New York, Nov 26: The insurgency in Iraq is now
self-sustaining financially, raising tens of millions of
dollars a year from oil smuggling, kidnapping, counterfeiting
and connivance by corrupt Islamic charities that the Iraqi
government and its American patrons have been largely unable
to prevent, according to a US government report.
The American study offers little hope that much can be
done to choke off revenues to the armed groups battling the
government in Iraq, the New York Times said.
The report, obtained by the paper, estimates that
groups responsible for many insurgent and terrorist attacks
are raising 70 million to 200 million dollars a year from
illegal activities.
It says 25 million to 100 million dollars 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 dollars 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 dollars in ransom last year.
The Times says a copy of the seven-page report was
made available to it by American officials who said the
findings could improve understanding of the challenges the
united states faces in Iraq.
The report acknowledges how little US authorities in
Iraq know three and a half years after the invasion that
toppled Saddam Hussein about crucial aspects of insurgent
operations.
"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.
It also says that "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, the
times says, were given an outline of the report 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 to the paper, 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.
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 Saddam Hussein's
days, and benefit from the willingness of many insurgents to
fight with little or no pay, it said.
But other estimates, the paper says, 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 four billion to 5 billion dollars 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 dollars or
more from fuel smuggling alone.
For Washington, the times says 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 Hussein and his associates seized as his
government collapsed.
US officials were quoted as saying that as American
troops entered Baghdad, Hussein's oldest son, Qusay, took more
than 1 billion dollars 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 Hussein's briefcase when he was
captured in December 2003.
But the report says 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
dollars in former regime assets.
Another reason, it says, is that 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 report also focuses on the role played by
"sympathetic donors," including Islamic charities and NGOs.
It says that "intelligence reporting" indicates that
only 10 to 15 of the 4,000 NGOs support terrorist and
insurgent groups, but that those few take advantage of lax
Iraqi regulation to divert funds to insurgent and other armed
groups.
Bureau Report