IRAQI NSC DISCUSSES INSURGENT FINANCING, AGREEMENT

S E C R E T SECTION 01 OF 04 BAGHDAD 004033

SIPDIS

E.O. 12958: DECL: 12/26/2018
TAGS: MOPS MARR MASS PREL PTER SY IZ
SUBJECT: IRAQI NSC DISCUSSES INSURGENT FINANCING, AGREEMENT
IMPLEMENTATION, AND ELECTION SECURITY

REF: BAGHDAD

Classified By: Ambassador Ryan C. Crocker for reasons 1.4 (b) and (d)


1. (S) Summary. At the December 21, 2009 meting of the Iraqi
National Security Council (NSC),Prime Minister (PM) Nouri
al-Maliki received a detailed report from the Minister of
Defense (MoD) on the internal sources of financing for Al
Qaeda in Iraq (AQI) and other insurgent organizations.
According to the report, domestic sources account for eighty
percent of total insurgent revenues. The Prime Minister also
received a proposal from National Security Advisor (NSA)
Mowafaq Rubaie for the structure of the implementing
committees under the Strategic Framework Agreement (five
committees) and the Security Agreement (twelve
sub-committees),which Maliki said he would pass to the
Council of Ministers and other political entities for final
approval. The NSC also discussed security for the upcoming
provincial elections, noting the special challenges the Iraqi
Security Forces (ISF) would face in disputed areas, and the
difficulty of vetting and verifying the credentials of 14,000
candidates. The Iraqi Independent High Electoral Commission
(IHEC) made an appeal for U.S. assistance with election
security, voter education, and support for international
election observers. End Summary.

Rule of Law and Detention Affairs Update


2. (C) The meeting opened with a briefing for the Prime
Minister on the status of Iraqi detainees who remain in
custody despite having no valid detention order, or in some
cases, no records at all. The update noted that the Ministry
of the Interior (MoI) had begun to comply with judicial
orders requiring the transfer of 390 detainees from the
heavily overcrowded facility at Baqdush.

Follow-up on Baiji Refinery Proceeds Funding Al Qaeda


3. (S) MoD Abdul Qadir stated that Al Qaeda in Iraq's (AQI)
ability to derive income from the Baiji refinery is largely
the result of the decision to remove the Iraqi Army from the
refinery's grounds at the request of the Ministry of Oil
(MoO). He said that the MoO, fearing that strict security
measures might lead to reprisal sabotage at the refinery,
asked for the battalion protecting the facility to move
outside of its perimeter. The resulting security void had
left the refinery vulnerable to extortion, and it now
furnishes the majority of AQI,s revenue.


4. (S) The MoD stated that in order to end the flow of funds
to the insurgents, the GOI would have to place an effective
security force, supported by intelligence agencies, inside
the refinery where AQI is dominant. He suggested creating a
force of 1200 vetted officers to reestablish control over the
refinery, and that employees sympathetic to AQI would have to
be culled out. Minister of the Interior Jawad al-Bulani
added that the MoO would also have to clean up the weak
administration at the refinery that facilitated diversion of
funds. The PM directed that the GOI would have to address
security and corruption at the refinery simultaneously.

Funding of Terrorist Organizations in Iraq


5. (S) The Minister of Defense delivered a report to the
Prime Minister on terrorist financing in Iraq. The report
noted the following challenges with regard to terrorist
financing:
--AQI and other insurgent groups receive eighty percent of
their funding from within Iraq.
--Iraqi intelligence agencies have been largely ineffective
at penetrating these organizations.
--Iraqi intelligence agencies are not cooperating efficiently
Q--Iraqi intelligence agencies are not cooperating efficiently
against terrorist financing, and a dedicated agency may be
required to deal with this problem.
On a more positive note, Qadir said that successful GOI
interdiction of terrorist financing flows could threaten the
existence of AQI and similar groups.


6. (S) The report identified a variety of terrorist
financing sources, from which funds are diverted or extorted,
which include:
--The Baiji oil refinery, the single greatest source of
terrorist financing in Iraq.
--The Basra Refinery, second only to Baiji as a source of
funds for insurgents.
--The Mosul cement factory.
--Cell phone companies.
--Sulfur plants.
--Fuel stations.
--AQI owned Fuel tankers.

BAGHDAD 00004033 002 OF 004


--Construction contractors.
--Flour mills and bakeries.
--Power plants.
--Large retail businesses.
--Kidnapping.
--Small retail establishments.
--Illicit drug smuggling.
--Auto dealerships.
--Hospitals.


7. (S) The MoD made the following recommendations:
--The Prime Minister should order the formation of a Joint
Committee to Counter Terrorist Financing that will include
representatives from MoD, MoI, military intelligence, the
office of the Minister of State for National Security Affairs
(MSNSA),the Counter Terrorism Bureau (CTB),and the
Coalition. Members of the Committee should have the rank of
Major General or above, and be properly vetted. The
committee should report directly to the PM, and be
operational no later than January, 2009, headquartered in the
PM NOC.
--The PM should assign the CTB the mission of arresting
suspects identified by the committee.
--The PM should instruct ministries that are sources of
revenue for insurgents to cooperate with the committee.


8. (S) While the Minister of the Interior hailed the
findings of the report, Minister of Justice (MoJ) Safa
al-Safi stated that the report failed to discuss the problem
created by management level personnel who are willingly
supporting terrorist groups. PM Maliki said that the report
identified significant threats in the form of corrupt
officials and commercial establishments that aid insurgents.
He then called for all Iraqi security agencies to work
together to combat terrorist financing.

Implementation of the Security Agreement


9. (SBU) NSA Rubaie presented the NSC with a proposed line
and block chart for the committees that will implement the
Strategic Framework Agreement (SFA) and the Security
Agreement (SA). The chart showed five joint committees under
the Higher Coordinating Committee for the SFA:
--Diplomatic and Political Coordination.
--Energy and Economic Coordination.
--Information and Technology Services Coordination.
--Cultural, Scientific, and Educational Coordination.
--Law and Judicial Coordination.
Under the Joint Military Operations Coordinating Committee
(JMOCC) of the SA, the proposal called for four joint
sub-committees:
--Temporary Committee for International Zone (IZ) Transition.
--Military Operations, Training, and Logistical Support.
--Movement of Vehicles, Ships, and Aircraft.
--Transfer of Provincial Security Responsibility.
Under the Joint Committee (JC) of the SA, the proposal
indicated eight joint sub-committees:
--Detainee Affairs.
--Facilities and Areas Agreed Upon.
--Claims.
--Surveillance and Airspace Control.
--Points of Entry.
--Imports and Exports.
--Frequency Management.
--Jurisdiction.
The Prime Minister stated that the framework would be
reviewed by the Council of Ministers and other political
bodies for final approval.


10. (C) The NSC members then discussed the roles and
composition of several committees. MoD Qadir focused on the
Frequency Committee, noting there is a well-established Iraqi
committee for deciding frequency issues led by the Minister
of Communications (MoC) that includes MoD and others. He
said he wants to make sure the military is not left out of
this committee. The MoJ noted that the executive branch, not
the judicial branch, should head the detainee affairs
committee. After an inconclusive discussion, the Prime
Minister said the issue needs to be studied. The Minister of
Defense asked who would coordinate the JMOCC, and stated that
QDefense asked who would coordinate the JMOCC, and stated that
he would prefer if it was a joint MoD/MoI lead, but that he
would review this issue. The Minister of Justice said that
the Ministry of Human Rights (MoHR) should be included on the
committee to adjudicate claims as this was an issue the
Minister follows closely. PM Maliki solicited General
Odierno,s view of the proposal, and the Commanding General
responded it is generally along the lines of what he had
previously discussed with the PM.

2008 Budget: MOD and MOI Investment Projects

BAGHDAD 00004033 003 OF 004



11. (C) The Ministers of Defense, Interior, and Planning
discussed the difficulty that MOD and MOI are having
liquidating their 2008 development budgets, and what to do
with the balances that remained. MoD Qadir, while admitting
that his Ministry has so far been able to liquidate only 20%
of its 2008 budget, stated that he would need additional
funds to complete MoD,s development plans. Qadir said that
while most of the budget remains unspent, contracts for the
majority of it of it had been executed. The apparent
discrepancy is a consequence of contracts signed for work
that had yet to start. MoI Bulani also stated that his
Ministry is having difficulty liquidating its infrastructure
funds, and suggested that the balance should roll over into
the 2009 account. The Prime Minister, after receiving a
confirmation from the Minister of Planning that the funds are
available, agreed that MoD and MoI should seek Ministry of
Finance (MoF) assistance to carry-over the unspent 2008
balances into the 2009 budget.
Election Security Committee Update

12. (S) The Chairman of the Independent High Electoral
Commission (IHEC) briefed the NSC on security plans for the
upcoming provincial elections. He stated that the ISF would
have to provide security for more than 6,000 polling centers
and numerous ballot storage facilities, while protecting both
the voters and the candidates. The Chairman said that the PM
had directed the ISF not to interfere with the elections, as
their role is limited to providing security alone and
cautioned against the potential for provincial governors to
try to overrule the decisions of election commissioners.


13. (S) With regard to election security in disputed areas,
such as Ninewa, where there will be 226 polling centers, or
Diyala, the Chairman described three possible options to
ensure election security:
--That the National Police assume responsibility for security.
--That Coalition forces assume responsibility for security.
--That Coalition forces, together with the local police,
assume responsibility for security. General Odierno stated
the he had been in discussion with the IHEC Chairman and his
head of security, MG Ayden, as well as discussion with the
MOD and KRG (Peshmerga) about elections security in the
disputed areas. Based on these discussions, he will have
recommendations for the PM on election security in the
disputed areas in about two weeks.


14. (S) The IHEC Chairman advised that special provisions
would be required to facilitate voting by members of the
military, especially Presidential Units. This challenge is
complicated because some of the units had not provided the
necessary information to IHEC, and in addition, January 31,
2009 is a holiday, precluding military voting on that day.
He said that IHEC is trying to guarantee that members of the
military, including reservists, will have the opportunity to
vote, though those on active duty will probably have to vote
in a manner different from polling procedures for civilians.


15. (S) The Prime Minister enumerated the following security
measures that he said might be necessary for a safe election:
--Imposing an evening curfew.
--Halting vehicles at the outskirts of cities and towns.
--Closing airports.
--Deploying female security agents, who can conduct searches
and reduce the threat of female suicide bombers.


16. (C) After stating that the GOI must be careful not to
exclude eligible voters, the PM launched into a lengthy
Qexclude eligible voters, the PM launched into a lengthy
discussion of how to address potentially ineligible
candidates who have criminal backgrounds or lack the
requisite educational qualifications. While conceding that
there might not be sufficient time before the elections to
successfully vet all of the candidates and verify their
diplomas, he reminded the NSC that this is a task that had to
be done, that he wants the Ministry of Education pressured to
complete its portion of the work quickly, and that the checks
and appeals could be completed after the election if
necessary. He also warned that the upcoming election remains
vulnerable to electoral fraud. When the MoJ raised the issue
of voting rights for prisoners and detainees, the PM said
that they could cast ballots. Maliki then reminded the IHEC
Chairman that a mechanism should be established to address
reports of electoral law violations.


17. (S) The IHEC Chairman responded that he sought the
support of MNF-I, specifically to participate in planning and
preparations for the provincial elections. He said that
international observers would also play an important role,
and will need accommodations within the international zone
(IZ). He stated that the Coalition would have to assist the
ISF in disputed areas, and help with security for IHEC. He
also stated that MNF-I should support UNAMI efforts to

BAGHDAD 00004033 004 OF 004


distribute voter education material, noting that the
Coalition had done so in previous elections, and he expressed
the hope that the Embassy and PRTs could do likewise. For
security reasons, IHEC will set up its media information
center in the IZ, and the Chairman asked for Embassy/MNF-I
assistance in finding a location.

Reconstruction Report: Diyala

18. (SBU) The meeting concluded with a short briefing from
Minister of State for Civil Society Affairs (MSCSA) Thamir
Jafar al-Zubaidi on the progress of reconstruction efforts
for Diyala Province. The current reconstruction plan
includes 124 projects, of which 26 are under contract. The
Minister provided an update on the status of the programs and
the timetable for completing the remaining work.
CROCKER