DPM SALEH DISCUSSES WAY FORWARD ON HYDROCARBONS

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 002142 SIPDIS SIPDIS E.O. 12958: DECL: 06/27/2017 TAGS: IR IZ PGOV PREL SUBJECT: DPM SALEH DISCUSSES WAY FORWARD ON HYDROCARBONS LEGISLATION, MASHHADANI Classified By: Ambassador Ryan C. Crocker for reasons 1.4 (b) and (d). ¶1. (C) SUMMARY: In a June 24 meeting, Deputy Prime Minister Barham Saleh and the Ambassador discussed the remaining hurdles to passing the hydrocarbons framework and revenue management laws in the Iraqi Council of Representatives. They discussed the current impasse over the removal of Council of Representatives Speaker Mahmoud Mashhadani and the Anfal trial verdict. Saleh updated the Ambassador on the status of the 607 agreement and budget execution review and conveyed Iranian concern about Maliki and the Erbil 5. END SUMMARY. -------------- Way Forward for Hydrocarbons -------------- ¶2. (C) The Ambassador said the Iraqis need to begin thinking actions required after the revenue management law passes the Council of Ministers (CoM). The Iraqis must think about getting the revenue management law through the Shura Council and on to the Council of Representatives (CoR),as well as how to effectively manage it in the CoR. (Note: PM Maliki decided to table the law at the CoM at the last minute in the face of Sunni Tuwafuq party bloc concerns. End note.) Saleh said that only the revenue management law will need a vote on June 26, after which it does not technically need to go to the Shura Council, but they can get it through in 2-3 days. He identified potential obstacles to its passage in the CoR, including the uncertain status of CoR Speaker Mashhadani. He said the laws would have to go through two or three committees. If the Iraqi Islamic Party can get Tawafuq under control, then the CoR can get the law through smoothly. Saleh intended to recommend that Oil Minister Sharistani, Minister of Planning Ali Baban, and himself brief the CoR on the law. Both Saleh and the Ambassador agreed that a PR campaign on this should begin when the law passes the CoM. -------------- -- Tawafuq: We Want to Remove Mashhadani Ourselves -------------- -- ¶3. (C) Saleh said Baban told him Tawafuq wants to remove Mashhadani itself. It proposed reinstating him for two months and then removing him once CoR reconvenes in September. Saleh also proposed that Mashhadani receive a "retirement" package should he choose to resign. The Ambassador said that the problems with the Speaker could seriously hinder efforts to get key legislation like the hydrocarbon laws passed before the August recess. The Ambassador suggested that if there was no clear solution, then Mashhadani's removal should wait until after the hydrocarbon law was finished. ¶4. (C) Saleh explained that Tawafuq had resolved not to give the current government "a success." He observed an emerging dynamic between Baban and Iraqi Vice-President and Iraqi Islamic Party leader Tariq al-Hashimi; Baban was inclined to take the opposing side of Hashimi's arguments. The Ambassador said that Tawafuq needed to give the US a success. Saleh concurred but pointed out that, should Hashimi move too far, Tawafuq would disintegrate. ¶5. (C) According to Saleh, the Kurds do not like Mashhadani, but they have stayed out of the forefront of this effort to remove him. If Mashhadani retains the speakership, then it would be a seen as a failure of the parliament for keeping him after they voted to remove him. The Ambassador reiterated that a deadlock preventing the key legislation from passing before the CoR recess would have serious repercussions in Washington. -------------- Anfal Trial Verdict "Historic" -------------- ¶6. (C) Saleh declared that the Anfal trial verdict delivered earlier that day showed the world why the liberation of Iraq from the Saddam Regime was crucial and an "historic change." Saleh agreed that a press conference featuring both GOI leaders and survivors or families of the victims of the Anfal would remind the world of the brutality of the regime. -------------- 607 Agreement -------------- ¶7. (C) Saleh expressed doubt that the CoM could achieve a deal on the framework for the 607 agreement, but he said CoM had approved one agreement that would get them "over the first hurdle." CoM had agreed to give the Ministry of Electricity authority to sign deals with the US and others to BAGHDAD 00002142 002 OF 002 import gas for use in making electricity. He argued that the decision did not have to go to parliament because it was simply a solution to a delivery problem that the US could help solve. He passed the Ambassador a copy of the signed decision. -------------- Budget Review -------------- ¶8. (C) Saleh remarked that GOI budget execution has proceeded much better than last year, and the GOI is preparing a budget execution review. All the ministries are aware that a review is coming, and the budget for next year is looming. Saleh said they have already told a number of ministries that they plan to launch the program in a week to 10 days. This meant the supplementary budget would get pushed to July as it has to go through the CoR. He noted that they could also reroute funds through the Ministry of Planning. The Ambassador observed that if the review slides, then there will be problems on the back end. -------------- -------------- Iranians Concerned about Maliki Government, Erbil 5 -------------- -------------- ¶9. (C) Saleh said the Iranian Ambassador to Iraq was visibly concerned about the Maliki government and the incidents in Amarah which allegedly involved British soldiers and resulted in the deaths of 20 civilians. Saleh thought another Amarah would shake the PM's government. The Iranians conveyed to Saleh their irritation at Maliki's blaming of Iran for many of the problems in Iraq. ¶10. (C) According to Saleh, the families of the Iranian detainees known as the Erbil 5 want to visit them, but the Iranian Ambassador and Consul General would like to see them first. He reminded the Ambassador that the 5 were in the Kurdistan Region at the invitation of the Kurdish leadership. CROCKER