TFUS01: GOK BEGINS TO CLARIFY ITS INTENTIONS ON

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004050

SIPDIS

STATE FOR NEA, EB

E.O. 12958: DECL: 09/14/2015
TAGS: AEMR EAID PREL ENRG KU US
SUBJECT: TFUS01: GOK BEGINS TO CLARIFY ITS INTENTIONS ON
BREAKDOWN OF HURRICANE KATRINA ASSISTANCE

REF: KUWAIT 3947

Classified By: Ambassador Richard LeBaron. Reasons: 1.4 (b) and (d)


1. (C) Summary/Comment. Ambassador was convoked to the
Ministry of Foreign Affairs on September 14 by Khaled
Al-Babtain, the acting MFA Under Secretary. Al-Babtain
clarified that the GOK 500M USD assistance offer would be
comprised of 100M USD in cash for humanitarian assistance
(HA); 300M USD in petrochemical products; and 100M USD in jet
fuel for use by U.S. forces in Iraq. He explained that the
first 100M in HA would be directly given to the Bush-Clinton
Fund (25M),the Red Cross (25M),with the remainder (50M)
going to the Kuwaiti Red Crescent for dispersal to the Red
Cross. Al-Babtain promised to provide specifics on dispersal
modalities for these donations. He welcomed the Ambassador's
recommendation to sell the petrochemical products on the
market and donate cash proceeds to relief efforts, although
he is not the decision-maker on the specifics of this
process. End Summary


2. (C) COMMENT FROM AMBASSADOR: The clarification on the
modalities for accepting the Kuwaiti aid will be an iterative
process that will take some time. Most of the aid will also
be subject to National Assembly approval, and the Assembly
does not come back into session until mid-October. The offer
of jet fuel is in direct response to a CENTCOM request for
additional fuel for operations in Iraq. This will mean that
DOD does not have to buy the fuel (and thus effectively picks
up $100 million of DOD costs incurred for Katrina aid). My
interlocutor today welcomed our idea on turning the rest of
the fuel contribution into cash, but he does not have the
last word on this and the idea will need to be
operationalized with the KPC experts. I suggest that
Washington start talking to the KPC rep there about this
aspect of the contribution. Finally, the overall
distribution of the funds represents a cabinet decision by
the Kuwaitis and the USG should not put itself in a position
of trying to re-jigger the distributions or micro-manage the
timing. We need to keep in mind that this aid is nearly
equal to all the other international aid promises combined,
and manage our acceptance with efficiency, but also with
patience and grace. END COMMENT.


3. (C) On September 14, Ambassador met with Khaled Al-Babtain
(at his request),the Acting Under-Secretary at the Ministry
of Foreign Affairs (MFA),to discuss the details and
modalities of the GOK's 500 million USD Hurricane Katrina
contribution. Ambassador shared with Al-Babtain the
NSC-approved points detailing the USG position and thanked
Al-Babtain for the GOK's generous offer. Ambassador asked
for clarification on the GOK offer and the expected timing of
aid dispersal. Al-Babtain explained that the GOK was also
eager to move forward in planning. Reading from a decision
memo of the Kuwaiti Council of Ministers (cabinet),Babtain
provided the GOK's intentions on the breakdown of their aid.
It will be:

--100M USD cash for humanitarian assistance
--100M USD in jet fuel for U.S. forces in Iraq
--300M USD worth of petrochemical products


100 Million USD Cash for Humanitarian Assistance
-------------- ---


4. (C) He explained that the 100M cash contribution for
humanitarian assistance would be distributed as follows:

--25M USD directly to the Bush-Clinton hurricane relief fund
(to be done on 9/15 in New York)
--25M USD contribution to the American Red Cross (timing to
be determined)
--50M USD dispersal to the Kuwaiti Red Crescent to
coordinate with the American Red Cross (timing to be
determined)


5. (C) Al-Babtain was unaware about the specific timing of
dispersals beyond the 25 million USD for the Bush-Clinton
Fund. He assured the Ambassador that he would seek
clarification on the timing and other details of the
humanitarian assistance dispersals.

100 Million USD in Jet Fuel
--------------


6. (C) This portion was forecast by the Energy Minister on
September 5 (see reftel, para 4). Al-Babtain pointed out
that 100M USD worth of jet fuel would be provided for U.S.
military operations in Kuwait. He noted that the fuel offer
was in response to the USG request for additional fuel to
meet operational requirements in Iraq. Asked about
modalities for this portion, Ambassador suggested strongly
that this portion be handled by Defense Energy Support Center
(for U.S.) and Kuwait Petroleum Company.

300 Million USD in Petrochemical Products
--------------


7. (C) With regard to the remaining 300M USD, Al-Babtain
welcomed the U.S. input recommending sale of the
petrochemical products on the open market and transfer the
cash proceeds directly to hurricane relief efforts. The
Ambassador shared with Al-Babtain the NSC-approved points
explaining the efficiencies afforded by cash contributions
and the benefit the added supply would have on the global
market. Ambassador passed along the non-paper as a reference
outlining the USG position.

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LEBARON