Springing a Leak

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.

A copy of the report was made available to The Times by American officials in Iraq, who said they acted in the belief that the findings could improve American understanding of the challenges facing the United States in Iraq.

The leakers also broke federal law by providing classified information and reports to reporters. Such leaks, regardless of the purpose or intent of the leakers, is a criminal act.

Now, let's examine the substantive portion of the report.

Kidnappings are big business. That's not a surprise. Millions have been paid in ransom and the insurgents know that people are willing to pay for the release of the kidnapped. It's a cycle of violence in miniature. Insurgents take hostages seeing that other kidnappings have resulted in ransoms paid. High profile hostages result in big paydays. Everyone gets in on the business - and indeed kidnapping is a business.

The way to stop this? It is easier said than done, but the key is to not pay ransoms. That goes for international businesses, governments, and locals.

Oil smuggling is big business. This isn't a surprise either. Saddam made oil smuggling a big business, and many of his former thugs are now at the heart of the insurgency. Cracking this nut is far tougher. Better patrolling of Iraq's borders will help - and it will also work towards shutting down the insurgent express. Syria and Iran are both trying to kill Iraq in the cradle, and they are both providing weapons, materials, and support to the insurgents inside Iraq. Patrolling the border will make that more difficult, and could help reduce the amount of oil smuggled across the border. Improving the security around Iraq will free up Iraqi forces to concentrate on the issue of oil smuggling.

Counterfeiting is big business. Counterfeiting is a major part of rogue nation operations. North Korea, Iran, and their proxies, including Hizbullah, have all engaged in counterfeiting in order to supplement their available funds. There's no easy solution to this particular problem.

But even this particular report has faults that cannot be simply explained away. The report indicates that the range generated by these illicit activities is from $70 to $200 million. That's quite a range. Oh, and then there's this:

While noting that the report appeared to go beyond any previous investigation of the subject, the experts said the seven-page document appeared to be speculative, at least in its estimates of funds available to the militants. They noted the wide spread of the estimates, particularly the $70 million to $200 million figure for overall financing, the report’s failure to specify which groups the estimates covered and the absence of documentation of how authors arrived at their estimates.

While data may have been omitted to protect sources and methods — the document has a heading on the front page saying “secret,” and a warning that it is not to be shared with foreign governments — several security and intelligence consultants said in interviews that the vagueness of the estimates reflected how little American intelligence agencies know about the opaque and complex militant groups.

So, once again, the leakers may have provided critical details of the surveillance of the insurgency, but the report indicates just how little the intel services actually know about what is going on. Wonderful.