The 50 civil servants have been arrested over the past three days. Among those seized was General Ahmad Abul Rif, the ministry's security chief.
A senior official said the group has been linked to the al-Awda (The Return), a clandestine group working to bring the Baath Party back into power.
The New York Times reported that a top interior ministry official said those arrested with al-Awda links had paid bribes to be recruited.
But Prime Minister Nuri al-Maliki's critics have accused the prime minister of arresting political enemies to consolidate his power ahead of next month's provincial elections.
Prime Minister Maliki himself was persecuted by Saddam Hussein's Sunni-led regime, but five years after the US-led invasion hundreds of members of the executed dictator's former Baath party have returned to public life in Iraq.
Earlier this year Iraq's presidential council approved a bill allowing former Baath Party members to return to government jobs as part of the current Shia-led administration.
The initiative was seen as a way to unite Iraqi factions, and a means to reverse what is widely seen as one of the huge blunders committed by US post-Saddam.
