Corruption poses a major threat to Iraq, so much so that Prime Minister Nuri al-Maliki has said it is "as dangerous" to the country's stability as terrorism, according to a US watchdog.

Iraq is one of the countries least able to control corruption, according to World Bank information cited in a report to the US Congress by the Special Inspector General for Iraq Reconstruction (SIGIR).

Iraq ranked 175th out of 182 countries in anti-corruption watchdog Transparency International's Corruption Perception Index in 2011.

And according to SIGIR, Maliki has said that corruption within the Iraqi government is "as dangerous a threat to national stability as terrorism," in a country that sees near-daily bomb and gun attacks.

At issue are the inadequacy of the legal framework set up after the US-led invasion of 2003, and pressure and threats against officials charged with fighting corruption, especially from the highest level, SIGIR said.

The report details the case of former defence minister Hazem al-Shaalan, who was convicted of spiriting more than $1 billion out of Iraq during his tenure.

But it notes that though Shaalan was convicted in absentia, as of mid-January he was "living comfortably abroad."

Radhi Hamza al-Radhi, the man who prosecuted the case against Shaalan and his associates and who from 2004 to 2007 headed the Commission of Integrity, Iraq's anti-corruption body, now lives in the United States due to assassination fears.

"One of my reliable sources within the ministry of defence informed me that I was on a list for 'elimination'," he told SIGIR.

Radhi discussed difficulties he faced as head of the commission.

"Leaders did not take our new anti-corruption agency seriously. The whole idea of an independent agency authorised to fight corruption was new to Iraq and, thus, not well understood or accepted," Radhi said.

"The (then) prime minister (Iyad Allawi) could not understand why he could not order us around like the rest of the government," he said.

"This became a problem because the prime minister is a politician subject to the political pressures of the moment -- and those political pressures began to interfere with our work."

A major obstacle was a legal loophole, article 136B of the Iraqi Criminal Procedure Code, that "allowed ministers to block investigations of ministry employees."

Radhi added that "the law did not allow the prime minster to grant similar immunity to ministers but (Allawi) claimed it did and no one challenged him."

SIGIR notes that the article has been repealed but that a pending appeal before Iraq's highest court could see it reinstated.

Another head of the Commission of Integrity, Rahim Hassan al-Uqailee, resigned in September 2011 citing political interference in his duties, after holding the post since January 2008.

"The fight over stealing the money of the state and its property is the unspoken part of the struggle for power in Iraq today," Uqailee said in an open letter to the Iraqi parliament's anti-graft committee released soon after his resignation.

Uqailee said that while Iraq's leaders claimed to be aware of the size of the corruption problem, they had instead complained over monitoring and legal restrictions.

He said they were "trying hard to resist the tools and mechanisms of accountability and transparency," and added: "I strongly rejected being a partner in this."