Iraq's Ministry of Communications awarded no bid contracts to state conglomerate the Muhandis General Company and an umbrella group of Iran-backed militias the Popular Mobilization Front to maintain the national fiber-optic network, the Atlantic reported.
The business gives the groups the opportunity for illegal profiteering, the magazine cited Iraqi officials and telecoms industry officials as saying, adding that it could give Tehran or its allies the possible ability to surveil Iraqis.
The US Treasury sanctioned MGC this month, accusing it of being led by Iranian Revolutionary Guards-backed militia Kata’ib Hizballah and siphoning off revenues from government contracts.
As parliamentary polls loom early next month, the Iraqi government has championed vast construction projects after decades of violence following a 2003 US invasion.
But Prime Minister Mohammed Shia al-Sudani has cemented his position by folding Iran-aligned factions including militia leaders who helped win a national fight against Islamic militants into his economic and political fold.
US Secretary of State Marco Rubio last week urged Baghdad to swiftly disarm Iran-backed militias in a phone call with al-Sudani, accusing the Shi'ite groups of diverting the Arab nation’s resources to Tehran’s benefit.
With this technical know-how, these militias or their Iranian backers could monitor civilian and government communications.
In a related development, Prime Minister Mohammad Shia al-Sudani sought to authorize a 5G mobile network contract for another consortium linked to the Popular Mobilization Front. A senior judge temporarily blocked the deal, citing national security risks, though legal experts say the suspension may not hold, The Atlantic reported.
Iran's former ambassador to Iraq said on Tuesday that Tehran aims to foster resistance far and wide.
"Resistance is not a proxy force; it transcends time and place, meaning today's resistance is not confined to the geography and ideology of the Islamic world," Tasnim News cited Hossein Kazemi Qomi, former ambassador to Iraq, as saying in Tehran.
"Westerners claim that the resistance is a proxy network backed by Iran, while their claim is baseless, as what has shaped the resistance is religious and ideological identity along with shared threats," he added.
Iran's armed affiliates in Gaza, Syria and Lebanon have suffered blows from Israeli attacks. The armed Houthi movement in Israel and Iraqi militias stand out as Tehran's more intact allies.