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[casi] The looting of Iraq..

Equipment vital to Iraq flows out of country
Looted machinery smuggled into Iran

Wednesday, July 2, 2003
San Francisco Chronicle

Robert Collier, Chronicle Staff Writer

Haj Umran, Iraq -- This isolated highway crossing on
the Iranian border has become a black hole into which
Iraq's former wealth is being sucked.

The dozens of backhoes, industrial generators,
drilling rigs, cement mixers,cranes and heavy factory
machines lined up here waiting to cross into Iran are
a virtual catalog of the vast amount of equipment
stolen from Iraqi government facilities after the fall
of Saddam Hussein's regime.

The smuggling of looted goods desperately needed to
rebuild the country passes without any interference
from the local autonomous Iraqi Kurdish government --
nor from the United States, which allows the Kurds to
maintain a standing militia and control the border

U.S. occupation authorities insist that American and
British forces have neither the mandate nor the
manpower to halt the trade.

U.S. officials have repeatedly blamed the nationwide
looting on Hussein loyalists bent on sabotaging
reconstruction. But Kurdish officials, truck drivers
and the owner of one large smuggling enterprise charge
that the trade in stolen goods is an organized
criminal activity in which both businessmen and
Kurdish leaders take a cut of the action.

"It's a mafia, which we can't stop," said an official
of the Kurdistan Democratic Party, or KDP, which rules
Haj Umran and the northern half of the Kurdish region.

"The people who are in charge are the top peshmerga,
who have too much influence," he said, referring to
the guerrilla commanders who led the Kurds' fight
against the Baghdad regime since the early 1970s.

By all accounts, the trade is highly profitable.

"Bulldozers, everything -- I'm ready to carry
anything, even an airplane," boasted one of the
busiest smugglers at the Haj Umran border crossing, as
he supervised the arrival of a half-dozen of his fully
laden trucks.

The man, who was interviewed Saturday and asked that
his name not be published, said the best bargain he
was offering that day was a 1983 Komatsu D155A
bulldozer. He said he had purchased from a middleman
in Irbil, the capital of the Kurdish region, for
$10,000 and had arranged to sell to an Iranian
merchant for $34,000. The final price, to judge by a
quick survey of listings of used construction
equipment on the Internet, is about one-third below
the average cost in the Middle East for that year and

Asked whether the bulldozer was looted, the smuggler
said, "Of course, but don't ask me where. Everything
here was looted."

Stroking his ample belly and waving a satellite phone
as he talked, he said with a wide grin: "Some people
say this makes me a war criminal, but so what? It's
good fortune, and it's my work."

Asked whether Kurdish or American authorities ever
interfered with his trucks, he replied, "No, never. I
have no problems."

Officials of the U.S.-British coalition ruling Iraq
say they do not have enough troops to stop the
smuggling, even though they agree that it is seriously
weakening their efforts to stabilize the country.

"There's been an evolution to more criminal looting,
finding more high- value items for trafficking and
export," said L. Paul Bremer, the U.S. administrator
of Iraq, when asked about the issue Tuesday. "We
obviously need to improve security of the borders, and
we will take steps to do that. We know we have a

The smuggler and others in the trade said the stolen
goods had been flowing unimpeded since April, when
Baghdad and other major cities were rent asunder by a
spasm of looting that has not yet fully abated.

None of those interviewed seemed to have moral qualms
about their work. "It's all Saddam's property, and he
was a bad man, so it's fair to take it," said one man
as a crowd of Kurdish truckers gathered around.

"Saddam was a thief!" shouted another. "Yes, this is a
fair business!" said someone else.

U.S. officials initially played down the looting,
saying it was merely exuberant public reaction to
liberation from dictatorship. But in recent weeks,

they have begun to acknowledge that it is causing much
more damage to Iraq's economy than the war itself.

As American firms such as Bechtel and Halliburton
rebuild power plants and water purifying stations,
criminals steal the new equipment almost as fast as it
is installed. High-tension electrical lines are melted
into copper bars, and generators, water filters and
other machines weighing many tons disappear in the
dead of night. The rampant thievery has caused
repeated blackouts in Baghdad and southern cities,
often lasting several days.

In southern Iraq, recently restarted oil refineries
reportedly are already working with smugglers to ship
diesel fuel to Iran, just as they did for years under
U.N. sanctions.

"The people who do this are big companies, people who
have been in the business," said the smuggler, who
said he had been a legitimate trader of construction
and industrial equipment for 10 years before the war,
based in Irbil. He said he had long done deals with
many of the current looters and middlemen.

On Monday, the smuggler showed his "legitimate" face,
meeting with a Chronicle reporter in his office at his
family business in Baghdad's wealthy Jadriyah
district. The firm is a medium-sized company involved
in a wide range of import-export trade; the smuggler
asked that its name be withheld.

He then invited the reporter to lunch at the White
Castle, a restaurant catering to Baghdad's business
elite. After effusively greeting friends and relatives
-- what seemed like half the people in the restaurant
-- he sat down to vent anger at the corruption that he
said stained the whole contraband trade.

He denounced the KDP, saying it charges extortionate
bribes to let his goods pass. He noted that the
Americans had decreed the elimination of all Iraqi
import and export taxes -- an order that Osman Surchi,
chief of the Haj Umran border post, had told The
Chronicle on Saturday was being strictly adhered to.

But the smuggler said Surchi charged huge fees under
the table. For example,he said, he had to pay Surchi
$19,500 on the Komatsu bulldozer that he had bought
for $10,000, leaving only a slim profit before selling
it in Iran for $34,000.

Everyone gets into the act, he complained. KDP
commanders in Irbil collect their own bribes from the
middlemen who bring the looted goods from Baghdad and
other cities, and Iranian border authorities charge
additional fees on the Iranian purchasers.

The smuggler and others interviewed for this article
said it was unclear whether the web of corruption
included the two best-known Kurdish politicians, the
KDP's Massoud Barzani and Jalal Talabani of the
Patriotic Union of Kurdistan (PUK).

It is widely believed that the smuggling is taking
place on all of Iraq's borders, with stolen goods also
making their way to Syria and Turkey. But the Kurds
appear to play the dominant role in cross-border

Only on smaller items can smugglers avoid paying
bribes, sources said. At all border points, items such
as computers and televisions are taken by mule or
four-wheel-drive vehicle around the official
crossings, out of view of greedy border officials.

On larger items, the two major Kurdish political
factions seem to practice a de facto division of
labor. While the KDP specializes in heavy industrial
and construction equipment, the PUK specializes in
spare parts, scrap metal and weapons.

At the main PUK-controlled border post, Bashmakh, 100
miles southeast of Haj Umran, the main business
appears to be cannibalized parts of industrial
machines and construction materials.

"The trucks come full of machines that have been
stolen and taken apart," a U.N. official who works in
the PUK region said Sunday. Across the border, at
Mariwan, Iran, one could see a several-acre area laden
with piles of metal bars and siding.

In Sulaymaniyah, the PUK capital, Shalow Askari, the
group's acting foreign minister, said his group
tolerated the trade in scrap metal, much of which he
said was Iraqi weapons from the recently concluded
war. "But whenever we find materials that have been
clearly looted, we stop it," he insisted.

KDP officials at Haj Umran showed a mix of brazen
denial and extreme nervousness about their role in
allowing the smuggling to pass. When a Chronicle
reporter arrived Saturday morning, Surchi immediately
ordered his officials to stop the trucks, the drivers
said later.

"There is no looted merchandise here," Surchi said.
"It's all imported from Holland or Germany via

Told that it certainly seemed looted, he switched tack
immediately. "None of these trucks will pass," he
said. "We never let them go through. They always have
to turn around."

Surchi blamed the smuggling on the Kurdistan Workers
Party, or PKK, a Turkish rebel group that has no
presence in the immediate region, and a previously
unknown group he said was called Red Fire.

Out of earshot of the reporter, he berated The
Chronicle's Kurdish translator, saying: "Get the
American out of here. We've shut the border because we
don't want him to see any trucks crossing."

But when the reporter insisted on nosing around and
found several smugglers willing to talk, Surchi
repeatedly interrupted the interviews or sent aides to
do so. "Don't say anything. As long as he's here, none
of your trucks will cross," they said in Kurdish.

Finally, an aide to Surchi approached the translator
and said, "We're going to complain about you to the
prime minister's office," referring to the Kurdistan
regional government.

"We'll tell them you're doing intelligence work for
the Americans. Watch out."

E-mail Robert Collier at

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