Iraq Is an Iranian Client State, Lawmakers Warn

GOP presses Biden admin to reassess U.S. aid, policy

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February 10, 2023

Iraq has become an Iranian client state that the regime uses as a hub for its money laundering and sanctions evasion schemes, according to three Republican foreign policy leaders who are calling on the Biden administration to reassess U.S. assistance programs in Baghdad.

"Any holistic U.S. policy toward Iran must also simultaneously address Iraq as it is now, as a client state of Iran rather than continuing to pretend it is a healthy democracy," Reps. Michael Waltz (R., Fla.), Kevin Hern (R., Okla.), and Joe Wilson (R., S.C.) wrote in a letter sent Friday to the White House and obtained by the Washington Free Beacon. The lawmakers are pressing the Biden administration to freeze out Iraq’s banking sector and cancel economic sanctions waivers that have allowed Iran to use Iraq as a hub for its money laundering efforts. The letter was sent as an Iraqi government delegation arrived in Washington, D.C., Thursday for meetings with the Biden administration on increased economic cooperation.

"Now is the time for the United States to clearly communicate to the Iraqi government the consequences of its alignment with Iran," the lawmakers wrote. "This policy must acknowledge the reality of Iranian influence and should not continue to provide banknotes to Iraq’s banking system or grant sanctions waivers that prevent Iraqi independence and enable further Iran-backed corruption."

The letter comes just a day after the Free Beacon reported on a Republican-led effort in Congress to slash nearly half a billion dollars in U.S. taxpayer-funded security assistance to Iraq as punishment for its growing alliance with Iran. Both efforts point to a growing consensus among Republicans that U.S. economic support for Iraq is propping up Iran and helping the hardline regime avoid sanctions. Iran’s Islamic Revolutionary Guard Corps, the country’s paramilitary fighting force, is embedded at nearly every level of Iraq’s economy, fueling concerns among lawmakers and experts that U.S. assistance to Baghdad ultimately benefits the hardline regime in Tehran.

Waltz, Hern, and Wilson say there is mounting evidence that "Iran is using Iraq’s government and financial system to weather international economic sanctions." Because of these sanctions evasion efforts, the United States must crack down on its longstanding policy of serving as an ATM for the Iraqi government, the lawmakers write.

In order to confront "Iran’s exploitation of Iraq’s political, legal, and military institutions," the United States must sanction a slew of high-profile Iraqi political leaders with known ties to the Iranian regime, the letter states.

Waltz, a member of the House Foreign Affairs and Armed Services committees, told the Free Beacon the Biden administration has largely ignored Iran’s penetration into Iraq because it has "an appeasement strategy toward Iran and this pipe dream to reconstitute the [nuclear deal], which leads them to sell out our interests in every other regard in the region."

Democrats in Congress and those serving in the administration, Waltz added, "don’t care about oil and gas," leading them to ignore Iraq’s potential as a provider of energy to America. The United States also has failed to stop Russia from expanding its investments in Iraq’s energy sector.

The Republican lawmakers are requesting the Biden administration turn over internal documents and answer questions about U.S. policy toward Iraq, including any information that comes to light as a result of this week’s meetings with the Iraqi delegation, which includes Foreign Minister Fuad Hussein.

The lawmakers suspect that some members of the Iraqi delegation currently in the United States may be vulnerable to sanctions over their ties to Iran. They are asking the State Department to determine if any Iraqi officials currently meeting with the Biden administration, including the country’s central bank governor and chief justice, "meet the criteria to be banned of a [U.S.] visa" for violations of sanctions laws, according to the letter.

They also want to know what guardrails the administration has put in place to ensure U.S. banknote transfers to Iraq "do not directly or indirectly benefit Iran and its proxies."

The Biden administration is also being pressed to explain what measures it is taking "to prevent the appointment of senior Iraqi officials affiliated with designated terrorist organizations including Iraq’s Ministry of Higher Education, the Ministry of Electricity, the Ministry of Defense, and Iraqi Intelligence Services," according to the letter.

Published under: Iran , Iraq , Sanctions