US embassy cable - 05BAGHDAD3111

C O N F I D E N T I A L SECTION 01 OF 05 BAGHDAD 003111 
 
SIPDIS 
 
E.O. 12958: DECL: 07/25/2025 
TAGS: PINS, PHUM, PGOV, KDEM, EPET, EINV, IZ, Ba'ath, Sunni Arab 
SUBJECT: IRAQI DPM CHALABI SUPPORTS OUTREACH TO SUNNIS, 
MODERATION IN DE-BAATHIFICATION 
 
REF: BAGHDAD 3069 
 
Classified By: Ambassador Khalilzad for reasons 1.4 (b) and (d) 
 
 1. (C) Summary. Deputy Prime Minister Chalabi says he 
supports outreach to the mass of the Sunni population, claims 
to desire Sunni inclusion in the political process and feels 
this will reduce tension in Iraq.  There is now a plan before 
the Cabinet, he said, to provide pensions to senior former 
military officers and selected Baathists to reach out to the 
disaffected from the previous regime in Iraq.  Chalabi is 
concerned about the budget deficit and the cost of subsidies 
to the ITG.  He has taken a personal interest in 
infrastructure security and is orchestrating the ITG's 
efforts at the direction of the Prime Minister.  Chalabi says 
that government officials do not get out to see the people of 
Iraq, and are isolating themselves in the Green Zone.  For 
his part, he has engaged in outreach to the Sadrists to bring 
them into the political process. Chalabi asserts that the TNA 
needs to make a "few changes" to Iraqi Special Tribunal law 
for it to "work properly and to legally accomplish its 
tasks."  Chalabi fur 
ther said that U.S. reconstruction efforts have fallen short 
of their goals, citing shortfalls in the electric power 
sector.  He claimed that the Contract Review Committee of the 
ITG, which he chairs, had reduced corruption.  He also said 
the U.S. should do more with private sector investment in 
Iraq, and requested U.S. support for scholarships for Iraqi 
students in the United States.  End summary. 
 
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SUNNI INCLUSION IN POLITICS AND DE-BAATHIFICATION 
--------------------------------------------- ---- 
 
2. (C) The Ambassador paid an initial call on Deputy Prime 
Minister Ahmed Chalabi on July 25. Chalabi said the crux of 
the problem with the Sunni population is that it needs to be 
included in the political process.  Since 2003, the result of 
the Sunni population's isolation and its identification with 
Baathism by both the U.S. and the Iraqi governments has been 
unproductive.  The CPA Order on De-Baathification was too 
broad. "The issue is this," Chalabi said, "We will not 
succeed if we continue to isolate the Sunni."  There were 3 
million people in the Baath Party, and 65 percent of them 
were Shia.  We need new laws on de-Baathification, and we 
need to moderate the TNA proposals, as some of them are much 
too radical, said Chalabi. 
 
3.  (C) Chalabi used the example of Tal Afar as a place where 
the outreach to the Sunni is working.  Tal Afar is a place 
where it is better to "talk first, before shooting"; 
consequently, he invited leaders of both sides, Sunni and 
Shia, to a four-hour meeting.  The Sunni declared in advance 
that the Shia were "agents of Iran," but came to the meeting 
anyway.  When the opposing sides met, they found they were 
all relatives, could talk together, and then concluded: "This 
shows how foolish we all are."  Chalabi said he told the 
group, "We need to solve these differences by talking, not by 
arms and soldiers.  Do you want to be a ghost town like 
Fallujah?" 
 
4.  (C) Chalabi used another example of political mediation, 
this time in Latifiyah.  A man whose father had been killed 
went to see the insurgent members of the Sawuara Tribe who 
had killed his father.  He asked to meet with the tribal 
leaders, and a man appeared and said his brother was a tribal 
leader.  The man asked what it would take to end the 
conflict-an amnesty?  The answer was, "Yes, but he has killed 
many people."  Chalabi ended this example by saying he would 
wait a bit before reaching a conclusion, to see if the tribes 
are really serious. He did add that this is the place where 
more then 250 bodies had been thrown into the river, but 
mediation may work in the future. 
 
5.  (C) The final example Chalabi gave of a political 
approach used to solve grievances related to Al Kut.  Chalabi 
explained that in Al Kut, rumors were spreading that the 
police in the prison were torturing many people, and that the 
lawyers were extorting money from people to supposedly defend 
the prisoners in the jails.  This was causing high levels of 
tension in the Sunni community.  Sunni sheiks were invited to 
the prisons to see the prisoners themselves.  They reported 
that they had talked with them and saw that the prisoners had 
not been tortured; they were even being held in 
air-conditioned cells.  This process reduced the tension in 
Al Kut, Chalabi said. 
 
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THE INSURGENCY 
-------------- 
6.  (C) "We need to figure out who is on our side in the 
North and Northwest, and protect them" said Chalabi.  Al 
Zarqawi has freedom of movement in the West.  "We caught a 
suicide bomber, a Sudanese man, the MoI got him in Baghdad, 
and upon his capture he wanted to make a public statement, 
which was 'I would like to express my thanks to the people of 
Anbar, who fed me, sheltered me, and brought me to Baghdad'". 
Chalabi explained that the worst feature of the insurgency is 
its infiltration of the police and military.  He then told 
the story of a man named Jadan who was the Police Chief in 
Anbar until the U.S. Marines found he had been giving arms to 
the insurgents and supporting them with information and 
protection. 
 
7. (C) "Saddam's security plan for an insurgency against the 
American attackers is now being used against the Iraqi 
Government," said Chalabi.  The insurgents are all around 
Baghdad, to the north, south, east and west.  "Baghdad is 
under siege by the insurgents who are cutting off the fuel 
and water supply, and electric power." 
 
8.  (C) Chalabi said he has proposed a three-pronged strategy 
to combat the insurgency.  He recommends telling the Sunni 
and Shia insurgents to 1) stop the incidents, 2) turn out the 
foreigners, and 3) release the hostages.  He stressed that a 
political solution is required to solve the insurgency. 
 
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PENSIONS FOR MILITARY AND BAATHISTS 
----------------------------------- 
 
9.  (C) Chalabi disclosed that a proposal was put forward to 
pay pensions to third and fourth tier Baathists at the last 
Cabinet meeting.  This proposal, which would exclude 
approximately 2000 senior Baath party members, would cost 
about $20 million to implement. He said there will also be a 
bill for military pensions at a cost of $600 million. 
Chalabi feels this may reduce tension in Iraq.  When asked 
how this might affect the insurgency, Chalabi said: "This is 
unknown, but such a measure would be part of a process to 
bridge the gap with former members of Saddam's Army.  The 
Army was made up primarily of conscripts, perhaps 95 per 
cent, and they fled at the end of the war. It is the senior 
members we are reaching out to in this process." 
 
--------------------------------------------- --- 
BUDGETS, OIL INCOME, AND INFRASTRUCTURE SECURITY 
--------------------------------------------- --- 
 
10.  (C) Chalabi said the ITG is facing an additional $1.7 
billion expenditure for fuel imports for the second half of 
the year.  "We have signed an agreement to reduce subsidies 
for fuel, but the rise in oil prices has been a curse on 
Iraq.  Iraqi refineries produce 10 million liters of fuel per 
day, but the demand is 24 million liters per day, which means 
purchasing 14 million liters of imported fuel at $.55 per 
liter per day; we then sell it at 1.4 cents per liter.  Some 
of this cost can be covered by the export of 250,000 barrels 
of oil per day from Kirkuk to Ceyhan, Turkey, thanks to the 
support of General Casey."  Chalabi asserted that the 
northern pipeline to Ceyhan is fully open and that oil is 
flowing at 250 thousand bbl daily (a figure post is 
attempting to confirm). 
 
11. (C) Infrastructure security has been a topic much 
discussed in the Cabinet, said Chalabi.  He said he had held 
a meeting with the Minister of Defense (MoD) on this subject 
several months ago, who had told him it would cost $600 
million and would take six months to secure the route and oil 
pipeline to export oil out of Kirkuk to Turkey.  He went on 
that Iraq has a protection plan and has allocated $35 million 
for infrastructure security and, since then, $200 million in 
oil exports have flowed from Kirkuk. 
 
12. (C) Chalabi told us that securing the oil infrastructure 
began with an ill-fated plan by Hassan Jabouri.  Eighteen Oil 
Security Battalions were formed under the Ministry of Oil; 
all were under strength with only about 250 soldiers in each 
battalion.  Unreliable, the battalions were transferred to 
MoD, which rapidly became fed-up with their tribal 
affiliations.  A decision was made by the ITG ministers to 
induct these battalions into the regular Iraqi Army.  This 
process is now being completed in the northern part of Iraq 
in coordination with MNF-I.  Chalabi has asked General Casey 
to assist in protecting the essential infrastructure of Iraq, 
to include oil and gas pipelines, and the electric power 
lines. "Baghdad is under siege," he told the General, "and we 
must deploy army forces." 
 
13. (C) The Prime Minister authorized a memorandum on July 24 
making Chalabi responsible for protection of infrastructure 
in Iraq.  Chalabi said he is working it through the National 
Energy Committee (NEC), which consists of the Ministers of 
Oil, Electricity, Water Resources, and is attended by the 
Ministers of Defense, Transportation, Trade, Interior, 
Industry and Minerals, and Finance as required.  The Deputy 
Commander of the Armed Forces represents the military and 
coordinates overall planning of infrastructure protection for 
MoD.  Chalabi said the security forces of the ministries, 
particularly the Electricity Protection Security Forces, were 
not capable of protecting the linear infrastructure, and did 
not even do a good job defending fixed sites.  Chalabi 
requested that the USG establish joint working groups with 
the ITG to work these infrastructure security issues.  He 
said he would hold a meeting of the NEC in the afternoon, 
about which we will report via septel. 
 
--------------------- 
OTHER SECURITY ISSUES 
--------------------- 
 
14. (C) Chalabi gave the Ambassador a copy of the memorandum 
from the Prime Minister referred to above, laying out the 
PM's "twelve point plan" on internal security issues, which 
had been discussed previously with Ambassador and General 
Casey. Ambassador and DCM expressed concern-as we have made 
clear with all our interlocutors-with any references 
endorsing the establishment of "militias".  Chalabi, noting 
that the Speaker of the Assembly had agreed with him that it 
is a bad idea to establish militias, suggested that Iraq 
needed "night watchmen," not militias. 
 
-------------------- 
SYRIA, IRAN AND IRAQ 
-------------------- 
 
15.  (C) Syria has invited the Prime Minister, said Chalabi. 
This seemed to be part of a ploy to get a three-way meeting 
with the Iranians, Syrians, and Iraq, according to Chalabi. 
The Prime Minister turned down the invitation.  Chalabi said 
the Syrians should give Iraq the funds they owe it. The 
Finance Minister sent a letter to Syria June 24 requesting 
release of the funds, but this has not yet happened.  Chalabi 
went on that "lots of other money is hidden in Syria."  The 
Ambassador said we would work with Iraq to help settle the 
claims.  Chalabi responded by saying there are many bogus 
claims from Syria, Jordan, and Lebanon. 
 
-------------------------- 
CHALABI'S VIEWS ON THE ITG 
-------------------------- 
 
16.  (C) The ITG's ministers do not understand the people and 
their concerns since the Ministers do not move around to see 
Iraq, said Chalabi.  "They stay in the Green Zone.  They 
clamor to live in the Green Zone.  We should not flee 
Baghdad, but we need to get out and see the people, which is 
why we liberated the country.  It is a TV government." 
 
17.  (C) The Sadrists need to be better integrated in the 
political system, said Chalabi. He was to talk to Sadr later 
in the day, especially about Sadr's concerns about Baathists 
in government.  He said he wanted Sadr's views on jobs and 
placement of people. 
 
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IRAQI SPECIAL TRIBUNAL 
---------------------- 
 
18.  (C) Chalabi said he supports the independence of the 
Iraqi Special Tribunal.  However, "there are two problems 
with the process.  First, the legitimacy of the Tribunal is 
in doubt; we need a TNA law to fix that.  Second, there needs 
to be continuity of law so as not to negate past laws; there 
must be amendments to the laws, not new laws."  Chalabi 
followed this by saying, "If I were Saddam's lawyer, and one 
of the judges is a Ba'athist, I would conclude that this is 
an illegal tribunal."  Chalabi suggested this is the case 
since some of the judges were Ba'athists.  (COMMENT  Chalabi 
is correct that th IS Sttute states that no IST personnel 
shall have been members of the Ba'ath party.  However, since 
membership in the Ba'ath party was a prerequisite for 
admission to the judicial institute, it would have been 
nearly impossible to find experienced judges who had never 
been Ba'ath party members.  Nearly all current IST personnel 
were at one point party members; this fact was disclosed and 
reviewed during 
the personnel appointment process.  Thus, the USG and others 
have read the Statute to preclude only high level Ba'athists 
from sitting on the Tribunal, and believe this is consistent 
with CPA Order No. 1's focus on high level party members.  No 
current IST personnel were members of the top four ranks of 
the party.  To alter that reading now, and to remove all 
Ba'athist members, even low level ones, would decimate the 
progress of the Tribunal and exclude some of the most 
productive, best trained judges.  Additionally, we think it 
is legally questionable whether the De-Ba'athification 
Commission may interfere with the positions of IST personnel. 
 END COMMENT.) 
 
19. (C) The Ambassador then passed a non-paper to Chalabi 
recommending changes to some of the TNA-proposed amendments 
to the IST Statute (see reftel).  Chalabi reviewed the 
non-paper and concurred in its recommendations.  (COMMENT. 
One USG recommendation is that the TNA limit its proposed 
changes on the Ba'ath provision to state that only those IST 
personnel who held the rank of any of the top four levels of 
the Ba'ath party are precluded from serving on the Tribunal. 
While Chalabi appeared to agree with this proposal, we 
understand that the TNA has not modified its proposed 
amendments to reflect the USG suggestion.  Post continues to 
engage on this issue and will press again with Chalabi and 
other leaders, as well as with TNA, the significant problems 
that would arise if the amendments were adopted unchanged. 
END COMMENT.)" 
 
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BUDGET FOR THE TNA 
------------------ 
 
20.  (C) The budget for the TNA, at 107 million Iraqi dinars, 
is inadequate to support the members and their work, said 
Chalabi.  He supports raising the TNA budget to 78 billion 
Iraqi dinars for the salaries of the members and their staff. 
 He said an additional $10 million U.S. dollars has been 
allocated for consultants and studies. 
 
----------------------------- 
RECONSTRUCTION AND CORRUPTION 
----------------------------- 
 
21.  (C) Chalabi said he supports the USG provincial 
reconstruction efforts, but is concerned that corruption is a 
greater problem at local levels.  His overall assessment of 
the reconstruction effort is not favorable.  He pointed to 
the electric power sector where, he said, more than $2 
billion in USG funds have been spent, and there is "not much 
to show for this effort." He did concede that the Musayyib 
gas turbine project is a success. 
 
22. (C) Chalabi recommended that the Ambassador talk to the 
Prime Minister about corruption.  Chalabi said he had written 
to the Prime Minister about contract corruption by the Iraqi 
Government. He was then delegated to oversee the Contracts 
Committee that reviews government contracts exceeding $5 
million. (Comment. We believe the floor is $3 million. End 
comment.) When the Contracts Committee approves a contract, 
he said, the committee notifies the Ministry of Finance, 
which authorizes payment of the contract. 
 
23.  (C) Chalabi said the Contract Review Committee had 
recently approved two major contracts, each for 650,000 tons 
of wheat, one from Australia and the other from the United 
States.  The Committee had also approved a contract for 
250,000 tons of U.S. rice.  It had reviewed a sugar contract 
with the wrong people for four million tons of sugar at a 
cost of $1.2 billion, so the committee authorized a purchase 
of 168,000 tons of sugar from the London Exchange. 
 
24.  (C) Chalabi claimed that corruption has dropped 90 
percent since the Contract Review Committee has been 
reviewing ITG contracts.  "We look for the tell-tale signs of 
corruption."  The Ambassador said we will work to find ways 
to help the Contract Review Committee Board.  Chalabi 
concluded by saying that all funds from oil sales are now 
deposited in the DFI. 
 
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PRIVATE SECTOR 
-------------- 
25.  (C) Chalabi informed us that the Iraqi Private Sector 
Committee had been dissolved on May 24.  "You should have 
protested!" he said. He went on that Iraq needs private 
sector investment in Iraq, and "we need to get the Americans 
on board." 
 
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SCHOLARSHIPS 
------------ 
 
26.  (U) Chalabi requested that the United States increase 
the number of scholarships for Iraqi students to the United 
States.  He said this is very important, and we need to get 
re-start a program.  The Ambassador concurred and said he 
would send the Public Diplomacy Officer to see Chalabi to 
give him information on the opportunities to study in the 
USA.  Chalabi replied that his daughter had just completed 
her Ph.D. at Harvard, and MacMillan publishers would publish 
her dissertation, which she had researched in the Middle 
East.  He said she would return to Iraq shortly.  The 
Ambassador responded that he is looking forward to meeting 
her, as we are interested in her insights on women in Iraqi 
society. 
Khalilzad