Today’s NY Times has a report about “insurgent” financing in Iraq that is difficult to parse, yet rather dark and melancholy in its tone. It says the “insurgency” is doing just fine, thank you.

The very first thing to note is that this report is classified “Secret – NoForn” and was made available to The Times by the usual unnamed Government sources, so we shouldn’t hear any screams of outrage from the VRWC about revealing secrets. Perhaps those sources really believe foreigners don’t read the US papers?

While such data may have been omitted to protect the group’s clandestine sources and methods — the document has a bold heading on the front page saying “secret” and a warning that it is not to be shared with foreign governments — several security and intelligence consultants said in telephone interviews that the vagueness of the estimates reflected how little American intelligence agencies knew about the opaque and complex world of Iraq’s militant groups.

When analyzing any such “Government” report there are three things to look for: what the report says, what agency produced the report, and who (or which faction) within that agency produced the report. Establishing these three criteria usually tell a reader what the report is aimed at.

Completed in June, the report was compiled by an interagency working group investigating the financing of militant groups in Iraq.

A Bush administration official, who spoke on condition of anonymity, confirmed the group’s existence. He said it was led by Juan Zarate, deputy national security adviser for combating terrorism, and was made up of about a dozen people, drawn from the C.I.A., the F.B.I., the Defense Intelligence Agency, the State Department, the Treasury Department and the United States Central Command.

Any reader experienced in the ins and outs of the Bu$h malAdministration should ask for the provenance of these people. It’s wise to understand that in the past reports from Bu$hCo have tended to be self-serving and not designed to further the knowledge of the general public. Were the members drawn from the CIA, DIA, and State career professionals or political appointees installed during the purges conducted under the auspices of Messers Goss, Rumsfeld and Ms Rice?

BAGHDAD, Nov. 25 — The insurgency in Iraq is now self-sustaining financially, raising tens of millions of dollars a year from oil smuggling, kidnapping, counterfeiting, connivance by corrupt Islamic charities and other crimes that the Iraqi government and its American patrons have been largely unable to prevent, a classified United States government report has concluded.

The report, obtained by The New York Times, estimates that groups responsible for many insurgent and terrorist attacks are raising $70 million to $200 million a year from illegal activities. It says $25 million to $100 million of that comes from oil smuggling and other criminal activity involving the state-owned oil industry, aided by “corrupt and complicit” Iraqi officials.

Oil smuggling is of course a key element in this report because oil is The Prize in Iraq as Mr Bu$h recently stated inadvertently. Oil production in Iraq is sketchy at best and in fact Iraq seems to import more oil than it exports, although some of this may simply be facilitation of Bu$hCo political campaign donors. Since for the first year or more oil exported successfully from Iraq was not metered, it’s difficult to determine just how much oil was going out, where it was going to, and who made money from it, but it’s a safe guess that the hands controlling the flow didn’t suffer too much. And, of course, oil production in Iraq hasn’t been to reliable since blowing up pipelines is a important part of “insurgency.” And let’s also remember that Executive Order 13303 pretty well set the gate for Iraq’s oil: the sky’s the limit and there are no controls.

The document tracing the money flows acknowledges that investigators have had limited success in penetrating or choking off terrorist financing networks. The report says American efforts to follow the financing trails have been hamstrung by several factors. They include a weak Iraqi government and its nascent intelligence agencies; a lack of communication between American agencies, and between the Americans and the Iraqis; and the nature of the insurgent economy itself, primarily sustained by couriers carrying cash rather than more easily traceable means involving banks and the hawala money transfer networks traditional in the Middle East.

COL W. Pat Lang, a retired US Army specialist in Middle Eastern affairs commented on this report:

They’re just guessing…“They really have no idea.” He added, “They’ve been very unsuccessful in penetrating these organizations.” He said he was equally skeptical about the report’s assertion that the insurgent and militant groups may have surpluses to finance terrorism outside Iraq. “That’s another guess,” he said.

“A judgment like that, coming from an N.S.C.-generated document,” he said, is not an analytical assessment as much as it is a political statement to support the administration’s contention that Iraq is a central front in the war on terrorism. “It’s a statement put in there to support a policy judgment,” he said.

The report is primarily about financing and makes some fairly remarkable and completely unsubstantiated claims, among them the fact that the “insurgency” is making much more from criminal activities than it needs to sustain itself, and the supposition is that they are exporting money to other countries to sustain other groups, or to foster new enterprises. If Bu$hCo really believes this, they’re admitting that they have been fought to a standstill in Iraq, and are in fact beaten. The premise implies the “insurgents” don’t need to spend all their funds domestically. Time to quit, Mr Bu$h.