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Last Updated: Tuesday, 11 October 2005, 08:54 GMT 09:54 UK
Iraq orders 'corruption' arrests
Iraqi Minister of Defence Hazem Shaalan greets a US army in Baghdad, July 2004
Shaalan took his post after the June 2004 handover of power
Iraq has issued arrest warrants for 27 senior officials from the US-backed interim government over suspected embezzlement of more than $1bn.

The money was allegedly taken from the defence ministry coffers to fund corrupt military procurement deals.

Suspects from the former administration include Defence Minister Hazem Shaalan, who has denied the allegations.

Sub-standard equipment was purchased that seriously impaired the fight against insurgents, it is reported.

Warrants have also been issued against the former labour, transportation, electricity and housing ministers.

Massive fraud

Ali al-Lami of Iraq's Integrity Commission said the authorities were working with international police to seek the arrest those suspects, including Mr Shaalan, who are believed to be abroad.

"If they are outside Iraq it should be Interpol who brings them back," he said.

On Monday, reports say parliament met in an attempt to strip Mr Shaalan, who is still an MP, of his immunity from prosecution, but it did not have a quorum.

The government of interim Prime Minister Iyad Allawi took office in June 2004 when the US-led coalition handed over sovereignty 14 months after invading Iraq.

"It is nearly 100% of the ministry's procurement budget that has gone [missing]," Finance Minister Ali Allawi was quoted saying in the Independent newspaper last month.

The money was reported to have been siphoned abroad in cash and used to buy overpriced outdated equipment in a money laundering scam.

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