Since the rise of ISIS, the Kurdish Regional Government (KRG) has been a vital U.S. ally in the fight against ISIS. The KRG is in many ways a unique sub-state, created through U.S. intervention following Saddam Hussein’s genocidal campaign against the Kurds, and preserved in the new Iraqi constitution through Article 137, which grants the KRG a degree of autonomy.  Yet Kurdistan is plagued by corruption common to governments that, like the KRG, are heavily reliant on oil and gas revenue. Of the hundreds of millions dollars produced by the oil and gas industry in Kurdistan each month, only a portion reaches the actual Kurdish economy. Kurdish officials have tried to combat this problem to some degree, but oil revenues continue to “leak” from official channels to foreign advisors and government ministers. The problems are exacerbated by the fact that the KRG government, while nominally a democracy, is dominated by two tribal-familial groups, the Barzani and the Talabani, and the government actually resembles a hereditary dictatorship more than a parliamentary democracy, with the Barzani family in particular controlling the presidency, prime minister, and head of the region’s security forces through direct familial ties. In fact, current president Massoud Barzani has been serving without a democratic mandate since 2013.

KRG corruption is not just a concern for the Kurdish people, but a real security threat for the United States, for two main reasons:

• First, the Kurdish military units known collectively as the Peshmerga have been fighting on the front lines against ISIS, but chronic funding shortfalls threaten to render the Peshmerga ineffective. The Peshmerga has always played an important role in the Kurdish region of Iraq, serving first as guerrilla soldiers in the pursuit of an independent Kurdistan, and later as the military arm of the KRG. The Peshmerga have proven to be of the most effective forces in the fight against ISIS. During the Islamic State’s initial rise, the U.S. trained Iraqi security forces led by the new government out of Baghdad proved almost entirely ineffective, quickly abandoning large swaths of the country to ISIS forces with minimal resistance. It was the Peshmerga, and not government forces, that fought back in several key areas, including the Nineveh Valley, which is currently under the control of Kurdish military forces rather than the Iraqi military. The Peshmerga are now serving as a front line force in the battle to retake Mosul from the Islamic State. Every day more images stream in from the siege with soldiers carrying the red, white, and green flag of Kurdistan, rather than the Iraqi flag. Yet the Peshmerga are faced with financial pressures that threaten to hobble their effectiveness, with some soldiers forced moonlight as taxi drivers or take other odd jobs just to support themselves and their families. The reason for this strain is that, despite currently holding some of the richest oil fields in Iraq, the KRG has been largely unable to pay its own soldiers for months at a time. While the global drop in energy prices is partly to blame, corruption in the KRG has is a significant contributor to this funding crisis. If the corruption in the Kurdish government continues to deprive the Peshmerga of adequate funding, the effectiveness of the Peshmerga in fighting ISIS will be jeopardized. For the moment, the U.S. government has circumvented these issues by paying the Peshmerga directly, rather than routing the funds through Kurdish government. But this solution is a temporary stopgap at best, both because directly funding the Peshmerga places the U.S. in a potentially troublesome legal situation, and because the U.S. army has also run into problems combating corruption when it comes to dispersing funds in conflict zones. If the U.S. hopes to maintain security in Iraq after the Mosul is captured, than a more sustainable method for maintaining Peshmerga funding must be used, which requires tackling the corruption currently inhibiting the KRG.
• Second, corruption in the Kurdish government threatens to trigger unrest among the KRG’s civilian employees, which could pose additional security problems. Due to the KRG’s reliance on the state-owned oil and gas industry, the government has always been the most important employer in the Kurdish region, with one in six Iraqi Kurds drawing their salary from the government. Funding deficiencies caused by the drop in energy prices and exacerbated by corruption in the government has led to chronic lapses in payment, and many civil servants have been forced to survive without taking home a salary. While this was sustainable in the short-run, with civil servants willing to work for little or no money out of sense of patriotic duty in the fight against ISIS, the cracks are now starting to show. Protests have erupted in some cities, as civil servants have finally begun to demand some money from the government for their continued work. These protests will likely continue to build, especially as the external threat of ISIS wanes. Something must be done to ensure a stable government in the region, which requires making sure these civil servants are able to draw a secure salary. Even though this instability may occur after ISIS’s ouster from Iraq, continuing protests in Kurdistan would raise serious security concerns specific to U.S. interests in the region. ISIS is only the most recent incarnation of a consistent pattern of radicalization in the region, with roots connecting back to earlier terrorist organizations, in particular the existing Al-Qaeda organization in Iraq and Syria. Given the recent signs of potential radicalization within the Kurdish community, ignoring an unstable Kurdistan would leave behind a potential vacuum for radicalism to spread, while weakening a potential ally in the fight against any future extremist groups in the region.

The U.S. has faced criticism in the past for failing to adequately account for the realities in the field after major military actions, especially with regard to expansion of extremist groups in the region. As already discussed on this blog, this criticism has also been directed at a general disregard for concerns connected to systematic corruption in allied governments. Taking steps to combat corruption relating to the KRG now, especially given the current leverage that the U.S. has over the KRG, would allow the U.S. to begin to proactively work towards heading off some of the issues that we have already seen emerge from mishandling corruption issues in the past, and hopefully help lay the groundwork for a more stable Middle East.