ERBIL, Kurdistan Region of Iraq – US Envoy to Iraq Mark Savaya on Wednesday warned of deep-seated “corruption networks” and suspicious financial activity within Iraq’s social structure that purportedly protect and sustain Iran-backed militias in Iraq.

For more than two decades, Savaya said in an X post, corruption networks have been active in Iraq bypassing “regulations, compliance frameworks, and international auditing mechanisms. Through this system, Iranian backed militia groups have been financially empowered, protected, and sustained.”

"I know in detail how illicit money is channeled. It does not flow only through senior principals," the US envoy stressed.

Savaya asserted that that the flow of “illicit money” is not limited to senior officials, but goes through “layers of lower-level actors such as family members, friends, guards, drivers, and intermediaries,” forming a structure that protects the top figures from confrontations while keeping the system operational.

The Chaldean diplomat, a key critic of Iran-backed militias in Iraq, claimed that efforts to restore Iraq’s sovereignty and dismantle militias will prove futile without first addressing the corruption system that “finance and protect them.”

“The sources of massive corrupt money such as fake payrolls, fake loans, and fictitious assets must stop. Without that, every other effort will fail,” he concluded.

Days prior, Savaya announced that the US Department of Treasury is set to review payment records and transactions of Iraqi entities suspected of having links to suspicious financial activities that fund “terrorist activities.”

Savaya's targeting of the militias and figures linked to suspicious financial activity has resulted in intense backlash from Iran-linked militias, who accuse him of foreign interference in the country’s internal affairs and urge politicians against engaging with him.

Washington has ramped up efforts to curb Tehran’s influence in Iraq, particularly by targeting Iran-backed militias as well as financial entities and networks who finance the militias and the Iranian Islamic Revolutionary Guard Corps (IRGC).

The US Department of the Treasury in October announced the imposition of sanctions on the Muhandis General Company (MGC) and three Iraqi bank executives, accusing them of laundering money for the IRGC and Iran-backed militias in Iraq, including Kataib Hezbollah and Asaib Ahl al-Haq, in extension of the country’s “maximum pressure” campaign on Iran.

In early January, Savaya stated that Washington will work alongside Baghdad to ensure that 2026 marks the end of militias, uncontrolled weapons, and plundering resources in Iraq.