Abstarct: The main objective of this research was to examine the effect of financial corruption on the fragility of the capital structure in Iraqi state-owned companies, emphasizing the role of financial development as a mediating variable. As explained in the first chapter, the Iraqi economy, due to its heavy dependence on oil revenues, the extensive role of the government in economic activities, and the weakness of regulatory institutions, has provided a context in which state-owned enterprises play a pivotal role in the allocation of financial resources. However, the spread of corruption and political influence in these companies has weakened the efficiency of the financial system and posed serious challenges to the sustainability of their capital structure. The results of the study show that corruption in Iraqi state-owned enterprises simultaneously weakens financial development and exacerbates the fragility of the capital structure. Financial development also plays a partial mediating role in the relationship between financial corruption and capital structure fragility; in the sense that part of the destructive effect of corruption is transmitted through a decrease in the level of financial development and increases the financial vulnerability of companies. These findings clearly demonstrate that tackling financial corruption is not merely a moral or administrative imperative, but rather a fundamental prerequisite for stabilizing the capital structure of state-owned enterprises, improving financial efficiency, and achieving sustainable financial development in the Iraqi economy. Without deep institutional reforms, strengthening financial transparency, and reducing political influence, any efforts to improve the capital structure of state-owned enterprises will face serious limitations.