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[casi-analysis] casi-news digest, Vol 1 #94 - 2 msgs

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Today's Topics:

   1. US Tightens Grip on Iraq's Future (WSJ) (Daniel O'Huiginn)
   2. Raiding the Iraqi piggybank (k hanly)


Message: 1
Date: Tue, 18 May 2004 14:02:12 +0100 (BST)
From: Daniel O'Huiginn <>
Subject: US Tightens Grip on Iraq's Future (WSJ)

Behind the Scenes,
US Tightens Grip on Iraq's Future
By Yochi J. Dreazen and Christopher Cooper
Wall Street Journal
May 13, 2004

Haider al-Abadi runs Iraq's Ministry of Communications, but he no longer
calls the shots there. Instead, the authority to license Iraq's television
stations, sanction newspapers and regulate cellphone companies was
recently transferred to a commission whose members were selected by
Washington. The commissioners' five-year terms stretch far beyond the
planned 18-month tenure of the interim Iraqi government that will assume
sovereignty on June 30.

The transfer surprised Mr. Abadi, a British-trained engineer who spent
nearly two decades in exile before returning to Iraq last year. He found
out the commission had been formally signed into law only when a reporter
asked him for comment about it. "No one from the U.S. even found time to
call and tell me themselves," he says.

As Washington prepares to hand over power, U.S. administrator L. Paul
Bremer and other officials are quietly building institutions that will
give the U.S. powerful levers for influencing nearly every important
decision the interim government will make.

In a series of edicts issued earlier this spring, Mr. Bremer's Coalition
Provisional Authority created new commissions that effectively take away
virtually all of the powers once held by several ministries. The CPA also
established an important new security-adviser position, which will be in
charge of training and organizing Iraq's new army and paramilitary forces,
and put in place a pair of watchdog institutions that will serve as checks
on individual ministries and allow for continued U.S. oversight.
Meanwhile, the CPA reiterated that coalition advisers will remain in
virtually all remaining ministries after the handover.

In many cases, these U.S. and Iraqi proxies will serve multiyear terms and
have significant authority to run criminal investigations, award
contracts, direct troops and subpoena citizens. The new Iraqi government
will have little control over its armed forces, lack the ability to make
or change laws and be unable to make major decisions within specific
ministries without tacit U.S. approval, say U.S. officials and others
familiar with the plan.

The moves risk exacerbating the two biggest problems bedeviling the U.S.
occupation: the reluctance of Iraqis to take responsibility for their own
country and the tendency of many Iraqis to blame the country's woes on the

Nechirvan Barzani, who controls the western half of the Kurdish autonomous
region in northern Iraq, warns that the U.S. presence in the country will
continue to spark criticism and violence until Iraqis really believe they
run their own country. For his part, Mr. Abadi, the communications
minister, says that installing a government that can't make important
decisions essentially "freezes the country in place." He adds, "If it's a
sovereign Iraqi government that can't change laws or make decisions, we
haven't gained anything."

U.S. officials say their moves are necessary to prevent an unelected
interim government from making long-term decisions that the later, elected
government would find difficult to undo when it takes office next year.
U.S. officials say they are also concerned that the interim government
might complicate the transition process by maneuvering to remain in power
even after its term comes to an end.

The fear is not a hypothetical one: The U.S.-appointed Governing Council
embarrassed and angered the U.S. by publicly lobbying to assume
sovereignty this summer as Iraq's next rulers. Those concerns are shared
by the country's top Shiite cleric, Grand Ayatollah Ali Sistani. With
Shiites making up nearly 60% of Iraq, Mr. Sistani and his followers don't
want important decisions made until an elected government -- which he
expects Shiites to dominate -- takes power.

U.S. officials say many Iraqi political leaders also tacitly approve
severely restricting the powers of the new government, even if they don't
say so publicly. "The Iraqis know we don't want to be here, and they know
they're not ready to take over," says a State Department official with
intimate knowledge of the Bush administration's plans for Iraq. "We'd love
a welcoming sentiment from the Iraqis, but we'll accept grim resignation."

Currently, the Coalition Provisional Authority, which answers to the
Pentagon, has total control of the governance of Iraq. It can issue
decrees on virtually any topic, which then immediately become law. It will
formally cease to exist on June 30. The Governing Council exists largely
as an advisory body. Its members can pass laws, but the legislation must
be approved by Mr. Bremer. The council has no control over the U.S.
military, and in practice has little influence on civil matters.

It's unclear what powers the interim government, which will be set up by
United Nations envoy Lakhdar Brahimi, will have. It will not control
Iraq's security forces or military. In theory, it will have the ability to
enforce and interpret laws on its own, though it will as of now lack the
ability to write new ones or make large changes to them.

One thing is clear: The government's actions are likely to be heavily
influenced by dozens of U.S. and Iraqi appointees at virtually all levels.

In March, for instance, Mr. Bremer issued a lengthy edict consolidating
control of all Iraqi troops and security forces under the Ministry of
Defense and its head, Ali Allawi. But buried in the document is a
one-paragraph "emergency" decree ceding "operational control" of all Iraqi
forces to senior U.S. military commanders in Iraq. Iraqis will be able to
organize the army, make officer appointments, set up new-officer and
special-forces courses, and try to develop doctrines and policies to
govern the forces. But they can't actually order their forces into, or out
of, combat -- that power will rest solely with U.S. commanders.

U.S. Maj. Gen. David Petraeus, who participated in the original Iraq
invasion, will soon assume responsibility for training the new forces.
With American commanders retaining the power to order the forces into
combat, Mr. Allawi or his successor will be left with only "administrative
control" of the forces.

Meanwhile, the media and telecom commission Mr. Bremer created will be
able to collect media licensing fees, regulate television and telephone
companies, shut down news agencies, extract written apologies from
newspapers and seize publishing and broadcast equipment.

One of the new watchdog agencies, the Office of the Inspector General,
will have appointees inside every Iraqi ministry charged with combating
malfeasance and fraud. Appointed to five-year terms, the inspectors will
be allowed to subpoena witnesses and documents, perform forensic audits
and issue annual reports.

The other watchdog, the Board of Supreme Audit, will oversee a battery of
other inspectors with wide-ranging authority to review government
contracts and investigate any agency that uses public money. Mr. Bremer
will appoint the board president and his two deputies. They can't be
removed without a two-thirds vote of Iraq's parliament, which isn't slated
to come into existence until sometime next year.

Few of the positions have been filled so far, but officials at the CPA and
the Governing Council say they expect to name the new officials within
weeks. The advisers inside the ministries are likely to be almost
exclusively American, while the inspectors and members of the various new
commissions will all be Iraqi. Individual ministers can dismiss their
advisers, but many U.S. officials assume they'll be reluctant to do so for
fear of antagonizing the U.S.

The nerve center of the U.S. presence in Iraq will be a massive new
embassy. CPA officials recently decided that most employees of the new
embassy will remain in a former palace used by Saddam Hussein even though
the building is seen by many Iraqis as a symbol of Iraqi sovereignty. The
embassy needs the space: It will ultimately employ approximately 1,300
Americans, as well as 2,000 or more Iraqis. The current occupation
authority employs 1,500 people.

The U.S. plans to convert a nearby building into the formal embassy that
incoming U.S. ambassador John Negroponte can use for ceremonial functions.
In an unusual move, two of Mr. Negroponte's top deputies will also have
ambassadorial rank. James Jeffrey will become the deputy chief of mission
at the embassy. Blunt and often profane, Mr. Jeffrey, a former Army
special forces officer, is currently the ambassador to Albania and has
held senior posts in Turkey and Kuwait. Ron Newman, currently the
ambassador to Bahrain, also has a military background and is likely to
join the embassy in Iraq in a senior position such as defense attach=E9.

The U.S. push to continue guiding events in Iraq has been led by the State
Department, where officials have grown convinced that placing the country
under full Iraqi control now would plunge it deeper into violence and
political turmoil, according to people familiar with the matter. U.S.
officials had once talked of occupying Iraq for several years, a period
more in keeping with the precedent set by the seven-year occupation of
Japan after World War II. Last November, however, the White House
accelerated the timetable. Despite a wave of bombings the previous month,
the administration believed the insurgency was limited to a small number
of what Defense Secretary Donald Rumsfeld called "dead-enders."

The Bush administration also felt Iraq's Sunni minority, which had
controlled Iraq under Mr. Hussein, had been neutralized by the disbanding
of the army and the firing of tens of thousands of government officials.
Iraq's Shiite majority was seemingly unified behind Mr. Sistani, who
counseled his followers to cooperate with the coalition. And Iraq's ethnic
Kurds, who controlled the country's north, had moderated their long-held
demands for full independence.

Many of those assumptions haven't yet panned out. Sunnis angry over their
forced disenfranchisement have put up a stiff resistance to the U.S.
occupation in cities like Fallujah, and Iraq's fledgling security forces
have been unable or unwilling to help fight them. Thousands of Shiites
have taken up arms against the U.S. under the flag of Muqtada al Sadr, an
anti-American cleric once dismissed by Washington as a bit player in Iraq.

The Kurds, meanwhile, remain deeply wary of joining up with the rest of
the country. With the violence surging in recent weeks, the State
Department official with knowledge of the administration's plans says the
U.S. "realized that what we put on the table in November wasn't flying."

U.S. officials settled on making an array of appointments intended to
allow them to influence the interim government. The CPA official charged
with setting up the new embassy, John C. Holzman, downplays the
possibility of disputes, and says the role of the advisers will change
after June 30 because they will no longer be answering to an occupation
authority with full authority over Iraq.

"There will be a huge difference because we're not going to be issuing
orders anymore," he says. "We won't be the sovereign here anymore."

But many Iraqis and Americans concede that friction is all but inevitable.
If recent events are any indication, the most serious disagreements
between the U.S. and the new government could arise over the best strategy
for fighting the ongoing insurgency. When fighting flared in Fallujah and
Najaf, U.S. commanders ordered newly trained Iraqi units into combat
alongside American forces, but the Iraqis proved largely ineffective. Many
units deserted entirely, while others joined the insurgents.

It's also unclear if Iraqi political leaders will want local units to
fight -- especially if the enemy is other Iraqis. The U.S. decision to use
heavy weaponry like helicopter gunships against targets in Fallujah caused
the resignations of two Iraqi political leaders who had been appointed by
the U.S. almost a year earlier, and sparked searing denunciations of the
coalition by numerous other Iraqi officials. The Iraqis insisted on a
nonviolent solution to the dispute and accused the U.S. of acting with a
heavy hand and causing needless civilian casualties.

If the U.S. pressed ahead with the offensive anyway, it would risk
embarrassing the new government and persuading ordinary Iraqis that the
body is powerless. But if it gave in, American commanders could find
themselves hamstrung in the fight against insurgents.

Bill Spindle contributed to this article

Daniel O'Huiginn
07745 192426
01223 704075
M13, Queens College


Message: 2
From: "k hanly" <>
To: "newsclippings" <>
Subject: Raiding the Iraqi piggybank
Date: Tue, 18 May 2004 10:39:22 -0500

Raiding Iraq's Piggy Bank
If the Bush administration is truly committed to the nation's sovereignty,
it should let Iraqis retake control of their own oil revenues.

- - - - - - - - - - - -
By Andrew Cockburn

May 17, 2004 | As the occupation of Iraq dissolves further into bloody
chaos, the colonial overseers in Baghdad are keeping their eyes fixed on
what is really important: Iraq's money and how to keep it. Whatever apology
for a "sovereign" Iraqi government is permitted to take office after June
30 -- and U.N. envoy Lakhdar Brahimi admits in private that he "has to do"
whatever the Americans tell him to do -- the United States is making sure
that the Iraqis do not get their hands on their country's oil revenues.

We are talking about big money here: Iraq's oil exports are slated to top
$16 billion this year alone. U.N. Security Resolution 1483, rammed through
by the United States a year ago, gives total control of the money from oil
sales -- currently the only source of revenue in Iraq -- to the occupying
power, i.e., the United States. The actual repository for the money is an
entity called the Development Fund for Iraq, which in effect functions as a
private piggy bank for Paul Bremer's Coalition Provisional Authority. The
DFI is directed by a Program Review Board of 11 members, just one of whom is

In case anyone should be moved to challenge this massive looting exercise in
the courts, President Bush followed up the May 2003 resolution with
Executive Order 13303, which forbids any legal challenge to the development
fund or any actions by the United States affecting Iraq's oil industry.
Since then, the Iraqi oil ministry, famously secured by the U.S. military
during post-invasion riots and looting, has been kept under the close
supervision of a senior U.S. advisor, former ExxonMobil executive Gary

Now, whatever President Bush or his officials may spout in public about the
transfer of power being a "central commitment," there is absolutely no
intention in Washington of changing the arrangement concerning oil revenues.
Queried on this crucial topic, the CPA has stated that it will continue to
control the revenues beyond June 30 "until such time as an internationally
recognized, representative government of Iraq is properly constituted."
Whatever entity is unveiled for June 30, it apparently will not fit these
requirements, so the hand-over date is, essentially, meaningless.

The development fund is not solely dependent on oil money -- of which it had
collected $6.9 billion by March. Under the terms of 1483 the DFI also took
over all funds -- $8.1 billion so far -- in the U.N.'s oil-for-food program
accounts (Russian and Chinese support for the resolution was bought by
agreeing to keep the oil-for-food racket running for a few more months);
various caches of Saddam Hussein's frozen assets around the world, amounting
to $2.5 billion; and further cash left behind by Saddam inside Iraq,
estimated at about $1.3 billion. The money is kept in an account at the
Federal Reserve Bank in New York.

In theory, these vast sums were to be spent in an open, transparent manner
solely for the benefit of the Iraqi people. But how can we be sure they have
been? Along with the development fund, there was meant to be a supervisory
group, the International Advisory and Monitoring Board -- made up of
officials from the World Bank, International Monetary Fund, U.N. and Arab
Fund for Development -- to oversee where the money goes. However, according
to a trenchant report from the Soros Foundation-funded group Iraq Revenue
Watch, which has been keeping an informed eye on the Iraq boondoggle,
because of dogged resistance by the occupation authorities, combined with
bureaucratic sloth by the IAMB, the board got its first look at the books
only this March, 10 months late. Needless to say, there are no Iraqis on the
board, though two have recently and reluctantly been designated as

Free from independent scrutiny, the DFI piggy bank has disbursed $7.3
billion. For months Bremer's merry men refused to disclose even the most
minimal information on where the money was going, and even now the CPA
releases only the most generalized breakdown, for example: "Restore Oil
Infrastructure -- $80,197,742.82."

Assuming that line item is accurate, that would be money paid to
Halliburton -- which as it happens is a fine example of how the piggy bank
has been used by the administration to get around irksome constitutional
restrictions on government spending without congressional approval.

Late last year, when the stench of Halliburton contracts for Iraq became so
strong that even Congress noticed, the $18.4 billion supplemental
appropriations bill for Iraqi reconstruction specifically forbade the award
of any contract worth more than $5 million that had not been competitively
bid. This might have put a spoke in the Halliburton wheel, except that the
CPA simply reached into the DFI to pay Dick Cheney's old company.

There has been no protest from Congress over this egregious flouting of its
fundamental role as controller of the government's checkbook. No one should
be surprised, however, given that there is specific legislation on the
books -- passed over fruitless objections from Democrats -- exempting the
CPA from any investigation by the Government Accounting Office or any
requirement to appoint an inspector general, as mandated for all government
agencies in a 1990 law.

For most of the past year, Iraqis have complained about ill treatment and
torture meted out by the army of occupation. No one paid much attention
until the Abu Ghraib photographs became public. Over the same period, in
several visits to Iraq, I heard Iraqis complaining with equal vehemence
about the generalized corruption of the occupiers -- corruption that extends
from the top right down to ordinary soldiers robbing Iraqis of cash and
valuables during house searches and vehicle checks, and military and CPA
officials at every level demanding bribes and kickbacks.

These complaints get the same brushoff treatment as the torture and abuse
victims at Abu Ghraib got until what was happening at the prison became
widely known. A photo of CPA officials giving the thumbs up and pointing to
their wallets might make a difference. In the meantime, don't expect the
administration to give Iraqis their money back anytime soon.

- - - - - - - - - - - -

About the writer
Andrew Cockburn is coauthor of "Out of the Ashes: The Resurrection of Saddam
Hussein" and has reported from Iraq for years.

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