The Sheikh Down

It's a bright day in February, and I am in a pink villa on the outskirts of Fallujah, sitting with a tribal sheikh and a Marine commander as they hunch over a plate of truffles. The sheikh is Eifan Saddun al-Isawi, a charming 33-year-old Iraqi in a red-checkered kaffiyeh, a brown dishdasha, and DKNY wraparound sunglasses who uses phrases like "sons of bitches" when he talks about Al Qaeda with Americans. He is the head of Fallujah's Sahwa, or Awakening, council, the Sunni militia hired by the United States in early 2007 to fight its enemies in Iraq, and he's become one of the American military's go-to guys in the city, as evidenced by the photos on his walls of him with George W. Bush and Barack Obama.

Sheikh Eifan Saddun al-Isawi poses with two prominent patrons.

The American officer, Lt. Colonel Chris Hastings, apologizes for forgetting to bring Eifan "magazines with pictures of pretty ladies" and congratulates him for winning a seat in the provincial elections. He proceeds to tell Eifan to make sure that a certain someone the Marines are "concerned" about doesn't make it into local politics. Eifan assures him he'll see to it.

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Hastings also needs Eifan on the hearts-and-minds front: The Marines recently killed a teacher strapped with a suicide belt, and Hastings wants the sheikh to convince his community that the Americans aren't bloodthirsty warmongers. The Awakening councils don't officially work for the Americans anymore—the Iraqi government now pays the $300-a-month salaries of Eifan's men—but Eifan obliges immediately. "Give me pictures and I will give it to all the imams and sheikhs to show them he was wearing a belt," he says. He then presses the lieutenant colonel to release some of his friends from prison (Hastings agrees), offers him an antique hunting rifle (Hastings declines), and steers the talk back to the topic he's been hinting at throughout the meeting: American cash.

"Just tell the colonel to give me the contract. Come on, man. You know I'll do a good job," he says. Over the years, Eifan's gotten used to the way Americans do business in Iraq. Working with them has made him a millionaire.

Hastings isn't particularly proud of that fact. He has been trying to wean the sheikh off the no-bid contracts the Pentagon has been giving him and his relatives for the past few years. The military has put "a lot of money" into Sheikh Eifan, he explains, and "he's gotten a little bit greedy."

Eifan is a beneficiary of what some American personnel call the "make-a-sheikh" program, a semiofficial, little discussed policy that since late 2006 has bankrolled Sunni sheikhs who are, in theory, committed to defending American interests in Iraq. The program was a major part of the Awakening, which the Pentagon has touted as a turning point in reducing violence and creating the conditions for an American withdrawal. It was also a reinstitution of a strategy started by Saddam Hussein, who picked out tribal leaders he could manipulate through patronage schemes. The US military didn't give the sheikhs straight-up bribes, which would have raised eyebrows in Washington. Instead, it handed out reconstruction contracts. Sometimes issued at three or four times market value, the contracts have been the grease in the wheels of the Awakening in Anbar—the almost entirely Sunni province in western Iraq where Fallujah is located.

The US military has never admitted to arming militias in Iraq—or giving anything more than $350 a month to Anbari tribesmen to fight alongside Americans against Sunni resistance groups and Al Qaeda. But reconstruction payments, sometimes handed out in shrink-wrapped bundles of $100 bills, have left plenty of extra for the sheikhs to "help themselves as far as security goes," as one Marine officer describes it, or "buy guns," as Eifan's uncle, Sheikh Talib Hasnawi, puts it.

From the Pentagon's perspective, the money gave Iraqis a reason to support—or at least stop attacking—the United States in the province where more American soldiers had been killed than in any other. But it has also put security in western Iraq in the hands of powerful, heavily armed men whose cooperation is based not on loyalty to Baghdad or Washington but on a consistent flow of cash.

When Eifan registered his construction firm, Al-Thuraya Contracting Co., with the Iraqi government in 2003, it barely had $4,000 in capital. Today, though, business is booming. "I'm going to turn Anbar into Dubai," he boasts.

Dubai isn't quite what comes to mind as I watch four men mixing cement and stacking cinder blocks, setting the foundation for a clinic a couple of miles from his compound. The 3,000-square-foot building is the most recent of Eifan's several "patronage projects," as Hastings describes them. The military paid the sheikh $488,000 for it, yet Hastings estimates that it will cost around $100,000 to build. "That's, you know, a pretty good profit margin," he says—close to 80 percent. In comparison, KBR, the largest military contractor in the country, cleared 3 percent in profits in 2008. Halliburton scored around 14 percent.

Most of these kinds of projects are funded through the Commander's Emergency Response Program, which allows batallion commanders to hand out reconstruction contracts worth up to $500,000 without approval from their superiors or Washington. CERP was founded in 2003 by then-Coalition Provisional Authority head Paul Bremer, who took its initial funding from a pool of seized Iraqi assets. Over the next five years, the program disbursed more than $3.5 billion in American taxpayer dollars. A Pentagon manual called "Money as a Weapon System" broadly defines CERP's purpose as providing "urgent humanitarian relief and reconstruction." The guideline has been interpreted liberally: CERP recently funded the development of a $33 million Baghdad International Airport "Economic Zone" with two hotels, a remodeled VIP wing, and a $900,000 mural depicting an "economic theme."

CERP regulations explicitly prohibit the use of cash for giving goods, services, or funds to armed groups, including "civil defense forces" and "infrastructure protection forces"—Pentagonspeak for militias. But Sam Parker, an Iraq programs officer at the United States Institute of Peace, says it's "no real secret" among the military in Iraq that CERP contracts are inflated to pay off sheikhs and their armies. Austin Long, an analyst with the Rand Corporation who has been studying the Awakening, says it is not unusual for contracts to go to sheikhs who, like Eifan, had little or no construction experience before the 2003 invasion. "Contracts are inflated because they are only secondarily about the goods and services received," explains Parker. "It's very problematic. You are rewarding the guys with the guns."

Five years and hundreds of millions of reconstruction dollars later, Fallujah remains a shell. The "city of mosques" still has minarets with gaping holes left by American rockets during the 2004 siege. Men wander the streets; the World Food Programme says 36 percent of Fallujans have no chance of employment. The city gets no more than eight hours of electricity a day. Sewage fills the streets; a sewer project is four years behind schedule and has cost $98 million, more than three times its original budget. Building after building is nothing but broken-down cement frames. Some have been repurposed by the Iraqi army as watchtowers, others by women drying their laundry. Bullet holes pockmark everything.

I walk down the city's main thoroughfare guided by a police officer. As I chat with a man about the collapsed building beside his shop, my notebook out, a group of men approach, eager to air their grievances. "When any country in the world gets money for reconstruction, it shows. But not here," says a burly man who calls himself Nabil. "The contractors just slap something together and put the money in their pockets," he says, slipping invisible bills into an imaginary shirt pocket. "Reconstruction contracts are deals between the Americans and their collaborators. I don't want to name names, but people who didn't have cigarettes in their pockets now have piles of money and brand-new, bulletproof cars."

Later, Eifan smirks as he tells me his black armored BMW is 1 of 11 in the entire world. Unlike the white Land Cruiser the Americans gave him last year (in 2008, the military spent $1.54 million on vehicles for "Anbari leaders"), he swears the sedan—which he claims is worth $420,000—was not a gift. "It will resist any automatic weapon and it will hold up pretty well in a bombing," he tells me, smacking one of its two-inch-thick windows. I grab an energy drink from the leather-covered, refrigerated liquor cabinet in the backseat as we admire its hidden cameras and a security feature that lets Eifan speak to people outside the car without rolling down the windows.

A few years ago, hardly anyone outside a green stretch of date orchards and wheat fields a few miles south of Fallujah knew who Eifan was. Born in Iraq but raised in Saudi Arabia, he didn't know much about his homeland except that his father was poisoned by the Baath Party's secret services in Egypt five years after he'd tried to lead an uprising in 1976. Eifan moved back to Iraq in 2001 with a degree in accounting, married, had three kids, and started a small construction company.

He says the American invasion "was a big mistake," but coming from a family of shrewd businessmen, he knew an opportunity when he saw one. "I'll do business with anyone. I don't care who it is," he says. He built a small militia "for protection" and, according to a close associate, started running construction materials to American bases. He says he tried to convince the Americans not to lay siege to Fallujah. Eifan considers the thousands of Iraqis subsequently killed heroes.

Today, being in Fallujah as a guest of Sheikh Eifan is like seeing Baghdad from the Green Zone. His home is a small fortress, surrounded by 12-foot walls, with a shack of armed men guarding the entrance. Suicide bombers have killed several of his militiamen at the front gate; many others have lost their lives in the 12 assassination attempts Eifan claims he has survived. Next to a 10-foot-tall picture of the sheikh in a paisley dishdasha, two pickups mounted with machine guns are constantly ready to go. They follow him almost everywhere.

While Eifan slips away for meetings on American bases or appointments with politicians, he leaves me with his armed assistants, who brusquely dissuade me from asking too many questions, including about their boss' whereabouts. While he is gone, people trickle in and gather in his diwan, or sit in lawn chairs around his empty swimming pool. Some days, upwards of 20 men await his return. Sometimes they watch TV or play with a remote-controlled helicopter, but mostly they sit in silence over dark, sweet tea.

When Eifan returns, the men hop to their feet and form concentric circles around him in hopes of stealing his attention. Sometimes, he hands out envelopes of cash. Other times, he ignores everyone and does side wheelies on his ATV around the compound. When I met Eifan for the first time, he was coming back from a meeting with the prime minister. He ordered his men to start up the grill so he could cook the crab one of his American friends had just brought him from Florida.