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The War Profiteers - War Crimes,
Kidnappings, Torture and Big Money |
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November 26th,
2006 - U.S. Finds Iraq Insurgency Has Funds to Sustain Itself |
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U.S. Finds Iraq Insurgency
Has Funds to Sustain Itself By John F. Burns and Kirk Semple New York Times November 26, 2006 Baghdad, Nov. 25 - The
insurgency in Iraq is now self-sustaining financially, raising tens of
millions of dollars a year from oil smuggling, kidnapping, counterfeiting,
connivance by corrupt Islamic charities and other crimes that the Iraqi
government and its American patrons have been largely unable to prevent, a
classified United States government report has concluded. The report, obtained by The
New York Times, estimates that groups responsible for many insurgent and
terrorist attacks are raising $70 million to $200 million a year from illegal
activities. It says $25 million to $100 million of that comes from oil
smuggling and other criminal activity involving the state-owned oil industry,
aided by “corrupt and complicit” Iraqi officials. As much as $36 million a
year comes from ransoms paid for hundreds of kidnap victims, the report says.
It estimates that unnamed foreign governments - previously identified by
American officials as including France and Italy - paid $30 million in ransom
last year. A copy of the seven-page
report was made available to The Times by American officials who said the
findings could improve understanding of the challenges the United States
faces in Iraq. The report offers little
hope that much can be done, at least soon, to choke off insurgent revenues.
For one thing, it acknowledges how little the American authorities in Iraq
know - three and a half years after the invasion that toppled Saddam Hussein
- about crucial aspects of insurgent operations. For another, it paints an
almost despairing picture of the Iraqi government’s ability, or willingness,
to take steps to tamp down the insurgency’s financing. “If accurate,” the report
says, its estimates indicate that these “sources of terrorist and insurgent
finance within Iraq - independent of foreign sources - are currently
sufficient to sustain the groups’ existence and operation.” To this, it adds
what may be its most surprising conclusion: “In fact, if recent revenue and
expense estimates are correct, terrorist and insurgent groups in Iraq may
have surplus funds with which to support other terrorist organizations
outside of Iraq.” Some terrorism experts
outside the government who were given an outline of the report by The Times
criticized it as imprecise and speculative. Completed in June, the report was
compiled by an interagency working group investigating the financing of
militant groups in Iraq. A Bush administration
official, who spoke on condition of anonymity, confirmed the group’s
existence. He said it was led by Juan Zarate, deputy national security
adviser for combating terrorism, and was made up of about a dozen people,
drawn from the C.I.A., the F.B.I., the Defense Intelligence Agency, the State
Department, the Treasury Department and the United States Central Command. The group’s estimate of the
financing for the insurgency, even taking the higher figure of $200 million,
underscores the David and Goliath nature of the war. American, Iraqi and
other coalition forces are fighting an array of shadowy Sunni and Shiite
groups that can draw on huge armories left over from Mr. Hussein’s days, and
benefit from the willingness of many insurgents to fight with little or no
pay. If the $200 million a year estimate is close to the mark, it amounts to
less than what it costs the Pentagon, with an $8 billion monthly budget for
Iraq, to sustain the American war effort here for a single day. But other estimates suggest
the sums involved could be far higher. The oil ministry in Baghdad, for
example, estimated earlier this year that 10 percent to 30 percent of the $4
billion to $5 billion in fuel imported for public consumption in 2005 was
smuggled back out of the country for resale. At that time, the finance
minister estimated that close to half of all smuggling profits was going to
insurgents. If true, that would be $200 million or more from fuel smuggling
alone. For Washington, the report’s
most dismaying finding may be that the insurgency now survives off money
generated from activities inside Iraq, and no longer depends on sums Mr.
Hussein and his associates seized as his government collapsed. American
officials said that as American troops entered Baghdad, Mr. Hussein’s oldest
son, Qusay, took more than $1 billion in cash from the Central Bank of Iraq
and stashed it in steel trunks aboard a flatbed truck. Large sums of cash
were found in Mr. Hussein’s briefcase when he was captured in December 2003. But the report says Mr.
Hussein’s loyalists “are no longer a major source of funding for terrorist or
insurgent groups in Iraq.” Part of the reason, the report says, is that an
American-led international effort has frozen $3.6 billion in “former regime
assets.” Another reason, it says, is that Mr. Hussein’s erstwhile loyalists,
realizing that “it is increasingly obvious that a Baathist regime will not
regain power in Iraq,” have turned increasingly to spending the money on
their own living expenses. The trail to these assets “has grown cold,” the
report adds. The document says the
pattern of insurgent financing changed after the first 18 months of the war,
from the Hussein loyalists who financed it in 2003 to “foreign fighters and
couriers” smuggling cash in bulk across Iraq’s porous borders in 2004, to the
present reliance on a complex array of indigenous sources. “Currently, we assess
that these groups garner most of their funding from petroleum-related
criminal activity, kidnapping and other criminal pursuits within Iraq,” the
report concludes. One section of the report is
dedicated to the role played by “sympathetic donors,” including Islamic
charities and nongovernmental organizations. It says that “intelligence
reporting” indicates that only 10 to 15 of the 4,000 nongovernmental groups
support terrorist and insurgent groups, but that those few take advantage of
lax Iraqi regulation to divert funds to insurgent and other armed groups and,
in some cases, “to provide cover for insurgent recruitment and the transport
of weapons and personnel.” The possibility that
Iraq-based terrorist groups could finance attacks outside Iraq appeared to
echo Bush administration assertions that prevailing in the war here is
essential to preventing Iraq from becoming a terrorist haven, as Afghanistan
became under the Taliban. But that suggestion was one of several aspects of
the report that drew criticism from Western terrorism and counterinsurgency
experts working outside the government who were given the outline of the
findings. While noting that the report
appeared to reflect a major effort by the administration to learn more about
the murky world of insurgent financing in Iraq, the experts said the
seven-page document appeared to be speculative, at least in its estimates of
the funds available to the insurgent and terror groups. They noted the wide
spread of the estimates, particularly the $70 million to $200 million figure
for overall financing, the report’s failure to specify which groups the
estimates covered and the absence of documentation of how authors had arrived
at their estimates. While such data may have
been omitted to protect the group’s clandestine sources and methods - the
document has a bold heading on the front page saying “secret” and a warning
that it is not to be shared with foreign governments - several security and
intelligence consultants said in telephone interviews that the vagueness of
the estimates reflected how little American intelligence agencies knew about
the opaque and complex world of Iraq’s militant groups. “They’re just guessing,”
said W. Patrick Lang, a former chief of Middle East intelligence at the
Defense Intelligence Agency, who now runs a security and intelligence
consultancy. “They really have no idea.” He added, “They’ve been very
unsuccessful in penetrating these organizations.” He said he was equally
skeptical about the report’s assertion that the insurgent and militant groups
may have surpluses to finance terrorism outside Iraq. “That’s another guess,”
he said. “A judgment like that,
coming from an N.S.C.-generated document,” he said, is not an analytical
assessment as much as it is a political statement to support the
administration’s contention that Iraq is a central front in the war on
terrorism. “It’s a statement put in there to support a policy judgment,” he
said. Several analysts said that,
except for the possibility that Al Qaeda of Mesopotamia might be transferring
money to Qaeda factions elsewhere, the assertion that insurgent money might
be flowing out of the country was doubtful considering the single-minded
regional focus of most of the militants operating here. Dr. Magnus Ranstorp of the
Swedish National Defense College, an author of extensive studies of the Iraqi
insurgency, said he doubted Iraqi groups were ready to finance terrorism
outside the country. “There’s very little evidence that they’re preparing to
export terrorism from Iraq to the West,” he said. “I think it’s much too
early for that.” The document tracing the
money flows acknowledges that investigators have had limited success in
penetrating or choking off terrorist financing networks. The report says
American efforts to follow the financing trails have been hamstrung by
several factors. They include a weak Iraqi government and its nascent
intelligence agencies; a lack of communication between American agencies, and
between the Americans and the Iraqis; and the nature of the insurgent economy
itself, primarily sustained by couriers carrying cash rather than more easily
traceable means involving banks and the hawala money transfer networks
traditional in the Middle East. “Efforts to identify key
financial facilitators, funding sources and transfer mechanisms are yielding
some results, but we need to improve our understanding of how terrorist and
insurgent cells interact, how their financial networks vary from province to
province or city to city and how they use their funds,” the report says. It
also says the United States must help the Iraqi government “to excise corrupt
officials from its law enforcement and security services and its ministries”
and “to prevent smuggled Iraqi oil from being sold within their borders.” Another challenge for the
United States, the report says, was to persuade foreign governments to “stop
paying ransoms.” It gives no details, but American officials have said
previously that France paid a multimillion-dollar ransom for the release in
December 2004 of two French reporters held hostage by an insurgent group.
Italy, these officials have said, paid ransoms on at least two occasions, in
September 2004 for the release of two women, both aid workers, and in March
2005, a reported $5 million for the release of Giuliana Sgrena, a journalist
for the Rome newspaper Il Manifesto. Several American security
consultants, all former members of government intelligence agencies that deal
with terrorism, said in interviews that the ineffectiveness of efforts to
impede the revenues to the insurgents was reflected in the continuing, if not
growing, strength of Iraq’s militants. “You have to look at what the insurgency
is doing,” Mr. Lang said. “Are they hampered by a lack of funds? I see no
evidence that they are.” Jeffrey White, a defense
fellow with the Washington Institute for Near East Policy, also a former
Middle East analyst with the Defense Intelligence Agency, agreed. “We’ve had
some tactical successes where we’ve picked off a financier or whatever, but
we haven’t been able to unravel a major component of the system,” he said.
“I’ve never seen any indication that they’re strapped for cash, never seen
any indication that they were short on weapons.” He said the insurgency had
demonstrated tremendous regenerative properties. “The networks fix
themselves, they heal themselves,” he said. He pointed to the success of Al
Qaeda in Mesopotamia in withstanding the loss of hundreds of combatants and
dozens of major leaders. “They keep coming back,” he said, “and I think the
same thing has happened to the financial system.” Reporting was contributed by
Mark Mazzetti from Washington and James Glanz from Baghdad. Copyright 2006 The New York
Times Company External link:
http://www.nytimes.com/2006/11/26/world/middleeast/26insurgency.html |