Iraq's interim trade ministry is investigating alleged corruption of up to
$US40 million by members of the US-led Coalition Provisional Authority and
senior ministry officials.

Trade minister Ali Allawi says he discovered a month ago that a contract for
wooden doors worth about $US80 million had been manipulated.

"I think a third of it was stolen," he said, specifically estimating that
"probably around 30, 40 million" disappeared.

Mr Allawi said the allegations mainly involve "contract manipulation and ...
contract prioritisation" which he has asked a prosecutor to investigate.

"There is strong evidence ... of the implication of certain individuals,
senior management who have since been asked to leave, together with,
unfortunately, figures in the CPA," said Mr Allawi, who returned from his
job as a London investment banker to take up his post in September.

He said a few "key individuals" were under investigation.

"If the evidence is confirmed then obviously I'll bring charges," he said.

The CPA could not immediately comment on the case.

Mr Allawi said Paul Bremer, who heads the CPA, has asked each ministry to
appoint an inspector general.

"So this investigation might be passed on to him or her," the minister said.

It is not the first time post-war contracts in Iraq have come under
scrutiny.

The Middle East Economic Survey predicted earlier that it was increasingly
unlikely Iraq's new mobile telephone service would be in place by year's end
because of a Pentagon investigation into allegations of corruption in the
awarding of the three licences.

Iraq's interim telecommunications minister, Haydar al-Abadi, said the
corruption allegations were "a naked lie" exposed by the fact that he signed
the licences last week and the companies were testing their networks.

He said neither the Pentagon nor any other agency had asked his ministry
questions about the mobile phone deals.

"There is no such inquiry," he said.

In October, the British charity Christian Aid alleged $US4 billion in oil
revenues and other Iraqi funds earmarked for the country's reconstruction
had disappeared into "opaque" bank accounts administered by the CPA.

Mr Bremer rejected those allegations and said all funds were being spent or
transferred in a "completely transparent" way.

Mr Allawi said the latest allegations ran counter to the mentality he was
trying to instill within his department.

"We are trying as much as possible to instill a culture of resisting
corruption," he said.

The ministry is organising a public forum to create a non-governmental
organisation that would combat the problem.

Once the watchdog has elected its own secretariat, the ministry will
withdraw from the body, Mr Allawi said.

-- AFP