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Instead, I'll bet it has been quietly dispersed by American authorities to the local populace. Shady as it is, one might argue that it's amongst the best money yet spent in Iraq.
The following is heavily spiced with my own speculation, but I base a lot of it on fairly well documented SAS and Army Special Forces doctrine, not to mention a fair amount of alcohol-lubricated Pentagon City talk.
The way I hear it works is like this. Local American and British intelligence officers (and, since there aren't enough of them, probably private contractors as well) go into communities and start offering small sums of money for simple information. Who's willing to lease out troop housing and storage? Where can I find livestock? Where can I find water? Thanks a lot, here's a little cash.
You come back to the people willing to deal, and each time the questions asked are a little more detailed and the reward is a little more lucrative until eventually every town has fifty or more people subsisting on what is effectively a covert American stipend. People interested in cooperating are encouraged to bring in friends. Friends of the occupiers are supported both financially and militarily. Is there a local tribal dispute which can be exploited against anti-American groups? Well, you lubricate the guy on your side and become his enemy's enemy. Once they're hooked on American cash, the entire community can be threatened with an immediate and devastating cutoff of the dole if insurgents aren't sold out, run off, or scalped. No doubt incentives are also offered for those willing to help realize the same thing.
With unemployment and poverty a huge problem in Iraq, it's initially attractive, and like any addiction, once started it's hard to kick. It also provides immediate financial assistance to people most in need, rather than having the money siphoned off by corrupt corporations or the puppet government. But it's necessarily covert, because what it really is is a vast, informal, lethal and effective intelligence network designed to corner and neutralize anyone not supportive of the occupation. And the organization is almost certainly used in ways that wouldn't please any human rights watchdog group--what those people who are ratted out know is far too valuable to merely kill them, at least at first.
But killing, imprisoning, and interrogating the insurgents is what you're out to do, by turning the local populace against the insurgents and compressing them into ever smaller areas where they can be cornered, captured or killed without overly harming the local population--although some of the locals are invariably harmed. The families of the innocents (and probably the insurgents) are paid off, too, but I understand that money comes from another funding source.
Where this tactic doesn't work as well is in precicely the areas where we don't see it working--strongly Islamic areas which already have a large, effective and nearly identical version of the network already in place, like in Najaf. It's still working there to some extent, in that the insurgents are essentially trapped in Najaf because the surrounding area has already been bought off by the Americans.
If this sounds familiar, it should. It's the same strategy used by the SAS in Sarawak and Aden, by the Phoenix Project people in Vietnam, and by al Qaeda in Afghanistan and the Sudan.
The price tag for this covert boodle is enormous--imagine shelling out a thousand bucks a month to each of a hundred people in every crossroads town in the country. In order to keep the costs out of sight of watchful Congressional eyes, I'm willing to bet that DoD accountants are quietly shifting the expenses to places where it can't easily be tracked. Writing that money up as a CPA expense seems perfectly reasonable to me.
Please note that while I have my own opinions about this system, I've tried hard not to express them in the above description. And of course, since it's offered without citation, you have to check it out for yourself and make up your own mind whether or not I'm full of shit. But from my point of view it's what best fits the available evidence, and there were plenty of loose lips in Caucasian City willing to confirm it when I'm willing to listen.
If you want to read more about how the process works there's a surprisingly informative nonfiction Tom Clancy (but typically incoherent, biased and somewhat boring) book on the subject called Shadow Warriors. Much more interesting is a great little mass market paperback about the SAS in Aden (Yemen) and Sarawak (Malaysia)--I think it's called Who Dares Wins. Mark Bowden's book Killing Pablo dances around the subject a little, but it is essentially an excellent example of the Columbians and Americans out-Phoenixing Pablo Escobar's own Phoenix-style method of buying local adoration and wasting people who don't agree. And a few passages of John Keegan's recent Intelligence in War hint at the fact that winning hearts and minds through financial and material assistance is one of the better ways to quickly establish an effective intelligence network.
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