Militants muscle in on rackets

LOS ANGELES TIMES

TIKRIT, Iraq — Iraqi insurgents and sectarian militias are funding their deadly activities by muscling in on Mafia-style rackets involving everything from real estate and oil to cement and soft drinks, U.S. commanders say.

U.S. diplomats and senior Iraqi officials have repeatedly singled out corruption as one of the greatest obstacles to stability in Iraq. But until recently, commanders acknowledge, they knew little about the murky dealings that sustain militant groups across the country.

“If you think that the majority of money is coming from outside the country to fund the insurgency, you’d be wrong,” said Lt. Col. Eric Welsh, commander of the U.S. Army’s 2nd Battalion, 7th Cavalry Regiment in the northern city of Mosul. “I think a majority is being done right here ... under the disguise of legitimate storefront operations.”

Maj. Gen. Benjamin Mixon, who is wrapping up 15 months as commander of U.S. forces in northern Iraq, said shutting down the networks that finance the insurgency will be a growing priority as U.S. forces seek to consolidate recent gains against Sunni extremists in Mosul, Baqouba and elsewhere.

An internal U.S. Embassy assessment leaked to the media in August said endemic graft was crippling the government and providing a major source of funding to the insurgency and sectarian militias. Prime Minister Nouri al-Maliki has described the fight against corruption as Iraq’s “second war.”

“We can’t win this thing with a bullet. We can’t win it by killing everybody,” Mixon said. “We have got to attack the insurgency from what source it comes from. Part of that is the financing.”

Kidnapping rings have long been a focus of U.S. operations in Iraq. But commanders say insurgents have many other ways of skimming and strong-arming the money they need to buy weapons, build bombs, support fighters and pay restitution to their families.

Recent U.S. and Iraqi raids targeting the financiers of bloodshed in the northern city of Mosul have uncovered a criminal network of kickbacks, over-billing and illegal sales that has pumped millions into Sunni Arab militant groups such as al-Qaida in Iraq.