Situation Report: ISIS cash smoked; Senators want Petraeus to be left alone; Bob Gates is back; more laser-guided bombs for Iraq; think tanks think about Asia rebalance; and lots more

By Paul McLeary with Adam Rawnsley

Up in smoke. The Islamic State might want to look into diversifying its portfolio. American and coalition aircraft have bombed nine of the group’s cash storage points in Iraq and Syria in recent days, with at least two of those hits coming in Mosul. The strikes have wiped out “tens of millions of dollars” of ISIS cash, according to a U.S. military spokesman. Is possibly related news, the group has told its fighters to expect their pay to be cut by half due to “exceptional circumstances.”

It’s difficult to know exactly what kind of effect the strikes will have overall, as some estimates put the group’s revenues at about $2.9 billion a year, but Mosul is most definitely in the coalition’s crosshairs, having absorbed about 50 airstrikes over the past week. Defense Secretary Ash Carter has said in recent days that there are “big arrows pointing at both Mosul and Raqqa” as that’s where the U.S. is pushing Iraqi troops and Syrian rebels to head next.

Big bombs. Iraq is looking to buy about $2 billion worth of guided bombs and missiles for its growing fleet of American-made F-16 fighter planes. In 2011, Baghdad began the purchase of what will eventually be 36 F-16s, (much to the delight of execs at Lockheed Martin) with the first four planes having arrived in Iraq in July. The deal — if Congress signs off on it — will include over 16,000 bombs in total.

Four star review. Sens. John McCain (R-Ariz.) and Jack Reed (D-R.I.) were pretty unhappy to learn that Defense Secretary Ash Carter is considering demoting David Petraeus from his position as a retired four-star general. Petraeus pled guilty to a misdemeanor for sharing classified information with his biographer Paula Broadwell, with whom he was carrying on an extramarital affair. The move would cost the former general millions in retirement benefits.

“It is rare that a retirement grade determination is conducted for an officer previously retired from the U.S. armed forces,” the duo wrote in a letter to Carter. “We are concerned such a retirement grade review, taking place nearly a year after the misdemeanor conviction in which General Petraeus admitted his guilt, and apologized for his actions, is manifestly unreasonable and unfair.” McCain added, “the unusual circumstances surrounding this review raise serious questions about the motivations behind it.”

He’s baack. Former Defense Secretary Bob Gates is back, and he’s pushing a new book, “A Passion for Leadership: Lessons on Change and Reform from Fifty Years of Public Service.” Gates is making the rounds in Washington, and gave Business Insider his take on what the primary causes are for the rise of the Islamic State — but he doesn’t hit the Obama administration as hard as some might think. “I think the primary reasons for the rise of ISIS are the Syrian civil war and the policies followed by the government [of then-Prime Minister Nouri al-Maliki] in Baghdad,” Gates said.

But the White House doesn’t emerge unscathed. “You can argue all day long whether the absence of US forces had an impact” on the ability of the terrorist group to rise, Gates said. “The absence of senior leadership that was able to mitigate some of the sectarian conflicts in Iraq probably had some impact on the willingness of Maliki to follow these wrong policies.”

It’s short week for us stateside, but there’s plenty to keep us busy. As you know, we can never get enough information, so if you have any thoughts, announcements, tips, or national security-related events to share, please pass them along to SitRep HQ! Best way is to send them to paul.mcleary@foreignpolicy.com or on Twitter: @paulmcleary or @arawnsley.

Syria

Secretary of State John Kerry and Russian Foreign Minister Sergey Lavrov met on Wednesday to try and hash out a disagreement over which Syrian groups should participate in international peace talks and which should be barred as terrorist groups. The AP reports that Kerry and Lavrov didn’t make much headway on the topic. Kerry also brought up the subject of Madaya, where residents of the rebel-held town are starving at the hands of a Hezbollah and Assad regime siege, urging Russia to use its influence with the Assad regime to allow humanitarian aid deliveries.

The Wall Street Journal reports that the Islamic State has been hiding its prisoners and senior officials inside the Tabqa Dam, just west of the group’s capital in Raqqa, using the makeshift prison and headquarters as leverage to deter the U.S. from bombing the area. Analysts worry that the group could also blow up a nearby bridge of its own accord should the tide of battle shift against it. The Islamic State has already used the dam as a weapon, using it to limit access to water in Iraq’s neighboring Anbar Province.

Retired Israeli national security advisor Gen. Yaakov Amidror told a group of new Israeli immigrants that Hezbollah now has “Moscow’s most advanced” weapons, according to Ynet News. Amidror said Russia is aware that some of the sophisticated weaponry it has transferred to the Syrian government is being diverted to the Lebanese terror group but doesn’t object. The Russian weapons mentioned by Amidror include Kornet anti-tank missiles, Oniks anti-ship missiles and surface-to-air missiles.

An American family is trapped in the starving town of Madaya in Syria, according to Vice. The rebel-held town has been under siege by Hezbollah troops acting on behalf of the Assad regime, which has limited food and aid deliveries inside, leading to widespread malnutrition and some deaths from starvation, according to humanitarian organizations. Vice reports than an American family with three children from Allentown, Pennsylvania is among them. When the family approached the U.S. embassy in Lebanon for help, they received a form letter telling them the U.S. was unable to provide assistance.

Pens down

A Taliban suicide bomber targeted Afghanistan’s Tolo TV on Wednesday, fulfilling threats made against the news organization in October. The New York Times reports that a suicide car bomber from the group crashed into a bus filled with Tolo employees, killing six and wounding 25. The Taliban threatened further attacks against Tolo, which has provided crucial reporting on the Afghan conflict, unless the news organization apologized and recanted its reporting from during the Taliban’s siege of Kunduz.

Anti-social media

American tech companies are under pressure from the U.S. government to do more against terrorist recruitment on social media, and company representatives are trying to get creative in how to approach the problem. Google Ideas’ Jared Cohen recently appeared at a Chatham House panel in London and suggested forcing the Islamic State from major platforms like Twitter and corralling them into the less convenient and well trafficked Tor relay network, which promises to provide users with anonymity. At the World Economic Forum in Davos, Switzerland, Facebook’s Sheryl Sandberg countered that social media companies providing a platform for extremist groups’ speech can also facilitate public criticism of that extremism, citing the example Germans recently swarming a neo-Nazi groups’ Facebook page in “a ‘like’ attack.”

Special Ops

Some of the top tech buyers from the U.S. Special Operations Command outlined their technology wish lists on Wednesday. Air Force special operations chief Lt. Gen. Bradley Heithold reiterated his desire for laser-equipped AC-130’s that can launch drones, while the Naval Special Warfare Command’s Rear Adm. Brian Losey said smaller drones with greater endurance and heavier payloads were in his sights. Drones were also a big item for Army special operators, with Army Maj. Gen. Clayton Hutmacher looking for quiet and long-flying drones that can be recovered by a net, obviating the need for a runway.

Think tanked

In the National Defense Authorization Act of 2015, Congress tasked the Center for Strategic and International Studies with running an assessment of President Barack Obama’s “rebalance” to the Asia-Pacific region. And now that study, Asia-Pacific Rebalance 2025: Capabilities, Presence, and Partnerships, is out. A brief writeup says that the researchers are “concerned that the administration’s rebalance effort may be insufficient” to secure American interests. “Chinese and North Korean actions are routinely challenging the credibility of U.S. security commitments, and at the current rate of U.S. capability development, the balance of military power in the region is shifting against the United States.”

The American Enterprise Institute and the Institute for the Study of War are launching a joint report on American strategy to fight the Islamic State. The first section in the two-part series breaks down American strategic objectives in the war against both the Islamic State and al-Qaeda and the threats the groups pose. A second section breaks down U.S. interests in Iraq and Syria as well as those of the regional players involved.