LOS ANGELES, CA (Catholic Online) - Baghdad said it cancelled the $4.2 billion weapons package with Russia on due to graft concerns.

The cancellation was a big setback for Moscow's attempts to firm up its slipping foothold in the Middle East. The dashed deal also throws into doubt efforts by Iraq to equip its armed forces.

The cancellation had been announced when Prime Minister Nuri al-Maliki led a delegation to Russia last month. "The deal was cancelled," Maliki's spokesman Ali Mussawi said.

"When Maliki returned from his trip to Russia, he had some suspicions of corruption, so he decided to review the whole deal... There is an investigation going on, on this."

Mussawi declined to say who specifically was being investigated. He also did not say exactly when the final decision was made to stop the deal. The Russian embassy in Baghdad has not been available for comment.

Russian media said the deal had covered 30 Mi-28 attack helicopters and 42 Pantsir-S1 surface-to-air missile systems. Discussions were also said to be underway for Iraq's eventual acquisition of a large batch of MiG-29 fighters and helicopters, along with heavy weaponry.

The ongoing civil war in Syria threatens to unseat Moscow's sole unwavering Arab ally, Bashar al-Assad, and has made it all the more crucial for Russia to forge other regional alliances.

Russia also lost an estimated $4 billion in outstanding contracts in the NATO-led Libya offensive that toppled Moammar Khadhafi, a one-time friend of the Kremlin. Moscow has been scrambling to find a way to compensate for the loss since then.

Iraq is seeking to re-equip an army that, while regarded as a capable counter-insurgency force, lacks the ability to defend the country's borders, airspace or maritime territory.

The Russian deal was seen by Iraqi diplomats as a way for the nation to avoid becoming too dependent on American military equipment, and to hold more bargaining power in weapons negotiations with Washington, which remains Baghdad's biggest arms supplier by far.

It was also a short-term measure to boost Iraq's air defense capabilities in the years before a cadre of F-16 fighter jets are delivered by the U.S.

"It is not a policy to go to Russia," Deputy National Security Adviser Safa Hussein said in an interview last month. "The backbone of our armaments is from the United States, but whenever it is required that we go with another country, we will go."

"The American programs were a little slow," he added. "We can't live with this gap in our defense capabilities for a long time, and the Americans understand this."

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