Sunday, August 1, 2010

The Growth Of Organized Crime And Gangs In Iraq

With violence decreasing in Iraq, organized crime is becoming a larger issue. Gangs were initially co-opted by the Baath Party, and then after the state collapsed with the U.S. invasion, they had free reign in the country. They eventually helped swell the ranks of the insurgency and militias, and funded their activities. Today, many militants have gone back to being criminals to make a living, where they continue to threaten the security and development of the country.

Modern organized crime had its birth in Iraq in the 1970s. Two events helped its spread. One was the 1972 nationalization of the oil industry. The second was the creation of a trust for the Baath Party’s funds. Both created a huge amount of money that could be manipulated by officials. Some tapped gangs to buy and sell items illegally such as petroleum or launder money. In return, the government allowed the criminals to operate within set boundaries. That created a close connection between the Baath party and organized crime.

The sanctions period changed that relationship, making the government rely upon gangs. In 1990 Iraq was hit by international sanctions due to its invasion of Kuwait. They strangled the economy that was largely dependent upon oil exports. Per capita GDP dropped from $2,304 in 1989 to $938 in 1990 to $507 or below from 1991-1996. Saddam became focused upon preserving his regime, and turned to criminals to undermine the United Nations’ restrictions and shore up domestic support. This took many forms. One was that Sunni tribes in western and central Iraq were allowed to smuggle, loot, and hijack along the highways in their areas, in return for backing the government and providing local security. Another was using gangs to smuggling goods and oil through Jordan, Syria, Turkey, Saudi Arabia, Kuwait, Iran, and Egypt. The government itself also began acting something like a criminal organization under the U.N. run Oil for Food program, demanding kickbacks, making companies increase their prices and having the difference paid to Baghdad, making illegal oil deals, attempting to bribe officials and companies to work against the sanctions by offering them oil vouchers. All of these profits were also money laundered through front companies and foreign banks before they arrived in Iraq. These activities allowed Saddam to stay in power, while bringing in millions of dollars in illicit funds to keep the government running. Organized crime also grew in strength, and became an almost legitimate operation within Iraq.

The U.S. invasion in 2003 removed all restrictions upon Iraq’s gangs. First, before the U.S. attack Saddam released 30,000-100,000 criminals in October 2002. Second, the Americans invaded without enough troops to secure the country. Then the government collapsed, followed by the economy falling apart. Finally the U.S. disbanded the Iraqi military. All of those factors together emboldened gangs, and the anarchic situation that Iraq found itself in created powerful incentives towards lawlessness to make a living.

Crimes from the Baath period continued after the fall of Saddam, while new ones developed. Murder, looting, and kidnappings exploded immediately after the fall of the government, which lasted for months. All of the smuggling through neighboring countries expanded as the police were emasculated, the army was disbanded and then had to be rebuilt, there was no border control, and the U.S. military was caught up chasing militants. Stealing copper from the electricity grid and selling it on the black market became a major business. Gangs could basically do whatever they wanted.

Eventually the insurgency and militias also became intertwined with organized crime. Many criminals joined militant groups, while militants turned to crime for funding. They would steal fuel from refineries, and then sell it on the black market. They would kidnap children and fathers and ransom them off to their family. They would smuggle crude out of Basra. They would demand protection money from businesses to operate. They would tap into power lines or water pipes and sell the services. This allowed groups to be financially independent, while expanding the reach of organized crime.

Today, as militant groups are in decline, their former members need to find a living. Many have continued with their criminal activities as their new jobs. That’s shown in Iraqi headlines where every week there’s news of bank robberies, jewelry stores being held up, gang members being arrested, kidnappings, the selling of women and children for prostitution and sex slaves, etc.

Organized crime has seen a steady expansion in Iraq since the 1970s. At first, gangs were organized by the Baath Party to steal from the government. Then Saddam came to depend upon them to break the U.N. sanctions. The U.S. invasion increased the opportunities and incentives to partake in crime, and those have hardly changed up to the present time. The Iraqi government still does not consider this a major issue, and many officials are corrupted themselves either being directly involved in crimes or getting payoffs to look the other way. There’s no other way that such large-scale criminal activity could continue without it. Until the economy improves, the government gains more strength, and there’s a real concerted effort to fight corruption gangs and crime will continue to flourish in Iraq.


Aswat al-Iraq, “Mafias in Baghdad, clever in changing masks,” 2/5/08

Cordesman, Anthony, “The Changing Situation in Iraq: A Progress Report,” Center for Strategic and International Studies, 4/4/09

Dodge, Toby, “The failure of sanctions and the evolution of international policy towards Iraq, 1990-2003,” Journal Contemporary Arab Affairs, January 2010

Iraq Survey Group, “Comprehensive Report of the Special Advisor to the DCIA on Iraq’s WMD,” 9/30/04

Kelly, Dr. Terrence, “An Iraqi Modus Vivendi How Would It Come About and What Would It Look Like?” Senate Foreign Relations Committee, 4/3/08

Williams, Phil, “Criminals, Militias, And Insurgents: Organized Crime In Iraq,” Strategic Studies Institute, June 2009


AndrewSshi said...

This question is somewhat orthogonal to your entry, but do you have any thoughts on what was behind the July spike in violence? I mean, there's the usual strikes against pilgrims that happens this time of year, but there also seemed to be an uptick in more insurgent-y violence: roadside bombings, checkpoint ambushes, and that sort of thing. Do you have any thoughts?

Don Cox said...

That was an excellent summary of the Mafia problem in Iraq. Probably, as in Sicily, the organised crime will discourage economic growth. Crime causes poverty.

Joel Wing said...

Iraq Body Count is the only group that showed a steady increase in deaths in 2010 so I went through their incident reports for the entire year to see what was the cause. It came down to mass casualty bombings, just 2-3 big ones made the death count go up each month.

In July 2010 there were 4 big bombings and an attack upon a checkpoint in Baghdad that had a lot of casualties.

7/29 - 16 killed in attack on checkpoint in Baghdad
7/26 - 19 killed in car bombings at checkpoint in Karbala
7/18 - 32 killed in suicide attack on SOI in Baghdad
7/18 - 43 killed in another suicide attack upon SOI in Baghdad
7/8 - 48 killed in bombings against Shiite pilgrims in Baghdad

That's 158 deaths to add to the regular monthly count, which accounts for the increase in July.

Joel Wing said...

Don said: "Crime causes poverty. "

It's caused by poverty and perpetuates it. If Iraq had anything near a functioning economy the incentives to turn to crime for a living would obviously be much lower. Its growth obviously keeps Iraq in a poor state. They've stripped the electricity grid for copper, they steal millions and millions from the oil industry, they corrupt officials, etc.

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