to an influential blog that monitors global anticorruption efforts. “You can’t just intervene in one area, because they’re all linked together, so you have to change multiple institutions at the same time.” It is hard to do that without a powerful outside force. The U.S. government was essential in eradicating the rampant graft in Chicago that peaked during the 1920s, when the gangster Al Capone had the city’s mayor on his payroll. There are few precedents for cleaning up an entire country in modern times, apart from autocratic city-states like Singapore, where former Prime Minister Lee Kuan Yew cracked down hard in the 1960s.

The largest single obstacle to reform in Iraq is the country’s overwhelming dependence on cash, which is hard to trace and thus more vulnerable to money laundering. Moving more Iraqis into the banking system, where payments leave a record that can be verified, has been a goal of the country’s lonely anticorruption advocates for years. But the transition away from cash is itself fraught with risk: New technologies are vulnerable to capture by the oligarchs, who can turn them into even more effective tools for laundering.

One of Iraq’s most brazen embezzlement schemes offers a near-perfect illustration of this danger. It involves the use of a device called Qi Card, which was intended to move the country toward electronic payments. Developed by a company named International Smart Card, it allows government employees and pensioners to retrieve their monthly payments in cash at any one of thousands of terminals across the country. It is a popular innovation: Before Qi Card came along in 2007, workers often had to wait in line for hours outside a government bank to get their money. The company now competes with other, smaller card companies and advertises on huge billboards with the slogan “Join the largest family.” It presents itself as a homegrown tech firm helping to bring Iraq into the information age, with images on its website of biometric registration processes and happy customers making cash-free payments. But its link to the state payroll has given it immense power. In 2019, according to a report issued by the central bank, the government paid nearly $47.5 billion to its employees and pensioners — a vast sum for a country of Iraq’s size — and much of that went through Qi Card.

This makes it all the more remarkable that the company appears to operate with almost no oversight, according to officials I spoke with and documents I obtained from Iraq’s Finance Ministry and the central bank. It has sidestepped a legal requirement to integrate its payment system with the national card-payment network. This would allow the central bank to monitor its transactions. The documents describe frustrated efforts to make Qi Card accountable for its transactions, along with complaints from Iraqi retirees who say Qi Card has been used to skim from their salaries. (Qi Card’s chief executive, reached by email, said that the company complies with all relevant regulations and that its transactions are monitored directly by the central bank, in addition to being audited periodically by independent firms.)

Beneath this data blackout, Qi Card is being used by Iranian-backed militia figures who operate a large-scale “ghost employees” scheme to steal hundreds of millions of dollars from the state payroll, I was told by several government officials, including one who is close to the financial bureau of the Hashd. This official told me that the Hashd has registered about 70,000 fictional soldiers for electronic payments via Qi Card. (It was not clear whether this was done with or without the knowledge of Qi Card’s managers.) Ghost soldiers have been a standard self-enrichment scheme for high-ranking officers in Iraq’s Army and police forces for years, but Qi Card appears to have allowed this ruse to be taken to a higher level. The average salary of a Hashd member is almost $1,000 per month, which would put the scheme’s revenues at more than $800 million a year. This operation, the official told me, has been run in strict secrecy by powerful figures with deep ties to Iran, including Abu Mahdi al-Muhandis, the militia leader who was assassinated in January with Qassim Suleimani. Qi Card also earns enormous profits from the fees it charges for electronic transactions. Some of that profit, I was told by another senior Iraqi official, is shared with other leading Iran-backed figures.

Qi Card’s founder, a businessman named Bahaa Abdul Hadi, appears, the senior official told me, to have insulated himself from scrutiny and criticism for years by forming business relationships with Iraq’s most powerful people, including militia leaders with close ties to Iran. One of them is Ammar al-Hakim, a prominent and wealthy Shiite cleric and political figure. Another is Shibl al-Zaydi, the general secretary of a militia called Kataib Imam Ali, whom the U.S. Treasury Department issued sanctions against in 2018 for his financial dealings with the Revolutionary Guards and Hezbollah. A third connection is Nasser al-Shammari, a leader of another Iran-backed group called Hezbollah al-Nujaba. (A Qi Card spokeswoman told me that Abdul Hadi has no relationship with al-Hakim, al-Zaydi or al-Shammari.)

At the same time, Qi Card has made efforts to endear itself to American officials, some of which appear to have paid off. In early 2018, an incoming Trump political appointee, Max Primorac, suggested to a United Nations agency that it use Qi Card for transactions, according to a report published in May by ProPublica. Primorac was doing consulting work at the time for Markez, an American-Iraqi firm hired by Qi Card. The United Nations did not hire Qi Card, but Primorac’s pitch triggered an ethics complaint by a State Department official, ProPublica reported. (When asked about the complaint, Primorac responded by forwarding a memo indicating that no investigation was opened.) He went on to become an aide to Vice President Mike Pence.

Qi Card’s forays into the American influence industry are a reminder that corruption can encompass far more than crude payoffs and tropical tax havens. The 2008 global financial crisis, which exposed unsavory links between politicians and speculators, helped fuel the populist movements still roiling Europe and the election of Donald Trump, who has made corruption an increasingly apt description of our own political life even as he flings the word indiscriminately at his opponents.

On a warm afternoon in February, I drove out to a construction site in eastern Baghdad called Sadr al Qanaat. It is a narrow strip of vacant land — almost a median — that runs for 15 miles between two sides of a major highway on the western edge of the Sadr City slum, with a canal at the center. The Baghdad city authorities had talked for years of an ambitious project to turn the corridor into a vast outdoor pleasure area, encompassing sports fields, parks, restaurants and playgrounds. Decorative bridges would be built over the canal, where visitors would ride back and forth on boats. In 2011, the city government signed a contract with three construction companies for about $148 million.

Today the site is a dismal dumping ground with little sign that anything was ever spent on it. Stepping off the highway onto the grass, I found my feet covered in a thick slurry of plastic trash. I walked up and down for 20 minutes or so and found only a few signs of construction: a cheap prefab children’s playground gathering dust, a couple of unfinished concrete bunkers. In the concrete-lined canal, the water looked fetid.

No one seems to know exactly what happened to the money thrown at Sadr al Qanaat, but a report by Iraq’s integrity commission rings sadly familiar notes: delays, disagreements and a former mayor who, along with one of his deputies, fled the country after “causing a deliberate damage of more than $12 million,” most of which, presumably, ended up in his pocket. There are projects like this all over Iraq. Abandoned cranes rust by half-built mosques and housing projects. Many of them are tied up in legal and political disputes. Billions of dollars have been spent on electricity, yet Iraq still has power outages of up to 20 hours a day.

Iraqis have a word for the shady businessmen and power brokers who grow immensely rich at their country’s expense: hitaan, or whales. They are widely said to be above the law. I was repeatedly warned, while reporting this article, that my life would be in great danger if I confronted any one of them about his illicit activities. But I did manage eventually to speak to a whale.

He was an Iraqi construction magnate who told me he had spent years paying off politicians to secure contracts worth many millions of dollars. He described a world of cynical back-room deals in which deadly rivalries are common, political alliances shift easily and the ultimate currency is “cash, always in dollars, always in advance.” It was clear that he accepted graft as his everyday reality; I didn’t sense any unease or guilt about it. He had offices and homes in multiple countries, but he spoke in the guttural Iraqi dialect of a man without much formal education. I was introduced via a government official who met him through a friend. It was impossible for me to verify the details of the stories he told. But they are consistent with everything I heard from government insiders and bankers about the way high-level corruption works. We spoke by phone for about two hours. He told me about one deal he had managed, a major construction project in which the government allocated about 40 billion dinars (about $33.6 million).

“In reality I spent only about 10 billion dinars on construction,” he said. Of the rest, most went to paying off government and party officials, along with other expenses. The remainder, about five billion dinars ($4.2 million), was pure profit.

He told me that for the past six or seven years, Iraq’s provincial governors — who have great power over contracts — have been elected almost exclusively through deals with businessmen who pay off the provincial council (which elects the governor) in exchange for a share of the province’s contracts. “Anyone who has money can manipulate these things,” he said. The deals are elaborately constructed, with deputy mayors loyal to different political parties dividing up the expected proceeds from inflated contracts. A single big contract can supply enough kickbacks to cover the bribery costs of getting a governor elected, he said.

Government officials are not just passive recipients of bribes. The members of the provincial council, he told me, “knock on the doors of businessmen and say, How can we help? Do you have someone you want to smear? Is there a conspiracy you want to promote, someone you want to refer to the integrity commission?” These dark arts transcend party loyalty; money is all that counts. “If you want to conspire against the Dawa Party, provincial council members from that party will cooperate with you” if you pay them, he said.

Behind all these deals, he told me, lurk the militias, providing muscle and taking their cut of the cash. “Any businessman, any bank owner without a militant group backing him will not be able to operate,” he said.

None of this is a surprise to Iraqis. They have become so cynical that they now see even the country’s various anticorruption bodies as vehicles for extortion and bribes. Sadly, this is not an entirely groundless charge. When I was in Baghdad, I went to see Mishaan al-Jabouri, a businessman and politician who is famous for his jeremiads against graft. Jabouri is a big man of 63 with a lumpy, bald head and protruding eyes who has become a kind of mascot for his country’s struggle with corruption; he has been on every side of it. He was a businessman in the 1980s and fled the country at the end of the decade to join the opposition. In 2006, Jabouri had to flee Iraq again after being accused of an elaborate extortion scheme involving attacks on oil pipelines. He made his way back, was elected to Parliament and joined its anticorruption committee.

“Everyone is involved, the religious, the secular, in villages, in cities, from the top commanders to the porters,” Jabouri told me as we sat in a cavernous, half-furnished house he owns in the Harthiya neighborhood. “It became a culture. It’s something people are proud of.”

In 2016, Jabouri made headlines around the world by telling a reporter from The Guardian that he too was corrupt; he had taken a $5 million bribe from a man who wanted him to drop a fraud investigation. “At least I am honest about it,” he told the newspaper.

When I saw him in February, Jabouri recanted his confession, claiming to have invented the $5 million bribe. I stared at him in disbelief. He stared back. “I needed to shake the society,” he said. Now, he added, such falsehoods were no longer necessary. “The current protests are doing this.”

To those watching from another continent, the street demonstrations that captured Iraq’s cities last October looked like a sudden eruption of rage. In fact, this anger had been simmering for years in cities and towns all over the country. One protest leader I met was a short, squarely built 28-year-old named Mousa, who grew up in a poor farming family in Samawa, a southern Iraqi city. (He asked that I not use his last name because he remains in hiding and fears repercussions.) Like many others I spoke to, Mousa repeatedly bumped up against the cruelty of Iraq’s gangster economy, where real qualifications are often irrelevant and most job offers come with a hefty upfront price, the equivalent of several months’ salary. After spending five years earning an advanced degree in veterinary science, he could find only one veterinary job — a one-year contract paying $200 a month — which he was fired from after he refused his boss’s offer to join a militia. He had no choice but to take a job at the regional electricity ministry, which paid $375 a month.

His rebellion began more than two years ago, when, he told me, he found documents suggesting that a regional director at the electricity ministry was getting rich by taking kickbacks on government contracts. Mousa helped organize protests calling for his boss to be fired. (The boss was later dismissed, Mousa told me.) Over the following year, he began making connections with other young people across Iraq who had had similar experiences and shared his feelings. Many of them believed their country was becoming a vassal of Iran and its local gun-toting thugs. By the summer of 2019, a loose archipelago of local protest networks was coalescing into something larger. Mousa was among the organizers who called for a national insurrection starting on Oct. 1.

Barely a week later, he found himself sitting on a couch across from Prime Minister Adel Abdul Mahdi. Outside the ministry’s high wooden doors, the country was on fire. More than 100 people had been killed in chaotic clashes with the police, and the economy was at a standstill. Abdul Mahdi was desperate to restore order, and he invited Mousa and eight other protest leaders to hear them out. Mousa handed him a piece of paper outlining the protesters’ demands, which he read quickly, in silence. Dealing with corruption was one of them. After a brief exchange, one of Abdul Mahdi’s advisers said: “Give us a list of the most corrupt people.”

Mousa, who has a patient manner and big, earnest eyes, was baffled and irritated by the request, he told me. He already knew he was wanted for arrest by the security services; not long afterward he would be forced into hiding, like many other protest leaders. He also knew that some of the country’s most corrupt figures had very likely been welcomed on that same couch. “That’s not our job, that’s your job,” he answered. The mood soured, and the meeting broke up after only 10 minutes. The prime minister declared soon after that the protest movement was leaderless. The same thing might have been said about Abdul Mahdi’s own floundering government. Less than two months later, facing even wider insurrections and a rising death toll, he announced his resignation.

The depth and fury of the protest movement took everyone by surprise. The militias were on the defensive for the first time in years, with some demonstrators deriding them as Iranian stooges. Even some members of the Hashd took part. One of them described to me a tense phone call in which he told his former boss: “This is a revolution against you.” In December, the Iraqi Parliament passed a landmark law that allows the country’s integrity commission to check a public servant’s income against his assets and to impose large fines or even jail time if he or she cannot show a legitimate source for the money. A new demand for accountability was seeping into all kinds of unexpected places. In Baghdad, I met a young lawyer named Marwa Abd al-Rida, who took out her cellphone and showed me documents about a curious little scandal at the Iraqi Bar Association, which had submitted vastly inflated expenses for the construction of a swimming pool. The fraud had been uncovered just a day earlier, before any of the lawyers had a chance to don a bathing suit. “In the past, there was lots of spending and no complaints,” she said. “Now, lawyers are speaking out.”

The protest movement’s uncompromising spirit helped keep it alive — at least until the pandemic struck — but also limited its impact. As the months dragged on, the protesters adamantly refused to nominate anyone for office. They seemed caught in an Iraqi Catch-22: They wanted to change the system, but anyone who touched that system, even on their behalf, became instantly suspect. Their only heroes were their martyred comrades, whose faces appear in graffiti and posters all over the protest squares.

At the heart of Iraq’s protest movement is a struggle to break free of the country’s tortured history. Many in the younger generation understand that Iraq — like many other former colonies across Africa and Asia — has too often elevated its military men and clerics into gods, only to see them transform into monsters. That is one reason the protesters have refused to delegate any leader to represent them. They know that what matters now is the slow, unglamorous work of building institutions, not anointing saviors. But they are also starved for admirable public figures. Like anyone else, they want to be inspired and led.

One leader did emerge early in the protests, and it seems fitting that he is something of an antihero. Abdul-Wahab al-Saadi is one of Iraq’s most senior counterterrorism officials. He is beloved throughout the country not only for his military record — he led a series of decisive battles against ISIS — but also because, almost alone among Iraqi officers, he is resolutely nonpartisan and is said never to have taken a bribe. Last September, Iraq’s prime minister abruptly sidelined him. The protesters quickly seized on him as a political martyr who lost out because he didn’t play the game (this was partly true, though factional rivalries played a role as well). They began carrying posters with his face on them and chanting his name. Some demanded that Saadi be nominated to replace Abdul Mahdi as prime minister. Saadi responded to these overtures with a characteristic diffidence. He said he was a military man who wasn’t qualified for political office. Some protesters were disappointed, but others were delighted, seeing his renunciation as a badge of honor.

Saadi is a tall, razor-lean 57-year-old with an air of lonely sobriety and a quiff of steel gray hair. Although he is Shiite, the people of Mosul — which is overwhelmingly Sunni — revere him as a liberator from the plague of ISIS, and last year a statue of him was erected there. (The government, apparently threatened by this gesture, removed the statue before it could be unveiled.) When I met him in February, Saadi still seemed mildly amused by the attention he was receiving. He told me about a series of phone calls he had received from political heavyweights, all of them hoping to recruit him or gain his endorsement. “The prime minister wants to hire me to get benefits in public opinion,” he said dismissively, dragging on a cigarette.

Saadi seemed uncomfortable talking about himself. He has a kind of austere modesty, his hands often jammed into his pockets, gaze fixed in the distance as if he were quietly assessing a field maneuver. For anyone accustomed to the self-important manners of most Iraqi political figures, Saadi forms an almost ludicrous contrast. Where they are often plump and garrulous, he is gaunt and self-effacing. They often own townhouses in London and Amman; he lives in a Baghdad apartment. I don’t have proof that Saadi has never taken a bribe. But there are plenty of people in Iraq who would love to embarrass him, and no compromising evidence has emerged. He is so uncorrupt that when his son joined the army, he refused to use his own position to help the boy in any way — a level of personal integrity that some of his colleagues saw as unnatural. When I asked him about this, he told me his own father died young, and his older brother was executed by Saddam Hussein. He had been forced to make his own way, and he felt it had saved him from the slackness that infected the military. He wanted the same for his son. “I told him, ‘You have to rely on yourself, I have nothing to do with it,’” Saadi told me. “I never helped him with rank, vacations, privileges.”

One Friday evening, I met Saadi at a coffee shop called Ridha Alwan, in a lively middle-class neighborhood. We sat at an outdoor table, surrounded by warm drafts of coffee and cardamom and flavored tobacco. He has a stiff, taciturn demeanor, but he seemed to relax a little as we chatted about politics and history, with frequent interruptions from customers who wanted a handshake or a selfie with the hero of Mosul. Saadi obliged them all with a shy grin, and when they asked if he would play a role in the new government, he would wave them off with a noncommittal “inshallah” — God willing. (After our meeting, Iraq’s new prime minister, Mustafa al-Kadhimi, restored and promoted Saadi.)

Then we tried to leave the cafe. Almost as soon as he stood up, people on the street recognized him, and he was surrounded by a thick crowd of admirers. He patiently posed for selfies and shook hands. Cars slowed to get a look. “Hey, look, it’s Saadi!” I heard someone shout. A woman began ululating. His bodyguards were looking nervous, but there was nothing they could do. Everyone wanted a moment with him.

After 15 minutes, he was still only a few feet from the cafe, and the street was impassable. A middle-aged man began to improvise a rhyming ballad about Saadi and his role in saving Iraq from ISIS. The onlookers clapped along, delighted, and snapped photos. A young taxi driver in a black djellaba ran up, pushed his way through the crowd and began telling Saadi that his brother had been killed in the Baghdad protest square. He thanked Saadi for everything he’d done and then stepped back to let other fans in. A soldier in a helmet and flak jacket walked up and began imploring Saadi to become the next minister of defense. Then a police officer pushed in, saying, “We want him as interior minister.”

Standing in the darkness, I was moved by the sight of those eager, hopeful faces. All they ask is what many of us are lucky enough to take for granted, at least for the moment: relatively honest bureaucrats, clean streets, police officers who don’t demand bribes. They want a country.

Robert F. Worth is a contributing writer for the magazine whose book on the 2011 Arab uprisings, “A Rage for Order,” won the 2017 Lionel Gelber Prize. He last wrote about the leader of the United Arab Emirates, Mohammed bin Zayed. Moises Saman is a Magnum photographer from Lima, Peru, and currently based in Jordan who has covered conflicts around the world, including in Kosovo, Iraq and Afghanistan. His last assignment for the magazine was photographing Japanese families on holiday in Gunma, Kagoshima and Kanagawa prefectures.

The New York Times