The following editorial appeared recently in the Detroit Free Press:

Just when the U.S. and other nations determined to discourage Iran's nuclear aspirations were beginning to believe that economic sanctions imposed on that renegade republic were having a real impact, the Obama administration has acknowledged that those sanctions are being significantly undermined by — wait for it — Iraq.

That's right, the same Iraq U.S. taxpayers spent billions of dollars to free from the despotic grip of Saddam Hussein, followed by a few billion more to prop up a fledgling democratic government that could serve as a counterweight to Iran. (The U.S. government's earlier support for Saddam Hussein, you may recall, was similarly designed to keep Iran's anti-American regime in check.)

So why in the world would members of Prime Minister Nuri al-Maliki's government help Iraq's longtime rival, Iran, skirt sanctions designed to pressure the Ahmadinejad government by limiting its foreign trade and starving Iran of desperately needed U.S. currency?

The White House conceded that private interests in Iraq have helped Iran smuggle oil last month when it barred U.S. banks from any dealings with the Iraq-based Elaf Islamic Bank, which was flagrantly abetting Iranian smuggling operations.

Then, in a recent lead story in Sunday's New York Times, journalists James Risen and Duraid Adnan reported that the Elaf Islamic Bank was only part of a network of Iraqi financial institutions funneling U.S. dollars to Iran. Citing unnamed sources in both the U.S. and Iraqi governments, the Times said those profiting from such illicit transactions include Iraqi government officials close to Prime Minister Malaki.

On the bright side, some American taxpayers may be relieved to learn that Iraq's sanction-busting activities signal nothing more than the vitality of public corruption; sound strategic arguments support Iraq's continuing official hostility toward Iran.

But the practical impact of that corruption is essentially the same. The likelihood that at least some of the billions the U.S. and its allies have supplied to Iraq is being used to systematically undermine allied strategic objectives in the Middle East is enough to sour any U.S. taxpayer on continued support for the Malaki government.

Nonetheless, and despite the multitude of reasons to fault American hubris and myopia in the U.S.-led invasion of Iraq, the discouraging reports of Iraqi corruption do not warrant a full-scale retreat into isolationism. Rather, they underline the need for the same unblinking vigilance the U.S. has practiced in Pakistan, Afghanistan and other countries that take pleasure in publicly identifying themselves as American allies while working privately to undermine American interests or succor America's rivals.

The curbs the administration imposed on Elaf Islamic Bank are an example of the tactics U.S. diplomats can use by which to drain Iraq's polluted bath water without abandoning its baby democracy. Forbearance, after all, has always been a vital element of effective diplomacy, and those who are easily outraged by double-dealing had best find a different line of work.