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http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/07/02/MN133485.DTL#sections 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 posts. 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. TRADE PROFITABLE 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 The man, who was interviewed Saturday and asked that his name not be published, said the best bargain he was offering that day was a 1983 Komatsu D155A bulldozer.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 model. 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." NO U.S. INTERFERENCE 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 problem." 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. FEW MORAL QUALMS 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. UNDER-THE-TABLE FEES 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 trafficking. 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 Turkey." 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 rcollier@sfchronicle.com. __________________________________ Do you Yahoo!? SBC Yahoo! DSL - Now only $29.95 per month! http://sbc.yahoo.com _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. To unsubscribe, visit http://lists.casi.org.uk/mailman/listinfo/casi-discuss To contact the list manager, email casi-discuss-admin@lists.casi.org.uk All postings are archived on CASI's website: http://www.casi.org.uk