MOSUL, Iraq (Reuters) – Three years ago, the world rejoiced when Iraqi forces backed by the United States and Iran liberated this ancient city from the brutal rule of Islamic State. The people of Mosul hoped to rebuild their shattered lives.

Today, a different battle plays out.

Taking place largely behind the scenes, from legislative halls that overlook the city’s bombed-out streets to hotel meeting rooms in Baghdad, it is a power struggle among parties, politicians and militiamen. Some are backed by Iran. Others favor the United States.

At stake: political control of Nineveh province, of which Mosul is capital—a region rich in natural resources and a link in a supply route from Tehran to the Mediterranean. The route serves Iran-backed militias, Washington’s fiercest enemy here since the defeat of Islamic State.

Iran’s allies had been winning. They installed a governor favored by Tehran a year ago. But then anti-government protests, U.S. sanctions and the assassination of Iran’s military mastermind Qassem Soleimani challenged Iranian influence. The pro-Western camp replaced the Nineveh governor with a longtime U.S. ally.

The contest mirrors a wider struggle over the future of Iraq itself.

Speaking to Reuters over the span of a year, around 20 Iraqi officials involved in the political tussle over Nineveh described how Iran and its allies developed the networks to influence local government, how pro-Western officials tried to hit back, and how this tug of war has crippled Mosul’s recovery. If any side prevails, many of these insiders believe, it will ultimately be the side aligned with Iran. Iran helps its allies with money, political backing and sticks with them, explained Nineveh councilor Ali Khdeir. The United States, in contrast, “has left no real mark on Iraq.”

Mosul, meanwhile, lies largely in ruins. Traffic snarls across battered bridges and disabled war victims sell tissues, cigarettes and tea at junctions—the kind of misery that Iraqi officials fear is the perfect breeding ground for Islamic State to reemerge.

Two changes of governor in 2019 meant contracts for projects worth at least $200 million were not awarded by the local government last year. They included building a new emergency hospital, procuring vehicles to clear rubble from bombed-out homes and bolstering the fleet for Mosul’s under-equipped first-responder teams, according to officials and a local government document seen by Reuters.

A spokesperson for the U.S. Department of State accused Iran of working “overtime to dominate every aspect of Iraq’s political and economic life.” The United States is committed to helping Iraq build its economic prospects and improve stability and security, said the spokesperson, Morgan Ortagus.

A spokesperson for Iran’s mission to the United Nations in New York, Alireza Miryousefi, insisted: “Iran does not interfere in Iraq’s internal affairs.”

The Iraqi government did not respond to detailed questions for this article. Prime Minister Mustafa al-Kadhimi told Reuters in response to a question about Mosul that corruption and political infighting hampered the city’s recovery, but denied it was part of a proxy contest.

“We Had a Modest Life and Simple Dreams”

Rasha Saeed’s young family is one of thousands suffering from the failures of city hall.

Still mourning the death of their nine-year-old son, killed in a U.S. coalition air strike in 2015, the family returned to their neighborhood after its liberation from Islamic State. They found their home had been destroyed by bombs and bulldozed over. Rasha, her husband Luay Shaker and their three remaining children live in debt and in limbo in a partially repaired rented flat nearby. They watch grass grow on the earth where their old house stood. Residents say Islamic State fighters’ bodies are buried beneath.

Luay, a manual laborer who ferried supplies before the war to stores in Mosul’s historic Old City markets, cannot work while he recovers from an operation to remove a tumor from behind his ear. Limited space at the West Mosul medical complex nearby—where a new hospital was meant to go up—means follow-up treatment is sporadic and slow. “It can be a long wait between appointments because Luay’s doctor can take only three patients on site a week,” Rasha said.

The medical complex is a cluster of portacabins on a vast bombed-out site that once boasted five fully-equipped hospitals with hundreds of beds. It currently has around 80 emergency ward beds for a population of more than a million people living in the area, doctors say. They describe a lack of equipment and medicine, including masks and gloves—a concern especially as cases of COVID-19 rise in Iraq. A spokesperson for Iraq’s Health Ministry responded that protective equipment is available in all state health institutions.

Rasha’s temporary home stands alone amid destruction on a hill above the Tigris River, overlooking Mosul.

“We had a modest life before Islamic State, simple dreams to live without violence, for our children to be educated and maybe one day to afford a bigger home. That is now impossible,” Rasha said.

A Change in City Hall

The political contest for Nineveh is part of a wider picture across Iraq’s northern Sunni-majority provinces, former strongholds of dictator Saddam Hussein which hold strategic value for Tehran—and where Washington wants to curb Iranian influence.

The fertile plains of Nineveh flank Syria to the west, where Iran’s Revolutionary Guards have fought alongside President Bashar al-Assad’s forces. Beyond is Lebanon, home to Shi’ite Iran’s Hezbollah allies. The provinces of Anbar, bisected by the vast Euphrates River, Salahuddin, home to an important Shi’ite shrine, and Diyala, which borders Iran, form the rest of that mostly Sunni land corridor. Many of the 5,000 U.S. troops in Iraq—a number that is being reduced—have been deployed at bases dotted through three of these provinces and are regularly harassed by rocket attacks that U.S. officials have blamed on Iranian proxies who want U.S. troops to leave.

Iran firmly established dominance over Baghdad and Iraq’s southern Shi’ite provinces after the 2003 U.S.-led invasion that ousted Saddam. But the country’s Sunni areas, home also to minority groups of Kurds, Christians, Shi’ite Turkmen and Yazidis, presented more of a challenge. They became hubs for a Sunni insurgency against U.S. forces in the mid-2000s and strongholds for Islamic State, which made Mosul its capital in 2014.

After Iran-backed militias helped drive Islamic State from Mosul in 2017, the militias stayed put. Their flags fly throughout northern Iraq, next to banners and billboards that honor their leaders, including the late Soleimani.

Twenty local government officials, Baghdad lawmakers and tribal leaders interviewed by Reuters described how Iran then deepened its political influence until it had allies in almost every provincial administration.

Central to such efforts in Nineveh, these sources said, were two powerful Sunnis—Khamis al-Khanjar, an Anbar businessman turned politician, and Ahmed al-Jabouri, widely known as Abu Mazen, a former governor of Salahuddin province, now sitting in the Iraqi parliament.

Mr. Khanjar was an outspoken opponent of Iran. He supported Sunni protests against the Iran-backed Baghdad government in 2013 and later accused Iran-allied Shi’ite militias of human rights abuses. Abu Mazen was once a U.S. ally. He described working closely with U.S. forces after the 2003 invasion.

In 2018, Mr. Khanjar and Abu Mazen unexpectedly joined a bloc of Iran-backed parties and militia leaders in the Iraqi parliament. Explaining this shift, Mr. Khanjar said: “The strongest on the ground can get things done…I go with the bloc that’s [strongest] on the ground. If that coalition has Iranian links, that’s not on us.” He denied being an ally of Iran. Abu Mazen declined to comment for this article.

Then, in May 2019, Mr. Khanjar and Abu Mazen intervened in the selection of Nineveh’s new governor, according to nine sources, including several members of the regional administrative council and relatives of the two men. A majority of Nineveh’s 39 counselors, tasked with electing the new governor, initially favored a candidate critical of Iran, these sources said. But two days before the council was due to vote, Abu Mazen and Mr. Khanjar invited nearly two dozen council members to a meeting in a hotel in nearby Erbil, said several people, one of whom attended.

The council members were promised local government posts or payments of up to $300,000 apiece from the men or their offices if they voted for a different candidate, Mansour al-Mareid, a Sunni favored by Iran and its allies in Baghdad, these people said. One council member told Reuters he accepted money and used it to buy a new home.

Mr. Mareid was duly elected with the votes of 28 of the 39 council members.

Mr. Khanjar confirmed he and Abu Mazen met with councilors in Erbil to agree on the governor and negotiate over provincial posts. He also confirmed he supported Mr. Mareid, but denied that votes were bought. “I didn’t pay a single dinar,” he said.

Mr. Mareid, the winning candidate, said he had no knowledge of bribes being given to counselors and he denied any loyalty to Iran, but he added: “Council members can be bought, so it wouldn’t surprise me, and nothing can happen in this country without Iran approving it.”

The gathering in Erbil was not the only meeting that took place around that time. Three of the counselors interviewed by Reuters described further meetings and contacts with senior Iraqi paramilitary officials who were trying to win support for Mr. Mareid.

Another Nineveh councilor recounted that he and a colleague were invited to a hotel in Baghdad shortly after the vote to meet a senior Iranian diplomat and an Iraqi militia leader loyal to Iran. The councilor, who had loudly criticized Mr. Mareid’s appointment, said he was offered a post in the Nineveh government if he would drop his opposition to the new governor. He said he declined the offer. The Iranian embassy did not reply to questions about the meeting. Reuters couldn’t reach the militia leader. The Iraqi state paramilitary Popular Mobilization Forces (PMF) that oversees militias did not respond.

U.S. Pushes Back

Within a few months the pendulum had swung again.

The United States imposed sanctions on Iran-aligned militia leaders and on their Iraqi Sunni allies—among them Abu Mazen in July and Mr. Khanjar in December.

The U.S. Treasury said it was freezing Abu Mazen’s assets because he had protected “his personal interests by accommodating Iran-backed proxies that operate outside of state control.” It targeted Mr. Khanjar in a round of sanctions against Iran-backed militia leaders, accusing him of bribery and saying he had spent “millions of dollars in payments to Iraqi political figures in order to secure their support.”

Abu Mazen and Mr. Khanjar denied any wrongdoing at the time and condemned the U.S. sanctions as interference in Iraq’s internal affairs.

Abu Mazen felt under pressure as a result of the U.S. move, said a relative and five Nineveh counselors. The measures helped persuade Abu Mazen, these sources said, to withdraw support for Mr. Mareid and back a former military commander and U.S. ally, Najm al-Jabouri, to replace him as governor. In November, 23 of the council’s 39 members voted to dismiss Mr. Mareid and appoint Mr. Jabouri.

Mr. Jabouri’s appointment and the pressure on Iran’s allies across the country from U.S. air strikes and sanctions have given militia groups pause in Mosul, local officials say. Their military presence has reduced on inner city streets where Shi’ite and militia flags once flew atop mosques and junkyards they controlled.

Pro-U.S. officials in Mosul hope that the government of Prime Minister Kadhimi, who is accepted by both the United States and Iran, together with fractures among Iran-backed militias following the death of Soleimani, will turn the tide against Tehran’s influence. But they also complain that Governor Jabouri is mostly hamstrung against Iran’s militia and political allies in Mosul.

“Jabouri is weak politically,” said Mosul council member Ali Khdeir. “Because of their power on the ground, he’ll have to deal carefully with the militias at first.”

Mr. Jabouri told Reuters that any governor would face criticism and he defended his record. He conceded that political rivalries were impeding progress in rebuilding the city. “It makes my work harder,” he said.

Four local officials said some administrative posts have changed hands and are no longer controlled by allies of Iran-backed militias, but others are still held by officials with links to militia groups. The militias also have offices in Mosul, these local officials said, through which they win construction and other business contracts, even though such offices were banned by a central government decree last year. The militia groups did not respond to Reuters questions about their activities.

A City in Ruins

Amid this chaos, reconstruction stalls.

The power vacuum between Mr. Mareid and Mr. Jabouri just weeks before the end of 2019 prevented contracts being awarded at a crucial time when the annual budget needed to be spent, a senior local administrator and a second official said.

A document signed by the head of municipalities, Abdul Qadir al-Dakhil, and reviewed by Reuters showed that provincial authorities failed to award contracts worth more than $200 million in Nineveh province in 2019. They included the new emergency hospital, equipment for another nearby hospital, providing additional vehicles for the civil defense rescue services and rehabilitating 13 schools, Mr. Dakhil told Reuters.

Dr. Omar Hamudat, who helps run the West Mosul emergency medical complex, worked in Mosul hospitals under international sanctions in the 1990s and under Islamic State’s occupation. Dr. Hamudat said healthcare infrastructure was the worst it had ever been.

“Once we could carry out 200 emergency operations a day here. Now, we manage about 15,” he said, speaking in his cramped portacabin office at the complex.

Nineveh province had hospitals with a total of about 4,000 beds before the arrival of Islamic State. It has a little over 1,000 now, including in what Dr. Hamudat called his “caravans,” a reference to the portacabins.

Mosul’s civil defense chief, Hossam Khalil, said a provision of emergency vehicles such as fire engines and ambulances, expected in 2019, had not come through. “Sometimes we have to use our own cars for work,” Mr. Khalil said, “but try not to do that for crucial life-saving work, or putting out fires.”

Residents of Mosul have praised Mr. Jabouri’s handling of the COVID-19 crisis, where a lockdown has so far avoided a mass outbreak, but some worry he is not up to the task of rebuilding the city. Many just want a competent governor, regardless of political affiliation.

“Mareid began getting things done,” said Safwan al-Madany, a 30-year-old activist who has been involved in voluntary aid projects for his city since 2011 and rebuilding work since the fall of Islamic State.

During Mareid’s six-month tenure, some bridges in the city were fixed. “He had the contacts, power and connections in Baghdad to make things happen, even if those were paramilitary-linked. He’s an engineer by trade and understands construction. Jabouri is a military man. We wish Mareid would come back,” said Mr. Madany.

Enduring Influence

Across the rest of the Sunni provinces that lie between Nineveh and Baghdad, regional counselors, tribal chiefs and members of Iraq’s parliament say Iran’s efforts to entrench local political allies will likely outlast the U.S. tactics of air strikes and economic sanctions.

Potential friends of America lament what they see as a lack of U.S. interest or ability to blunt Iran’s influence in the country allied troops invaded 17 years ago. In February 2019, the head of Salahuddin provincial council, Ahmed al-Krayem, travelled to Washington to drum up U.S. support for his region and help counter Iran.

“The visit wasn’t fruitful,” said a senior Iraqi lawmaker, a relative of Mr. Krayem.

“Whoever he met didn’t seem interested in his proposals for a bolstered U.S. troop presence and U.S. investment.”

The U.S. Chamber of Commerce, which hosted Mr. Krayem at a private event during that trip, declined to give details about the gathering. Mr. Krayem also declined to comment.

A Salahuddin official said that by contrast, “the Iranians, including their diplomats at the embassy, reach out to people you’d never expect them to, at a local level.”

Asked about U.S. engagement in Iraq, Department of State spokesperson Morgan Ortagus said: “We will continue to stand with the Iraqi people in support of their calls for reform and change, and to help them achieve an Iraq that is economically prosperous, a pivotal country in the region, and free of foreign meddling.”

Other Salahuddin Sunni chieftains have met Shi’ite paramilitary officials to plead over the return of Sunni families displaced by the war with Islamic State and scattered in camps and temporary homes across northern Iraq. They worry about the drawdown of U.S. troops in Iraq, saying it opens up their regions to the danger of a resurgent Islamic State.

“A few years ago I would never have dealt with Iran-backed officials,” said Sheikh Khalid al-Nasseri, a senior leader in Saddam Hussein’s clan. “Now I’ll work with anyone to get services for our people and return families to their homes from miserable camps.”