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.

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Time Line an Important Achievement
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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.

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Supports Package Deal Meeting in Iraq
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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.

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Focus on Core Sunni/Shiite Disputes
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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.

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Federalism, But Not Immediately
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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.
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Oil
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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