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CEO Jailed for Fraud

The owner and chief executive officer of an armored vehicle company was sentenced today to 70 months in prison for his role in orchestrating a scheme to defraud the United States by providing the U.S. Department of Defense with armored gun trucks that did not meet ballistic and blast protection requirements set out in the company’s contracts with the United States.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Rick A. Mountcastle of the Western District of Virginia, Special Agent in Charge Adam S. Lee of the FBI’s Richmond, Virginia, Field Office and Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office made the announcement.

William Whyte, 72, of King City, Ontario, the owner and CEO of Armet Armored Vehicles of Danville, Virginia, was sentenced by U.S. District Judge Jackson L. Kiser of the Western District of Virginia, who also ordered Whyte to serve three years of supervised release following his prison sentence and to pay restitution in the amount of $2,019,454.36.

On Oct. 9, 2017, after a two-week trial, Whyte was found guilty of three counts of major fraud against the United States, three counts of wire fraud and three counts of criminal false claims.  Whyte was charged by an indictment in July 2012.

Evidence at trial demonstrated that Whyte executed a scheme to defraud the United States by providing armored gun trucks that were deliberately under-armored.  Armet contracted to provide armored gun trucks for use by the United States and its allies as part of the efforts to rebuild Iraq in 2005.

Despite providing armored gun trucks that did not meet contractual specifications, Whyte and his employees represented that the armored gun trucks were adequately armored in accordance with the contract, the evidence showed.  Armet was paid over $2 million over the course of the scheme, the evidence showed.

The case was investigated by the FBI and DCIS.  The case is being prosecuted by Trial Attorney Caitlin Cottingham of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Heather Carlton of the Western District of Virginia.

(Source: US Dept of Justice)

Pentagon Stops Budgeting for Peshmerga Salaries

By Jack Detsch for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The Trump administration’s budget proposal for next fiscal year does not include peshmerga salaries even as the Pentagon aims to continue training the Kurdish force.

The Department of Defense had requested $365 million in stipends for the year that ends Sept. 30 but did not spend the money after negotiations to extend an expiring memorandum of understanding broke down in September. Iraqi Prime Minister Haider al-Abadi had agreed to pay the peshmerga wages in October, but a US Inspector General report released earlier this month said the Kurdish fighters still hadn’t been paid

“Those documents do not specifically refer to training/stipends for the peshmerga,” Pentagon spokesman Eric Pahon told Al-Monitor in an email today. Lawmakers have yet to weigh in on the $716 billion Pentagon request for fiscal year 2019.

Instead, President Donald Trump’s budget request for the year starting Oct. 1 seeks $850 million to train and equip Iraqi troops with a focus on bolstering the Iraqi Security Forces with Ranger brigades. As part of that amount, the peshmerga force of about 150,000 could still be eligible for up to $290 million in so-called operational sustainment funds aimed at preventing the Iraqi government from becoming more reliant on Iran and Russia, according to budget language.

The shift in focus by the United States comes as the Iraqi Kurds have been marginalized by Baghdad following the Kurdistan Regional Government’s (KRG) controversial independence vote in September. As a result, US and peshmerga officials are at odds over how much assistance is actually getting through to Erbil since Baghdad has to sign off on any weapons shipments to the Kurdish troops.

“Right now, the Iraqis are stopping a lot of stuff,” said Michael Knights, a researcher at the Washington Institute for Near East Policy.

Though the Pentagon acknowledges that the peshmerga proved helpful to the US-backed coalition until the beginning of the Mosul fight in 2016, the Kurdish force has faced difficulties in assimilating US equipment, experts say, in part because the peshmerga relies on its own training structures and tactical formations. The US-led coalition said in December that 5,200 American advisers in Iraq had stopped advising the peshmerga as the Pentagon appears set to draw down its presence.

Over the past year, the United States also sold the Iraqi government nearly $300 million worth of military equipment to outfit two infantry brigades with M-16 rifles, .50 caliber machine guns, up-armored Humvees and mine-resistant vehicles. That was cut down from an initial effort to outfit four peshmerga brigades — each typically between 4,000 to 8,000 troops — including a border unit.

“Peshmerga brigades didn’t fit a US brigade set,” Knights told Al-Monitor. “A lot of the German equipment went everywhere. Gucci German assault rifles got given to commanders and bodyguards.”

The US-led force has trained 26,000 peshmerga over the course of the anti-IS mission that began in 2014. Even though the funding stream appears to be in a winnowing process, the United States and the KRG remain engaged in high-level dialogues, with the peshmerga still playing an important role as the Pentagon aims to curb the influence of Iran-backed Shiite militias that are enmeshed in the Iraqi Security Forces.

In meetings in Washington in November, the head of the KRG’s Department of Foreign Relations called for the United States to do more to encourage talks with Baghdad and keep tenuous supply lines open on the border, including the Fish Khabur crossing, a critical lifeline for the 2,000 US troops serving in Syria.

“We already have border guards,” Falah Mustafa told Al-Monitor in a November interview. “Border guards are wearing Iraqi uniforms, they are on the payroll of the Iraqi government, they are getting instructions and directives from the Iraqi government in Baghdad.”

(Picure Credit: David B. Gleason)

Chevron Resumes Drilling in Kurdistan

By John Lee.

Chevron has reportedly announced that it had resumed drilling operations at the Sarta-3 well in Iraqi Kurdistan.

The US company temporarily suspended operations in October following the controversial independence referendum, which increased tensions between Baghdad and Erbil.

According to Kurdistan 24, it currently operates and holds an 80-percent contractor interest in two production-sharing contracts covering the Sarta and Qara Dagh blocks.

(Sources: Reuters, Kurdistan 24)

Tribal Disputes Flare in over Water Scarcity

By Mustafa Saadoun for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News

Tribal disputes flare in southern Iraq over water scarcity

Iraqi Prime Minister Haider al-Abadi gave instructions on Feb. 11 to stop the encroachment upon water quotas and increase the water share to Al-Mejar district in Maysan province in southern Iraq.

Abadi’s instructions came days after tribal conflicts in Iraq’s southern provinces broke out over agricultural land water quotas, prompting activists in the province to launch a campaign titled Save the Tigris in a bid to end the water crisis. There are already conflicts plaguing those provinces — especially Basra, where water issues between the southern tribes have already escalated into armed conflicts.

Hassanein al-Munshid, a civil activist in a local campaign in Maysan province working to end the water crisis, told Al-Monitor, “Tribal conflicts are intensifying in the province because of the water crisis, which might lead to additional fighting.”

He added, “There is a tribal sheikh in the northern areas of Maysan province controlling the water flow of the Tigris River to irrigate his farms. There are top officials who are aware of his acts of encroachment, but the government cannot do anything about it.”

For security reasons, Munshid did not name the sheikh.

The Iraqi government is doing its best to face the drought that hit the southern provinces due to the lack of water flowing from Turkey, which is the source of the Euphrates River. Most areas of the south and the middle Euphrates depend on the water flowing from the Euphrates.

Majid al-Gharabi, a sheikh in Diwani province, told Al-Monitor, “The reason behind the tribal differences over water is that some clans are diverting the flow of water to prevent it from reaching the farms of other tribes.”

On Jan. 21, Iraqi Minister of Water Resources Hasan al-Janabi wrote on his Facebook page that “Turkish Foreign Minister Mevlut Cavusoglu said in front of Abadi that Turkey is committed to postponing the filling of the Ilisu Dam and that the Turkish president is committed [to not harming] Iraq. We definitely have specific demands we seek to achieve peacefully and diplomatically in this regard.”

In an interview published by Foreign Policy Concepts on Jan. 7, the Iraqi minister said the country’s water scarcity is intensified by excessive control measures in the upper reaches of the Tigris and Euphrates rivers.

Of note, 70% of the water that flows into Iraq comes from outside of Iraq’s borders, and this issue — just like any other — affects and is affected by politics, so Turkey’s construction of the Ilisu Dam faced strong Iraqi objections given the risks of drought it entails for Mesopotamia.

In the province of Dhi Qar alone, 20 clan clashes erupted recently due to water scarcity, according to Mayor Hussein Ali Raddad of the Islah district, who also confirmed that the local government in the province failed to reach any solutions regarding the issue.

Ali Raddad told Al-Monitor, “The crisis we are facing now lies in the tribal conflicts that sometimes escalate into violence.”

Iraqi officials say the reason behind the water crisis in the country is that not enough water is flowing into Iraq from Turkey, warning of a looming “disaster” in the coming months.

Meanwhile, a number of citizens blame the Iraqi government for the tribal conflicts erupting in the country, saying the government is incapable of monitoring the distribution of water quotas to farmers. Some tribes are not getting their share of the water while others are getting more than their specified quota, citizens told Radio Nawa.

Water is not sufficiently flowing into farms from the main sources in their provinces, worsening the issues between tribes.

The water crisis may serve as the impetus for new demonstrations in Iraq, specifically in the southern regions where some tribes warned the Iraqi government of a “war” that may erupt in the absence of appropriate measures to resolve the water crisis.

In Maysan province, water shortages are no less serious than those in Dhi Qar, Samawah and Wasit. The capital city of Maysan, Amarah, may suffer a major disaster as a result of drought, as waves of displacement will ensue, the marshes will dry out, the livestock will die and the agriculture industry will be doomed, officials say.

This is not the first time that armed conflicts have erupted between the tribes of southern Iraq over water. Three years ago, the dispute escalated between the tribes of the provinces of Muthanna and Diwaniyah for the same reason.

Parts of southern Iraq are going through a phase no less serious than the situation in the Sunni areas of Anbar, Salahuddin and Ninevah. Water is the dwindling lifeblood that could lead to long-term tribal fighting in those areas.

Despite its attempts, the Iraqi government is seemingly unable to control the tribal differences over water in the areas of southern Iraq, especially considering that there are tribes and families controlling the water flow and preventing it from reaching other farms and areas.

The Iraqi government may have to resort to a military option to end inter-clan disputes over water and force tribes to divide water quotas. Otherwise, some farms will be deprived of their quotas.

Details of Defeat-ISIS Strikes in Syria, Iraq

Combined Joint Task Force Operation Inherent Resolve and its partners continued to strike Islamic State of Iraq and Syria targets in designated parts of Syria and Iraq between Feb. 9-15, conducting 43 strikes consisting of 63 engagements, Combined Joint Task Force Operation Inherent Resolve officials reported today.

Strikes in Syria

Yesterday in Syria, coalition military forces conducted four strikes consisting of five engagements against ISIS targets:

— Near Abu Kamal, three strikes engaged two ISIS tactical units and destroyed an ISIS supply route, a staging area and a weapons cache.

— Near Shadaddi, a strike engaged an ISIS tactical unit and destroyed an ISIS headquarters.

On Feb. 14, coalition military forces conducted two strikes consisting of two engagements against ISIS targets:

— Near Abu Kamal, a strike engaged an ISIS tactical unit.

— Near Dayr Az Zawr, a strike engaged two ISIS tactical units and destroyed an ISIS outpost.

On Feb. 13, coalition military forces conducted four strikes consisting of six engagements against ISIS targets near Abu Kamal. The strikes suppressed two ISIS maneuver elements and destroyed a fighting position, a heavy machine gun and an artillery system.

On Feb. 12, coalition military forces conducted 10 strikes consisting of 13 engagements against ISIS targets:

— Near Abu Kamal, nine strikes engaged an ISIS tactical unit; suppressed an ISIS maneuver element; and destroyed two artillery systems, a tactical vehicle, a heavy machine gun, two ISIS supply routes, a fighting position and a command-and-control center.

— Near Shadaddi, a strike destroyed two ISIS fighting positions.

On Feb. 11, coalition military forces conducted seven strikes consisting of 11 engagements against ISIS targets near Abu Kamal. The strikes engaged two ISIS tactical units and destroyed two fighting positions, an ISIS-held building, a command-and-control center, three tactical vehicles and two ISIS-supply routes.

On Feb. 10, coalition military forces conducted nine strikes consisting of 11 engagements against ISIS targets:

— Near Abu Kamal, eight strikes engaged six ISIS tactical units and destroyed two command and control centers, a fighting position, an ISIS-held building, a weapons cache, an ISIS motorcycle and a mortar tube.

— Near Dayr Az Zawr, a strike engaged two tactical units of hostile forces and destroyed a tank.

On Feb. 9, coalition military forces conducted three strikes consisting of seven engagements against ISIS targets near Abu Kamal. The strikes engaged three ISIS tactical units and damaged an ISIS-held building.

Additional Strikes in Syria

On Feb. 8, coalition military forces conducted a strike consisting of one engagement near Raqqa, engaging an ISIS tactical unit.

On Jan. 31, coalition military forces conducted a strike consisting of one engagement near Shadaddi, destroying an ISIS rocket fighting position.

Strikes in Iraq

On Feb. 15, coalition military forces conducted a strike consisting of two engagements against ISIS targets near Rutbah. The strike destroyed an ISIS weapons cache.

On Feb. 14, coalition military forces conducted two strikes consisting of three engagements against ISIS targets near Beiji. The strikes engaged an ISIS tactical unit and destroyed an ISIS facility.

There were no reported strikes in Iraq on Feb. 12-13.

On Feb. 11, coalition military forces conducted a strike consisting of one engagement against ISIS targets near Tal Afar. The strike engaged an ISIS tactical unit and destroyed an ISIS tunnel.

There were no reported strikes in Iraq on Feb. 9-10.

Additional Strikes in Iraq

On Jan. 27, coalition military forces conducted a strike consisting of one engagement in support of an Iraqi raid on a high-value ISIS leader.

Part of Operation Inherent Resolve

These strikes were conducted as part of Operation Inherent Resolve, the operation to destroy ISIS in Iraq and Syria. The destruction of ISIS targets in Iraq and Syria also further limits the group’s ability to project terror and conduct external operations throughout the region and the rest of the world, task force officials said.

The list above contains all strikes conducted by fighter, attack, bomber, rotary-wing or remotely piloted aircraft; rocket-propelled artillery; and ground-based tactical artillery, officials noted.

A strike, as defined by the coalition, refers to one or more kinetic engagements that occur in roughly the same geographic location to produce a single or cumulative effect.

For example, task force officials explained, a single aircraft delivering a single weapon against a lone ISIS vehicle is one strike, but so is multiple aircraft delivering dozens of weapons against a group of ISIS-held buildings and weapon systems in a compound, having the cumulative effect of making that facility harder or impossible to use. Strike assessments are based on initial reports and may be refined, officials said.

The task force does not report the number or type of aircraft employed in a strike, the number of munitions dropped in each strike, or the number of individual munition impact points against a target.

(Source: US Dept of Defense)

US EXIM agrees $3bn Iraq Financing

On Tuesday, the Export-Import Bank of the United States (EXIM) entered into a memorandum of understanding (MOU) with Iraq’s Ministry of Finance aimed at rebuilding Iraq and enhancing trade and economic cooperation between the two countries.

EXIM’s Acting Vice Chairman Scott Schloegel signed the MOU today with Iraq’s Deputy Finance Minister Dr. Maher Hammad Johan at the Kuwait International Conference for the Reconstruction of Iraq held at Bayan Palace in Kuwait City.

U.S. Ambassador to Iraq Douglas A. Silliman and Iraqi Prime Minister Haider al-Abadi also attended. The signing was part of a U.S. diplomatic mission from February 11-16 being led by U.S. Secretary of State Rex Tillerson to Jordan, Turkey, Beirut, Lebanon, Egypt, and Kuwait.

“This MOU signals that American workers want to be part of the rebuilding effort in Iraq,” said Acting Vice Chairman Scott Schloegel. “We anticipate that the financing following from this agreement will support scores of jobs across the United States over the coming years.”

Under the MOU, EXIM and Iraq’s Ministry of Finance agreed to identify potential projects in Iraq for procurement of goods manufactured in the United States and services produced by American workers. Areas for collaboration and business development include infrastructure, rail and road transportation, aircraft, energy, health care, and security, among others.

EXIM has agreed to facilitate short- and medium-term financing of U.S. exports to Iraqi state-owned enterprises up to a total of $3 billion in aggregate.

Up to $1 billion of this financing may be allocated to eligible short-term commodity transactions. Access to EXIM financing is subject to the bank’s approval for each individual transaction and must comply with the terms for EXIM’s financing.

(Source: EXIM)

Progress To Defeat ISIS Continues

Significant progress in the fight to defeat the Islamic State of Iraq and Syria has resulted in a shift in focus to sustaining military gains in Iraq to ensure a lasting defeat of Islamic State of Iraq and Syria terrorists, The commander of U.S. Air Forces Central Command told Pentagon reporters today.

An Air Force C-17 Globemaster III transport jet assigned to the 816th Expeditionary Airlift Squadron sits on the ramp at Bagram Airfield, Afghanistan, Jan. 24, 2018. The C-17 is capable of rapid strategic delivery of troops and all types of cargo to bases throughout the U.S. Central Command area of responsibility. Air Force photo by Tech. Sgt Gregory Brook

Speaking via teleconference from the Combined Air Operations Center at Al Udeid Air Base, Qatar, Air Force Lt. Gen. Jeffrey L. Harrigian said the Feb. 1 standup of a coalition aviation advisory and training team is an example of the transition.

The coalition team of airmen will help the Iraqis build a capable, affordable, professional and sustainable aviation enterprise, he explained. And while the standup of the team does not signal an increase in the U.S.-led coalition’s presence in Iraq, the CAAT will bridge the work toward standing up an air expeditionary wing that will take over that mission, he said.

Preventing ISIS Resurgence

The coalition’s train, advise and assist efforts to build a lasting Iraqi aviation enterprise will not be tied to a timeline, but instead will be conditions-based, proportional to the needs, and in coordination with partners in the Iraq government, Harrigian said.

“As we transition our focus in [Operation Inherent Resolve] to sustain our military gains, let me be clear that we will retain the necessary amount of air power to prevent a resurgence of ISIS,” he emphasized.

Harrigian said the progress to defeat ISIS has allowed the United States to realign some of its deployed combat air power and personnel to Afghanistan, including A-10 Thunderbolt II aircraft, MQ-9 Reaper unmanned aircraft and HH-60 Pave Hawk helicopters.

“These aircraft will provide increased air support to the South Asia strategy, as well as ongoing counterterrorism efforts in Afghan-led operations,” the commander said. “This plus-up in air power is also producing tangible results as part of a deliberate air campaign that we kicked off in late November to decimate the Taliban’s primary revenue source — narcotics production.”

Goal: Choke Off Taliban

The goal is to choke off the Taliban’s ability to pay for its deadly attacks, such as those in Kabul recently, he noted.

Harrigian said the campaign to stop the Taliban’s resource flow will take time and that it will not align with the traditional fighting season in Afghanistan.

“Instead, [the campaign] will be relentless and persistent, as demonstrated by the 321 precision munitions we released this January against Taliban targets in the dead of winter, a time they typically rest and recuperate,” he said.

Such pressure will persist until the Taliban reconcile or die, Harrigian said. “We are already seeing positive reflections from our intelligence that the Taliban are not enjoying their typical winter break.”

(Source: US Dept of Defense)

US Firm wins $45m Iraq Training Deal

By John Lee.

Spartan Air Academy Iraq LLC., Addison, Texas, has been awarded a $45,000,000 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for the stand-up of an Air Academy training in support of the Iraq Air Force.

Work will be performed at Balad Air Base, Iraq, and is expected to be complete by Feb. 8, 2019.

This award is the result of a country-directed sole-source acquisition.

(Source: US Dept of Defense)

US Ambassador, UNDP visit the Ninewa Plains

Ambassador Silliman and Lise Grande of UNDP Visit the Ninewa Plains

Ambassador of the United States to Iraq Douglas Silliman joined the Deputy Special Representative of the Secretary General and UNDP Resident Representative Lise Grande for a visit to several sites in the Ninewa Plains to highlight the U.S.-UN partnership in supporting the Iraqi government’s efforts to help its most vulnerable people return home following the liberation of their territory from ISIS.

During his visit to the historically Christian towns of Al Hamdaniya and Karamless, home to Syriac Catholic and Chaldean Catholic communities respectively, Ambassador Silliman reaffirmed the U.S. government’s commitment to supporting the UNDP Funding Facility for Stabilization (FFS).

Since 2015, the United States has provided $190.3 million to the FFS, which includes a recent $75 million contribution, portions of which the United States has specifically set aside for projects in the Ninewa Plains.  The United States also pledged an additional $75 million contribution for 2018.

The U.S. government also plans to fund up to $39 million to non-governmental and private organizations to help stabilize ethnic and religious minority communities in the Ninewa Plains and western Ninewa, which will bring our total funding for stabilization activities up to $300 million.

Separately, the United States has contributed more than $1.7 billion in humanitarian assistance since 2014 for conflict-affected Iraqis who were displaced by the ISIS threat.

“We are committed to supporting UNDP stabilization projects like these until all displaced Iraqis can return to their liberated, stabilized areas,” said Ambassador Silliman at the reopening of the Al Hamdaniya Hospital, which was looted and vandalized during the ISIS occupation before its initial rehabilitation by UNDP.  The U.S. government recently approved $2.6 million to fund UNDP’s further rehabilitation of the hospital and the purchase of necessary medical equipment.  The Ambassador added, “As I look at this facility, I see it as a symbol of hope that more peaceful and prosperous days lie ahead for the people of this community.”

UNDP Resident Representative for Iraq Lise Grande said, We are very grateful for the contribution of the U.S. government.  UNDP is currently implementing more than 1,000 projects across Ninewa Governorate.  Progress is tangible; electricity grids are starting to work, water systems are being repaired, schools are opening, health centers are functioning and people are getting back to work.  With continued support, we can accelerate this critical work and help bring hundreds of thousands of displaced Iraqis back home.”

The visit also included meetings with Syriac Catholic and Chaldean Catholic religious leaders and a tour of the Karamless primary health care center, another UNDP stabilization project that the United States will be partially funding.

The United States is committed to ensuring that its humanitarian assistance and stabilization funding is reaching Iraq’s most vulnerable communities, including the ethnic and religious minorities who suffered under ISIS occupation.  With support from the U.S. government and other international donors, the United Nations’ stabilization projects are helping displaced Iraqis from all backgrounds rebuild their homes and communities in the liberated areas.

(Source: U.S. Embassy in Iraq)

Coalition Aviation Advisory and Training Team established in Iraq

U.S. Air Forces Central Command, in coordination with Combined Joint Task Force – Operation Inherent Resolve, stood up a Coalition Aviation Advisory and Training Team in Iraq Feb. 1.

This standup will help to develop an Iraqi aviation enterprise capable of safeguarding the country from ISIS and its affiliates.

The CAATT, in partnership with the Office of Security Cooperation-Iraq, will enhance the aviation capabilities of the ISF and train, advise and assist the Iraqi Army Aviation Command, Iraqi Air Defense Command and the Iraqi Air Force.

“This Coalition team of airmen will build upon our Iraqi partner’s combat-proven capabilities to ensure a capable, affordable, professional, and sustainable Iraqi Aviation Enterprise,” said Lt. Gen. Jeffrey Harrigian, U.S. Air Forces Central Command commander. “Together with our Iraqi Security Forces partners, we will ensure the lasting defeat of ISIS in Iraq.”

The standup of this unit does not indicate an increase in the overall number of troops deployed to Iraq. The CAATT is comprised of U.S. and Coalition airmen from multiple specialties and is specifically designed to leverage existing resources and Coalition partner capabilities.

Following the country’s liberation from ISIS’ physical presence, the Coalition is transitioning to a more training-focused and building-partner-capacity role – decreasing overall Coalition air support as the Iraqi Air Force assumes air missions, duties and responsibilities necessary to ensure a lasting defeat of ISIS.

(Source: US Dept of Defense)