Iraq needs auditors and accountants to defeat enemy funding

John Burns:

The insurgency in Iraq is now self-sustaining financially, raising tens of millions of dollars a year from oil smuggling, kidnapping, counterfeiting, corrupt 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 armed groups responsible for many of the insurgent and terrorist attacks across Iraq are raising between $70 million and $200 million a year from illegal activities. It says that between $25 million and $100 million of the total comes from oil smuggling and other criminal activity involving the state-owned oil industry that is aided by “corrupt and complicit” Iraqi government officials.

As much as $36 million a year comes from ransoms paid to save thousands of kidnapping victims in Iraq, the report said. It estimates that unnamed foreign governments — previously identified by senior American officials in Iraq as including France and Italy — paid Iraqi kidnappers an estimated $30 million in ransom last year.

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“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 for a lack of precision and a reliance on speculation.

Completed in June, the report was compiled by a working group in Iraq that operates under the leadership of the National Security Council.

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It should not be too surprising that the report relies on speculation since the enemy did not submit its rooks to auditors for reconciliation and balance. The bottom line is like the WMD reports the money still has not been accounted for. What the government should be able to do is account for what is missing from government operations and oil revenues. Apparently they still cannot do that.

The story provides no clue at where surplus finds might be held or how funds are transferred from illegal enterprises such as the oil smuggling.