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BAGHDAD, Sept 3 (Reuters) - Iraqi graft police arrested a deputy transport minister after a set-up in which they caught him taking a $100,000 bribe from a firm he was allegedly trying to extort money from, anti-graft officials said on Thursday.
Adnan al-Ubaidi, a Sunni Arab politician, was appointed a deputy transport minister on Aug. 10.
He was caught taking the bribe on camera on Wednesday, said Rahim al-Ugaili, head of Iraq's government-appointed corruption watchdog, the Integrity Commission, told Reuters.
The firm, a foreign security company officials declined to name, complained to the Integrity Commission after Ubaidi demanded the cash.
The firm, in coordination with the commission, then set up a sting in which it pretended to offer Ubaidi the first installment of an agreed half-a-million-dollar payment for renewal of a security contract. The commission's own special police force detained Ubaidi after he took the payment.
"He was blackmailing the firm, which is owed $2 million by the government, when it wanted to renew its contract," said Sabah al-Saedi, head of Iraqi parliament's Integrity Committee.
Iraqis are increasingly frustrated by what they see as an epidemic of corruption, which they blame for the poor state of basic services such as water and electricity.
Iraqi officials estimate that billions of dollars in government funds go missing each year.
In 2008, only Somalia and Myanmar were seen as more corrupt than Iraq, according to watchdog Transparency International.
Prime Minister Nuri al-Maliki has vowed to crack down on officials caught diverting funds or extorting bribes, but only a handful of senior officials have been prosecuted.
Earlier this year, former Trade Minister Abdul Falah al-Sudany was forced to resign in a scandal involving food imports and was detained while trying to leave Iraq. He denies any wrongdoing and has since been released on bail. (Reporting by Waleed Ibrahim and Khalid al-Ansary; Writing by Tim Cocks; Editing by Louise Ireland)