Sat, Dec 06, 2003 - Page 7 News List

US puts the squeeze on insurgents using new currency

AP , Baghdad

A spate of US raids on Iraqi smugglers signals a new strategy to deny the guerrilla insurgency one of its chief recruiting assets: money.

If US military strategists are correct, in just over a month, the insurgency will face a financial crisis when old Iraqi dinar notes bearing the face of Saddam Hussein will be worthless. The military wants to deepen the crisis by launching raids on black market-eers thought to be funding the guerrilla movement.

"If we can stop the money, we can stop the insurgency," a coalition military official in Baghdad said, speaking on condition of anonymity. Because many strikes are carried out by hired attackers, he said on Thursday, the US is going after the "paymasters."

The insurgency's need for funds was highlighted by coordinated attacks in Samarra, where bands of guerrillas laid in wait at two banks awaiting the delivery of dinars -- setting off clashes with US troops that claimed dozens of Iraqi lives.

The guerrillas are thought to be funding the insurgency with the former regime's stockpiles of old dinar notes, or by counterfeiting the relatively simple Saddam notes, which are now being exchanged for new, Saddam-free notes.

In Washington, a US defense official speaking on condition of anonymity said the money changeover is expected to inhibit guerrilla operations that rely on paying attackers for bombings and hits on US troops.

As the currency approaches expiration on Jan. 15, the US military is pressing its advantage. At least four US Army units have either begun or plan to launch new operations targeting the guerrilla financiers.

At the same time, insurgent groups have shown an increasing desperation for hard currency.

US military officials have said individual payments for attacks have risen in past months.

They now range from US$150 to US$500 per attack, making financiers scramble for funds, the officials said.

US military convoys supplying banks with new Iraqi dinars have been ambushed on six occasions, including the attacks on Sunday in Samarra.

US military officials in Baghdad and Washington said the attacks were a sign of the insurgency's increasing desperation for money to fund its fight against coalition forces.

The US military is launching a series of counter-funding moves targeting "paymasters" who finance bomb workshops and hire mercenaries.

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