Viewpoint - September 25, 2014

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How the West Created the Islamic State: Part 2
Source: NAFEEZ AHMED, Counter Punch

Part 2 - THE LONG WAR

Follow the Money

Media reports following ISIS' conquest of much of northern and central Iraq this summer have painted the group as the world's most super-efficient, self-financed, terrorist organisation that has been able to consolidate itself exclusively through extensive looting of Iraq's banks and funds from black market oil sales. Much of this narrative, however, has derived from dubious sources, and overlooked disturbing details.

One senior anonymous intelligence source told Guardian correspondent Martin Chulov, for instance, that over 160 computer flash sticks obtained from an ISIS hideout revealed information on ISIS' finances that was completely new to the intelligence community.

"Before Mosul, their total cash and assets were $875m [£515m]," said the official on the funds obtained largely via "massive cashflows from the oilfields of eastern Syria, which it had commandeered in late 2012." Afterwards, "with the money they robbed from banks and the value of the military supplies they looted, they could add another $1.5bn to that." The thrust of the narrative coming from intelligence sources was simple: "They had done this all themselves. There was no state actor at all behind them, which we had long known. They don't need one."

"ISIS' half-a-billion-dollar bank heist makes it world's richest terror group," claimed the Telegraph, adding that the figure did not include additional stolen gold bullion, and millions more grabbed from banks "across the region."

This story of ISIS' stupendous bank looting spree across Iraq made global headlines but turned out to be disinformation. Senior Iraqi officials and bankers confirmed that banks in Iraq, including Mosul where ISIS supposedly stole $430 million, had faced no assault, remain open, and are guarded by their own private security forces.

How did the story come about? One of its prime sources was Iraqi parliamentarian Ahmed Chalabi - the same man who under the wing of his 'Iraqi National Congress' peddled false intelligence about Saddam's weapons of mass destruction and ties to al-Qaeda.

In June, Chalabi met with the US ambassador to Iraq, Robert Beecroft, and Brett McGurk, the State Department's deputy assistant secretary of state for Iraq and Iran. According to sources cited by Buzzfeed in June, Beecroft "has been meeting Chalabi for months and has dined at his mansion in Baghdad."

Follow the Oil

But while ISIS has clearly obtained funding from donors in the Gulf states, many of its fighters having broken away from the more traditional al-Qaeda affiliated groups like Jabhut al-Nusra, it has also successfully leveraged its control over Syrian and Iraqi oil fields.

In January, the New York Times reported that "Islamist rebels and extremist groups have seized control of most of Syria's oil and gas resources", bolstering "the fortunes of the Islamic State of Iraq and Syria, or ISIS, and the Nusra Front, both of which are offshoots of al-Qaeda." Al-Qaeda affiliated rebels had "seized control of the oil and gas fields scattered across the country's north and east," while more moderate "Western-backed rebel groups do not appear to be involved in the oil trade, in large part because they have not taken over any oil fields."

Yet the west had directly aided these Islamist groups in their efforts to operationalise Syria's oil fields. In April 2013, for instance, the Times noted that al-Qaeda rebels had taken over key regions of Syria: "Nusra's hand is felt most strongly in Aleppo", where the al-Qaeda affiliate had established in coordination with other rebel groups including ISIS "a Shariah Commission" running "a police force and an Islamic court that hands down sentences that have included lashings." Al-Qaeda fighters also "control the power plant and distribute flour to keep the city's bakeries running." Additionally, they "have seized government oil fields" in provinces of Deir al-Zour and Hasaka, and now make a "profit from the crude they produce."

Lost in the fog of media hype was the disconcerting fact that these al-Qaeda rebel bread and oil operations in Aleppo, Deir al-Zour and Hasaka were directly and indirectly supported by the US and the European Union (EU). One account by the Washington Post for instance refers to a stealth mission in Aleppo "to deliver food and other aid to needy Syrians - all of it paid for by the US government," including the supply of flour. "The bakery is fully supplied with flour paid for by the United States," the Post continues, noting that local consumers, however, "credited Jabhat al-Nusra - a rebel group the United States has designated a terrorist organisation because of its ties to al-Qaeda - with providing flour to the region, though he admitted he wasn't sure where it comes from."

And in the same month that al-Qaeda's control of Syria's main oil regions in Deir al-Zour and Hasaka was confirmed, the EU voted to ease an oil embargo on Syria to allow oil to be sold on international markets from these very al-Qaeda controlled oil fields. European companies would be permitted to buy crude oil and petroleum products from these areas, although transactions would be approved by the Syrian National Coalition. Due to damaged infrastructure, oil would be trucked by road to Turkey where the nearest refineries are located.

"The logical conclusion from this craziness is that Europe will be funding al-Qaeda," said Joshua Landis, a Syria expert at the University of Oklahoma.

Just two months later, a former senior staffer at the Syria Support Group in DC, David Falt, leaked internal SSG emails confirming that the group was "obsessed" with brokering "jackpot" oil deals on behalf of the FSA for Syria's rebel-run oil regions. "The idea they could raise hundreds of millions from the sale of the oil came to dominate the work of the SSG to the point no real attention was paid to the nature of the conflict," said Falt, referring in particular to SSG's director Brian Neill Sayers, who before his SSG role worked with NATO's Operations Division. Their aim was to raise money for the rebels by selling the rights to Syrian oil.

Tacit Complicity in IS Oil Smuggling

Even as al-Qaeda fighters increasingly decide to join up with IS, the ad hoc black market oil production and export infrastructure established by the Islamist groups in Syria has continued to function with, it seems, the tacit support of regional and western powers.

According to Ali Ediboglu, a Turkish MP for the border province of Hatay, IS is selling the bulk of its oil from regions in Syria and Mosul in Iraq through Turkey, with the tacit consent of Turkish authorities: "They have laid pipes from villages near the Turkish border at Hatay. Similar pipes exist also at [the Turkish border regions of] Kilis, Urfa and Gaziantep. They transfer the oil to Turkey and parlay it into cash. They take the oil from the refineries at zero cost. Using primitive means, they refine the oil in areas close to the Turkish border and then sell it via Turkey. This is worth $800 million." He also noted that the extent of this and related operations indicates official Turkish complicity. "Fighters from Europe, Russia, Asian countries and Chechnya are going in large numbers both to Syria and Iraq, crossing from Turkish territory. There is information that at least 1,000 Turkish nationals are helping those foreign fighters sneak into Syria and Iraq to join ISIS. The National Intelligence Organization (MIT) is allegedly involved. None of this can be happening without MIT's knowledge."

Similarly, there is evidence that authorities in the Kurdish region of Iraq are also turning a blind eye to IS oil smuggling. In July, Iraqi officials said that IS had begun selling oil extracted from in the northern province of Salahuddin. One official pointed out that "the Kurdish peshmerga forces stopped the sale of oil at first, but later allowed tankers to transfer and sell oil."

State of Law coalition MP Alia Nasseef also accused the Kurdistan Regional Government (KRG) of secretly trading oil with IS: "What is happening shows the extent of the massive conspiracy against Iraq by Kurdish politicians... The [illegal] sale of Iraqi oil to ISIS or anyone else is something that would not surprise us." Although Kurdish officials have roundly rejected these accusations, informed sources told the Arabic daily Asharq Al-Awsat that Iraqi crude captured by ISIS was "being sold to Kurdish traders in the border regions straddling Iraq, Iran and Syria, and was being shipped to Pakistan where it was being sold 'for less than half its original price.'"

An official statement in August from Iraq's Oil Ministry warned that any oil not sanctioned by Baghdad could include crude smuggled illegally from IS: "International purchasers [of crude oil] and other market participants should be aware that any oil exports made without the authorisation of the Ministry of Oil may contain crude oil originating from fields under the control of [ISIS]."

"Countries like Turkey have turned a blind eye to the practice" of IS oil smuggling, said Luay al-Khateeb, a fellow at the Brookings Doha Center, "and international pressure should be mounted to close down black markets in its southern region." So far there has been no such pressure. Meanwhile, IS oil smuggling continues, with observers inside and outside Turkey noting that the Turkish government is tacitly allowing IS to flourish as it prefers the rebels to the Assad regime.

According to former Iraqi oil minister Isam al-Jalabi, "Turkey is the biggest winner from the Islamic State's oil smuggling trade." Both traders and oil firms are involved, he said, with the low prices allowing for "massive" profits for the countries facilitating the smuggling.

Buying ISIS Oil?

Early last month, a tanker carrying over a million barrels in crude oil from northern Iraq's Kurdish region arrived at the Texas Gulf of Mexico. The oil had been refined in the Iraqi Kurdish region before being pumped through a new pipeline from the KRG area ending up at Ceyhan, Turkey, where it was then loaded onto the tanker for shipping to the US. Baghdad's efforts to stop the oil sale on the basis of its having national jurisdiction were rebuffed by American courts.

In early September, the European Union's ambassador to Iraq, Jana Hybásková, told the EU Foreign Affairs Committee that "several EU member states have bought oil from the Islamic State (IS, formerly ISIS) terrorist organisation that has been brutally conquering large portions of Iraq and Syria," according to Israel National News. She however "refused to divulge the names of the countries despite being asked numerous times."

A third end-point for the KRG's crude this summer, once again shipped via Turkey's port of Ceyhan, was Israel's southwestern port of Ashkelon. This is hardly news though. In May, Reuters revealed that Israeli and US oil refineries had been regularly purchasing and importing KRG's disputed oil.

Meanwhile, as this triangle of covert oil shipments in which ISIS crude appears to be hopelessly entangled becomes more established, Turkey has increasingly demanded that the US pursue formal measures to lift obstacles to Kurdish oil sales to global markets. The KRG plans to export as much as 1 million barrels of oil a day by next year through its pipeline to Turkey.

Among the many oil and gas firms active in the KRG capital, Erbil, are ExxonMobil and Chevron. They are drilling in the region for oil under KRG contracts, though operations have been halted due to the crisis. No wonder Steve Coll writes in the New Yorker that Obama's air strikes and arms supplies to the Kurds - notably not to Baghdad - effectively amount to "the defense of an undeclared Kurdish oil state whose sources of geopolitical appeal - as a long-term, non-Russian supplier of oil and gas to Europe, for example - are best not spoken of in polite or naïve company." The Kurds are now busy working to "quadruple" their export capacity, while US policy has increasingly shifted toward permitting Kurdish exports - a development that would have major ramifications for Iraq's national territorial integrity.

To be sure, as the offensive against IS ramps up, the Kurds are now selectively cracking down on IS smuggling efforts - but the measures are too little, too late.

A New Map

The Third Iraq War has begun. With it, longstanding neocon dreams to partition Iraq into three along ethnic and religious lines have been resurrected.

White House officials now estimate that the fight against the region's 'Islamic State' will last years, and may outlive the Obama administration. But this 'long war' vision goes back to nebulous ideas formally presented by late RAND Corp analyst Laurent Muraweic before the Pentagon's Defense Policy Board at the invitation of then chairman Richard Perle. That presentation described Iraq as a "tactical pivot" by which to transform the wider Middle East.

Brian Whitaker, former Guardian Middle East editor, rightly noted that the Perle-RAND strategy drew inspiration from a 1996 paper published by the Israeli Institute for Advanced Strategic and Political Studies, co-authored by Perle and other neocons who held top positions in the post-9/11 Bush administration.

The policy paper advocated a strategy that bears startling resemblance to the chaos unfolding in the wake of the expansion of the 'Islamic State' - Israel would "shape its strategic environment" by first securing the removal of Saddam Hussein. "Jordan and Turkey would form an axis along with Israel to weaken and 'roll back' Syria." This axis would attempt to weaken the influence of Lebanon, Syria and Iran by "weaning" off their Shi'ite populations. To succeed, Israel would need to engender US support, which would be obtained by Benjamin Netanyahu formulating the strategy "in language familiar to the Americans by tapping into themes of American administrations during the cold war."

The 2002 Perle-RAND plan was active in the Bush administration's strategic thinking on Iraq shortly before the 2003 war. According to US private intelligence firm Stratfor, in late 2002, then vice-president Dick Cheney and deputy defense secretary Paul Wolfowitz had co-authored a scheme under which central Sunni-majority Iraq would join with Jordan; the northern Kurdish regions would become an autonomous state; all becoming separate from the southern Shi'ite region.

The strategic advantages of an Iraq partition, Stratfor argued, focused on US control of oil:

"After eliminating Iraq as a sovereign state, there would be no fear that one day an anti-American government would come to power in Baghdad, as the capital would be in Amman [Jordan]. Current and potential US geopolitical foes Iran, Saudi Arabia and Syria would be isolated from each other, with big chunks of land between them under control of the pro-US forces.

"Equally important, Washington would be able to justify its long-term and heavy military presence in the region as necessary for the defense of a young new state asking for US protection - and to secure the stability of oil markets and supplies. That in turn would help the United States gain direct control of Iraqi oil and replace Saudi oil in case of conflict with Riyadh."

The expansion of the 'Islamic State' has provided a pretext for the fundamental contours of this scenario to unfold, with the US and British looking to re-establish a long-term military presence in Iraq.

In 2006, Cheney's successor, Joe Biden, also indicated his support for the 'soft partition' of Iraq along ethno-religious lines - a position which the co-author of the Biden-Iraq plan, Leslie Gelb of the Council on Foreign Relations, now argues is "the only solution" to the current crisis.

In 2008, the strategy re-surfaced - once again via RAND Corp - through a report funded by the US Army Training and Doctrine Command on how to prosecute the 'long war.' Among its strategies, one scenario advocated by the report was 'Divide and Rule' which would involve "exploiting fault lines between the various Salafi-jihadist groups to turn them against each other and dissipate their energy on internal conflicts."

Simultaneously, the report suggested that the US could foster conflict between Salafi-jihadists and Shi'ite militants by "shoring up the traditional Sunni regimes... as a way of containing Iranian power and influence in the Middle East and Persian Gulf."

One way or another, the plan is in motion. Last week, Israeli foreign minister Avigdor Leiberman told US secretary of state John Kerry: "Iraq is breaking up before our eyes and it would appear that the creation of an independent Kurdish state is a foregone conclusion."

The rise of the 'Islamic State' is not just a direct consequence of this neocon vision, tied as it is to a dangerous covert operations strategy that has seen al-Qaeda linked terrorists as a tool to influence local populations - it has in turn offered a pretext for the launch of a new era of endless war, the spectre of a prolonged US-led military presence in the energy-rich Persian Gulf region, and a return to the dangerous imperial temptation to re-configure the wider regional order.

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Original Article: How the West Created the Islamic State

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