ERBIL, Iraq (Reuters) - For at least a decade, Iraqi business mogul Khamis Khanjar has bankrolled Sunni politicians and fighters alike. Now, he wants to use his multi-million dollar fortune to create an autonomous region for Iraq’s Sunnis.

Khamis Khanjar, (C) a Sunni multimillionaire, visits displaced Sunni Iraqis at a school he funds in Iraqi Kurdistan, Iraq, February 16, 2016. REUTERS/Ned Parker

Khanjar’s emergence from backroom deal-maker to would-be Sunni champion is just one sign of Iraq’s continued political drift.

Efforts by Prime Minister Haider al-Abadi to reconcile Iraq’s Sunni and Shi’ites have mostly foundered, despite increased U.S. engagement in Iraq. Shi’ite parties and militias are often more focused on their own internal power struggles than brokering a political compromise with Sunnis. Sunni tribes tell security officials and politicians they are at the mercy of both Sunni extremist group Islamic State and Shi’ite militias.

Dubai-based Khanjar says he offers an alternative: a federation in which Sunnis, Shi’ites and Kurds could all run their own parts of the country without formally breaking it up. A Sunni federal region would win billions in investments from Gulf Arab states and Turkey, Khanjar and partners in his alliance said.

Last week, Khanjar, a native of the embattled Sunni city of Falluja, announced in a televised address that he was forming a delegation to investigate “extrajudicial killing,” the “demolishing and looting of property” and other alleged human rights violations by Shi’ite militia there.

“The Iraqi government is granting a political cover to militias and consistently denies the systematic violations of human rights” Khanjar said.

The government has consistently denied any involvement by state forces in killings or abductions and said it actively works to arrest criminal gangs behind such actions.

Over the past year, the six-foot-tall tycoon, flanked by a gaggle of aides and British private security contractors, has made a series of trips to northern Iraq. He limits himself to Kurdistan, because, he says, his life is in danger from Islamic State and Iranian-backed forces in other parts of the country.

He is also paying $65,000 a month to a Washington, D.C.-based lobbying firm run by former Clinton White House officials to promote his cause in the United States.

Iraq’s ruling Shi’ite leaders deride him as a destabilizing opportunist. Jabbar al-Abadi, a member of parliament from the Prime Minister’s Dawa party, described Khanjar’s push for Sunni autonomy as “an invitation to tear Iraq apart.”

Sunni rivals of Khanjar describe him as a self-promoter and accuse him of putting his desire for power above Iraq’s stability.

Khanjar’s advantage is his checkbook, which has helped bankroll political coalitions, finance tribal uprisings and fuel nationwide protests. Sunni and Shi’ite politicians alike have tried to woo him at one time or another, including some who despise him.

Former U.S. diplomats say that Khanjar’s sizeable fortune and close ties with Gulf States and Turkey allow him to be a secret and enduring force in Iraq’s politics.

“Khanjar will play any side so as to gain advantage for himself,” one former U.S. official said. “Question is: does he really want to influence his country for the best, or is he just protecting and expanding his business networks? Or is it all just a game for a guy who is a billionaire?”

That matters because over the past decade, assassinations by Islamic State and Shi’ite militias, and political infighting have severely winnowed the pool of budding Sunni politicians.

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Ex-U.S. diplomat Ali Khedery, who worked in Baghdad from 2003 to 2010, said “Khanjar is one of the very few Sunni figures with vision, intellect, and money, who is left standing, although he is far from perfect in a country wracked by violence, sectarianism and corruption.”

Khanjar’s history is controversial. Former Sunni guerrillas in Iraq say he helped fund the anti-U.S. insurgency that began soon after the 2003 U.S.-led invasion. Later, they say, he backed the 2006 pro-American Sunni tribal uprising that helped destroy Islamic State’s original incarnation, Al Qaeda in Iraq.

In 2010, Khanjar says he helped found one of the two main political lists in Iraq’s national elections. Three years later, he helped finance nationwide Sunni protests against Baghdad.

Ezzat Shabandar, a Shiite politician, who negotiated with Khanjar during the 2010 Iraqi government formation process, described the tycoon as the man the Shi’ite parties had to talk with earlier this decade.

“He had power and wealth,” Shabandar said, though cautioned that the emergence of Islamic State meant it would be harder for Khanjar to be an unrivaled “strongman” for Sunnis today.

Khanjar’s net worth is estimated to be in the hundreds of millions of dollars. His assets include manufacturing, banking, financial services and commercial and residential real estate across the Middle East, Europe and North Africa.

Detractors – from former insurgents to Iraqi intelligence officers – say his family built its fortune by setting up front companies for members of Saddam Hussein’s regime in the 1990s. They accuse Khanjar of seizing his partners’ assets for himself after the 2003 invasion, accusations he denies.

Asked his worth, Khanjar laughed and answered: “God has been very good to me.”

PANDORA’S BOX?

Earlier this year, Khanjar flew into Iraqi Kurdistan to inspect some of the 14 schools and three clinics he funds for the one million Sunnis who have settled there after being displaced from their homes across Iraq.

Dressed elegantly in a dark suit, he was greeted by dozens of Sunni children in matching blue and white uniforms. The children dutifully recited poems praising him as their rescuer from Iraq’s sectarian conflict. Khanjar smiled, folded his hands and addressed them. Iraq’s Sunnis must fight both Islamic State terrorists and Iraqi government-backed Shi’ite militias, he said.

“We are heading towards a borderless, bloody Sunnistan if there is no immediate action by the Iraqi government to address Sunni rights,” he told Reuters later. “Once we cross the threshold, no wise men – myself or any other – can close Pandora’s box.”

Khanjar argues that a federal region modeled on Iraq’s nearly independent Kurdish territory will grant Sunnis rights and help them to fight Islamic State.

The Iraqi constitution allows the country’s provinces to create a federal region. Sunni provinces have attempted to do so twice but were rebuffed by former Iraqi Prime Minister Nuri al-Maliki. Abadi, who took over two years ago, has endorsed the principle of greater local governance. But he has been reluctant to address the campaign for a broader Sunni region.

To push his case, Khanjar has recruited powerful Sunni political allies, including the former governor of Mosul, Atheel al-Nujaifi, and ex-finance minister Rafaa al-Issawi. U.S. officials viewed Issawi as a leading Sunni moderate before former Prime Minister Maliki issued a controversial arrest warrant against him for terrorism in December 2012.

But Khanjar and his allies complain that they have been frozen out by the Obama administration. They say U.S. officials do not believe their complaints that the Iraqi government is failing to reconcile with Sunnis or to address abuses carried out by the Shi’ite militia forces.

They say the U.S. government has refused to issue visas for Issawi and Nujaifi to travel to the United States after the two visited Washington last spring and criticized the Iraqi government.

U.S. ambassador to Iraq, Stuart Jones, denied that there was a deliberate policy to keep the men out but declined to elaborate on why their visas had been refused. Jones said it was against policy to speak about individual visa cases.

“The US embassy has no interest‎ in silencing Iraqi voices in Washington DC or anywhere else,” Jones said. “Nor do we have that capacity.”

U.S. officials declined to speak publicly about Khanjar.

Seeking to address the impasse with the United States, Khanjar has deployed his wealth in Washington. In September 2015, he hired the Glover Park Group, a lobbying firm run by former Clinton White House and Democrat campaign officials. This winter, he opened an office in Washington. And his current media point man is the former spokesman of U.S. ambassador to the United Nations Samantha Power.

“We have great relations with Qatar, Saudi Arabia, United Arab Emirates, and Turkey,” Khanjar said, while emphasizing he was an Iraqi patriot. “We want to leverage these relationships.”

Nujaifi, the former Mosul governor, says he is focused on securing the support of Turkey for the Sunni federal project.

The pair are also building their own paramilitary forces to fight Islamic State. Nujaifi says his force now includes 4,000 men from Nineveh province who have been trained by Turkey. Khanjar says he has funded 2,400 men now fighting Islamic State just outside Falluja. He claims to have another 4,000 recruits who are ready for training.

Khanjar insists he is trying to save his country for its sake, not his. “Anyone would like to see his country stable and secure,” he said. “If it was stable and secure, I would never have thought of going into politics.”

(Inserts missing words United Arab Emirates in paragraph 36.)