SHIA COR DEPUTIES: DE-BAATH LAW MOVING FORWARD,

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 003152

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/04/2017
TAGS: PGOV IZ
SUBJECT: SHIA COR DEPUTIES: DE-BAATH LAW MOVING FORWARD,
HYDROCARBON LAW GOING NOWHERE

REF: A. BAGHDAD 3119 (SADRISTS LEAVE ALLIANCE)

B. BAGHDAD 3132 (NO CONFIDENCE VOTE?)

Classified By: Political Counselor Matt Tueller for reasons 1.4 (b) and
(d).


1. (C) Summary: ISCI Deputy Humam Hamudi and Da'wa Deputy
Ali al-Adib told us September 18 in separate meetings that
the De-Baathification Law is on track for CoR presentation
and approval. A CoR source later told us the draft law could
reach the CoR Legal Committee as early as September 20, with
CoR deliberation to follow. Discussions over the draft
hydrocarbon law have stalled and both Hamudi and Adib cast
full blame on the Kurds, particularly Masoud Barzani and the
KDP. They said they have been unable to overcome KDP
insistence on pursuing a regional oil law which would allow
the Kurds to get their share of national oil revenues while
also enjoying undivided proceeds from oil and gas produced
within the Kurdish region. Adib said that President Talibani
has played a cooperative role in the discussions and has been
enlisted to try to reason with Barzani. As representatives
of the leading Shia parties that comprise half of the Group
of Four alignment, Hamudi and Adib displayed an utter lack of
concern about the recent Sadrist withdrawal from the Shia
Alliance and mounting rumor mill rumblings about the possible
formation of an opposition bloc. Adib expressed confidence
that the Group of Four can still count on 140 members in any
vote. End Summary.

Good News, Bad News on Pending Legislation
--------------


2. (C) Humam Hamudi, Deputy CoR party leader for the Supreme
Iraqi Islamic Council (ISCI) and his counterpart from the
Da'wa Party, Ali al-Adib, expressed optimism that the draft
De-Ba'athification law would soon be presented for CoR
deliberation in the coming days. A CoR source later told us
the draft bill, known officially as the "Law on Justice and
Accountability" could be sent to the CoR Legal Committee as
early as September 20, with a first reading to follow. Adib
told us the bill went forward after CoR deputy party leaders
agreed on several "reasonable" amendments. Hamudi predicted
that, God willing, the bill will be passed even though Sunni
"hard-liners" will grouse that the bill has not gone far
enough to address their concerns while Shia "hard-liners"
will argue that the bill offers too many concessions to
Sunnis. Adib also said that the Provincial Powers law was
likely to move forward and had been placed on the September
20 CoR agenda for further discussion and that the "National
Sectarian Balance Law" was also nearing presentation to the
CoR. He added that the Petraeus/Crocker report and testimony
had "clarified" USG support for the Maliki government and
allowed the government to move forward on pending
legislation.


3. (C) Just as the two deputies were optimistic about
De-Baathification law prospects, they were uniformly downbeat
on the status of the Hydrocarbons Law and placed full
responsibility for the lack of progress on Masoud Barzani and
his Kurdish Democratic Party CoR members. While Hamudi and
Adib said the Iraqi constitution states that the country's
oil wealth is the undivided property of the Iraqi people and
is a tool to unite the country, they complained that the
Kurds are asserting ownership rights over reserves found on
their land. Adib claimed that the Barzani group has insisted
on moving forward with a regional oil law that allows the
Kurdistan Regional Government (KRG) to enter into joint
production/marketing ventures with foreign oil companies to
exploit oil and gas reserves within KRG territory while not
sharing any proceeds from such ventures with the GOI. At the
same time, Barzani's group demanded that the Kurds receive a
full 17 percent share of GOI oil and gas revenues under any
new hydrocarbons bill. He said this approach is unacceptable
and "provocative" to the Shia and Sunnis alike. Adib vented
that Barzani and the KDP have displayed manipulative tactics
throughout the draft law negotiating process and seem to have
no sense of urgency to reach agreement, believing that time
is on their side. He has asked President Talabani, who he
said has played a helpful role in finding common ground on
the issue, to write to Barzani in an effort to effect
compromise. He also asked that the Ambassador weigh in with
Barzani on this issue since a new oil law is an important
test of success in national reconciliation. .


4. (C) Hamudi framed the dispute in constitutional terms,
stating that the Kurdish approach is not in accordance with
the Iraqi constitution but rather a faulty interpretation of
the constitution. He said that he had even offered to amend
the constitution to accommodate the Kurds in a previous draft
of the law, but they had refused in order to pursue a
regional oil law that contradicts the constitution and sends
a message to show other Iraqis that the Kurds have a right to

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change the constitution as they see fit. Hamudi complained
that Deputy PM Barham Saleh refused to discuss details of
differences regarding the draft law. Both he and Adib said
they understood our points that Iraqi oil revenues will
remain insufficient to cover national needs without major
outside investment in oil and gas infrastructure; that such
investment will not be forthcoming in the absence of a strong
national Iraqi oil law; and that deals based on regional oil
laws will likely attract only third-tier oil companies that
will invest as little as possible in Iraq. We stressed
repeatedly the need for party leaders such as Hamudi and Adib
to engage with other leaders to deal seriously and in a
spirit of national interest on legislation that advances
national reconciliation. Adib suggested that the Ambassador
attend a future senior GOI leadership meeting to further
emphasize this point.

Opposition Maneuverings: What, Me Worry?
--------------


5. (C) As representatives of the leading Shia parties that
comprise half of the Group of Four alignment, Hamudi and Adib
seemed remarkably nonchalant when we asked about the recent
Sadrist withdrawal from the Shia Alliance (Ref A) and ominous
rumblings of a move afoot to form an opposition bloc aimed at
toppling or at least threatening to topple Maliki and the
Group of Four (ref B). Adib explained that the Sadrists are
divided on the issue of alliance withdrawal, noting that some
Sadrist CoR members had told him they were not notified in
advance of the decision and were already talking about
rejoining the alliance. Hamudi said the Sadrist withdrawal
will have little impact, and Adib predicted that the Sadrists
will not make an alliance with any other party. He also
dismissed speculation that the Da'wa Tanzim Party would leave
the alliance, claiming that such rumors were started by the
media. Abid expressed confidence that the Group of Four can
still count on 140 members in any vote, adding that not all
CoR members from the Sunni Tawafuq will follow their party
leaders. Adib could not resist the temptation to take an
unsolicited swipe at Deputy VP Tariq al-Hashemi, complaining
that Hashemi had sent an implicit message to Iraqis that
their leaders can't solve the country's problems when he
disclosed sensitive details of CoR deliberations and also of
his meeting with POTUS in recent media interviews.
BUTENIS