IRAQ PRESSES FOR OIL FOR FOOD MEETING

C O N F I D E N T I A L BAGHDAD 003566

SIPDIS

E.O. 12958: DECL: 11/11/2018
TAGS: PREL EFIN UNSC UN IZ
SUBJECT: IRAQ PRESSES FOR OIL FOR FOOD MEETING

Classified By: Economic Minister Marc Wall for reasons 1.4 (b) and (d)


1. (U) This is an action request. See para 7.


2. (C) EMIN met November 10 with Ambassador Srood Najib,
Director of the Iraqi MFA Americas Department, to discuss
the Oil-for-Food (OFF) program. This was EMIN's first
meeting and Najib, who has covered this issue for years,
spent much of his time detailing his efforts to bring the
troubled program to closure and also preserve GOI
interests. For instance, Najib noted that since 2003,
19,000 pending OFF contracts have been cancelled, resulting
in some $10 billion being released to the GOI. (Note:
Numbers appear to be inflated.) Najib's current focus, and
the reason he requested the meeting, is his effort to
(a) resolve the approximately 130 remaining OFF contracts
currently in dispute (worth $256 million, according to
Najib),and (b) formally close the program by the end of

2009. Najib's concern, and his main request for the USG,
is that the UN Security Council will move to formally close
the program in the coming weeks without giving the GOI the
opportunity to sit down one last time with OFF program
administrators to attempt to resolve the remaining contracts.


3. (C) Najib said he has been trying for months to get the
UN's OFF administrators to agree to schedule a meeting with
the GOI. Last week he again instructed the Iraqi UN
Mission to seek one final meeting, ideally in Amman or
Istanbul, in late November or early December. Najib
offered assurances that he has worked with each of the
ministries that have contracts in dispute to make sure they
are ready to present a detailed case to the UN team during
this meeting; he added that he plans to ask the Prime
Minister to direct each impacted ministry to provide a full
accounting within ten days. (Note: at the last such
meeting in Amman in June 2008, the GOI sent relatively
junior staff from the relevant ministries who were unable
to address the specifics of the contract disputes.)


4. (C) Najib expects that the GOI will be able to close
each of the open cases during the proposed meeting. After
this and a formal UNSC vote to end the OFF program, Najib
said his next effort would be to begin "pursuing the
violations identified in the Volcker Report" on the OFF
program.


5. (C) Najib requested USG assistance to (a) intercede as
necessary within the UN to gain agreement for a final
meeting to review the approximately 130 open contracts, and
(b) prevent any effort in the coming weeks to approve a UNSCR
that would formally close the OFF program -- and order that
all the vendors in contracts disputed by the GOI be paid out
of OFF funds -- before a meeting to decide on the open
contracts can take place. Najib thought that either Russia
or France was likely to push for such a Resolution. He
said that the majority of open letters of credit involve
firms from Russia, China, Pakistan and Syria.


6. (C) Najib requested a follow-up meeting with EMIN during
week of November 17 to discuss next steps.


7. (C) Comment and action request: We are aware of the
efforts of USG and other partners in the UN to bring the
long-running OFF saga to a swift conclusion, as well as
frustration with GOI engagement to date. That said, at a
delicate time in our relationship with Iraq, it is
important that we not ignore a reasonable GOI request for
help to close a troubled chapter in its history and protect
a significant amount of money at stake. We request
Washington and USUN's help in preventing any Resolution
moving forward for Security Council action on OFF and, as
appropriate, encouraging UN OFF administrators to look
favorably at the GOI's request for a last meeting in the
coming
weeks. We also request Department/USUN provide embassy, by
COB Friday, Nov 14, with USG position on bringing OFF to
closure for use in EMIN's next meeting with Najib.
CROCKER