Operation Economic Fury Turns Its Attention to Iraq

After weathering weeks of attacks from Iran-backed militias in Iraq, the United States designated seven leaders of these terror groups on April 17, asserting, “These militias operate with near impunity, attacking U.S. personnel and innocent civilians across Iraq.”

The sanctioned individuals are commanders in four U.S.-designated Foreign Terrorist Organizations (FTOs): Kataib Hezbollah, Asaib Ahl al Haqq, Kataib Sayyid al Shuhada, and Harakat Hezbollah al Nujaba. Operating under the banner of various front groups, these organizations have conducted hundreds of attacks since Operation Epic Fury began on February 28. Simultaneously, airstrikes likely conducted by U.S. forces targeted these Iranian partners.

Now, the United States is pursuing non-kinetic measures against the Islamic Republic’s Iraqi partners. On April 14, the State Department’s Rewards for Justice program announced a $10 million reward for information on Ahmad al-Hamidawi, the leader of Kataib Hezbollah, on top of an existing $3 million reward for information on Iraqi militia attacks against American facilities in Iraq. However, without buy-in from Baghdad to combat the militias, Washington’s efforts to counter malign Iranian influence in Iraq will be undermined from within the country.

Militias Threaten the U.S. and Partners

The U.S. Embassy in Baghdad issued a warning on April 20 that “Iraq’s Iran-aligned terrorist militias continue planning additional attacks against U.S. citizens and U.S.-associated targets,” reiterating its recommendation that Americans leave Iraq. On April 9, Washington summoned the Iraqi ambassador to condemn militia attacks, including an “ambush that targeted American diplomats in Baghdad on April 8,” after the U.S.-Iran ceasefire.

Iran and its proxies have conducted more than 250 attacks in Iraq during their conflict with the United States and Israel. Tehran’s proxies targeted the U.S. presence in the country, domestic and foreign-operated energy infrastructure, as well as energy, civilian, and U.S. diplomatic and military sites across Iraqi Kurdistan, which the militias mistrust due to its close relationship with Washington. Despite the current ceasefire, Kurdish groups have reported attacks that were likely carried out by both the Islamic Republic and its militias. Front groups for Iran-backed militias also claimed dozens of attacks on neighboring Arab countries.

Baghdad Repeatedly Failed To Hold Militias Accountable

Following the kidnapping of an American journalist in Baghdad by Kataib Hezbollah, Iraq’s Ministry of the Interior issued a statement attributing the abduction to “unknown individuals.” The Iraqi government routinely refuses to attribute criminal attacks to Iran-backed militias, a prerequisite to arresting and prosecuting individuals involved.

This trend extends beyond attacks on Americans. Iraqi Prime Minister Mohammad Shia al-Sudani blamed a “cowardly group” for a deadly Iran-backed militia attack on the Iraqi National Intelligence Service on March 21. Officials in Baghdad are often unwilling to attribute attacks to Iran-backed militias due to those militias’ membership and influence in the Iraqi government and official institutions.

Simultaneously, the Iraqi government authorized the Popular Mobilization Forces (PMF), an official Iraqi security organization comprised mainly of Iran-backed militias, to respond to attacks it faced. Airstrikes, likely conducted by American forces, have targeted PMF positions, controlled by Tehran’s proxies, since February 28. The government’s permission provided legitimacy for militia attacks against the United States.

Washington Must Prevent Militia Control of Baghdad’s Next Government

Iraq is in the final hours of the constitutionally mandated period for the prime ministerial selection following the November 2025 parliamentary election. Washington has reportedly suspended security cooperation and the physical transfer of dollars from the country’s oil revenue to Iraq until a government is formed without militiamen in senior positions. The Trump administration should also identify clear actions that the next Iraqi government must take to curb militia influence, such as cutting the PMF’s budget.

If the government fails to meet American requirements, Washington should follow through on the 2026 National Defense Authorization Act provision that the U.S. government will transfer no more than 75 percent of approved funds for non-PMF, Iraqi security institutions. This provision is an effort to condition U.S. support to Iraq on credible action against Iran’s influence.

The U.S. Treasury should simultaneously pursue financial isolation of Iran’s Iraqi militias by designating militia leaders, financiers, and their protectors in Baghdad’s political elite.

Bridget Toomey is a research analyst at the Foundation for Defense of Democracies (FDD), where she focuses on Iranian proxies, specifically Iraqi militias and the Houthis. For more analysis from Bridget and FDD, please subscribe HERE. Follow Bridget on X @BridgetKToomey. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.