Iraqis say insurgents extort U.S. cash to fund war

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.

The payments, in return for the insurgents’ allowing supplies to move and construction work to begin, have taken place since the earliest projects in 2003, Iraqi contractors, politicians and interpreters involved with reconstruction efforts said.

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-Qaida 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.

The U.S. Embassy in Baghdad declined to provide anyone to discuss the allegations. An embassy spokesman, Noah Miller, said in an e-mailed statement that, “in terms of contracting practices, we have checks and balances in our contract awarding system to prevent any irregularities from occurring. Each contracted company is responsible for providing security for the project.”

Providing that security is the source of the extortion, Iraqi contractors say.

A U.S. company with a reconstruction contract hires an Iraqi subcontractor 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.

One Iraqi official said the arrangement makes sense for insurgents.

By granting safe passage to a truck loaded with $10,000 in goods, they receive a “protection fee” that can buy more weapons and vehicles.

Sometimes the insurgents take the goods, too.

None of the Iraqi contractors agreed to speak on the record for fear of losing U.S. contracts and retaliation from insurgent groups.