MEETING BETWEEN DEPUTY SECRETARY NEGROPONTE AND

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 001991

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E.O. 12958: DECL: 06/16/2017
TAGS: ECON ENRG PREL
SUBJECT: MEETING BETWEEN DEPUTY SECRETARY NEGROPONTE AND
DEPUTY PRIME MINISTER BARHAM SALIH


Classified By: AMBASSADOR RYAN C. CROCKER for Reasons 1.4 (b) and (d).


1. (C) SUMMARY: Deputy Secretary John Negroponte, Senior
Advisor to the Secretary of State David Satterfield, and
Ambassador Ryan Crocker met with Deputy Prime Minister Barham
Salih (DPM) to discuss a range of issues from security and
budget execution to the draft hydrocarbon-related laws and
relations with Iran and Syria. END SUMMARY.


2. (C) On June 14, 2007, DepSec, Senior Advisor to the
Secretary of State David Satterfield (S/I),and the

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Ambassador met with Deputy Prime Minister Barham Salih to
discuss a number of topics. The DepSec noted that this was
his first visit to Iraq since becoming the Deputy Secretary,
and while encouraged by what he has seen in Al-Anbar
province, he gave other areas he visited mixed reviews. He
reported that officials in Mosul complained that the central
Government of Iraq (GOI) was not devoting needed attention to
the area as demonstrated by the fact that the Ministers of
Interior and Defense had not visited the area since taking
office.


3. (C) The DPM stated that Al-Anbar and Mosul were
experiencing reconstruction difficulties because contractors
were still fearful of the security situation. He also stated
that other areas like Kirkuk and Kut were doing much better
in their reconstruction efforts.


4. (C) The DepSec observed that budget execution by the
various Iraqi ministries appeared to be a problem. The DPM
noted that budget execution was improving, but there were
other contributing problems including security and capacity.
The DPM stated that because of the current security
situation, many valuable technocrats have left the
government, and while procurement requirements and other
regulatory issues appear to complicate efforts to execute
that budget, the GOI was attempting to "fast-track"
resolution of these issues. He also anticipated that a
review of the procurement and other procedures as part of a
supplementary budget exercise would help with the GOI,s
budget execution efforts.


5. (C) The DepSec observed that the GOI still had some
unfilled cabinet posts. The DPM observed that this presented
a "golden opportunity" to fill these posts with individuals
who could contribute to the stability of, and confidence in
the government. He also identified the GOI's effort to
streamline the cabinet by, perhaps, having only five
ministers instead of the current forty.


6. (C) The DPM noted that the Ministers of Communications,
Public Works, Electricity, and Water were performing well.
The Minister of Oil, however, has manifested an inability to
manage the issues confronting that ministry. The DPM stated
that he anticipates that the passage of the suite of
hydrocarbon laws would give a beneficial structure to the
Ministry of Oil and be helpful to efforts to attract the
interest of foreign oil companies. He noted, however, that
in his opinion, the oil companies will not be interested in
the Iraqi oil industry until they see better management in
the Ministry of Oil. (Note: The DPM observed that in the
current political climate, production sharing agreements were
not favored, but that he hoped this situation could be
overcome. End Note.)


7. (C) The DPM stated that pipeline security was a problem,
but that the Prime Minister had authorized the use of Kurdish
forces to assist with the effort to secure the pipelines.


8. (C) The DepSec stated that he had had productive
meetings with President Masoud Barzani and Prime Minister
Nechirvan Barzani of the Kurdish Regional Government
regarding the Revenue Management law negotiations. The DPM
stated that they would meet on this topic tomorrow (June 15)
and discuss a few suggested changes to the existing draft
law. He anticipated that the parties could resolve all
outstanding issues, conduct a meeting of the Cabinet on
Sunday morning (June 17),and announce the closure of all
issues on that same day.


9. (C) The DepSec stated that he had spoken with Prime
Minister Maliki about Iraqi problems with Iran and Syria, and
that those countries were becoming increasingly aggressive in
their actions. Ambassador Crocker noted that Iran and Syria
were becoming increasing dangerous and confident in their
aggression. The DPM noted that both countries had a major
stake in Lebanon and were searching for similar successes in
Iraq.


10. (C) The DepSec and DPM concluded the meeting with a
discussion of internal Iraqi ethnic and sectarian issues,
specifically about the influence of Grand Ayatollah Ali

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al-Sistani. Ambassador Crocker stated that he would like to
explore ways to have a more direct line of communication with
Sistani. Offering that the Ayatollah's son would be an
avenue worth pursuing, the DPM noted that Sistani is very
engaged and interested in Iraqi and American politics, and
stated that perhaps Sistani,s foundation in Qum could offer
a better, more direct avenue of communication. The DPM noted
that in his only meeting with Sistani, Sistani stated that,
in his opinion, the benefits of an American presence in Iraq
would be available only for the next eighteen months.
CROCKER