US embassy cable - 05BAGHDAD3822

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 003822 
 
SIPDIS 
 
E.O. 12958: DECL: 09/14/2015 
TAGS: ECON, ELAB, IZ, MCAP, PGOV, PINS 
SUBJECT: VETERANS' PENSION REFORM STALLED 
 
Classified By: COUNSELOR FOR POLITICAL MILITARY AFFAIRS DAVID C. LITT F 
OR REASONS 1.4 B AND D 
 
1.  (U) SUMMARY:  On August 19, the Council of Ministers 
reached a preliminary consensus to grant veteran status to 
qualified personnel released from active duty in 2003. If 
approved by law, it would bring the total number of military 
pensioners in Iraq to nearly 800,000 (80-90% Sunni). Military 
pension reform could have an enormous impact on giving Sunni 
Arabs a stake in the developing political process. However, 
no public action on this subject has taken place since the 
meeting. END SUMMARY. 
 
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Dissolving the Army 
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2.  (U)  On May 23, 2003, the CPA Administrator dissolved the 
Iraqi military per CPA Order Number Two. This action reduces 
the possibility that Ba,athists in official positions could 
interfere with reconstruction, and allow for the 
reconstitution of the army from the ground up. 
 
3.  (U)  An emergency monthly stipend was given to each of 
the personnel released from active duty as a temporary form 
of assistance. It was expected that by the end of 2004, 
retirement-eligible stipend recipients would begin receiving 
pensions, and most other stipend recipients would have found 
jobs. Due to the slow growth in employment and delays in 
pension reform, the stipend program was extended through the 
end of 2005. The Iraqi government and Embassy have been 
concerned about the ramifications of removing the stipend, 
and have sought to extend the stipend through 2006. 
 
4.  (U)  The stipend is given to approximately 350,000 
people, many of whom were otherwise eligible for retirement 
from the Iraqi military when they were dismissed. Recent 
reform efforts have focused on codifying the status of the 
population that receives this stipend, within a legal 
framework. 
 
5.  (U)  The Council of Ministers made the following specific 
recommendations, per our translation from the Azzaman 
newspaper on August 20: 
 
a. Employees of entities dissolved under CPA Order Number Two 
and military recruits who completed 15 years of service and 
who have not been found to be former Ba,athist leadership 
shall receive retirement benefits. 
 
b. A temporary committee shall be formed, comprised of: 
members of the dissolved military offices; representatives of 
the Iraqi Veterans Agency; and representatives of the 
Ministry of Finance Pension Office. This committee will 
report directly to the General Secretariat of the Council of 
Ministers and contact all those eligible for retirement 
benefits, check their documents and ensure that all paperwork 
is completed in accordance with regulations. 
 
c. All names of those who apply for retirement benefits will 
be subject to background checks for membership in the Ba,ath 
party. 
 
d. Any employee who served for less than 15 years of active 
duty will be given a lump-sum payment of two months salary 
for each year of service, based on that person,s final rank 
at current salary. 
 
e. The retired person will have the right to be reinstated 
with a government entity in accordance with the applicable 
laws and provisions. 
 
f. Any employee found to have had significant Ba,ath party 
ties following a de-Ba,athification review will be excluded 
from all benefits. 
 
6.  (C)  There was significant disagreement within the 
Council of Ministers on item f, the proposal to deny benefits 
to veterans with significant Ba,ath party ties. Deputy Prime 
Minister Chalabi preferred that former Ba,athists be given 
benefits. A majority of the Ministers agreed with Chalabi, 
but the reform proposal has stalled. (COMMENT: Though no 
evidence exists or public steps have been taken since the 
August 19 meeting, it is likely that the Iraqi Ministers, 
desire to give former Ba,athists benefits is an effort to 
curry favor with Sunnis who were senior leaders in the Iraqi 
government under Saddam Hussein, but who are willing to 
embrace current political developments and the new Iraqi 
government. END COMMENT.) 
Satterfield