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Iraqi Insurgents Taking Cut of US Rebuilding Money
BAGHDAD - Iraq's deadly insurgent groups have financed their war against U.S. troops in part with hundreds of thousands of dollars in U.S. rebuilding funds that they've extorted from Iraqi contractors in Anbar province.
The payments, in return for the insurgents' allowing supplies to move and construction work to begin, have taken place since the earliest projects in 2003, Iraqi contractors, politicians and interpreters involved with reconstruction efforts said.
A fresh round of rebuilding spurred by the U.S. military's recent alliance with some Anbar tribes - 200 new projects are scheduled - provides another opportunity for militant groups such as al Qaeda in Iraq to siphon off more U.S. money, contractors and politicians warn.
"Now we're back to the same old story in Anbar. The Americans are handing out contracts and jobs to terrorists, bandits and gangsters," said Sheik Ali Hatem Ali Suleiman, the deputy leader of the Dulaim, the largest and most powerful tribe in Anbar. He was involved in several U.S. rebuilding contracts in the early days of the war, but is now a harsh critic of the U.S. presence.
The U.S. Embassy in Baghdad declined to provide anyone to discuss the allegations. An embassy spokesman, Noah Miller, said in an e-mailed statement that, "in terms of contracting practices, we have checks and balances in our contract awarding system to prevent any irregularities from occurring. Each contracted company is responsible for providing security for the project."
Providing that security is the source of the extortion, Iraqi contractors say. A U.S. company with a reconstruction contract hires an Iraqi sub-contractor to haul supplies along insurgent-ridden roads. The Iraqi contractor sets his price at up to four times the going rate because he'll be forced to give 50 percent or more to gun-toting insurgents who demand cash payments in exchange for the supply convoys' safe passage.
One Iraqi official said the arrangement makes sense for insurgents. By granting safe passage to a truck loaded with $10,000 in goods, they receive a "protection fee" that can buy more weapons and vehicles. Sometimes the insurgents take the goods, too.
"The violence in Iraq has developed a political economy of its own that sustains it and keeps some of these terrorist groups afloat," said Iraq's Deputy Prime Minister Barham Saleh, who recently asked the U.S.-led coalition to match the Iraqi government's pledge of $230 million for Anbar projects.
Despite several devastating U.S. military offensives to rout insurgents, the militants - or, in some cases, tribes with insurgent connections - still control the supply routes of the province, making reconstruction all but impossible without their protection.
One senior Iraqi politician with personal knowledge of the contracting system said the insurgents also use their cuts to pay border police in Syria "to look the other way" as they smuggle weapons and foot soldiers into Iraq.
"Every contractor in Anbar who works for the U.S. military and survives for more than a month is paying the insurgency," the politician said, speaking on condition of anonymity because of the sensitivity of the matter. "The contracts are inflated, all of them. The insurgents get half."
Iraqi Foreign Minister Hoshyar Zebari said he was aware of the "insurgent tax" that U.S.-allied contractors are forced to pay in Anbar, though he said it wasn't clear how much money was going to militant groups and how much to opportunistic tribesmen operating on their own.
"It's part of a taxation they put on trucks through all these territories, but it's very difficult to establish if it's going directly to insurgents," Zebari said.
As of July, the U.S. government had completed 3,300 projects in Anbar with a total value of $363 million, the U.S. embassy said. Another 250 projects with a total price tag of $353 million are under way.
Saleh, the deputy prime minister, said dealing with such huge amounts of money in such a volatile place means corruption is inevitable and that some projects cost far more than they should. But despite qualms, he believes the effort is worth it.
"I'm a realist," he said. "When I look at my options, will I have a 100 percent clean process? No. But will this force me to hold back? Absolutely not."
Suleiman, the Dulaimi sheikh and onetime U.S. ally, speaks more bitterly. Sitting in his Baghdad office, he displayed a stack of photos and status updates for projects that included two schools, a clinic and a water purification center. The photos showed crumbling, half-finished structures surrounded by overgrown weeds and patchworks of electrical wires. He blamed such failures on "the terrorists" who work under the noses of U.S. and Iraqi officials.
"Those responsible for these projects had to give money to al Qaida. Frankly, gunmen control contracting in Anbar," he said. "Even now, the thefts are unbelievable, and I have no idea where those millions are going."
None of the Iraqi contractors agreed to speak on the record - they risk losing future U.S. contracts and face retaliation from insurgent groups. Some of the Iraqis interviewed remain in Fallujah or Ramadi on the U.S. payroll; others had fled to Arab countries and Europe after they deemed the business too risky.
"I put it right in my contracts as a line item for 'logistics and security,'" said one Iraqi contractor who is still working for a major American company with several long-term projects in Anbar. "The Americans think you're hiring a security company, but how you execute it is something else entirely. This is how it's been working since Day 1."
One Iraqi contractor who is working on an American-funded rebuilding project in the provincial capital of Ramadi said he faced two choices when he wanted to bring in a crane, heavy machinery and workers from Baghdad: either hire a private security company to escort the supplies for up to $6,000 a truck, or pay off locals with insurgent connections.
He chose the latter, and got $120,000 for a U.S. contract he estimates to be worth no more than $20,000. The contractor asked that specific details of the project not be disclosed for fear he'll be identified and lose the job.
"The insurgents always remind us they're there," the contractor said. "Sometimes they hijack a truck or kidnap a driver and then we pay and, if we're lucky, we get our goods returned. It's just to make sure we know how it works.
"Insurgents control the roads," he added. "Americans don't control the roads - and everything from Syria and Jordan goes through there."
Another Iraqi contractor with several U.S. rebuilding contracts said he's been trying to avoid paying off insurgents by strengthening his relationship with reputable tribal leaders in Anbar.
In one contract for a major U.S. company, the contractor said, he gave cash payments to tribal leaders and trusted them to buy the goods in Anbar instead of having to pay insurgents to bring the goods in from Baghdad. He said the tribesmen took photos as proof that they used the money properly and had to hide the supplies in their homes for fear insurgents would find out they'd been left out of the deal.
The contractor said such scenarios are extremely rare and very dangerous. More typical, he said, was a recent order he took to haul gravel to U.S. bases in Anbar.
"If I do it in the Green Zone, it's just putting gravel in Hesco bags and it would be about $16,000," the contractor said. "But they needed it for Ramadi and Fallujah. I submitted an invoice for $120,000 and I'd say about $100,000 of that went to the mujahideen," as Iraqis sometimes call Sunni insurgents.
An Iraqi who used to work as an interpreter for Titan Corp., the U.S. company that supplies local interpreters to U.S. forces in Iraq, said he witnessed countless incidents of insurgents shaking down contractors during the two years he spent as a translator in the "Engineering Operations Room" on a U.S. military base in Anbar. The man, a Fallujah native who has since fled to the United Arab Emirates, spoke on condition of anonymity because he hasn't ruled out returning to Iraq now that Anbar construction is on the upswing.
He said he was stunned when, from early 2004 to his departure in summer 2006, a parade of sheikhs with known insurgent connections were awarded contracts worth hundreds of thousands of dollars.
The interpreter said that on several occasions contractors pleaded with American officials for protection and told them that gunmen were shaking them down for large sums of cash.
In a project to rebuild Dam Street in Fallujah, the interpreter said, insurgents forced the local contractor to pay for protection on three or four separate occasions. Work would stop for a few days until the contractor paid up. In the end, the interpreter said, the contractor grew so terrified that he walked off the unfinished project and fled Iraq.
On another project for a water treatment plant in the insurgent stronghold of Zoba, the interpreter said, the local contractor was summoned to meet with militant leaders who threatened his life if he didn't give them at least half the contract's value.
Fawzi Hariri, a member of the Iraqi cabinet and head of the government's Anbar Reconstruction Committee, said some U.S. rebuilding funds "absolutely" have gone into insurgents' pockets. The exception is where construction sites were guarded around-the-clock by U.S. or Iraqi troops.
"If you're on your own, you certainly would have to pay somebody," Hariri said.
Hariri said the Iraqi government's Anbar committee checks contractors' permits and references, withholds payment until the work is reviewed and only hires workers who are familiar enough with Anbar's deep-rooted tribes to arrange for security. On the parallel U.S. reconstruction effort, however, American contracting officials rarely consult their Iraqi counterparts about how much they spent or who was paid on specific projects.
"The Americans are accountable only to themselves," Hariri said. "It's their money."
(Leila Fadel and McClatchy Newspapers special correspondent Mohammed al Dulaimy contributed.)
© 2007 McClatchy Newspapers
31 Comments so far
Show All"He had thought he was doing a good and noble thing when he started telling the FBI about the guns and the land mines and the rocket-launchers — all of them being sold for cash, no receipts necessary, he said. He told a federal agent the buyers were Iraqi insurgents, American soldiers, State Department workers, and Iraqi embassy and ministry employees.
The seller, he claimed, was the Iraqi-owned company he worked for, Shield Group Security Co.
"It was a Wal-Mart for guns," he says. "It was all illegal and everyone knew it."
So Vance says he blew the whistle, supplying photos and documents and other intelligence to an FBI agent in his hometown of Chicago because he didn't know whom to trust in Iraq.
For his trouble, he says, he got 97 days in Camp Cropper, an American military prison outside Baghdad that once held Saddam Hussein, and he was classified a security detainee."
http://www.msnbc.msn.com/id/20430153
I think this ties things together nicely.. notice who's doing the buying?
That's how the "Great" american system works.
Not a surprise. Playing all sides against one another is how this war of terror is being fought.. Americans/Westerners v. Iraqis, and Iraqi v. Iraqi, equals perfect chaos, funded by our tax dollars in our names.
Ha-Haa . . . Now the Iraqi economic system begins to surface. Things are done over there just like they are done here . . . Pay enough money and you can get anything done that you want. If you don't belive me, pay attention to congress and the upcoming election. More money means more votes.
In some cases more money means better, and more complete election coverage in the media to express your views.
The Great American GOD, "The GreenBack" . . . After all it will buy your way into heaven why shouldn't it buy your shipment safe passage down the highway.
So?
That's how the "Great" american system works. One hand destroys, while the other rebuilds. The American system is rotten to the core - especially at the highest levels of the federal government.
As the world's most notorious terrorists they cause more horror & misery in the world than any of us are capable of grasping. While they loudly portray themselves to the ignorant American masses as defenders of freedom, democracy and human rights.
Over 800,000 Iraqi people of all ages have been killed and over a million maimed/crippled for life since the USA invaded Iraq. NONE of them deserved such a fate. None of the bastards most responsible have been charged with any crimes.
The USA poses a threat to all life on Earth. It is the #1 obstacle to world peace. Tolerance is a great thing, but the USA in it's present world role as killer, kidnapper, torturer, liar, bully & thief should not be tolerated. Who could tolerate a rabid dog running loose in their neighborhood? Tolerating the USA's countless crimes against humanity is a great recipe for disaster. It's like tolerating battalions of rabid dogs who terrorize millions. The sick bully must be stopped. If it is not stopped very soon, things will get much uglier. The world can't wait much longer. Please ask yourself how can you help stop the bully and get to it!!!
==========================================
"I spent thirty-three years and four months in active service in the country's most agile military force, the Marines. I served in all ranks from second lieutenant to major general. And during that period I spent most of my time being a high-class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism.
"I suspected I was just part of a racket at the time. Now I am sure of it. Like all members
of the military profession I never had an original thought until I left the service. My mental
faculties remained in suspended animation while I obeyed the orders of the higher-ups. This is
typical with everyone in the military service.
"Thus I helped make Mexico, and especially Tampico, safe for American oil interests in 1914. "I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenue in. I helped in the raping of half-a-dozen Central American republics for the benefit of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers and Co. in 1909-1912. I brought light to the Dominican Republic for the sugar interests in 1916. I helped make Honduras 'right' for American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went its way unmolested.
"During those years, I had, as the boys in the back room would say, a swell racket. I was rewarded with honors, medals, and promotion. Looking back on it, I feel that I might have given Al Capone a few hints. The best he could do was to operate a racket in three city districts. The Marines operated on three continents."
—Maj. Gen. Smedley Butler (U.S. Marine Corps)
-------------------------------------------
"Man must change or die.
There is no other course."
The World Teacher
http://www.Share-International.org
Bush brings us to full understanding of the term "throwing money around like a drunken sailor". He's done it all his life, why should now be different?
Thank you MaxheMust for that quote from General Butler. At last, an honest man. And one who grew up. These days, some of our military aren't waiting to leave the service before having original thoughts. Dire times create change.
Funding Iraqi Insurgents Is Taking A Cut of US Rebuilding Money...This Is A Direct Violation Of National Security Presidential Directive 51!
When will the U.S. Government seize the assets of Misters Bush and Cheney? Perhaps our New A.G. will do the right thing. Do you think?
I bet we sent the contractors those top notch, counterfit hundred dollar bills we got from Korea. Yankees are shrewd businessmen, that's why we are so loved throughout the world now.
If the USA didn't fund and arm the insurgents, they would have no one to fight, and would have to go home without all that lovely oil
Something tells me that this little detail will be left out of the September progress report....
Not only does crime pay, it becomes a way of life. Rock on, U$A!
30 percent of the weapons provided by America for the Iraqi armed forces had gone missing. Now our tax dollars for the rebuilding of the mess we started in Iraq is finding its way to the insurgency. Now we know the reason the insurgency has grown from a nuisance to a problem killing more US soldiers and Iraqi civilians everyday.
What a shame that so many have died in vain. Cheney and Bush need to answer for this. Such a gross misuse of their powers and mismanagement of the war and our country. Now they want to bomb Iran.
Impeachment is our only hope to save us from conflict with Iran.
Add in the direct arming of Sunni militias by the U.S. Army to ostensibly aid us.
I still think all the Iraq chaos is a smoke-screen to distract us while Constitutional protections under the law are abrogated - probably permanently.
The article coming on the heels of the Rolling Stone exposé "The Great Iraq Swindle" is informative but put in proper perspective, "the hundreds of thousands of U.S. dollars" the contractors have paid out is insignificant compared to the millions and millions of dollars that have been shamelessly collected by the crony corporations which bill for no work, for falsified work, or at a maximum work that is so shoddy that Congress has actually asked that the money be returned. Naturally, the answer is no as these cronies know they were part of a free-for-all frenzy of US taxpayer money for the taking and there has been and likely will be no consequences for the money fest, at the expense of the American public.
My only objection to the article is the use of the word extorted in the opening statement "Iraq's deadly insurgent groups have financed their war against U.S. troops in part with hundreds of thousands of dollars in U.S. rebuilding funds that they've extorted from Iraqi contractors in Anbar province." This leads one to believe that the contractors are somehow being victimized, when in reality it is the US taxpayers that have been victimized by the crony contractors in a racketeering scheme that is one of the greatest swindles of all time.
Ugh. US number one export weapons. MMMMM. Lemme see. More war ...Sell more weapons....... Big business who run government make more money....Arghhh. Make more money...Buy more power.....Snurkk....Even stupid me figure it out. How bout you, Bush people?
Shaking down contractors for a cut of the action is what Americans should start doing. They owe us big time. You have no health insurance? You are the victim of terrorism my friend. Fight back and get a piece of the pie.
Let's see,... how does one spell insurgent,.. umm, I S R A L. hmm looks right. If it swims like a duck, quacks like a duck,...
This "protection racket" story recalls our Government's "regime change" in Haiti, where the US Ambassador showed up at President Aristides' residence in the dead of night with a heavily armed escort, told the President of Haiti that the US could not provide him with protection against an approaching band of "insurgents" (otherwise accurately described by Secretary Colin Powell as a bunch of "criminal thugs") -- despite the fact that US attack aircraft were available at our Gitmo naval air station less than 30 minutes away) -- and that in order to save the lives of the President, his wife and thousands of innocent Haitians the President's only course of action was to sign a "resignation" and immediately get on a US aircraft that was waiting to take the President and his wife to some yet-to-be-disclosed destination in Africa. We not only have a war criminal for our President, we also have a two-bit imitation of a mafia street thug. Had enough, fellow Americans?
How can we send these horrific stories to our congress folks? Please tell me?
don't see why not everybody else is taking a cut
"An embassy spokesman, Noah Miller, said in an e-mailed statement that, "in terms of contracting practices, we have checks and balances in our contract awarding system to prevent any irregularities from occurring."
Otherwise known as "no-bid" contracts to Halliburton and Friends. No irregularities there!
Now we have a better perspective into the "Anbar Success Story". Insurgent activity is down and reconstruction is improving because the insurgents own the market forces. From the figures cited in the article, a "pacified" Anbar may be worth over $100 million so far. It is more profitable for the insurgents not to stage operations here. We have created an insurgent Wall Street for them.
Does the great white father know about this?
This is hilarious ...
Why do we still call them insurgents. The Iraqi Resistance is the correct term. We didnt call the French fighters in WW2 the French Insurgents did we ?? Why the double-standard ??
Maybe we could call them "detergents" as in "cleansing agents".
Also, according to merriam-webster a "detergent" is "an oil-soluble substance that holds insoluble foreign matter in suspension". Perfect.
From insurgents to detergent, thanks for the good laugh.
Kirby--your idea of getting this material to our congresspersons is great, but they all act as if they have been hypnotized and turned into zombies so what good would it do?
Maybe if we redacted it as the Bushies do so nothing was left with any meaning they would understand it.
Here is the line:
"Damnit, take this money and get out of my way, I've got some kill'n to do. And by the way, wipe that smile off your face while your counting it!"
—Maj. Gen. Smedley Butler (U.S. Marine Corps)
Seems to believe that it is all right for other countries to steal american money. I guess he never fugured out what "The Shores of Tripoli" meant.