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NYTimes.com June 18, 2008 Brown Says Europe Will Tighten Iran SanctionsLONDON — Prime Minister Gordon Brown announced Monday that Britain and the European Union would freeze the overseas assets of Iran’s largest commercial bank, joining the United States in intensifying financial pressure against Iran over its refusal to address international concern over its nuclear activities. Mr. Brown, appearing with President Bush after discussions here, also pledged to send additional troops to Afghanistan, and indicated that he would not bend to political pressure at home to withdraw British forces in southern Iraq more quickly. Both leaders said that they remained open to resolving the dispute with Iran diplomatically, but only after it suspended uranium enrichment, which Mr. Bush and others have said is aimed at developing nuclear weapons. Iran’s leaders insist the nuclear program is for peaceful purposes. Iran gave a chilly reception to a proposal from Western powers that was delivered Saturday. The proposal offered economic and diplomatic incentives to Iran to suspend its enrichment and to begin talks to resolve questions about its nuclear work. While Iran has not formally responded, President Bush said Saturday that it had rejected the offer. Reuters reported on Tuesday that Iran would continue enriching uranium. “We have repeatedly said that enrichment is our red line and we should enjoy this technology. The work will be continued,” Deputy Foreign Minister Alireza Sheikhattar said, according to the state news agency IRNA. Mr. Sheikhattar said Iran was reviewing the incentives package. “We will give our answer as soon as possible. But we do not know exactly when it will be,” he said, according to Reuters. Mr. Brown announced that Europe would move to restrict European transactions of the Iranian bank, Bank Melli, immediately. Last week, the Iranian news media reported that Iran had recently moved $75 billion in assets from Western financial institutions to banks in Iran and Asia. Mr. Brown also said that if Iran continued to defy existing United Nations resolutions calling for it to halt uranium enrichment, European leaders would begin considering sanctions on investments in Iran’s oil and natural gas industries. That would be a far more significant penalty, though one that causes unease because of already soaring global energy prices. “We await the Iranian response and we’ll do everything possible to maintain the dialogue,” Mr. Brown said at a news conference with Mr. Bush at the Foreign and Commonwealth Office. “But we are also clear that if Iran continues to ignore united resolutions, to ignore our offers of partnership, we have no choice but to intensify sanctions.” Iran did not immediately respond to Mr. Brown’s announcement, but economists in Tehran said that sanctions could put further strain on Iran, especially at a time when Iran is highly dependent on imports, from Europe in particular, forcing it to look elsewhere for trade. “The sanctions will put on further pressure, but Iran can use its windfall oil revenue and pay further costs to import through smaller banks,” said Saeed Leylaz, an Iranian economist. “Iran will also shift its trade from Europe to Asia.” New sanctions would be the latest move to gradually increase punitive measures against Iran, while offering an option to ease them if its government retreated from its enrichment program. The United States, which severed diplomatic relations and most economic ties with Iran after the Islamic Revolution in 1979, has long sought to interfere with Iran’s foreign financial transactions. The Bush administration imposed largely symbolic sanctions against Bank Melli, which handles most of Iran’s overseas trade, and other banks last fall. “If we freeze the assets of Bank Melli, they start to run out of places they can do business in Europe,” the senior British official said. “That starts to apply real pressure.” Mr. Brown’s strong support for Mr. Bush on Iran, Afghanistan and Iraq came as Mr. Bush was ending a weeklong visit to Europe that featured confrontations over a variety of issues, but produced what administration officials described as progress in several areas. Mr. Brown’s announcement of sending additional troops to Afghanistan was intended to bolster the NATO mission there, at a time when the alliance has been accused of responding slowly to re-emerging threats from the Taliban and other militants and tying its own hands with individual limits on certain operations. Frustrated American defense officials have urged the NATO allies to contribute more forces and let those already there operate more aggressively. Britain has 7,800 troops in Afghanistan. That is second only to the United States, which has 34,000, some of those within the NATO-led operation. The NATO force has more than 50,000 troops in all. The British defense minister, Desmond Browne, later confirmed to Parliament that an additional 230 troops, including engineers, trainers and other specialists in reconnaissance, would be sent to Afghanistan. That would bring the British total by next spring to more than 8,000, most of them in southern Afghanistan. An official traveling with Mr. Bush said that while the increase might seem small, the new troops would not operate with the constraints that other nations have imposed on their forces serving there. The announcement came as the bodies of five British soldiers killed in two attacks in Afghanistan last week returned home. A total of 102 British soldiers have died in Afghanistan since 2001. In the final stop on his European tour, President Bush met Monday in Belfast with leaders of Northern Ireland, implying that peacemaking efforts there would be a model for other deep-seated conflicts around the world, including Iraq. Flanked by First Minister Peter Robinson, the new leader of the main Protestant party, the Democratic Unionists, and Deputy First Minister Martin McGuinness of Sinn Fein, the Catholic party allied to the Irish Republican Army, the president told journalists about his confidence that the Northern Ireland peace agreement, after decades of conflict, would endure. “Obviously more work has to be done,” he said of the power-sharing agreement reached in March of last year, which took effect two months later But, he added, “progress made to date would have been unimaginable 10 years ago.” Mr. Bush has already visited Slovenia, Germany, Italy, the Vatican and France, a trip he described as a farewell tour a week ago. But as the week went on, Mr. Bush and his aides appeared annoyed with tributes that tended to highlight the end of his presidency. “You kind of wrote my political obituary,” Mr. Bush told President Nicolas Sarkozy of France, after a glowingly nostalgic toast. On Monday, Mr. Bush had another message for Europe and its leaders. “By the way, some are speculating this is my last trip. Let them speculate. Who knows?” Reporting was contributed by Alan Cowell from Paris, Nazila Fathi from Tehran, Stephen Castle from Luxembourg and Eamon Quinn from Belfast, Northern Ireland.
Britain, E.U. Announce Iran Sanctions By Dan Eggen LONDON, June 16--British Prime Minister Gordon Brown on Monday announced new sanctions against Iran and a small increase in troops for Afghanistan, handing President Bush a symbolic boost on the last day of his weeklong farewell trip to Europe. Brown, appearing with Bush at a 10 Downing Street news conference, said Britain and the European Union would act later Monday to freeze the assets of Iran's largest bank, Bank Melli, in response to Tehran's refusal to suspend its uranium enrichment program. Bush has made Iran's uranium enrichment program a focus of his European swing, and has been encouraging European nations to further pressure the Islamic Republic to curtail its nuclear activities and allow more extensive international inspections. Iran says the program is peaceful, but there is concern that the enriched uranium could also be diverted to nuclear weapons. The British prime minister also said the number of British troops in Afghanistan would be raised to a record level. British officials said after the press conference that the total number of troops would be about 200, added to about 7,800 already in Afghanistan. Brown also strongly rejected reports that he was planning a timetable for rapid withdrawal of the roughly 4,000 British troops that remain in Iraq. The British contingent is stationed on the outskirts of Basra and focused primarily on training Iraqi security forces. British troops withdrew from the center of Basra last year. "In Iraq, there is a job to be done," Brown said. "There's going to be no artificial timetable. And the reason is we're making progress." The United Kingdom is the last stop for Bush on a weeklong trip through Europe, which will include a visit later Monday to Northern Ireland. Along with discussion of Iran and other issues, U.S. officials, including first lady Laura Bush, in recent days helped raise $20 billion in pledges to help rebuild Afghanistan. Monday's announcements from Brown came as good news for Bush, who is entering his final months in office and, like Brown, is struggling with low approval ratings and political opposition at home. It follows a joint statement last week by the United States and the European Union vowing to pursue aggressive financial sanctions against Iran unless the regime in Tehran opens its nuclear program to inspections and agrees to halt uranium enrichment. Iranian leaders effectively rejected a package of incentives offered by the EU's top diplomat over the weekend aimed at securing Tehran's cooperation. European action against Bank Melli comes on top of restrictions imposed in Oct. 2007 when the U.S. Treasury Department froze bank assets and halted transactions as part of a broader package of sanctions against state-owned Iranian financial institutions. Bank Melli allegedly sent $100 million to Hamas, Palestinian Islamic Jihad and other terrorist groups from 2002 to 2006, according to Treasury officials. Treasury has also cut off another major Iranian bank, Bank Saderat, from the U.S. financial system. "This has been a good trip," President Bush said at the press conference.
Donors promise $21 billion more for AfghanistanBy ANNE GEARAN and ANGELA CHARLTON Associated Press Writers 3:59 PM CDT, June 12, 2008 PARIS Donors ranging from the U.S. to the World Bank pledged more than $21 billion for Afghanistan on Thursday -- and this time they want their money spent better in a desperately poor country where the president is barely in charge.
NYTimes.com May 23, 2008 Iraq Spending Ignored Rules, Pentagon SaysBy JAMES GLANZ A Pentagon audit of $8.2 billion in American taxpayer money spent by the United States Army on contractors in Iraq has found that almost none of the payments followed federal rules and that in some cases, contracts worth millions of dollars were paid for despite little or no record of what, if anything, was received. The audit also found a sometimes stunning lack of accountability in the way the United States military spent some $1.8 billion in seized or frozen Iraqi assets, which in the early phases of the conflict were often doled out in stacks or pallets of cash. The audit was released Thursday in tandem with a Congressional hearing on the payments. In one case, according to documents displayed by Pentagon auditors at the hearing before the House Committee on Oversight and Government Reform, a cash payment of $320.8 million in Iraqi money was authorized on the basis of a single signature and the words “Iraqi Salary Payment” on an invoice. In another, $11.1 million of taxpayer money was paid to IAP, an American contractor, on the basis of a voucher with no indication of what was delivered. Mary L. Ugone, the Pentagon’s deputy inspector general for auditing, told members of the committee that the absence of anything beyond a voucher meant that “we were giving or providing a payment without any basis for the payment.” “We don’t know what we got,” Ms. Ugone said in response to questions by the committee chairman, Henry A. Waxman, Democrat of California. The new report is especially significant because while other federal auditors have severely criticized the way the United States has handled payments to contractors in Iraq, this is the first time that the Pentagon itself has acknowledged the mismanagement on anything resembling this scale. The disclosure that $1.8 billion in Iraqi assets was mishandled comes on top of an earlier finding by an independent federal oversight agency, the Special Inspector General for Iraq Reconstruction, that United States occupation authorities early in the conflict could not account for the disbursement of $8.8 billion in Iraqi oil money and seized assets. “This report is further documentation of the fact that the United States had absolutely no preparation to use contracting on the scale that it needed either at the military or aid level in going to war in Iraq,” said Anthony H. Cordesman of the Center for Strategic and International Studies in Washington. “We had really allowed ourselves to become more and more dependent on contractors in peacetime,” said Mr. Cordesman, who spoke in a telephone interview on Thursday. “We were unprepared to use contractors in wartime, and all of this had an immense impact.” The Pentagon report, titled “Internal Controls Over Payments Made in Iraq, Kuwait and Egypt,” also notes that auditors were unable to find a comprehensible set of records to explain $134.8 million in payments by the American military to its allies in the Iraq war. The mysterious payments, whose amounts had not been publicly disclosed, included $68.2 million to the United Kingdom, $45.3 million to Poland and $21.3 million to South Korea. Despite repeated requests, Pentagon auditors said they were unable to determine why the payments were made. “It sounds like the coalition of the willing is the coalition of the paid — they’re willing to be paid,” said Mr. Waxman, who later in the day introduced what he called a “clean contracting” amendment to a defense authorization bill being debated on the House floor. The amendment, which was accepted by voice vote, would institute a number of reforms, including new whistleblower protections and requirements on competitive bidding. The audit was carried out by the Defense Department Office of the Inspector General, which is led by Claude M. Kicklighter, a retired lieutenant general. Mr. Kicklighter was not at the Thursday hearing because of a scheduling conflict. Many of the previous investigations of payments to contractors in Iraq have focused on the flawed effort to rebuild the country’s decrepit electricity grid, oil infrastructure, transportation network and public institutions. The feeble accountability and spotty paperwork of the contracts examined by Mr. Kicklighter’s office make it difficult to say what many of them were for, but the report indicates that many appeared to be for things as mundane as bottles of water, truck rentals and food deliveries. According to the report, the Army made 183,486 “commercial and miscellaneous payments” from April 2001 to June 2006 from field offices in Iraq, Kuwait and Egypt, for a total of $10.7 billion in taxpayer money. The auditors focused on $8.2 billion in so-called commercial payments to contractors — American, Iraqi and probably other foreign nationals — although the report does not give details on the roster of companies. Because the contracts were too numerous to be examined one by one, the auditors said they took a standard approach and examined 702 statistically representative contracts, then extrapolated the results to the full set. When the results were compiled, they revealed a lack of accountability notable even by the shaky standards detailed in earlier examinations of contracting in Iraq. The report said that about $1.4 billion in payments lacked even minimal documentation “such as certified vouchers, proper receiving reports and invoices,” to explain what had been purchased and why. Another $6.3 billion in payments did contain information explaining the expenditures but lacked other information required by federal regulations governing the use of taxpayer money — things like payment terms, proper identification numbers and contact information for the agents involved in the transaction. Taken together, those results meant that almost 95 percent of the payments had not been properly documented. In a separate examination, auditors found that the $1.8 billion in seized Iraqi assets paid out by American military officers had not been properly accounted for. Examples of the paperwork for some of those payments, displayed at the hearing, depict a system that became accustomed to making huge payments on the fly, with little oversight or attention to detail. In one instance, a United States Treasury check for $5,674,075.00 was written to pay a company called Al Kasid Specialized Vehicles Trading Company in Baghdad for items that a voucher does not even describe. In another case, $6,268,320.07 went to the contractor Combat Support Associates with even less explanation. And a scrawl on another piece of paper says only that $8 million had been paid out as “Funds for the Benefit of the Iraqi People.” But perhaps the masterpiece of elliptic paperwork is the document identified at the top as a “Public Voucher for Purchases and Services Other Than Personal.” It indicates that $320.8 million went for “Iraqi Salary Payment,” with no explanation of what the Iraqis were paid to do. Whatever it was, the document suggests, each of those Iraqis was handsomely compensated. Under the “quantity” column is the number 1,000, presumably indicating the number of people who were to be paid — to the tune of $320,800 apiece — if the paperwork is to be trusted.
US, Iranian relations remain cool as Iraq pleads for aidMiddle East states wary of Tehran's sway in BaghdadBy Anne Gearan, Associated Press | April 23, 2008 KUWAIT CITY - The United States and Iran, the two nations with the most at stake in Iraq, pointedly ignored each other yesterday as Iraq's premier unsuccessfully pleaded for immediate financial and diplomatic backing from rich Arab neighbors still leery of Tehran's influence on Baghdad. A sharp exchange between Saudi and Iranian diplomats underscored the mistrust that has hampered Secretary of State Condoleezza Rice's mission to win those specific commitments. Rice and Iran's foreign minister, Manoucher Mottaki, did not speak or shake hands as Prime Minister Nouri al-Maliki of Iraq said he cannot understand why Arab states have not forgiven Iraq's crushing debts, made new loans, or sent ambassadors to Baghdad. "We find it difficult to explain why diplomatic exchange [between Iraq and its Middle Eastern neighbors] has not taken place," Maliki told foreign ministers from nearby nations. "Many foreign countries have kept their diplomatic missions in Baghdad and did not make security excuses." Rice sat diagonally across a large U-shaped table from Mottaki as Maliki spoke at the opening of a meeting of Iraq's neighbors held in Kuwait - the third such meeting in the past year. A copy of the conference's draft resolution obtained by the Associated Press calls for increased help from Iraq's neighbors in fighting militias and "assistance in solving the issue of Iraqi debts." But Iraq's neighbors have made similar pledges at two previous meetings, with little follow-through. They have also promised to open diplomatic missions in Baghdad, but none has yet done so. Iraq's foreign minister, Hoshyar Zebari, and Rice said they heard encouraging signals on both the diplomatic and economic fronts, but Arab states offered no specific new promises. "We need to be patient. This is how politics works in this part of the world," Zebari told reporters. Yesterday's conference was a rare occasion where top diplomats from Iran and the United States were even in the same room. Rice told reporters she did greet Syria's envoy to the session. The Bush administration blames both Iran and Syria for feeding the insurgency inside Iraq, but considers Iran the far greater problem. "We would hope that all of Iraq's neighbors would choose to be positive neighbors. I don't think it's any secret that we do not believe that to be the case with all of Iraq's neighbors," Rice said. "The good thing about meetings like this is that it periodically calls people to account." Rice congratulated the group for agreeing to hold its next session in Baghdad, where violence has declined in the past year. The United States was midwife to Iraq's Shi'ite-led democratic government, and Washington remains Maliki's greatest patron. He is trying to balance that relationship with the complex one he and his government maintain with Iran, Washington's principal adversary in the Middle East. The Sunni Arab neighbors Maliki is courting, meanwhile, have a strong stake in keeping Iraq - which is majority Shi'ite - firmly in the Arab orbit as a buffer against expanding influence by Iran, the world's largest Shi'ite nation. But they are still leery of Maliki's government and the deep Iranian ties of its main coalition members. Asked about US accusations that Iran supports Shi'ite militias in Iraq, Mottaki said the problem was foreign troops and called on Washington to withdraw its forces from Iraq. "The main players on the Iraqi playground are the foreign forces. They insist on their policies there, although they are failed policies," he said.
U.S. may give $4 billion more for Afghan reconstruction Wednesday, April 9, 2008 3:17 AM By Matthew Lee ASSOCIATED PRESS
WASHINGTON -- The Bush administration is hoping to pledge nearly $4 billion in additional aid for Afghanistan at an international donors conference to be held in June in Paris, a U.S. official said yesterday. France will host the meeting on June 14 and set a goal of raising $12 billion to $15 billion to fund Afghan reconstruction projects through 2014. The United States is looking to contribute at least 25 percent of that total, the official said. The official, who said Secretary of State Condoleezza Rice likely would lead the U.S. delegation to the conference, spoke on condition of anonymity because the administration has not yet determined its pledge amount. International donors have pledged about $32.7 billion in reconstruction funds for Afghanistan since 2001; $21 billion of that has come from the United States. The donors will gather in June as NATO tries to better coordinate military and civilian reconstruction efforts in Afghanistan with the help of new U.N. envoy Kai Eide. Eide attended last week's NATO summit in Romania, where France and other nations agreed to deploy more troops to Afghanistan to boost the alliance's 47,000 troops there. But more manpower is needed. Also, international assistance to Afghanistan has been criticized as wasteful. An umbrella group of aid agencies estimated that 40 percent of donations go to salaries of highly paid foreign experts. Eide has said that one of his key roles will be to see that the aid money is well-spent.
NYTimes.com March 26, 2008 Afghans Lack $10 Billion in Aid, Report SaysKABUL, Afghanistan — Western countries have failed to deliver $10 billion of nonmilitary assistance pledged to Afghanistan over the last six years and the United States, by far the biggest donor, is responsible for half of the shortfall, a new report published here on Tuesday said. The report was written by a policy adviser from the British charity Oxfam and published by the Agency Coordinating Body for Afghan Relief, or Acbar, a coalition of Afghan and international nongovernment aid organizations. It warned that development assistance to Afghanistan had been inadequate and in many cases wasteful or ineffective, jeopardizing economic progress and security in the country. Donor countries pledged $25 billion in aid from 2002 to 2008, but only $15 billion has been disbursed to date, the report states, citing Afghan government figures. The United States, which provides one third of all development assistance to Afghanistan, has spent only $5 billion of the $10.4 billion it has pledged for that period. Jim Kunder, the acting deputy administrator of the United States Agency for International Development, told The Associated Press that there were always concerns about the speed with which aid was delivered but that the work was being done. “The U.S. government is on track to provide the aid to Afghanistan that it pledged,” he said. American officials have also blamed security conditions for slowing assistance programs, including the largest one in the country, the development of the Kajaki dam in the insurgent stronghold of Helmand Province. The new report is one of several recent studies that have called for more and better organized assistance to Afghanistan. In an attempt to address some of the concerns, the Security Council recently gave the United Nations Assistance Mission in Afghanistan greater powers to coordinate international development assistance. The World Bank has spent only a little more than half of its commitments to Afghanistan, and the European Commission and Germany have disbursed less than two-thirds of theirs, the Acbar report said. The Asia Development Bank and India have disbursed only a third of their commitments, while Japan and Canada were singled out for best meeting their pledges. The shortfalls in assistance can be partly attributed to poor security, high levels of government corruption and the inability of Afghan institutions to absorb the aid any faster, the report said. “However, the magnitude of the shortfalls underscores the importance of donors increasing efforts to mitigate or adapt to such problems,” it said. International development aid to Afghanistan remained “woefully inadequate,” the report’s author, Matt Waldman, wrote. At $7 million a day, it is far below the $100 million spent daily on military needs. It has also fallen far short of development assistance to other postconflict countries, like Bosnia and East Timor. In the two years after 2001 Afghanistan received only $57 per capita in aid, whereas Bosnia received $679 and East Timor $233. The report also called for a comprehensive review of international assistance, two-thirds of which bypasses the Afghan government and fails to do enough to relieve the poverty of the Afghan people. The Afghan government says it has no knowledge of where $5 billion of the $15 billion spent since 2001 went, according to the Acbar report, and only half of the money being spent now is being disbursed in concert with the government, it said. A spokesman for President Hamid Karzai said that the government largely agreed with the findings in the report but that it rejected the report’s criticism of the government for failing to tackle corruption. The Acbar report estimated that of the $15 billion spent to date, a “staggering” 40 percent had not stayed in Afghanistan but had been repatriated in consultants’ salaries and company profits. More than half the international aid is “tied,” meaning it is bound by procurement rules that resources and services have to be purchased from the donor’s country. The report singled out A.I.D. for wasteful practices. A road from the Kabul airport to a major intersection near the United States Embassy cost more than $3 million a mile, “at least four times the average cost of building a road in Afghanistan,” Acbar said in a news release issued in Kabul alongside the report. A.I.D. does not finance development through the government but works through profit-making contractors who often subcontract the work to other companies. “Vast sums of aid are lost in the corporate profits of contractors and subcontractors, which can be as high as 50 percent on a single contract,” the report said. The use of foreign consultants is also costly, at $250,000 to $500,000 a year for each, because of high salaries, generous living allowances and security expenses. The report also criticized an imbalance in assistance. Too much of the aid goes to the capital, Kabul, and other urban centers, it said, when three-quarters of the population lives in rural areas. Agriculture, the main livelihood of the population, has not been a priority, it added. A disproportionate amount of the aid is also being spent in the southern part of the country, where the insurgency is strongest, which has created resentment in northern areas, the report said.
NYTimes.com March 16, 2008 Iraq’s Insurgency Runs on Stolen Oil ProfitsBy RICHARD A. OPPEL Jr. BAIJI, Iraq — The Baiji refinery, with its distillation towers rising against the Hamrin Mountains, may be the most important industrial site in the Sunni Arab-dominated regions of Iraq. On a good day, 500 tanker trucks will leave the refinery filled with fuel with a street value of $10 million. The sea of oil under Iraq is supposed to rebuild the nation, then make it prosper. But at least one-third, and possibly much more, of the fuel from Iraq’s largest refinery here is diverted to the black market, according to American military officials. Tankers are hijacked, drivers are bribed, papers are forged and meters are manipulated — and some of the earnings go to insurgents who are still killing more than 100 Iraqis a week. “It’s the money pit of the insurgency,” said Capt. Joe Da Silva, who commands several platoons stationed at the refinery. Five years after the war in Iraq began, the insurgency remains a lethal force. The steady flow of cash is one reason, even as the American troop buildup and the recruitment of former insurgents to American-backed militias have helped push the number of attacks down to 2005 levels. In fact, money, far more than jihadist ideology, is a crucial motivation for a majority of Sunni insurgents, according to American officers in some Sunni provinces and other military officials in Iraq who have reviewed detainee surveys and other intelligence on the insurgency. Although many American military officials and politicians — and even the Iraqi public — use the term Al Qaeda as a synonym for the insurgency, some American and Iraqi experts say they believe that the number of committed religious ideologues remains small. They say that insurgent groups raise and spend money autonomously for the most part, with little centralized coordination or direction. Money from swindles in Iraq and from foreign patrons in places like Saudi Arabia allows a disparate, decentralized collection of insurgent cells to hire recruits and pay for large-scale attacks. But the focus on money is the insurgency’s weakness as well as its strength, and one reason loyalties can be traded. For now, at least 91,000 Iraqis, many of them former enemies of the American forces, receive a regular, American-paid salary for serving in neighborhood militias. “It has a great deal more to do with the economy than with ideology,” said one senior American military official, who said that studies of detainees in American custody found that about three-quarters were not committed to the jihadist ideology. “The vast majority have nothing to do with the caliphate and the central ideology of Al Qaeda.” The corruption that drives money to the insurgency is hardly limited to the Baiji refinery, which a reporter visited last month. In Mosul, for example, insurgents have skimmed profits from soda and cement factories, American officers said. Insurgents in Mosul also make money from kidnapping for ransom and by extorting 5 to 20 percent of the value of contracts local businessmen get from the government, said Khasro Goran, the deputy governor of Nineveh Province. A military official familiar with studies on the insurgency estimated that half of the insurgency’s money came from outside Iraq, mainly from people in Saudi Arabia, a flow that does not appear to have decreased in recent years. Iraq’s Black Market Before the invasion of Iraq, eight gasoline stations dotted the region around Sharqat, an hour north of the refinery at the northern edge of Saddam Hussein’s home province, Salahuddin. Now there are more than 50. Economic growth? Not exactly. It is one of the more audacious schemes that feed money to the black marketeers. Most tanker trucks intended for Sharqat never make it there. “It’s all a bluff,” said Taha Mahmoud Ahmed, the official who oversees fuel distribution in Salahuddin. “The fuel is not going to the stations. It’s going to the black market.” Gas stations are often built just to gain the rights to fuel shipments, at subsidized government rates, that can be resold onto the black market at higher prices. New stations cost more than $100,000 to build, but black market profits from six or seven trucks can often cover that cost, and everything after that is profit, said officials who have studied the scheme. The plan also requires bribing officials in the province and Baghdad, said Col. Mohsen Awad Habib, who is from Sharqat and is now police chief in Siniya, near Baiji. He said owners of bogus gas stations told him they paid $20,000 bribes to an Oil Ministry official in Baghdad to get their paperwork approved. Local and provincial officials then extort their own cut. “In each station you’ll find high Iraqi officials who have shares,” he said. In Baiji, dozens of active insurgent groups feed off corruption from the refinery, said Lt. Ali Shakir, the commander of the paramilitary Iraqi police unit here. “If I give you all the names, your hand is going to be tired” from writing them down, he said. Lieutenant Shakir said the more hard-core insurgent groups had a lot of money to pay other fighters, and he grumbled that part of the reason they thrived was that obvious thievery was never prosecuted. Another scheme, he said, involves a trucking company owned by a man tied to the insurgency who is also a relative of Baiji’s mayor. The trucks take fuel from the refinery but are then unloaded just south of Tikrit. Making arrests would be a waste of time, he said, because provincial officials would let the perpetrators go. “What can I do?” he said. “After a half hour, they would be released.” Last year, the Pentagon estimated that as much as 70 percent of the Baiji refinery’s production, or $2 billion in fuels like gasoline, kerosene and diesel, disappeared annually into the black market. Baiji supplies eight provinces. Some of the most obvious corruption and theft, like tanker trucks hijacked at gunpoint from distribution pumps, has been curbed by Captain Da Silva and his predecessors. The American troops live inside the compound. Moreover, American officials say they believe that in recent weeks, some illicit profits flowing from the refinery have diminished. The refinery has been operating at almost full capacity, they say, pouring more fuel on the market and narrowing the spread between government-mandated rates for fuel and what it fetches on the black market. Exploiting that spread is one key to illicit profits from the refinery. For example, in January a tanker filled with kerosene that was supposed to be worth about $10,000 was going for $19,000 in Baiji, according to surveys of black market prices for the American military. In Samarra, it cost $35,000, a result of what soldiers described as the former mayor’s efforts to manipulate fuel prices. Most theft occurs outside the refinery, but fraud still abounds inside, too. At one refinery office, a broken control-room machine has a hole where an object has been jammed through the glass to stop a dial from turning. Most everything is recorded using paper, and tubes of correction fluid sit on the desks of clerks overseeing the flow of fuel. It is regularly used to cover up huge discrepancies in production and distribution tallies that soldiers say can only be explained by theft. “We’d all be hanged” if the refinery had operated this way under Mr. Hussein’s government, one senior refinery official confided to American soldiers. Refinery workers plead for jobs dispensing fuel, offering to work for no pay. Far more money can be made conspiring with tanker truck drivers to skim gas from the pumps, a job some soldiers liken to being a valet parking attendant at a Las Vegas casino. The Flow of Illicit Profits American and Iraqi officials struggle to say exactly how much the insurgency reaps from its domestic financing activities. In the past, Iraqi officials have estimated that insurgents receive as much as half of all profits attributable to oil smuggling. And before the troop buildup began a year ago, an American report estimated that insurgents generated as much as $200 million a year. Nor is the skimming limited to the insurgency; illicit earnings from the Baiji refinery also flow to criminal gangs, tribes, the Iraqi police, local council members and provincial officials who also smuggle fuel, Iraqi officials say. Barham Salih, the Iraqi deputy prime minister, said he believed that the pool of money available to insurgents across Iraq had fallen in the past year, but he declined to provide an estimate himself. He said Iraqi security analysts estimated that Al Qaeda in Mesopotamia received $50,000 to $100,000 per day from swindles related to the Baiji refinery. “It’s a serious problem,” he said. Those amounts are significant given the hard realities of Iraq, especially in Sunni areas where unemployment and discontent with the Shiite-run government run high. Men can be hired to hide roadside bombs for $100, officers say. And while American troops have captured stockpiles of artillery shells from Mr. Hussein’s days, insurgents have adapted, building bombs from cheap materials like fertilizer and cocoa. The insurgents appear to understand how valuable the Baiji refinery is to their operations. “They have not attacked the oil refinery, because they don’t want to damage their cash cow,” said First Lt. Trent Teague, who commands the Third Platoon in Captain Da Silva’s unit, the headquarters company of the First Battalion, 327th Infantry. Instead, when the insurgents want to send an angry message to someone at the refinery, they attack neighborhoods where oil workers live. Two suicide bombings in these Baiji neighborhoods in December killed at least 30 people and wounded more than 100. “It was the refinery being hit, without it being hit,” Lieutenant Teague said. But the insurgents do have agents inside, and some are the very people who are supposed to thwart graft and the insurgents’ influence. In February, American troops detained Ghalib Ali Hamid, the intelligence and internal affairs chief of the Oil Protection Force at the refinery, on suspicion of skimming fuel profits and having ties to insurgents. Among other things, officers said Mr. Hamid had issued a stern warning to one of his superiors at the refinery: “If you’re going to work here, you’ve got to be friends with the Islamic State of Iraq,” a reference to an insurgent group with ties to Al Qaeda in Mesopotamia. Last year, a new Iraqi Army brigade commander, Col. Yaseen Taha Rajeeb, was assigned to the refinery. He helped stop some of the most blatant theft. But the colonel’s paychecks were stopped soon after he began cracking down, and he was fired this year. While black market fuel prices and profit margins have dropped recently, they could rise again, especially if refinery production falls off. Capt. Stephen Wright, who works at the refinery with Captain Da Silva, is concerned about whether there may be unseen problems looming, like the sort of fatigue that ruptured a propane unit in January. “If something happens to this refinery from neglect, you won’t have fuel for eight provinces,” he said, “and we’ll have 6,000 unemployed Sunnis, who are people we definitely don’t want unemployed.” The money feeds an insurgency that is constantly adapting, and information about its exact composition and organization has continued to elude the Americans. The Motivations of Insurgents Some American officials and politicians maintain that Sunni insurgents have deep ties with Qaeda networks loyal to Osama bin Laden in other countries. Al Qaeda in Mesopotamia, whose members are mainly Iraqi but whose leadership has been described by American commanders as largely foreign, remains a well-financed and virulent force that carries out large-scale attacks. But there are officers in the American military who openly question how much a role jihadism plays in the minds of most people who carry out attacks. As the American occupation has worn on and unemployment has remained high, these officers say the overwhelming motivation of insurgents is the need to earn a paycheck. Nor do American officers say they believe that insurgent attacks are centrally coordinated. “As far as networked coordination of attacks, we are not seeing that,” said a military official familiar with studies on the insurgency. Opposition to the occupation and fear of the Shiite- and Kurdish-dominated government and security forces “clearly are important factors in the insurgency,” the official said. “But they are being rivaled by the economic factor, the deprivation that exists.” Maj. Kelly Kendrick, operations officer for the First Brigade Combat Team of the 101st Airborne Division in Salahuddin, estimates that there are no more than 50 hard-core “Al Qaeda” fighters in Salahuddin, a province of 1.3 million people that includes Baiji and the Sunni cities of Samarra and Tikrit. He said most fighters were seduced not by dreams of a life following Mr. bin Laden, but by a simpler pitch: “Here’s $100; go plant this I.E.D.” “Ninety percent of the guys out here who do attacks are just people who want to feed their families,” Major Kendrick said. The First Brigade’s commander, Col. Scott McBride, concurs. “I don’t know that I’ve ever heard one person say, ‘I believe in a caliphate,’ ” he said. Abu Azzam, a prominent leader of American-backed Sunni militiamen in Nasr Wa Salam, between Baghdad and Falluja, estimated that only 10 percent of Al Qaeda in Mesopotamia’s members adhered to extremist jihadist doctrines. “Many joined Qaeda for financial and personal reasons,” said Abu Azzam, whose militia includes former insurgents. “The others joined Qaeda because they hate the government, or they hate the American army, or for revenge.” The focus on Al Qaeda in Mesopotamia obscures the activities of other major guerrilla groups in the country. Some, like Jaish-e-Muhammad, or the Army of Muhammad, which includes ex-Baathists and former military officers, continue to battle American forces. Some American officers consider another organization, the Islamic State of Iraq, to be a front group for Al Qaeda in Mesopotamia. But some members of other groups, including the 1920s Revolutionary Brigades and Jaish al-Islami, or the Islamic Army, have agreed to support American-financed Sunni militia forces. Paying former insurgents to stop attacking American forces and join neighborhood militia forces has played a crucial role in turning around security in many Sunni parts of Iraq. But American officers worry that the failure to incorporate these Sunni militiamen into the government of Iraq or find them other jobs could portend trouble. “There’s got to be an outlet,” the senior military official said, referring to a job and salary not related to the insurgency. “Without that outlet, a lot of guys will gravitate back. They are not going to starve their families. You have got to do what you have got to do to survive.” Reporting was contributed by Michael R. Gordon, Solomon Moore and Anwar J. Ali from Baghdad, and Iraqi employees of The New York Times from Salahuddin, Falluja, and Diyala.
NYTimes.com March 12, 2008 Turkey Set to Invest in Better Relations With KurdsANKARA, Turkey — Turkey’s government is planning a broad series of investments worth as much as $12 billion in the country’s largely Kurdish southeast, in a new economic effort intended to create jobs and draw young men away from militancy, Prime Minister Recep Tayyip Erdogan said. The program is intended to drain support for the militant Kurdish group, the Kurdistan Workers’ Party, by improving the lives of Turkey’s impoverished Kurdish minority, Mr. Erdogan said in an interview with The New York Times on Tuesday. As part of the push, the government will dedicate a state television channel to Kurdish language broadcasting, a measure that Kurds in Turkey have sought for years. The Turkish state has imposed severe restrictions on the use of Kurdish, arguing that allowing that freedom would strengthen the Kurds’ desire to form a separate state. Turkey, a vibrant Muslim democracy and a strong American ally, has for years fought the militant group, known as the P.K.K., which hides in Turkey and Iraq and seeks greater autonomy for Kurds in Turkey. That fight has put it at odds with the United States, whose strongest allies in the war in Iraq are Kurds. But after an ambush of Turkish troops last fall, and subsequent lobbying by Mr. Erdogan and the Turkish military, the Bush administration agreed to let Turkey strike at the group inside Iraq, opening up airspace there and even offering intelligence. “Turkey is not a guest,” said Mr. Erdogan, 54, sitting in a cream-colored high-backed chair in his official residence in Ankara, Turkey’s capital. “Everyone who has entered Iraq until now will stay for a while and go away, but we will stay.” “We are the most important door for northern Iraq to open up to the world,” he added. “We are the healthiest door.” Last month, Turkey conducted an eight-day ground offensive into Iraq, and Mr. Erdogan said that the United States had been fully behind it. “I can openly and freely say that this short process has been done with the total understanding of Turkey, the United States and the central government of Iraq,” he said. “But the fight against terrorism is not only this,” he added. “It also has a socioeconomic part, a psychological part, a cultural part.” Mr. Erdogan was the first public figure to speak openly about Turkey’s troubles with its Kurdish population in a speech several years ago that won him a measure of respect among Turkey’s approximately 12 million Kurds, about a sixth of its population. Kurds voted in large numbers for his political party in a national election last July. Since then, many say his efforts have stalled, replaced by frequent military operations just over the border. Mr. Erdogan sought to allay Kurds’ fears Tuesday, emphasizing Turkey’s efforts to engage them on both sides of the border. Turkey has chosen not to negotiate directly with the Kurdish enclave in northern Iraq, led by Massoud Barzani, despite the fact that many of the militants it is chasing hide in that territory. Mr. Erdogan added, however, that informal contacts had been made with the area’s representatives. “We have relatives in northern Iraq,” he said. “And people living there have relatives in our southeastern region. With whom will we have good relations other than with ourselves?” Efforts to improve relations with Iraq include plans to open a consulate in the southern city of Basra, Mr. Erdogan said. Turkey has an embassy in Baghdad and a consulate in Mosul, a major city in the north. Mr. Erdogan is still identifying funds for the economic effort, which was started years ago by a previous administration but languished. The state will invest between $11 billion and $12 billion over five years to build two large dams and a system of water canals, complete paved roads and remove land mines from the fields along the Syrian border, he said. Plans for the project will be completed within two months, he said, at which point construction on the two dams will begin. He said he had dedicated one of his deputy prime ministers to visit cities across the largely Kurdish southeast to work on it. “Everything we can see in the western part of the country we can see in the east,” he said. The television channel will also include Persian and Arabic, Mr. Erdogan said, and should be running in several months. “This will be the most important step providing cultural rights to the region,” he said. Turkey, a member of NATO, has ambitions to join the European Union, though Mr. Erdogan has recently come under criticism for allowing the required democratic and economic retooling needed for membership to drop from the agenda. “There is no stalling or slowing down,” he said. “We are determined.” A social security law required to meet European standards will be submitted to Parliament in the next two to three weeks, he said, and a long-awaited revision of a law that limits freedom of speech is nearly ready. At every weekly cabinet meeting, one of the topics is Turkey’s European bid, and each ministry is working on it. “There is no alternative for us other than full membership,” Mr. Erdogan said. Sebnem Arsu contributed reporting.
Studies: Iraq Costs US $12B Per MonthBy CHARLES J. HANLEY AP Special Correspondent 4:54 AM CDT, March 10, 2008 The flow of blood may be ebbing, but the flood of money into the Iraq war is steadily rising, new analyses show. In 2008, its sixth year, the war will cost approximately $12 billion a month, triple the "burn" rate of its earliest years, Nobel Prize-winning economist Joseph E. Stiglitz and co-author Linda J. Bilmes report in a new book. |
