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THE STRATFOR WEEKLY
18 December 2003
by Dr. George Friedman
Saddam Hussein and the Dollar War
Summary
The capture of Saddam Hussein is an intelligence success for the
United States. It represents a massive effort to improve U.S.
intelligence capabilities in Iraq following a period of
intelligence failure. Hussein's capture, therefore, is important
not only in itself or in its implications for the guerrillas, but
also because it represents a massive and rapid improvement in
U.S. intelligence capabilities. It demonstrates that poor
intelligence is not inherent in U.S. guerrilla war-fighting; the
United States overcame it by identifying the central weaknesses
of its opponents. In this case, the central weakness was money --
and this was not only a financial weakness, but also a cultural
one.
Analysis
For once, the media have got it right. The capture of Saddam
Hussein is a major event in the war. Its importance does not rest
on whether he was in operational command of the guerrillas; he
wasn't. Nor does it hinge on whether his capture will destroy the
morale of the guerrillas; it won't. The importance of Hussein's
capture is that it happened at all: It signals a major
improvement in U.S. war-fighting capabilities in general and in
American intelligence in particular.
The greatest intelligence failure of the Iraq war did not concern
weapons of mass destruction. It concerned the failure of U.S.
intelligence to understand the Iraqi war plan, which in hindsight
was obvious. The Baathists knew the United States would rapidly
defeat Iraq's conventional forces. Therefore, they prepared a
follow-on plan that would begin after Baghdad was occupied. This
plan was a guerrilla war, manned by troops drawn from trusted
elite forces, with an installed infrastructure of arms caches,
safe houses and secure -- nonelectronic -- command and control
systems suitable for such a war.
The guerrilla war began within weeks of the fall of Baghdad in
April. U.S. intelligence about the war was so poor that until
late in June, Defense Secretary Donald Rumsfeld and the rest of
the administration were denying that the attacks on U.S. troops
were being staged by an organized force. They viewed them simply
as random attacks by unconnected dead-enders and criminals. It
was not until summer that the administration conceded that it was
facing a concerted guerrilla war.
Throughout the summer, the United States had trouble defining the
nature of the guerrilla force, let alone developing a coherent
picture of its order of battle or command structure. Therefore,
the United States, by definition, could neither engage nor defeat
the guerrillas. Washington remained in an entirely defensive
posture during this period; the guerrillas had the initiative.
There never was a danger that the guerrillas would actually
defeat the United States. Still, the continual drumbeat of
attacks and the U.S. forces' inability to launch effective
counterattacks created substantial political problems, as it was
intended to.
The problem for the United States was that the Iraqis understood
the strengths and weaknesses of U.S. intelligence. The United
States is extremely strong in technical means of intelligence,
including image and signal intelligence. The guerrillas avoided
electromagnetic communications and were difficult to distinguish
with aerial reconnaissance. They were essentially invisible to
the preferred U.S. intelligence methods.
Late in the summer, the United States began to increase its human
intelligence capability in Iraq substantially, particularly the
number of CIA officers on the ground. It began a systematic
program of penetrating the guerrillas. It was not an easy task:
Recruiting agents able to infiltrate the guerrilla ranks was hard
to do; getting them into the ranks was even harder. The
guerrillas understood that recruitment was a risk and relied upon
existing forces or recruited from well-known and reliable
reservoirs. The ranks of foreign jihadists who entered the
country also were difficult to penetrate. To add to the
complexity, they operated separately from the main force.
The guerrillas did have one major vulnerability: money. The
Baathist regime long ago lost its ideological -- and idealistic -
- foundations. It was an institution of self-interest in which
the leadership systematically enriched itself. It was a culture
of money and power, and that culture permeated the entire
structure of the Iraqi military, including the guerrilla forces
that continued to operate after the conventional force was
defeated. Indeed, the guerrillas substituted money for
recruitment. In many cases, they would pay people outside their
ranks to carry out attacks on U.S. troops as a supplement to
attacks by the main guerrilla force.
The culture of money made the guerrillas vulnerable in two ways.
First, they relied on support from an infrastructure fueled by
money. Whatever their ideology, they purchased cooperation with
money and intimidation. Second, much of the money the guerrillas
had was currency taken from Iraqi banks prior to the fall of
Baghdad. A great deal of it was in U.S. dollars, which continued
to have value, but most of it was in the currency of the old
regime. One of the earliest actions of the U.S. occupation forces
was to replace that currency. Over time, therefore, the resources
available to the guerrillas contracted.
The United States brought its financial resources into play,
purchasing information. As U.S. money surged into the system and
guerrilla money began to recede, the flow of information to the
United States increased dramatically. Obviously, much of the
information was useless or false, and it took U.S. intelligence
several months to tune the system sufficiently that operatives
could evaluate and act upon the intelligence. Over time, the very
corruption of the Baathist system was turned against it. Indeed,
it happened in a surprisingly short period, made possible by a
Baathist organization in which political loyalty and business
interests tied together so blatantly that reversals of loyalty
did not necessarily appear as betrayals.
This process was speeded up dramatically during the November
Ramadan offensive. This offensive, we now know, was a surge
operation rather than a sustained increase in operational tempo.
Two things happened during the Ramadan offensive: First, the
guerrillas increased their consumption of resources dramatically,
burning through men and money very quickly; second, the rapid
tempo of operations required the guerrillas to expose their
assets far more than in the past. Whereas previously a combat
team would attack, disperse and remain dispersed for an extended
period, the tempo of Ramadan required that the same team carry
out multiple attacks. This meant that they could not disperse and
therefore could be more readily identified. This led to a greater
number of prisoners and further opportunities to purchase
information.
The United States moved from being almost blind during the summer
to having substantially penetrated the guerrillas by the end of
November. By that time, Washington had a clearer idea of the
guerrilla order of battle and command structure. It had created a
network of informants that was prepared to provide intelligence
to the Americans in exchange for money, amnesty and future
considerations.
Hussein, therefore, was betrayed by the culture he created. He
was found with no radio -- no surprise, since the guerrillas
tried not to use them. Rather, he was found with his two most
important weapons: a pistol and $750,000 in cash. His pistol
could not possibly outfight the troops sent to capture him. He
did not have enough money to buy safety. The Americans had him
outgunned and outspent.
The importance of Hussein's capture is not only its symbolism --
although that certainly should not be underestimated. Its
importance is that it happened, that U.S. intelligence was able
to turn a debacle into a success by identifying the core weakness
of the enemy force and using it for the rapid penetration and
exploitation of the guerrilla infrastructure.
The guerrillas understand precisely what happened to Hussein:
Someone betrayed him for money. They also understand that even
though attacks on U.S. troops can be purchased for dollars, the
Americans have far more dollars than they do. That is why, in the
week prior to Hussein's capture, the guerrillas twice attacked
banks: They desperately needed to replenish their cash reserves.
In one case, they even went so far as to engage in a pitched
battle with U.S. armor, a battle they couldn't possibly win.
The threat to the guerrillas is snowballing betrayal. The
guerrillas must be increasingly paranoid. At the prices the
Americans are paying, the probability of betrayal is rising. As
this probability rises, paranoia not only eats away at the
guerrillas' effectiveness, it also raises the temptation to
betray. Better to betray than to be betrayed.
The guerrillas can arrest this process only by ruthlessly
punishing betrayers. If the people who betrayed Hussein can't be
identified -- or can't be publicly killed -- then the guerrillas'
impotence will become manifest and a self-fulfilling prophecy.
Indeed, as other insurgencies have controlled betrayal by public
retribution, the guerrillas, unable to compete financially, would
have to respond with a wave of public executions. However, with
each public execution, they would expose themselves to capture
and revenge.
The capture of Hussein, regardless of whether he commanded anyone
or knows anything, is critically important. It is inconceivable
that the guerrillas would want him captured, since it inevitably
hurts their credibility. Like him or not, he was theirs to
protect. Their inability to protect Hussein creates a massive
crisis of confidence among the Baathist guerrillas.
This does not mean the guerrilla movement in Iraq is dying. It
means that the leadership of the movement is going to shift away
from the Baathists who launched the guerrilla war to the mostly
foreign jihadists, who joined the war for very different motives.
These guerrillas are not motivated by money and are unlikely to
betray each other for cash. They fight because they believe --
and that makes it more difficult to penetrate their ranks.
At the same time, most of them are foreigners. They do not know
the country as well as the Baathists, they don't have family and
tribal connections there, and they don't have their own
infrastructure. They were separate from the Baathists, but relied
upon them for their support structure. If the Baathists are taken
down, the jihadists will fight on. However, just as they are less
vulnerable to money, they are less invisible than the Baathists.
The capture of Hussein does not, in other words, end the war.
However, the process that led to his capture is broader and more
subversive than simply the capture of the former president. It is
eating away at the infrastructure of the Baathist guerrillas. It
is possible for them to reverse this, but as their financial
resources decline, they will have to respond with brutal
suppression to betrayers. That might not do the trick.
Still, the war is far from over. Washington now faces a more
substantial challenge -- one that has proven difficult to
overcome in the broader war. It must penetrate the jihadists in
Iraq. Given the experience with al Qaeda, this might well prove
difficult.
18 December 2003
by Dr. George Friedman
Saddam Hussein and the Dollar War
Summary
The capture of Saddam Hussein is an intelligence success for the
United States. It represents a massive effort to improve U.S.
intelligence capabilities in Iraq following a period of
intelligence failure. Hussein's capture, therefore, is important
not only in itself or in its implications for the guerrillas, but
also because it represents a massive and rapid improvement in
U.S. intelligence capabilities. It demonstrates that poor
intelligence is not inherent in U.S. guerrilla war-fighting; the
United States overcame it by identifying the central weaknesses
of its opponents. In this case, the central weakness was money --
and this was not only a financial weakness, but also a cultural
one.
Analysis
For once, the media have got it right. The capture of Saddam
Hussein is a major event in the war. Its importance does not rest
on whether he was in operational command of the guerrillas; he
wasn't. Nor does it hinge on whether his capture will destroy the
morale of the guerrillas; it won't. The importance of Hussein's
capture is that it happened at all: It signals a major
improvement in U.S. war-fighting capabilities in general and in
American intelligence in particular.
The greatest intelligence failure of the Iraq war did not concern
weapons of mass destruction. It concerned the failure of U.S.
intelligence to understand the Iraqi war plan, which in hindsight
was obvious. The Baathists knew the United States would rapidly
defeat Iraq's conventional forces. Therefore, they prepared a
follow-on plan that would begin after Baghdad was occupied. This
plan was a guerrilla war, manned by troops drawn from trusted
elite forces, with an installed infrastructure of arms caches,
safe houses and secure -- nonelectronic -- command and control
systems suitable for such a war.
The guerrilla war began within weeks of the fall of Baghdad in
April. U.S. intelligence about the war was so poor that until
late in June, Defense Secretary Donald Rumsfeld and the rest of
the administration were denying that the attacks on U.S. troops
were being staged by an organized force. They viewed them simply
as random attacks by unconnected dead-enders and criminals. It
was not until summer that the administration conceded that it was
facing a concerted guerrilla war.
Throughout the summer, the United States had trouble defining the
nature of the guerrilla force, let alone developing a coherent
picture of its order of battle or command structure. Therefore,
the United States, by definition, could neither engage nor defeat
the guerrillas. Washington remained in an entirely defensive
posture during this period; the guerrillas had the initiative.
There never was a danger that the guerrillas would actually
defeat the United States. Still, the continual drumbeat of
attacks and the U.S. forces' inability to launch effective
counterattacks created substantial political problems, as it was
intended to.
The problem for the United States was that the Iraqis understood
the strengths and weaknesses of U.S. intelligence. The United
States is extremely strong in technical means of intelligence,
including image and signal intelligence. The guerrillas avoided
electromagnetic communications and were difficult to distinguish
with aerial reconnaissance. They were essentially invisible to
the preferred U.S. intelligence methods.
Late in the summer, the United States began to increase its human
intelligence capability in Iraq substantially, particularly the
number of CIA officers on the ground. It began a systematic
program of penetrating the guerrillas. It was not an easy task:
Recruiting agents able to infiltrate the guerrilla ranks was hard
to do; getting them into the ranks was even harder. The
guerrillas understood that recruitment was a risk and relied upon
existing forces or recruited from well-known and reliable
reservoirs. The ranks of foreign jihadists who entered the
country also were difficult to penetrate. To add to the
complexity, they operated separately from the main force.
The guerrillas did have one major vulnerability: money. The
Baathist regime long ago lost its ideological -- and idealistic -
- foundations. It was an institution of self-interest in which
the leadership systematically enriched itself. It was a culture
of money and power, and that culture permeated the entire
structure of the Iraqi military, including the guerrilla forces
that continued to operate after the conventional force was
defeated. Indeed, the guerrillas substituted money for
recruitment. In many cases, they would pay people outside their
ranks to carry out attacks on U.S. troops as a supplement to
attacks by the main guerrilla force.
The culture of money made the guerrillas vulnerable in two ways.
First, they relied on support from an infrastructure fueled by
money. Whatever their ideology, they purchased cooperation with
money and intimidation. Second, much of the money the guerrillas
had was currency taken from Iraqi banks prior to the fall of
Baghdad. A great deal of it was in U.S. dollars, which continued
to have value, but most of it was in the currency of the old
regime. One of the earliest actions of the U.S. occupation forces
was to replace that currency. Over time, therefore, the resources
available to the guerrillas contracted.
The United States brought its financial resources into play,
purchasing information. As U.S. money surged into the system and
guerrilla money began to recede, the flow of information to the
United States increased dramatically. Obviously, much of the
information was useless or false, and it took U.S. intelligence
several months to tune the system sufficiently that operatives
could evaluate and act upon the intelligence. Over time, the very
corruption of the Baathist system was turned against it. Indeed,
it happened in a surprisingly short period, made possible by a
Baathist organization in which political loyalty and business
interests tied together so blatantly that reversals of loyalty
did not necessarily appear as betrayals.
This process was speeded up dramatically during the November
Ramadan offensive. This offensive, we now know, was a surge
operation rather than a sustained increase in operational tempo.
Two things happened during the Ramadan offensive: First, the
guerrillas increased their consumption of resources dramatically,
burning through men and money very quickly; second, the rapid
tempo of operations required the guerrillas to expose their
assets far more than in the past. Whereas previously a combat
team would attack, disperse and remain dispersed for an extended
period, the tempo of Ramadan required that the same team carry
out multiple attacks. This meant that they could not disperse and
therefore could be more readily identified. This led to a greater
number of prisoners and further opportunities to purchase
information.
The United States moved from being almost blind during the summer
to having substantially penetrated the guerrillas by the end of
November. By that time, Washington had a clearer idea of the
guerrilla order of battle and command structure. It had created a
network of informants that was prepared to provide intelligence
to the Americans in exchange for money, amnesty and future
considerations.
Hussein, therefore, was betrayed by the culture he created. He
was found with no radio -- no surprise, since the guerrillas
tried not to use them. Rather, he was found with his two most
important weapons: a pistol and $750,000 in cash. His pistol
could not possibly outfight the troops sent to capture him. He
did not have enough money to buy safety. The Americans had him
outgunned and outspent.
The importance of Hussein's capture is not only its symbolism --
although that certainly should not be underestimated. Its
importance is that it happened, that U.S. intelligence was able
to turn a debacle into a success by identifying the core weakness
of the enemy force and using it for the rapid penetration and
exploitation of the guerrilla infrastructure.
The guerrillas understand precisely what happened to Hussein:
Someone betrayed him for money. They also understand that even
though attacks on U.S. troops can be purchased for dollars, the
Americans have far more dollars than they do. That is why, in the
week prior to Hussein's capture, the guerrillas twice attacked
banks: They desperately needed to replenish their cash reserves.
In one case, they even went so far as to engage in a pitched
battle with U.S. armor, a battle they couldn't possibly win.
The threat to the guerrillas is snowballing betrayal. The
guerrillas must be increasingly paranoid. At the prices the
Americans are paying, the probability of betrayal is rising. As
this probability rises, paranoia not only eats away at the
guerrillas' effectiveness, it also raises the temptation to
betray. Better to betray than to be betrayed.
The guerrillas can arrest this process only by ruthlessly
punishing betrayers. If the people who betrayed Hussein can't be
identified -- or can't be publicly killed -- then the guerrillas'
impotence will become manifest and a self-fulfilling prophecy.
Indeed, as other insurgencies have controlled betrayal by public
retribution, the guerrillas, unable to compete financially, would
have to respond with a wave of public executions. However, with
each public execution, they would expose themselves to capture
and revenge.
The capture of Hussein, regardless of whether he commanded anyone
or knows anything, is critically important. It is inconceivable
that the guerrillas would want him captured, since it inevitably
hurts their credibility. Like him or not, he was theirs to
protect. Their inability to protect Hussein creates a massive
crisis of confidence among the Baathist guerrillas.
This does not mean the guerrilla movement in Iraq is dying. It
means that the leadership of the movement is going to shift away
from the Baathists who launched the guerrilla war to the mostly
foreign jihadists, who joined the war for very different motives.
These guerrillas are not motivated by money and are unlikely to
betray each other for cash. They fight because they believe --
and that makes it more difficult to penetrate their ranks.
At the same time, most of them are foreigners. They do not know
the country as well as the Baathists, they don't have family and
tribal connections there, and they don't have their own
infrastructure. They were separate from the Baathists, but relied
upon them for their support structure. If the Baathists are taken
down, the jihadists will fight on. However, just as they are less
vulnerable to money, they are less invisible than the Baathists.
The capture of Hussein does not, in other words, end the war.
However, the process that led to his capture is broader and more
subversive than simply the capture of the former president. It is
eating away at the infrastructure of the Baathist guerrillas. It
is possible for them to reverse this, but as their financial
resources decline, they will have to respond with brutal
suppression to betrayers. That might not do the trick.
Still, the war is far from over. Washington now faces a more
substantial challenge -- one that has proven difficult to
overcome in the broader war. It must penetrate the jihadists in
Iraq. Given the experience with al Qaeda, this might well prove
difficult.