Withholding funds

Not only are we bribing the people of Iraq to like us, but now we are using extortion as well, dropping leaflets on the town of Fallujah(link via Atrios):

"If the security situation does not improve you will lose $102-million, which is already allocated and approved. This amount of money will be transferred to peaceful and open towns," the leaflet said.

Is this any way to teach people how to run a country?