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General David Petraeus, the commander of the U.S. mission in Iraq, sits for an exclusive interview with PJM's Austin Bay.

MR. BAY:  Well, let me move to another line of operation.  You operate both operationally and strategically.  You mentioned the diplomatic line of operation, and Ambassador Crocker.  I’d like to come back and ask you a question about that in a moment.  But rule of law is absolutely vital.  And you mentioned gangs. That associates immediately with crime.  And many terror organizations, rebel groups engage in criminal activities to fund operations.  There’s often a fine line between smuggling and rebellion, and we’ve seen that in Iraq.  We see that, to a degree, in Afghanistan.

How are the Iraqis approaching that component, rule-of-law component, not just through criminal rule of law but also dealing with corruption?  I realize it’s a big question but it’s one that you must address every day.

GENERAL PETRAEUS:  Well, it’s a huge question.  There a number of components to the rule of law.  Obviously the police is one component.  In that regard, there’s been good development in the area of the police, and especially the national police, an organization that many people, probably rightly so, some fourteen months ago, might ought to just be disestablished because they had become part of the sectarian problem instead of part of the solution.

As you’ll recall, the sectarian violence here was horrific, and it is very important to remember how bad it was.  In the winter of 2006 and into the spring of 2007, there were periods when there were fifty five dead bodies a night on average, that was the average in December 2006, turning up just on the streets of Baghdad, just from sectarian violence, not including other forms of violence.

When you have such horrific violence day in/day out, fifty five dead bodies every twenty four hours, the security forces themselves start to take sides.  They have to because their families are threatened, they are threatened, their leaders are assassinated, families are kidnapped, ministries are hijacked.

The Ministry of Health became a sectarian killing machine in many respects.  The prime minister — one of the early tasks he asked me to help with was, of all things, to detain the deputy minister of health in his government and then the Ministry of Health facility protection security forces chief.

But, over time, and as the sectarian violence has receded, much has been possible in terms of reforming these different forces.

Now, in the case of the national police, it took replacement of every division commander and brigade commander and seventy five percent of the battalion commanders.  But that has been done.  There’s been retraining months long for each unit, and so forth.

So that is moving along reasonably well.  There is some progress in the judicial arena as well.  The construction of rule-of-law complexes, rule-of-law green zones, if you will, secure areas in which they can conduct the investigations and the trials, has helped.

But there is a lot of work that needs to be done in that regard.  There’s still considerable intimidation of the judicial authorities.  There have been assassinations and attempted assassinations of some of them.  The militia and special groups have sought to strike fear in them if they take up those cases.  And this comes back to the mafia-like activities and therefore the mafia-like actions of some of those elements that threaten security in Iraq.

We have, in fact, put considerable emphasis on how Al-Qaeda, in Iraq, generates resources.  And they do it, again, like a mafia does, that we would be familiar with.  It’s through extortion of successful businesses; extortion of money for protection rackets, or what have you; insisting that a cell phone business, for example, give them a cut of their profits or they’ll blow the cell phones down — cell phone towers down; taking a cut out of the cement business, the real estate business, the financial businesses, and so forth.

And you see the same on the militia side; although, again, much reduced now and they don’t control the port of Umm Qasr anymore.  They don’t control various other elements that they did control until about six to eight months ago.

So progress there.  And then beyond that, certainly corruption is a concern and a problem and one that the Iraqis have very much recognized and about which they’re very concerned.  They’ve launched an anti-corruption program.

But this is going to be a serious issue.  There is considerable money.  There is a very young and still very much developing government largely led by individuals who — very good people and good leaders of opposition parties for many years but have not necessarily exercised strategic leadership in the past and very much growing into their jobs but with bureaucracies that are still very much developing as well.

So a lot of work to be done in the entire rule-of-law arena.  Huge challenges to it.  And it’s not a country that has had a tradition of strong-willed law, given the way that everything was, in a sense, perverted, if you will, by Saddam Hussein, twisted to his desires and basically responsive to the whims of the moment from Saddam and his regime.

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