Order Code RS22323
Updated October 21, 2008
Iran’s Activities and Influence in Iraq
Kenneth Katzman
Specialist in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division
Summary
With a conventional military and weapons of mass destruction (WMD) threat
from Saddam Hussein’s regime removed, Iran seeks to ensure that Iraq can never again
become a threat to Iran, either with or without U.S. forces present in Iraq. By supporting
armed Shiite factions, Iran’s influence in Iraq has at times hindered U.S. efforts to
stabilize Iraq, and has heightened the U.S. threat perception of Iran generally. However,
Iran faces difficult choices in Iraq now that its protege Shiite factions, formerly united,
are competing and often fighting each other. This report will be updated; also see CRS
Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman.
Background
During 2003-2005, it Iran calculated that it suited its interests to support the entry
of Iraqi Shiite Islamist factions into the U.S.-led election process, because the number of
Shiites in Iraq (about 60% of the population) virtually ensured Shiite dominance of an
elected government. To this extent, Iran’s goals did not conflict with the U.S. objective
of establishing democracy. Iran helped assemble a Shiite Islamist bloc (“United Iraqi
Alliance”), encompassing the Islamic Supreme Council of Iraq (ISCI), the Da’wa (Islamic
Call) party, and the faction of the 34-year-old cleric Moqtada Al Sadr — the bloc won 128
of the 275 seats in the December 15, 2005, election for a full term parliament. Dawa
senior leader Nuri al-Maliki was selected as Prime Minister; several ISCI figures took
other leadership positions. ISCI’s leaders, including Ayatollah Mohammad Baqr Al
Hakim, who was killed in an August 2003 car bomb in Najaf, spent their years of exile
in Iran and built ties to Iranian leaders. In 1982, Mohammad Baqr was anointed by then
Iranian leader Ayatollah Ruhollah Khomeini to head a future “Islamic republic of Iraq.”
ISCI’s militia, the “Badr Brigades” (now renamed the “Badr Organization”), had been
recruited, trained, and armed by Iran’s Revolutionary Guard, the most politically powerful
component of Iran’s military, during the 1980-88 Iran-Iraq war. In that war, Badr
guerrillas conducted attacks from Iran into southern Iraq against Baath Party officials, but
did not shake the regime. After Saddam’s fall, Iran continued to provide political,
financial, and military support to ISCI and the Badr Brigades militia, which numbered
about 15,000. During 2005-6, with the help of ISCI member Bayan Jabr as Interior
CRS-2
Minister (and close ally of ISCI leader Abd al Aziz al-Hakim, younger brother of
Mohammad Baqr), the militia burrowed into the Iraqi Security Forces (ISF).
The Sadr faction’s ties to Iran were initially limited because his family remained in
Iraq during Saddam’s rule. Still, the Sadr clan has ideological ties to Iran; Moqtada’s
cousin, Mohammad Baqr Al Sadr, was founder of the Da’wa Party, a political ally of
Ayatollah Khomeini, and was hung by Saddam Hussein in 1980. (Moqtada is married to
a daughter of Mohammad Baqr Al Sadr.) Iran later came to see political value and
potential leverage in Sadr’s faction — which has 30 total seats in parliament, a large and
dedicated following among lower-class Iraqi Shiites, and which built an estimated 60,000
person “Mahdi Army” (Jaysh al-Mahdi, or JAM) militia after Saddam’s fall. Sadr
unleashed the JAM on several occasions as part of a strategy of challenging what he sees
as a U.S. occupation of Iraq, but U.S. military operations defeated the JAM in April 2004
and August 2004 in “Sadr City” (Sadr stronghold in east Baghdad), Najaf, and other
Shiite cities. In those cases, fighting was ended with compromises under which JAM
forces stopped fighting in exchange for amnesty for Sadr. Seeing the JAM as useful
against the United States in the event of a U.S.-Iran confrontation, in 2005, Iran began
supplying arms to it through the Revolutionary Guard’s “Qods (Jerusalem) Force,” the
unit that assists Iranian protege forces abroad. During 2005-6, the height of sectarian
conflict in Iraq, Badr fighters in and outside the ISF, as well as JAM militiamen, were
involved in sectarian killings of Sunnis, which accelerated after the February 2006
bombing of the Al Askari Mosque in Samarra.
Iran’s efforts to promote Shiite solidarity began to unravel in 2007 as Maliki and
ISCI recognized they needed to cooperate with the U.S. “troop surge” by permitting U.S.
military pressure against the JAM. As a result, Sadr broke with Maliki, pulling his five
ministers out of the cabinet and withdrawing his faction from the UIA bloc during 2007.
As the rift widened, JAM fighters battled Badr-dominated Iraqi forces, and U.S., and
British forces for control of such Shiite cities as Diwaniyah, Karbala, Hilla, Nassiryah,
Basra, Kut, and Amarah. This caused a backlash against Sadr among Iraqi Shiite civilian
victims, particularly after the August 2007 JAM attempt to take control of religious sites
in Karbala. The backlash caused Sadr to declare a six month “suspension” of JAM
activities. (He extended the ceasefire in February 2008 for another six months.) The intra-
Shiite fighting expanded as Britain drew down its forces the Basra area from 7,000 to
4,000 in concert with a withdrawal from Basra city to the airport, and the transfer of Basra
Province to ISF control on December 16, 2007.
Assertions of Iranian Support to Armed Groups
Iran’s arming and training of Shiite militias in Iraq has added to U.S.-Iran tensions
over Iran’s nuclear program and Iran’s broader regional influence, such as its aid to
Lebanese Hezbollah and the Palestinian organization Hamas, which now controls the
Gaza Strip. By supplying armed groups in Iraq, U.S. officials fear that Iran seeks to
develop a broad range of options that includes pressuring U.S. and British forces to leave
Iraq, to bog down the United States militarily, and to be positioned to retaliate in Iraq
should the United States take military action against Iran’s nuclear program. U.S. officials
have, over the past few years, provided specific information on Qods Force and Hezbollah
aid to Iraqi Shiite militias. No firm information exists on the number of Iranian agents in
CRS-3
Iraq, although one press report said there are 150 Qods and intelligence personnel there.1
Qods Force officers often do not wear uniforms and their main role is to identify Iraqi
fighters to train and to organize safe passage for weapons and Iraqi militants between Iran
and Iraq, although some observers allege that Iranian agents have sometimes assisted the
JAM in its combat operations. A study by the “Combatting Terrorism Center” at West
Point, published October 13, 2008 (“Iranian Strategy in Iraq: Politics and ‘Other
Means’”), details this activity, based on declassified interrogation and other documents.
! On February 11, 2007, U.S. military briefers in Baghdad provided what
they said was specific evidence that Iran had supplied armor-piercing
“explosively formed projectiles” (EFPs) to Shiite (Sadrist) militiamen.
EFPs have been responsible for over 200 U.S. combat deaths since 2003.
In August 2007, Gen. Raymond Odierno, then the second in command
and who is now overall commander in Iraq, said that Iran had supplied
the Shiite militias with 122 millimeter mortars that are used to fire on the
Green Zone in Baghdad. On August 28, 2008, the Washington Times
reported that pro-Sadr militias were now also using “Improvised Rocket
Assisted Munitions” — a “flying bomb” carrying 100 pounds of
explosives, propelled by Iranian-supplied 107 mm rockets.
! On July 2, 2007, Brig. Gen. Kevin Begner said that Lebanese Hezbollah
was assisting the Qods Force in aiding Iraqi Shiite militias, adding that
Iran gives about $3 million per month to these Iraqi militias. He based the
statement on the March 2007 capture of former Sadr aide Qais Khazali
and Lebanese Hezbollah operative Ali Musa Daqduq. They were
allegedly involved in the January 2007 killing of five U.S. forces in
Karbala. On October 7, 2007, Gen. David Petraeus, then overall U.S.
commander in Iraq, told journalists that Iran’s Ambassador to Iraq,
Hassan Kazemi-Qomi, is himself a member of the Qods Force.
Continuing to present evidence of Iranian material assistance to Shiite militias, Gen.
Petraeus testified on April 8-9, 2008, that Iran continues to arm, train, and direct “Special
Groups” — radical and possibly breakaway elements of the JAM — and to organize the
Groups into a “Hezbollah-like force to serve [Iran’s] interests and fight a proxy war
against the Iraqi state and coalition forces....” The testimony was delivered amidst an ISF
offensive, launched by Maliki on March 26, 2008, to clear JAM (and Fadhila party)
militiamen from Basra, particularly the port area which these militias controlled and used
for financial benefit. Maliki reportedly launched the offensive in part to reduce Sadrist
strength in provincial elections planned for the fall of 2008 (but now put off until early
2009). In the initial assault, the ISF units (dominated by Badr loyalists) failed and partly
collapsed — 1,300 of the 7,000 additional ISF sent in for the assault did not fight. Later,
U.S. and British forces intervened with air strikes and military advice, helping the ISF
gain the upper hand and restore relative normality. Sadr, who reportedly received Iranian
aid during the fighting, agreed to an Iran-brokered “ceasefire” on March 30, 2008, but not
to disarm. Some fighting and JAM rocketing of U.S. installations in Baghdad continued
subsequently, in some cases killing U.S. soldiers, and U.S. forces continued to fight JAM
1 Linzer, Dafna. “Troops Authorized To Kill Iranian Operatives in Iraq,” Washington Post,
January 26, 2007.
CRS-4
elements in Sadr City until another Sadr-government agreement on May 10, 2008.
Subsequently, the ISF moved into Amarah unopposed on June 16, 2008, and quieted that
city, while prompting Sadrists protests about ISF arrests of the Amarah governor and
other Sadrists. Other arrests of Sadrists took place in Sadr’s former stronghold of
Diwaniyah, the capital of Qadisiyah Province. The weakening of Sadr’s faction facilitated
the handed over of that province to Iraqi control in July 2008.
In responding to Maliki’s moves, Sadr told his followers on June 13, 2008 that most
of the JAM would now orient toward “peaceful activities,” clarified on August 8, 2008
to be social and cultural work under a new movement called “Mumahidun,” or “trail
blazers;” (2) that a small corps of “special companies” would be formed from the JAM
to actively combat U.S. (but not Iraqi) forces in Iraq; and (3) in order to circumvent the
government’s demand that the JAM be disbanded as a condition for Sadrist participation
in the provincial elections, the Sadr movement would back technocrats and independents
for upcoming provincial elections but not offer a separate “Sadrist” list. The number two
U.S. commander in Iraq, Gen. Lloyd Austin, explaining the relative inactivity of the JAM
in recent months in military terms rather than a deliberate decision by Sadr to focus on
political competition, said on August 18, 2008 that U.S. forces were increasingly
uncovering arms caches and other JAM weaponry and that JAM fighters had gone to Iran
temporarily for more training and resupply. The relative quiescence of the JAM could also
explain why a U.S. briefing on new information on Iranian aid to the JAM, first expected
in May 2008 but opposed by Iraqi leaders who do not want to draw Iraq into a U.S.-Iran
dispute, was not held. Nor has there been further follow-up from an Iraqi parliamentary
group that visited Iran to discuss the issue in April 2008, or from an Iraqi commission
investigating Iran’s aid to the JAM. However, suggesting the U.S. concern that Sadr might
reactivate militia operations for political purposes, the U.S. commander for Baghdad city,
Maj. Gen. Jeffery Hammond, told journalists on October 19, 2008 that some special
groups fighters have been returning to Baghdad recently, perhaps to try to influence the
provincial elections. The Defense Department’s “Measuring Stability and Security in
Iraq” report for September 2008 (it is published quarterly) assesses that continuing Iranian
support for the special groups constitutes “the most significant threat to long term stability
in Iraq.”
While wary of renewed activity, U.S. officials anticipate that the Maliki offensives
and prior U.S. counter-measures will make Iran and Sadr hesitant to again unleash the
JAM and the special groups. U.S. forces arrested a total of 20 Iranians in Iraq, many of
whom are alleged to be Qods Forces officers, during December 2006-October 2007; five
of which were arrested in January 2007 in the Kurdish city of Irbil. In late 2007, the U.S.
military released ten of them, but continue to hold ten believed of high intelligence value.
On August 12, 2008, U.S.-led forces arrested nine Hezbollah members allegedly involved
in funneling arms into Iraq, and on August 29, 2008, U.S. forces arrested Ali Lami on his
return to Iraq for allegedly being a “senior Special Groups leader.” On March 24, 2007,
with U.S. backing, the U.N. Security Council unanimously adopted Resolution 1747 (on
the Iran nuclear issue), with a provision banning arms exports by Iran — a provision
clearly directed at Iran’s arms supplies to Iraq’s Shiite militias and Lebanese Hezbollah.
In 2007, the U.S. military built a base near the Iranian border in Wasit Province, east of
Baghdad, to stop cross-border weapons shipments. In July 2008, U.S. forces and U.S.
civilian border security experts established additional bases near the Iran border in
Maysan Province, to close off smuggling routes.
CRS-5
In an effort to financially squeeze the Qods Force, on October 21, 2007, the Bush
Administration designated the Qods Force (Executive Order 13224) as a provider of
support to terrorist organizations. On January 9, 2008, the Treasury Department took
action against suspected Iranian and pro-Iranian operatives in Iraq by designating them
as a threat to stability in Iraq under a July 17, 2007 Executive Order 13438. The penalties
are a freeze on their assets and a ban on transactions with them. The named entities are:
Ahmad Forouzandeh, Commander of the Qods Force Ramazan Headquarters, accused of
fomenting sectarian violence in Iraq and organizing training in Iran for Iraqi Shiite
militiamen; Abu Mustafa al-Sheibani, the Iran-based leader of network that funnels
Iranian arms to Iraqi Shiite militias; and Isma’il al-Lami (Abu Dura), a Shiite militia
leader — who has broken from the JAM — alleged to have planned assassination
attempts against Iraqi Sunni politicians. Also on October 21, 2007, the Administration
designated the Revolutionary Guard and several affiliates, under Executive Order 13382,
as proliferation concerns. The designations carry the same penalties as do those under
Executive Order 13224. Neither the Guard or the Qods Force was named a Foreign
Terrorist Organizations (FTOs) — recommended by the FY2008 defense authorization
bill (P.L. 110-181) and H.R. 1400 (passed September 25, 2007).
Negotiations With Iran. U.S. officials initially rejected the recommendation of
the “Iraq Study Group” (December 2006) to include Iran in multilateral efforts to stabilize
Iraq, in part because of concerns that Iran might use such meetings to discuss Iran’s
nuclear program. However, in a shift conducted in concert with the “troop surge,” the
United States attended regional (including Iran and Syria) conferences “Expanded
Neighbors Conference”) in Baghdad on March 10, 2007, in Egypt during May 3-4, 2007,
and in Kuwait on April 22, 2008. Secretary of State Rice and Iranian Foreign Minister
Mottaki held no substantive discussions at any of these meetings. In a more pronounced
shift, the United States agreed to bilateral meetings with Iran, in Baghdad, on the Iraq
issue, led by U.S. Ambassador to Iraq Ryan Crocker and Iranian Ambassador Kazemi-
Qomi. The first was on May 28, 2007. A second round, held on July 24, 2007, established
a lower level working group; it met on August 6, 2007. Talks in Baghdad scheduled for
December 18, 2007, were postponed because Iran wanted them at the ambassador level,
not the working group level. On May 6, 2008, Iran said it would not continue the dialogue
because U.S. forces are causing civilian casualties in Sadr City, although the Iranian
position might reflected a broader Iranian assessment that it needs to make no concessions
to the United States in Iraq.
Iranian Influence Over Iraqi Political Leaders
Iran has exploited its close ties to Iraqi leaders to build broad political and economic
influence over outcomes in Iraq, although Iran’s commerce with and investment in Iraq,
do not necessarily conflict with U.S. goals. The most pressing concern for the United
States is Iran’s efforts to derail a U.S.-Iraq Status of Forces Agreement that would
authorize the U.S. military presence beyond December 31, 2008. Iran has publicly
opposed the pact as an infringement of Iraq’s sovereignty — criticism that likely masks
Iran’s fears the pact is a U.S. attempt to consolidate its “hold” over Iraq and encircle Iran
militarily. As of mid-October 2008, Iraqi leaders are asking for further U.S. concessions
to a final draft agreement. As an example of the extent to which Iran is reputedly trying
to derail the agreement, Gen. Odierno said on October 12, 2008 that there are intelligence
reports suggesting Iran might be trying to bribe Iraqi parliamentarians, who will be asked
to ratify a final agreement, to vote against it.
CRS-6
Previously, Iran’s interests have been served by post-Saddam Iraqi leaders. During
exchanges of high-level visits in July 2005, Iraqi officials took responsibility for starting
the 1980-1988 Iran-Iraq war, indirectly blamed Saddam Hussein for using chemical
weapons against Iranian forces in it, signed agreements on military cooperation, and
agreed to Iranian consulates in Basra, Karbala, Irbil, and Sulaymaniyah. In response to
U.S. complaints, Iraqi officials subsequently said that any Iran-Iraq military cooperation
would not include Iranian training of Iraqi forces. On May 20, 2006, Iraq’s Foreign
Minister, Hoshyar Zebari, supported Iran’s right to pursue “peaceful” nuclear technology.2
Maliki is threatening to expel the 3,400 members of the Iranian opposition People’s
Mojahedin Organization of Iran (PMOI), a group allied with Saddam against Iran but
whose members are confined by U.S.-led forces to “Camp Ashraf” near the Iran border.
Suggesting the degree to which the Iraqi government views Iran as a mentor and
benefactor, Maliki has visited Iran three times to consult on major issues and to sign
agreements: September 13-14, 2006, resulting in agreements on cross border migration
and intelligence sharing; August 8-9, 2007, resulting in agreements to build pipelines
between Basra and Iran’s city of Abadan to transport crude and oil products for their swap
arrangements (finalized on November 8, 2007); and June 8, 2008, resulting in agreements
on mine clearance and searches for the few Iran-Iraq war soldiers still unaccounted for.
On March 2-3, 2008, Ahmadinejad visited Iraq, a first since the 1979 Islamic revolution.
In conjunction, Iran announced $1 billion in credits for Iranian exports to Iraq (in addition
to $1 billion in credit extended in 2005, used to build a new airport near Najaf, opened
in August 2008, which helps host about 20,000 Iranian pilgrims per month who visit the
Imam Ali Shrine there). The visit also produced seven agreements for cooperation in the
areas of insurance, customs treatment, industry, education, environmental protection, and
transportation. In 2005, Iran agreed to provide 2 million liters per day of kerosene to
Iraqis. The two countries also have developed a free trade zone around Basra, which buys
electricity from Iran, and Iraq is now Iran’s second largest non-oil export market, buying
about $2 billion in goods from Iran in 2007.
Prospects
Some believe Iran’s influence is fading as Iraq asserts its nationhood, as the security
situation has improved, and as Arab-Persian differences reemerge. Najaf might eventually
meet pre-war expectations that it would again exceed Iran’s Qom as the heart of the Shiite
theological world. Iraqi Shiites generally stayed loyal to the Iraqi regime during the 1980-
1988 Iran-Iraq war. Iran has not returned the 153 Iraqi military and civilian aircraft flown
to Iran at the start of the 1991 Gulf War, although it allowed an Iraqi technical team to
assess the aircraft in August 2005. Another dispute is Iran allegations Iraq is not doing
enough to deny safe haven to the Party for a Free Life in Kurdistan (PJAK), an Iranian
Kurdish separatist group, which Iran says is staging incursions into Iran. However, most
territorial issues are resolved as a result of an October 2000 rededication to recognize the
thalweg, or median line of the Shatt al Arab waterway as the water border (a provision of
the 1975 Algiers Accords between the Shah of Iran and the Baathist government of Iraq,
abrogated by Iraq prior to its September 1980 invasion of Iran.) The water border is
subject to interpretation, but the two sides agreed to renovate water and land border posts
during the March 2008 Ahmadinejad visit.
2 “Clarification Statement” issued by Iraqi Foreign Minister Hoshyar Zebari. May 29, 2006.