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Report: Iraq Keeps Filling Iran’s Coffers

iStockphoto/Thinkstock(NEW YORK) -- Iran is in desperate financial straits these days because of crippling economic sanctions imposed by the international community to punish Tehran for failing to stop its rogue nuclear program.

However, The New York Times reports that one source of income hasn't dried up yet and that's Iran's close neighbor Iraq.

According to the paper, Iran is still receiving steady money from Iraqi financial institutions and oil-smuggling operations.

This presents a sticky situation for the Obama administration, which is trying to force Iran to freeze its nuclear operations that the West says is intended to build an arsenal of atomic weapons despite protests to the contrary from Tehran.

Washington has also put pressure on Iraq to go along with other countries in turning off the spigot of funds to Iran, going as far as stopping one Baghdad bank from making any more transactions with the U.S. banking system.

Iraq wants to keep good relations with the U.S. but at the same time isn't ready to alienate Tehran, so the economic assistance to its neighbor has continued and, in some instances, have benefited Iraqi government officials close to Prime Nouri al-Maliki, sources told the Times.

Copyright 2012 ABC News Radio

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