FP’s Situation Report: Troops into Iraq; ISIS as mobsters: making money the old-fashioned way; FP Exclusive: US helps protect Chinese oil investments; Dahl to investigate Bergdahl; A big day for Mark Lippert; and a bit more.

By Gordon Lubold with Nathaniel Sobel 

POTUS weighs sending Special Forces to Iraq. As more Marines go to help in Baghdad and the U.S. weighs options for countering the deepening crisis in Iraq – but not putting "boots on the ground" into combat – there is also talk of using Special Forces troops, not as combat troops, but as advisers. The AP’s Lara Jakes and Julie Pace: "The White House is considering sending a small number of American Special Forces soldiers to Iraq in an urgent attempt to help the government in Baghdad slow the nation’s rampant Sunni insurgency, U.S. officials said Monday. While President Obama has explicitly ruled out putting U.S. troops into direct combat in Iraq, the plan under consideration suggests he would be willing to send Americans into a collapsing security situation for training and other purposes.

"Three U.S. officials familiar with ongoing discussions said the potential of sending Special Forces to Iraq is high on a list of military options that are being considered. It’s not clear how quickly the Special Forces could arrive in Iraq. It’s also unknown whether they would remain in Baghdad or be sent to the nation’s north, where the al-Qaida-inspired Islamic State of Iraq and the Levant has overrun several cities in the worst threat to the Shiite-led government since U.S. troops left in 2011.

White House spokeswoman Caitlin Hayden in a statement: "The president was very clear that we will not be sending U.S. troops back into combat in Iraq…That remains the case and he has asked his national security team to prepare a range of other options that could help support Iraqi security forces."

"…The mission almost certainly would be small: one U.S. official said it could be up to 100 Special Forces soldiers. It also could be authorized only as an advising and training mission – meaning the soldiers would work closely with Iraqi forces that are fighting the insurgency but not officially be considered as combat troops.

"The troops would fall under the authority of the U.S. ambassador and would not be authorized to engage in combat, another U.S. official said. Their mission is ‘non-operational training’ of both regular and counter terrorism units, which the military has interpreted to mean training on military bases, not in the field, the official said.

"…The White House also is considering launching air strikes and increased surveillance over insurgent bastions to thwart ISIL’s march toward Baghdad after capturing the Sunni-dominated cities of Fallujah, Mosul and Tikrit. The insurgency also has overrun smaller towns between Baghdad and the Syrian border, including on Monday the northwest city of Tal Afar." More here.

The U.S. and Iran signal willingness for a joint effort in Iraq.  The NYT’s Rick Gladstone, Thomas Erdbrink and Michael Gordon: "The United States and Iran on Monday signaled increased willingness to work together to arrest the expanding Sunni insurgency in Iraq, with Secretary of State John Kerry openly suggesting such a collaboration would be constructive and another American official saying the subject could come up at talks this week on the Iranian nuclear dispute." More here.

Meantime, from bank heists to extortion and kidnapping, ISIS is using mob tactics to fund its own attacks – which means it’s a militant group with built-in sustainability. FP’s Yochi Dreazen: "When fighters from the Islamic State of Syria and al-Sham stole tens of millions of dollars from a bank in Mosul earlier this year, it wasn’t simply a startling symbol of the collapse of Baghdad’s control over Iraq’s second-largest city. The brazen theft was instead a stark illustration of one of the most alarming aspects of ISIS’s rise: the group’s growing ability to fund its own operations through bank heists, extortion, kidnappings and other tactics more commonly associated with the mob than with violent Islamist extremists.

"In its early years ISIS — like the Taliban and other Sunni militants — received most of its funding from wealthy donors in Kuwait, Qatar, and other Persian Gulf countries. Extremists in those U.S. ally states continue to send money to ISIS, but American counterterrorism officials believe that the group now finances the bulk of its recruitment, weapons purchases, and attacks without outside help. Even if the U.S. and its allies somehow stopped the flow of money from the Persian Gulf to the battlefields of Iraq and Syria, in other words, it would be too late to prevent ISIS from banking enough money to fight on for years.

A U.S. counter-terrorism official: "The overwhelming majority of their money comes from criminal activities like bank heists, extortion, robberies and smuggling… They’re getting some money from outside donors, but that pales in comparison to their self-funding."

"The exact amount of money in ISIS’s possession is the subject of intense debate among Western intelligence officials. At the high end, some analysts estimate that the group may have access to at least $500 million in cash drawn from bank robberies, oil smuggling, and old-fashioned extortion and protection rackets. Other analysts believe the number is far lower, with one official putting it at between $100 million and $200 million. Those numbers are moving higher as the group conquers more cities on its seemingly inexorable drive toward Baghdad and is able to loot the local private and government banks. On Monday, ISIS fighters took the strategically important town of Tal Afar, adding to the territory under its direct control." More here.  

Though ISIS is known for its brutal rule in Syria, many residents of the Iraqi city it just captured are so hostile to the Shia-led government in Baghdad, they have welcomed the group. Andrew Slater for the Daily Beast, here.

J.M. Berger for the Atlantic on ISIS’ sophisticated social-media strategy, here.

Air strikes carry inherent risk, of course. But the U.S. must tread particularly carefully as the White House ponders using them against ISIS in Iraq. Bloomberg’s Tony Capaccio: "…for all the available firepower of U.S. planes and missiles, with an aircraft carrier already in the Persian Gulf, airstrikes risk civilian casualties and may not be enough to defeat an irregular enemy moving through densely populated areas, defense analysts and administration officials said. ‘One needs to be very careful about the downsides,’ said Eric Edelman, a former Pentagon undersecretary for policy in President George W. Bush’s administration. Airstrikes ‘to be effective will require some kind of U.S. presence on the ground" to discern militant targets from civilians.’ More here.

Marines have arrived at the U.S. Emba
ssy compound in Iraq. Military Times’ Gina Harkins and Andrew Tilghman: "The Pentagon has deployed about 100 troops – including more than 50 Marines attached to a Fleet Antiterrorism Security Team to the U.S. Embassy compound in Baghdad, Iraq, to help protect diplomatic personnel and property… The arrival of FAST Marines and a contingent of U.S. soldiers on the ground in Iraq on Sunday marked the first operational deployment of U.S. troops there since the withdrawal of combat forces in December 2011. Pentagon officials declined to identify the Army unit deployed to Baghdad. The Marine platoon is based out of nearby Bahrain, and is tasked with protecting American personnel and property, said Master Sgt. William Price, a spokesman for Marine Corps Forces Central Command.

Pentagon Pressec Rear Adm. John Kirby said yesterday: "This is a temporary thing… There is no intention that this is any kind of permanent plus up. They are there temporarily, to assist with some relocation of some personnel who work at the embassy. They are not engaged in ferrying to and fro anyone. No military aircraft … is being used to ferry these folks."

The U.S. doesn’t know what to hit in Iraq. The Daily Beast’s Eli Lake: "…Current and retired American defense and intelligence officials tell The Daily Beast that the CIA and the Pentagon are not certain who exactly makes up the forces that have taken so much of Iraq. Moreover, these intelligence and defense officials says that they believe that some of the people fighting with Islamic State of Iraq and al-Sham (ISIS) are former U.S. allies who could be turned against the hard-core fanatics-if they can be identified." More here.

What Iran’s Foreign Minister told Robin Wright on the phone sounds a lot like what Obama said on Friday about Iraq. USIP’s Robin Wright for the New Yorker’s blog: "For both [Washington and Tehran], their longtime strategies toward Iraq appear to be failing, as a few thousand thugs in the Islamic State of Iraq and Syria (ISIS) burn their way across the country. Washington and Tehran have started using the same language." More here.

Democracy For America, formed out of Howard Dean’s 2004 anti-Iraq war presidential campaign, believes a bipartisan group of lawmakers could stop intervention in Iraq by Buzzfeed’s Evan McMorris-Santoro, here.

The U.K. will reopen its embassy in Tehran. Reuters this morning: "British Foreign Secretary William Hague said Tuesday that ‘circumstances are right’ to reopen Britain’s embassy in Iran, which was closed in 2011 after hard-liners overran the building and ransacked it. The announcement represents another step in the thaw in recent days between Iran and the West. American officials are also looking for common ground with Iran as they seek ways to quell mounting violence in Iraq." More here.

And what the Pentagon said about cooperating with the Iranians in Iraq. Reuters’ Missy Ryan and Phil Stewart: "U.S. officials may hold discussions with Iran about Iraq’s security crisis on the sidelines of nuclear talks this week, but Washington will not coordinate potential military action in Iraq with its longtime adversary Tehran, the Pentagon said on Monday.

Pentagon spokesman Rear Admiral John Kirby on the upcoming nuclear talks: "It’s possible that on the sidelines of those discussions there could be discussions surrounding the situation in Iraq."

He added: "But there is absolutely no intention and no plan to coordinate military activity between the United States and Iran … there are no plans to have consultations with Iran about military activities in Iraq." More here.

How did we get here, anyway? Former U.S. ambassador to Iraq Jim Jeffrey takes that and other questions from War on the Rocks’ Ryan Evans, here.

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FP Exclusive: In another part of the world, the U.S. is funding U.N. peacekeepers –  to help protect Chinese oil projects. FP’s own Colum Lynch has this exclusive tale ahead of a big meeting at the U.N. this morning detailing how the U.S. is essentially paying to protect Chinese investment in South Sudan.  Lynch: "For years, American administrations have embraced U.N. peacekeeping as a cost-effective alternative to U.S. military intervention, a policy that has allowed Washington to harness the power and purse of foreign governments to promote America’s security and humanitarian interests abroad.

"…In South Sudan, the investment is indeed paying dividends — for China. Last month, Beijing quietly secured a deal that will put the U.N.’s famed blue helmets to work protecting workers in South Sudan’s oil installations, where China has invested billions of dollars over the years and holds a major financial stake — at least 40 percent — in South Sudan’s largest oil field. American taxpayers, who fund about 27 percent of the cost of U.N. peacekeeping missions, will effectively be helping to shoulder the financial burden of securing China’s investment.

"The unprecedented arrangement was hammered out last month in closed-door negotiations — which have not been previously detailed — over how to bolster the U.N. Mission in South Sudan, or UNMISS, so it could better protect hundreds of thousands of civilians from ethnic cleansing. The beefed-up mission will include thousands of additional troops from African countries as well as hundreds more from China."

David Deng, a researcher for the South Sudan Law Society: "The U.N. is walking a thin line between neutral peacekeeper and proxy military force for the government of South Sudan… For the U.N. to protect oil facilities would clearly be a huge strategic advantage for the government and cannot be seen as consistent with the role of a neutral peacekeeping force." More here.

Al-Shabab is blamed for a deadly attack on a hotel on Kenya’s coast that killed almost 50. One of the survivors described the carnage to the Daily Beast’s Margot Kiser, here.

Lippert’s big day: Hagel Chief of Staff Mark Lippert, nom’ed to go to South Korea as ambassador, appears befo
re Senate Foreign Relations Committee today. Lippert, who is passionate about Asia and is considered by many to be one of the administration’s best experts on Asia policy, appears before the Committee today as the Senate weighs his nomination to go to Seoul. He’ll likely get a question or two about the Pentagon’s role in the release of Sgt. Bowe Bergdahl and perhaps his views on Iraq. It’s at 3pm today.

The Navy talks strategy in Newport today. Chief of Naval Operations Adm. Jon Greenert is expected to speak today, 8:40 a.m., at the Current Strategy Forum at Naval War College. The two-day forum brings together a bunch of top thinkers, VIPs and students to "explore issues of strategic national importance." This year’s theme is "American Grand Strategy and Sea Power: Challenges and Choices," and it will focus on challenging assumptions and undertaking a strategic assessment of the future. Three panel discussions; "On Strategy," "Future Challenges," and "Sea Power and Maritime Strategy," that will be held over the course of the two-day event, and Greenert will give the opening keynote address.

From the Navy: "The Current Strategy Forum brings together preeminent naval strategists, scholars, authors, and leaders to discuss and debate the challenges that face our service and our nation now and in the future. This event underscores and reinvigorates the formulation of maritime strategy," Rear Adm. James Foggo III, Assistant Deputy CNO (Operations, Plans, and Strategy).

In addition to Greenert, who else is speaking? Professor Sir Lawrence Freedman of King’s College London; Robert Kaplan, Chief Geopolitical Analyst for Stratfor and Author of the 2014 book ‘Asia’s Cauldron: The South China Sea and the End of a Stable Pacific; Peter Singer of Brookings and Professor Geoffrey Till, King’s College London.

Who else is attending? Vice Admiral John Currier, U.S. Coast Guard; Rear Admiral James G. Foggo III, U.S. Navy, Assistant Deputy Chief of Naval Operations for Operations, Plans, and Strategy; Rear Admiral Walter Carter, U.S. Navy, President, U.S. Naval War College. What’s the agenda? Click right here for that. I wanna watch! Then click here to do that. 

Kenneth Dahl, an Army two-star, will investigate the Bergdahl matter. The Army issued a statement yesterday that Maj. Gen. Kenneth Dahl, "an Army officer with Afghanistan combat experience," will lead the investigation into Sgt. Bowe Bergdahl’s disappearance from a combat outpost in eastern Afghanistan in 2009. From the Army: "…The primary function of this investigation, as in any other investigation, is to ascertain facts and report them to the appointing authority.  These types of investigations are not uncommon and serve to establish the facts on the ground following an incident. The investigating officer will have access to previously gathered documentary evidence, including the 2009 investigation. The Army’s top priority remains Sgt. Bergdahl’s health and reintegration. We ask that everyone respect the time and privacy necessary to accomplish the objectives of the last phase of reintegration. The investigating officer will not interview Sgt. Bergdahl until the reintegration team clears such interaction, so no timeline for completion of the investigation has been set."

As the war ends, the military cuts its enlistment goals. The Pittsburgh Tribune-Review’s Brian Bowling via Stripes: "…With budget cuts, the Iraq war ending and reduction of forces in Afghanistan, the Army and other branches of the military need fewer people. Since 2003, enlistment goals for most active and reserve branches dropped between 18 and 35 percent. The Navy Reserve cut its recruiting goals by 66 percent. ‘Everybody does more with less,’ said Master Chief Aaron Smith. Like any organization, the Navy needs to find people qualified for jobs it must perform, and more of its people re-enlist to do those jobs – further cutting the number of openings. ‘It used to be a lot of people could get in,’ said Smith, assistant recruiting chief for the Navy’s Pittsburgh recruiting district. ‘We just don’t have the job availability.’ Locally, the Air Force Reserve has had fewer applicants and fewer of them qualifying, said Master Sgt. Dawn Serakowski, a recruiter stationed in Moon." More here.

Moscow’s cancellation of natural gas exports to Kiev ratchets up the pressure on Ukraine – and is making European leaders nervous about energy supplies. FP’s Keith Johnson: "With tensions between Russia and Ukraine at fever pitch, Moscow unsheathed its energy weapon Monday, cutting off natural-gas supplies to Ukraine amidst a dispute over billions of dollars in unpaid bills. The gas cutoff, Russia’s third in less than a decade, raises concern in Europe that one of its main sources of imported energy could be affected, with few realistic alternatives on the horizon. A last-ditch effort by the European Union to broker a compromise between Russia and Ukraine broke down Sunday night. Monday morning, Gazprom, the big Russian gas firm, said it halted gas flows to Ukraine and that it won’t ship any more until Kiev pays its hefty arrears and then prepays thereafter. Gazprom said that Ukraine was guilty of ‘persistent nonpayment,’ and said Kiev owes it about $4.5 billion. Russian officials said they would only be willing to go back to negotiations if Ukraine settles its outstanding debt. Russian Prime Minister Dmitry Medvedev blamed Ukraine for the crisis after it rejected ‘very beneficial, very preferential proposals’ from Gazprom." More here.

In a new article for Foreign Affairs, Stimson’s Russell Rumbaugh and Barry Blechman make the case for phasing out the U.S.’s tactical nukes in Europe. Over 20 years after retiring most of its tactical nuclear weapons in the aftermath of the Cold War, the United States still maintains a small arsenal of tactical nuclear bombs in Europe.  In the article, Rumbaugh and Blechman examine the weapons’ obsolete military mission, diminishing political value within NATO, and skyrocketing modernization costs. They make the case that, barring any major buy-in by European allies, the US should phase out its tactical nukes by cancelling plans to modernize these weapons and to make the F-35 capable of delivering them. Read it here.