This is a follow up post written by Enorrste that was on Blog 10-17-12 LINK
Where We Are With Removal Of Sinan Shabibi - Post Written By Enorrste - Dinar Alert
Although the Presidential Debate occupied much of my time last night, including listening to all of the spin from Fox, CNN and even MSNBC, I still felt obligated to complete my investigation of the removal of Sinan Shabibi prior to tonight’s call.
However, I have to admit that this is a daunting task! The articles just keep coming in, almost faster than even I can absorb them. However, I will endeavor to “cut to the chase” with this reading so that we can regain some focus.
In doing so I will make some tangential allusions to the most recent articles, as well as some other “dirt” that I found today. But it is not my intention to deal with each and every article, even though that would be an interesting challenge.
obviously there are a lot of people who have opinions on this matter. In saying that, incidentally, I am only referring to the articles, not the blather from the gurus on the internet. So here goes my attempt to bring this into focus.
My initial predisposition was to believe that this entire situation is politically motivated. It is clear that Maliki has been assiduously trying to consolidate power in an effort to become, essentially, a dictator in Iraq. We know, for instance, that he attempted to arrest the deputy Prime Minister Hashemi as well as the head of the Electoral Commission.
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In the case of Hasemi he represents the opposition political forces, so it is only natural that he would attack there first. In attempting to remove the head of the Electoral Commission he would be able to insert his own person who would then do whatever was necessary to make the next election of Maliki appear official.
One thing we do know: Maliki enjoys giving lip service to the democratic process. However, we also know that he has no need for democracy beyond that whatsoever.
About 3 years ago Sinan Shabibi came to Maliki to request that 4 high level banking officials be removed for corruption. A preliminary investigation was made and an arrest warrant was instead issued to arrest Shabibi himself rather than just removing the 4 bankers.
However, a visiting UN official and a member of the US Embassy heard about this before it became public. They raced to the Supreme Court, which also had heard nothing about the arrest warrant, or any reasoning behind it, and the court summarily dismissed the warrant. In addition, the Supreme Court chastised the judge who had issued the warrant.
This was all swept under the carpet because at that time Iraq was still under the UN provisional authority. In fact, at that time the UN was quite active in overseeing the burgeoning democracy of Iraq. They could tell even back then that Maliki was overstepping his authority and that he was acting rashly. Because the UN and US were still actively involved in Iraq, they were able to squelch the problem without much news or fanfare.
Now we move forward to this year. In January of this year Maliki appealed to the SIGIR (Special Inspector General for Reconstruction) to ask for an accounting of some funds that seemed to have disappeared as much as 3 years previously.
Clearly Maliki was not going to let this die, but he needed some backup documentation in order to proceed with his most ambitious attempt, namely to take over the Central Bank of Iraq and its $63 billion in reserves. The SIGIR responded that the funds in question, about $13 million, were in fact transferred to the Central Bank of Iraq in March of 2009.
However the funds could not be accounted for once they arrived at the CBI, apparently, which is what led to Maliki’s request. This was, I believe, the beginning of Maliki’s case against Shabibi and the CBI.
During the next few months Maliki continued to build on his case to remove Shabibi. He actually attempted to fire him about 4 months ago but was summarily dismissed in this attempt by Shabibi himself, who said that Maliki didn’t have the authority to remove him. At that point, looking back now in retrospect, we find that Maliki decided to do his homework on the Constitution and the Central Bank Law that I referred to in my post yesterday.
About 6 weeks ago the Council of Ministers held a meeting with Shabibi in which the governor was questioned about the falling of the value of the Iraqi dinar against the dollar. At the time we all felt that this was a meeting that was called by Shabibi himself and that he was making one last attempt to persuade the Council of Ministers, which reports directly to Maliki, to approve Shabibi’s plan to proceed with the “remove the three zeros” project. Today, unfortunately, we now know that this was not what occurred during this meeting at all.
It is my opinion now that the import of this meeting was to question Shabibi on his management of the CBI. In doing so, Maliki, who authorized the meeting, fulfilled his obligation as the “governing authority” under the Central Bank Law of 2004 to give Shabibi a chance to defend himself prior to actions taken against him by that same “governing authority,” who is none other than Maliki himself.
Shortly after that meeting a member of the Council of Ministers went to Najib Najafi, the head of the Parliamentary Commission that oversees the Central Bank of Iraq. He requested from her that she begin an audit of the Central Bank of Iraq and specifically requested that she look into any irregularities regarding the handling of money at the DFI.
Obviously this was done quietly, but it continued nevertheless. The result was that over the weekend the Council of Ministers, acting on behalf of the “governing authority,” Maliki, removed Shabibi and replaced him with a temporary new governor, Mr. Turki. Notice that I used the term “removed” instead of “fired.” Technically speaking, Shabibi has not yet been fired. This was stated late this afternoon in one of the articles on our site.
The initial reaction that I had was that Maliki didn’t have the authority to do what he did, nor did he have any evidence to back up his play. My due diligence search today has proven otherwise.
Just this morning Najafi issued her preliminary summary of the results of her investigation. Not surprisingly, her investigation dealt with the Development Fund for Iraq, the DFI. This fund receives up to 95% of the oil revenues generated in the country. The money is then distributed for the purchase of wheat and other foodstuffs for the people, as well as for the rebuilding of the infrastructure of Iraq.
Unfortunately Najafi’s summary was not good for Shabibi or for the CBI. She stated that about $6.6 Billion is somehow not accounted for in her audit.
This is the reason why Shabibi was removed. He apparently was not successful in explaining himself or his actions to the Council of Ministers 6 weeks ago, and they were representing the “governing authority,” Mr. Maliki. Therefore, Maliki did in fact have the authority to remove Shabibi, if only temporarily.
I have been surprised at the lack of outrage from the opposition in Iraq. Allawi has been quoted as saying that the CBI is independent, although he did not mention Shabibi at all. Similarly Al-Sadr made a statement that he felt that this was all politically motivated. But once again, Shabibi wasn’t mentioned.
The fact that Iraq is still under UN Chapter 7, but also that neither UN nor the US have intervened this time finally led me delve into this matter deeply enough to uncover the real reason behind the removal of Shabibi.
Fortunately that reason was made available this morning by Najafi herself. Unfortunately, however, Najafi, who was among the strongest supporters of Shabibi, has now changed sides.
This brings us to this evening. What do we make of all of this? Najafi herself said in her press conference that this large loss of funding accountability is either due to incompetence or outright corruption. Incidentally, she had her spokesperson Mr. Tamini hold the press conference, although she herself stated earlier that there were “irregularities” and that a report would be issued soon. In any case, it does not bode well for Shabibi, or for a number of his subordinates.
I am therefore led to conclude the following: while it is clear to me that Maliki is still trying to take over the CBI for his own nefarious purposes, it is also clear now, based on Najafi’s report, that there is way too much smoke at the CBI for there not to be a fire there
However, there is clearly more behind this than what we have seen on the surface. Again just today we have received a report that gives the real reason behind Maliki’s actions. This report was found by my friend Timster and sent to me.
I forwarded it to KAP who has probably posted it. The report is quite explicit and detailed in showing that Maliki has been frustrated in his attempts to get dollars into Syria and Iran, and the frustration has come from the CBI itself.
Therefore, this move to oust Shabibi is really related to funding for Syria and Iran and not to corruption within the bank itself. Unfortunately, however, the reality is that there is a problem at the bank, and Shabibi was either behind it or ignorant of it. In any case, it seems that the Council was justified in its actions.
Now we must look to a future without Shabibi. That seems very hard to even imagine, let alone come to any conclusions about. Surprisingly Saleh has not been called out. In fact KAP told me today that Saleh said, on hearing that Shabibi was removed, something to the affect that “change is good.” Talk about your fair weather friends! Sheesh! Given his rather fickle response to Shabibi’s removal I begin to question just how much we can believe from the hundreds of statements made by Saleh recently.
We are now in a “wait and see” mode. We aren’t even able to refer to the past 6 months of great articles as reliable anymore, since the person who was authorizing these press releases was the same person who allededly embezelled a large amount of money from the DFI. I must add the term “allegedly” here, but in any case the money is clearly missing, and the buck stops with Shabibi. That’s a great phrase incidentally. Where have I heard that before?……….
Having said that, I strongly doubt that Shabibi will recover from this, in spite of the fact that he has made a statement to the affect that he will be exonerated.
We know little or nothing about Mr. Turki. That should be our first focus of attention, I suspect. We will need to hear from him soon regarding the value of the dinar in order to get any sort of parameters from which to judge our investment.
Furthermore, we will hopefully hear something about the behind the scenes occurrences at the London Banking Conference on Iraq. Has all of that been scrubbed, or will it go forward? Only time will tell.
Finally, we must once again look to Maliki himself. As unappealing as that proposition is, it appears that he holds all of the cards now. Since he has personally chosen Shabibi’s replacement it would appear that whatever he says will be what happens regarding the value of the dinar.
I believe that we are now as up-to-date as we can be. I also believe that speculating on the future is too premature given the fact that we have absolutely nothing to go on at this point. Therefore, I suggest that we sit back, relax, and wait.
I will post these comments for you all to ruminate over as the evening proceeds.
However, you all might remember my favorite ending statement: Of course I could be wrong.