Hannah Allam writes for McClatchy Newspapers:

Iraq’s deadly insurgent groups have financed their war against U.S. troops in part with hundreds of thousands of dollars in U.S. rebuilding funds that they’ve extorted from Iraqi contractors in Anbar province.

The payments, in return for the insurgents’ allowing supplies to move and construction work to begin, have taken place since the earliest projects in 2003, Iraqi contractors, politicians and interpreters involved with reconstruction efforts said.

Your tax dollars at work.

A fresh round of rebuilding spurred by the U.S. military’s recent alliance with some Anbar tribes — 200 new projects are scheduled — provides another opportunity for militant groups such as al Qaeda in Iraq to siphon off more U.S. money, contractors and politicians warn.

“Now we’re back to the same old story in Anbar. The Americans are handing out contracts and jobs to terrorists, bandits and gangsters,” said Sheik Ali Hatem Ali Suleiman, the deputy leader of the Dulaim, the largest and most powerful tribe in Anbar. He was involved in several U.S. rebuilding contracts in the early days of the war, but is now a harsh critic of the U.S. presence.

And we thought all that money was just going to waste.

The biggest source of, um, overruns seems to be security.

A U.S. company with a reconstruction contract hires an Iraqi sub-contractor to haul supplies along insurgent-ridden roads. The Iraqi contractor sets his price at up to four times the going rate because he’ll be forced to give 50 percent or more to gun-toting insurgents who demand cash payments in exchange for the supply convoys’ safe passage.

One Iraqi official said the arrangement makes sense for insurgents. By granting safe passage to a truck loaded with $10,000 in goods, they receive a “protection fee” that can buy more weapons and vehicles. Sometimes the insurgents take the goods, too.

Sounds a bit like the old Mafia.

One senior Iraqi politician with personal knowledge of the contracting system said the insurgents also use their cuts to pay border police in Syria “to look the other way” as they smuggle weapons and foot soldiers into Iraq.

“Every contractor in Anbar who works for the U.S. military and survives for more than a month is paying the insurgency,” the politician said, speaking on condition of anonymity because of the sensitivity of the matter. “The contracts are inflated, all of them. The insurgents get half.”

I’d say that’s an argument for getting the bleep out.