Troop surge won't stop Iraq oil fraud, insurgency: leading Democrat

Senator Dianne Feinstein said Sunday that the US troop surge in Iraq could fall short of its goal, and raised concerns about a news report that said stolen oil cash was paying for the insurgency.

"The surge, where it has worked militarily, has not worked politically. What's left in Iraq is a government that is incompetent," Feinstein, a Democrat who serves on the Senate Appropriations committee, told CNN.

Feinstein also pointed to a report in the New York Times that alleged that stolen Iraqi oil profits were paying for deadly insurgent activities five years after the US-led invasion.

"The front page of the New York Times points out massive, massive oil fraud. We had a hearing in defense appropriations, which dealt with some of it. The estimate is nine billion dollars of oil revenues are missing," she said.

"Now, the Times contends it's going in to fuel the insurgency. If this is allowed to happen, it doesn't matter what the surge does, the insurgency will continue."

The newspaper citing American military officials as saying fraudulent activities, including hijackings of oil tankers, bribed drivers, forged papers and manipulated meters are responsible for siphoning off about one-third of Iraqi oil revenue toward the black market.

"Some of the earnings go to insurgents who are still killing more than 100 Iraqis a week," the newspaper said.

The Times quoted Captain Joe DaSilva, a platoon commander at the Baiji oil refinery in a Sunni Arab-dominated region of Iraq, as saying such kinds of fraud were "the money pit of the insurgency."

The United States boosted troop levels to Iraq last year, sending in tens of thousands of extra soldiers. Its force in Iraq, which currently numbers 162,000, is supposed to fall to 140,000 by July.