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Iraqi Red Crescent Paralyzed by Allegations

Another confrontation came over a 2005 government grant for the Red Crescent to build camps for Iraqis making the Muslim pilgrimage to Mecca, in Saudi Arabia. After the society spent the money, Hakki told Whayeb that the grant was a loan that needed to be repaid to the government, and directed her to transfer the money to him, which she did, according to Humeidi and other agency officials.

An Iraqi judge issued an arrest warrant for Hakki in 2005 on corruption charges related to the controversy, though the warrant was later rescinded. Iraq's public integrity commission is still reviewing the matter. Hakki said that he has no recollection of the project and that he has never embezzled money.

Under Hakki's leadership, the Red Crescent expanded rapidly. Its budget over the past five years has swelled from about $3 million to $60 million and its staff from 50 employees to 3,500, according to Mazin A. Salloum, the group's secretary general.

But several humanitarian organizations grew concerned over what they considered the Red Crescent's lack of transparency with funds, and some, including UNICEF, stopped working with the organization. "We simply don't know where our money went," said the head of one aid program, who spoke on the condition of anonymity because he feared retaliation against his organization.

Hakki alienated some of his colleagues by employing Washington lobbying firms to help the Red Crescent seek U.S. government funding and to arrange for Hakki to meet U.S. officials. The arrangement is highly unusual for foreign humanitarian groups.

Since last year, the Red Crescent has paid $1.1 million to Cassidy & Associates and the Carmen Group. The lobbying has not resulted in any U.S. government funding for the Red Crescent, but Hakki defended the expenditure. "If we end up receiving millions of dollars for the Iraqi Red Crescent, then it is worth it," he said.

The Red Crescent retained both firms in February 2007 and ended its contract with Cassidy in March; the Carmen account remains active. Cassidy said it helped raise awareness of the humanitarian crisis; Carmen said it helped to improve the Red Crescent's relationship with the U.S. government and develop a refugee resettlement program.

Raheem Hassen al-Igeeli, the head of Iraq's Commission on Integrity, called the hiring of the firms "unacceptable" and said it was an improper use of government funds. "This money should be spent on humanitarian issues inside Iraq," he said.

Humeidi and other officials said the Red Crescent contracted to buy emergency aid packages from a company owned by a relative of one of Hakki's deputies for about $50 each -- even though the packages are worth only $10. Hakki said he could not recall the cost of the packages, which contain basic food items including rice and cooking oil, but said the agency worked hard to procure goods at the lowest price. He said he was not aware of the owner's connection to any Red Crescent employee.

In 2007, the Iraqi Bureau of Supreme Audit, the government's top auditing agency, said it had identified financial irregularities at the Red Crescent. Abdul Bassit Turki Saeed, the agency's president, said he could not determine what happened to about $50 million the government had sent to the organization. Hakki called the audit part of the government's smear campaign against him and said all the money was spent on sick and needy Iraqis.

"Why are they doing this to the only effective organization in Iraq helping people?" Hakki said in one interview. "I came from America to do something good for the people of Iraq. And I feel I have succeeded. I don't want the political parties to take over the Iraqi Red Crescent and ruin the success."

The Red Crescent's work began to stall late last year after the agency's audit. It reached the point of collapse in early July, when arrest warrants were issued for Hakki, Red Crescent Vice President Jamal Karbouli and at least 11 other officials.

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