C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 003410

SIPDIS

E.O. 12958: DECL: 08/18/2025
TAGS: PGOV PHUM IZ
SUBJECT: CONSTITUTION UPDATE: SHIA AND KURDS TRYING TO
CLOSE DEAL AS EMBASSY WORKS TO KEEP SUNNI ARABS IN GAME

Classified By: AMBASSADOR KHALILZAD, REASON 1.5 (B) AND (D).


1. (C) Summary: The Embassy is trying to bridge the gaps on
an agreed constitution text between the Shia Coalition and
Kurdish Alliance that control the National Assembly. The
major issues still separating Shia Coalition and the Kurdish
Alliance are guarantees about sustained national unity,
provincial or national control of oil revenues and future
hydrocarbon sector development, the division of national and
provincial authorities and the future of Kirkuk. Spurred by
the Embassy, the Kurds put forward proposals on August 18
that leaned in favor of the provinces, and the initial
response from the Shia was that these leaned too far away
from the proper role for the central government. The Shia
did agree to drop the idea of a constitutional council. As
of August 18 late afternoon we await Shia responses to the
Kurdish proposals tabled midday. Meanwhile, the Embassy was
also reviewing constitutional issues with the Sunni Arab
negotiators whose positions, especially on federalism, were
frequently at variance with Kurdish and Shia thinking, but
becoming more focused. End Summary.


2. (C) On August 18 the Ambassador was trying to help close
agreement on a text between the Kurdish Alliance and the
Shia. In response to a request from the Shia Coalition (that
Shia Coalition leader Abdel Aziz al-Hakim said originated
with Ayatollah Sistani), the Embassy convinced Kurdish leader
Masud Barzani to put forward proposals on the following five
areas:

-- that "Iraq is a free union of people, land and
sovereignty and as long as this constitution is upheld its
unity will be preserved."

-- that "authorities of the central government will be
limited to those laid out in the Transitional Administration
Law, and the other authorities will be shared between the
central government and the governments of the provinces an
governorates. Where there is a conflict, the priority goes
to the law of the provinces."

-- that "Ownership of the oil and gas exploited from current
fields goes to the Iraqi people. The federal government will

undertake the management of resources in partnership with the
governments of the provinces or governorates that produce
them and distribute them in a fair manner that corresponds to
the population distribution in all areas of the country, with
the provision of a set allotment for a set period for damaged
areas deprived under the former regime in a way that ensures
balanced development in the different parts of the country,
and this will be regulated by law."

-- that "As for the future, the provincial or governorate
government will present in agreement with the central
government a new strategic policy for oil, and this will be
regulated by law."

-- that the process launched by Article 58 to resolve the
Kirkuk dispute "would end in a referendum in Kirkuk and the
disputed territories to determine the inhabitants' desires."

-- that the draft constitution's reference to establishing a
constitutional council be dropped entirely.


3. (C) The Shia agreed to drop the constitutional council
from the text. Prime Minister Jafari, Coalition leader Abdel
Aziz al-Hakim and Constitution Committee chair Hamudi
rejected the Kurdish language about a "free union," but they
liked the reference to maintaining Iraq's unity. They likely
will make a counterproposal. They were not enthusiastic in
private about the resource language and non-committal about
the language on central government and provincial government
laws. They also had no comment on the Kirkuk language.


4. (C) The Kurds and Shia prefer the Ambassador shuttle
between them before coming back to another large meeting of
Kurds and Shia like the one August 18 morning. We still have
to contend with Kurdish objections to wording on Islam and
personal status in the constitution.


5. (C) DCM and British Ambassador August 18 met meanwhile
with a group of Sunni Arab leaders to review issues related
to the text. These discussions moved forward slowly,
especially on the issue of federalism. At the end, the
Sunnis appeared to grasp that their best strategy would be to
focus with us on a few key issues, rather than obsess over
every detail of every sentence in the constitution. In
particular, we got grudging awareness that there had to be
acknowledgement of federalism for a Kurdish region now, with
the choice of governorates joining into provinces ) and the
legal mechanisms for that to happen ) made after the
elections and the seating of the next national assembly.
Despite the slow progress, the Sunnis were at pains to
reassure us that they were sticking with the political
process. It is likely that the Sunni Arabs and former Prime
Minister Allawi's Iraqiya bloc, the third largest in the
National Assembly, will be brought into talks with the Kurds
and Shia on the morning of August 19.


Khalilzad