"THE SECOND INSURGENCY"

That's the phrase the July report from the SIGIR used to described the corruption in Iraq and our new buddies in Anbar Province may not really be on our side after all. Note that the Dulaim are now supposedly are bestest buddies.

Iraqi insurgents taking cut of U.S. rebuilding money
By Hannah Allam McClatchy Newspapers
Posted on Monday, August 27, 2007

(excerpts)

BAGHDAD — Iraq's deadly insurgent groups have financed their war against U.S. troops in part with hundreds of thousands of dollars in U.S. rebuilding funds that they've extorted from Iraqi contractors in Anbar province.

A fresh round of rebuilding spurred by the U.S. military's recent alliance with some Anbar tribes — 200 new projects are scheduled — provides another opportunity for militant groups such as al Qaeda in Iraq to siphon off more U.S. money, contractors and politicians warn.

"Now we're back to the same old story in Anbar. The Americans are handing out contracts and jobs to terrorists, bandits and gangsters," said Sheik Ali Hatem Ali Suleiman, the deputy leader of the Dulaim, the largest and most powerful tribe in Anbar. He was involved in several U.S. rebuilding contracts in the early days of the war, but is now a harsh critic of the U.S. presence.

Providing that security is the source of the extortion, Iraqi contractors say. A U.S. company with a reconstruction contract hires an Iraqi sub-contractor to haul supplies along insurgent-ridden roads. The Iraqi contractor sets his price at up to four times the going rate because he'll be forced to give 50 percent or more to gun-toting insurgents who demand cash payments in exchange for the supply convoys' safe passage.

"The violence in Iraq has developed a political economy of its own that sustains it and keeps some of these terrorist groups afloat," said Iraq's Deputy Prime Minister Barham Saleh, who recently asked the U.S.-led coalition to match the Iraqi government's pledge of $230 million for Anbar projects.

Despite several devastating U.S. military offensives to rout insurgents, the militants - or, in some cases, tribes with insurgent connections - still control the supply routes of the province, making reconstruction all but impossible without their protection.

Suleiman, the Dulaimi sheikh and onetime U.S. ally, speaks more bitterly. Sitting in his Baghdad office, he displayed a stack of photos and status updates for projects that included two schools, a clinic and a water purification center. The photos showed crumbling, half-finished structures surrounded by overgrown weeds and patchworks of electrical wires. He blamed such failures on "the terrorists" who work under the noses of U.S. and Iraqi officials. "Those responsible for these projects had to give money to al Qaida. Frankly, gunmen control contracting in Anbar," he said. "Even now, the thefts are unbelievable, and I have no idea where those millions are going."

One Iraqi contractor who is working on an American-funded rebuilding project in the provincial capital of Ramadi said ... "Insurgents control the roads," he added. "Americans don't control the roads - and everything from Syria and Jordan goes through there."

Fawzi Hariri, a member of the Iraqi cabinet and head of the government's Anbar Reconstruction Committee, said some U.S. rebuilding funds "absolutely" have gone into insurgents' pockets. ... American contracting officials rarely consult their Iraqi counterparts about how much they spent or who was paid on specific projects. "The Americans are accountable only to themselves," Hariri said. "It's their money."