BAGHDAD — Iraqi lawmakers are no strangers to controversy and scandal. Since 2005, when democratic elections were first held, many have resigned in shame or fled the country after being accused of misconduct ranging from supporting terrorism to corruption and sexual impropriety.
For Aras Habib, the ignominy has come even before he has been sworn in.
On Monday, Habib, chairman of a Baghdad bank, celebrated winning a seat in Iraq's parliament following a nationwide vote on Saturday.
On Tuesday, he was among three people sanctioned by the U.S. Treasury Department for allegedly funneling money for Iran's Revolutionary Guard Corps. The United States accused him of using the al-Bilad Islamic Bank he runs to move cash between Tehran and Lebanon's Shiite militant group, Hezbollah. Washington has long designated Hezbollah a terrorist organization, while Tehran's Shiite leadership considers the group an integral part of its military and political apparatus.
On Wednesday, Habib strenuously denied the American accusations, suggesting that the timing of the sanction was designed to undermine his electoral victory.
He said the move against him was based on “fabrications” and pledged to mount legal challenges in Iraq and the United States to prove that the allegations are “baseless.”
“We will provide all conclusive evidence to the Central Bank of Iraq, which is the only regulatory body to which we are subjected,” Habib said in a statement.
It was the latest round of financial sanctions imposed by the United States on Iran since President Trump reneged on the 2015 Iran nuclear deal last week.
Habib's blacklisting underlines how fluid the relationships among Iraq, Iran and the United States can be, even though the latter two are fierce rivals. He ran for parliament on the ticket of Prime Minister Haider al-Abadi, a moderate politician who was Washington's tacit choice in Saturday's elections. Abadi's ticket did not do as well as expected, but a complicated parliamentary coalition-forming process could allow him to retain his seat.
If the allegation against Habib proves accurate, it also illustrates how Iran uses Iraq's weak institutions to further its interests in the region. Following the 2003 American invasion of Iraq, Iran has enmeshed itself in Iraq's political structure through figures who had long benefited from Tehran's financial and military support in fighting dictator Saddam Hussein. (Hussein was overthrown by the invasion and was executed in 2006.)
In a statement, the Treasury Department said Habib had long facilitated the transfer of money to Iranian-backed Iraqi groups and that his activities enabled “the exploitation of Iraq’s banking sector to move funds from Tehran to Hezbollah, jeopardizing the integrity of the Iraqi financial system.”
The Habib episode recalls a similar incident in 2007 that embarrassed the United States and gave some of the first hints that the Americans had totally miscalculated their ability to shape Iraq's emerging democracy to their liking.
Washington had strongly backed Nouri al-Maliki for prime minister but later discovered that his Shiite ruling coalition included a lawmaker named Jamal Jafaar Mohammed, better known as Abu Mahdis al-Mohandes. He had been sentenced to death in Kuwait in the 1980s for allegedly car-bombing the American and French embassies there.
Mohandes fled to Iran after the Americans discovered his link to the bombings. He returned following the withdrawal of U.S. troops from Iraq in 2011 and has since risen to become the highly influential commander of a group of mostly Shiite militias deputized by Iraq to fight the Islamic State. He remains close to Iran's Revolutionary Guard Corps, receiving funding and training for the Iraqi militias he commands.
Habib is not directly accused of terrorism, but the sanctions mark an inauspicious start to his legislative career and raise questions about his stated moderation. According to his website, his interest in politics began before the American invasion when he joined the Iraqi National Congress — the opposition group once headed by Ahmed Chalabi and that played an outsize role in prodding the George W. Bush administration to seek the removal of Hussein.
Habib said he took over leadership of the organization when Chalabi died in 2015.
“Habib assiduously fights sectarianism,” his online biography states. “He preaches moderation and encourages liberalism in the hopes of establishing the State of Institutions.
Mustafa Salim contributed to this report.