KURDISH LEADER BARZANI SUPPORTS "PACKAGE DEAL" IDEA

C O N F I D E N T I A L BAGHDAD 003454 SIPDIS SIPDIS E.O. 12958: DECL: 09/13/2016 TAGS: PGOV PINS PNAT IZ SUBJECT: KURDISH LEADER BARZANI SUPPORTS "PACKAGE DEAL" IDEA REF: A. BAGHDAD 3392 ¶B. BAGHDAD 3389 ¶C. BAGHDAD 3391 ¶D. BAGHDAD 3357 ¶E. BAGHDAD 3405 Classified By: Ambassador Khalilzad for reasons 1.4 (b) and (d). ¶1. (C) SUMMARY: Kurdistan Regional Government (KRG) President Masoud Barzani told the Ambassador September 13 that he would support a "package deal" by Iraq's political leaders on federal region formation, constitutional questions, militias, hydrocarbons and other issues (ref A). Barzani feels any package deal conference between leaders should take place in Iraq, not abroad, and should focus on core Sunni/Shiite disputes. Barzani said he would not support any law on regions that lacked broad consensus. The Ambassador told Barzani it would be unwise for the KRG to press legislation on oil before there is an agreement on the issue with the central government. END SUMMARY. -------------- Time Line an Important Achievement -------------- ¶2. (C) Barzani said that the Iraqi Policy Council on National Security (PCNS) agreement on a timeline for political actions (ref B) is an important achievement. Barzani received a copy of the timeline from Iraqi President Talabani. -------------- Supports Package Deal Meeting in Iraq -------------- ¶3. (C) Barzani told the Ambassador he supports the idea of a meeting of Iraq's political leaders to make a package deal involving tradeoffs on some of Iraq's thorniest issues. Barzani wants the conference to take place in Erbil, in the Kurdish region, but recognizes the controversy over his refusal to fly the Iraqi flag in the KRG (refs C and D) complicated this idea. If Erbil is not possible, Barzani opposes holding the conference abroad, for example, in Amman. He views Baghdad as the only other viable site in Iraq, perhaps rotating between different leaders' residences. -------------- Focus on Core Sunni/Shiite Disputes -------------- ¶4. (C) Barzani told the Ambassador package deal talks must focus on core Sunni/Shiite disputes, and the struggle for Baghdad is the heart of the matter. Shiites, with Iranian help, are fighting to break the "Sunni belt" Saddam created surrounding Baghdad; at the same time, Shiites see Sunnis as trying to make inroads into the majority Shiite areas adjacent to the roads between Baghdad and Hilla and Baghdad and Kut. Barzani said Sunni/Shiite tensions cannot be resolved without meeting these issues head-on. Resolving these types of issues was how he and rival Kurdish leader (currently President) Talabani came to an understanding, Barzani added. ¶5. (C) In addition, Barzani said that the Shia must publicly assert independence from Iran via a high-profile statement by a senior Shia spokesperson such as PM Maliki. Shiites must agree to disband their militias, the Badr Corps and Sadrist Mahdi Army (JAM); Sunnis must agree to stop their insurgency against the GOI. Barzani said he believes Iran is trying to make the JAM into the Hizbullah of Iraq, and that Iran believes instability in Iraq serves Iran's national interests. -------------- Federalism, But Not Immediately -------------- ¶6. (C) The Ambassador urged Barzani to work for a federalism formula that would have broad support. The Ambassador warned Barzani of serious problems if legislation on such a key issue passed the CoR by simple majority, without broader consensus. National reconciliation should trump federalism for now, the Ambassador told Barzani. ¶7. (C) Barzani reiterated his support for federalism, but said one possible compromise would be to pass a law now but to delay implementation for three to four years. Barzani suggested there could be two federal units, one Arab and one Kurd, but said the exact structure is not important to him. Whatever the structure, he insisted there must be a Kurdish region. However, he agreed not to support an immediate law that lacked broad consensus. --- Oil --- ¶8. (C) The Ambassador told Barzani it would be unwise for the KRG to pass legislation regarding oil resources before there is an agreement with the central government. The Ambassador noted that progress has been made towards agreement, but a unilateral step by the Kurds could undermine efforts for the reconciliation process. The oil law should strengthen national unity. Barzani said besides a fair revenue sharing, he favors the building of a pipeline from the North across Anbar province to Jordanian and Saudi ports and the building of refineries in the same region to give Sunni Arabs a share in the Iraqi oil industry. Barzani appeared open to various formulae and compromises on this issue. He told the Ambassador he had heard the USG is discouraging investments in the oil sector in Kurdistan. He wanted to know whether these reports were accurate. SPECKHARD