Treasury Department bureaucrats risk jumpstarting Islamic State resurgence

It has now been 21 months since Kurdish forces, backed by U.S. Special Forces and U.S. air support, moved into Raqqa, the capital of the Islamic State. Earlier this month, I spoke at a Rojava Centre for Strategic Studies conference in Amudeh, Syria, exploring the Islamic State’s enablers, after which I had the opportunity to visit Raqqa as the local administration’s guest.

To enter Raqqa is to be overwhelmed by destruction. Thousands of former residents remain in tents at a camp alongside the road outside Ayn Issa. Most would like to return to their homes just 45 minutes’ drive away, but Raqqa remains largely destroyed. Driving into town requires passing the shells of apartment buildings stretching miles. Local authorities have given a face lift to Naim Square, where the Islamic State executed prisoners and mounted their heads, and rebranded it Freedom Square. The buildings facing the square, however, remain bombed out.

There are signs of life in the center of town: wedding dresses, children’s toys, and sweets sold in shops surrounded by rubble. Children played soccer in a stadium once used as the Islamic State’s chief prison. Graffiti on the stadium wall cursed the Islamic State and expressed love for Taylor Swift. Unexploded ordnance slows recovery, as workers clear rubble by hand, and tempers are short. The biggest obstacle to Raqqa’s recovery, however, lies in Washington rather than Syria: The U.S. Treasury Department has been sitting on the Office of Foreign Asset Control (OFAC) waiver for the Syrian Democratic Council for four years.

Opposition groups in Syria can be an alphabet soup of acronyms but, in short, the Syrian Democratic Council is the umbrella organization for pro-American Syrian Kurdish militias like the People’s Protection Units (YPG), the all-female Women’s Protection Units (YPJ), and the Syrian Democratic Forces.

When I first visited northeastern Syria in January 2014, U.S. diplomats had refused to talk to the Syrian Kurdish opposition out of deference to Turkey. The United States reconsidered its position due to both Kurds’ effectiveness against the Islamic State and Turkey’s double-dealing on terrorism. The United States began talking to the Syrian Democratic Council (SDC), the political wing of the Syrian Democratic Forces (SDF), in December 2015, and almost immediately, the SDC applied for a U.S. Treasury Department Office of Foreign Asset Control (OFAC) waiver so that they could hire American companies to participate in reconstruction and so that they could spend their own money in the United States. The SDC does not ask for handouts: one of the biggest differences between my most recent trip and my first is that the oil derricks between Qamishli and the Tigris River are now operating but absent a waiver, the SDC cannot legally spend money in the United States or elsewhere.

It is unclear whether inertia or a misguided strategy motivates OFAC to sit for years on the pending SDC waiver: The group is pro-Western and cooperates closely with Washington. The Treasury Department previously granted the Syrian National Council, the political arm of the Free Syrian Army, a waiver even though extremists and terrorists have infiltrated the Free Syrian Army. In contrast, U.S. military members in Syria trust the SDF more than local partners in Iraq or Afghanistan; there has not been a single instance of SDF men or women turning on American mentors.

The Treasury Department’s inaction not only handicaps diplomacy but also undercuts U.S. strategy.

Isolating Syrian President Bashar al-Assad remains a core U.S. interest. The Kurds dislike Assad: He voided citizenship papers Kurds need for school and employment, and imprisoned Kurdish activists. However, given Turkey’s support for Islamist radicals and its anti-Kurdish ethnic cleaning in areas of Syria the Turkish army occupies, Syrian Kurds fear Turkey more. Simply put, Treasury’s failure is pushing pro-American Kurds back toward Assad.

Numerous diplomats castigate the Iraqi government for its failure to reconstruct Mosul after it was damaged first by Islamic State conquest and then its liberation. Diplomats fear frustration could fuel Islamic State resurgence. The same is now true with Raqqa, where frustration is palpable. The only difference is that if Raqqa erupts, the blame will not be on a foreign government, but on the glacial pace of the U.S. government’s own bureaucracy.

Michael Rubin is a resident scholar at the American Enterprise Institute. A former Pentagon official, he teaches classes on terrorism for the FBI and on security, politics, religion and history for U.S. and NATO military units. He has a Ph.D. in history from Yale University.