SAFA AL SAFI ON COALITION FAILURES, GOI FUND FOR BASRAH,

C O N F I D E N T I A L SECTION 01 OF 04 BASRAH 000040

SIPDIS

SIPDIS

E.O. 12958: DECL: 4/29/2018
TAGS: PGOV PINS KJUS ECON EAID IR IZ
SUBJECT: SAFA AL SAFI ON COALITION FAILURES, GOI FUND FOR BASRAH,
TRIBES, AND MORE

REF: A. BASRAH 31

B. BAGHDAD APRIL 20 O/I

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CLASSIFIED BY: Howell H. Howard, Director, U.S. Regional Embassy
Office, Basrah, Department of State.
REASON: 1.4 (b),(d)




1. (C/REL MCFI) SUMMARY: Acting Justice Minister Safa al-Safi
met with CMOC and REO Basrah Directors in Basrah on April 24.
Safi roundly criticized Coalition reconstruction efforts as
ineffective and corrupt. He showed little understanding of the
PRT role or a provided list of past projects. Safi was clear
that the Charge of the Knights (CoK) and his GOI oversight were
going to improve project execution in Basrah. He appears to
have developed a project list for Prime Minister Maliki's USD
100 million grant to Basrah, but is waiting for his committee of
Deputy Ministers to arrive and act on the list. Safi refuses to
use these funds for rounding out the Basrah Prison project or to
build the needed housing that he claims the Coalition should
fund. The GOI's tribal initiative is operational for project
selection, and he claims CoK detainees are treated legally.
Safi expressed disinterest in returning to Baghdad to manage
passage of the elections law. END SUMMARY.


2. (C/REL MCFI) Acting Justice Minister Safa al-Safi met with
MNC-I's Civil Military Operations Center (CMOC) Director and REO
Basrah Director on April 24 at the Basrah Palace. Also
attending were RDML Edward Winters, COL Ian Cave from MND-SE and
an ORA representative. Prime Minister Maliki charged Safi with
oversight of the GOI's USD 100 million aid package for Basrah
and with oversight of a tribal initiative (Ref A). The meeting
was dominated by Safi's wide-ranging criticism of PRT, UK and
U.S. development projects, a theme echoed in previous meetings
with CMOC Director and the UK Consul General/PRT.

COK EFFECT ON CORRUPTION AND PROVINCIAL RELATIONS
-------------- --------------


3. (C/REL MCFI) Safi was keen to stress that the Charge of the
Knights had changed everything in Basrah. Provincial budget
execution would remain a key to reconstruction, but now
corruption would decrease. Relations between the governor and
PC were already better and would improve more (with Safi's
help). The governor still needed to be more inclusive and
transparent; Safi noted that the heads of Basrah districts and
subdistricts told him that the governor had never met with them.
Safi was still meeting with the governor every day and
criticized the governor as a Fadhila party pawn. (Governor
Wa'eli arrived while this meeting was in progress.) REO
Director objected to Safi's implication the Coalition had helped
Governor Wa'eli's notoriously corrupt brother to escape justice.
(Note: Wa'eli's brother went with a Fadhila delegation to Saudi
Arabia. End note.)

REVIEW OF PRT/CG MEETING AND 2007 PROJECT EXECUTION
-------------- --------------


4. (C/REL MCFI) CMOC's CAPT Burns provided a voluminous list of
projects from that were done with the USD 1.2 billion provide by
the US from 2003 through 2007. After thanking Burns, Safi
launched into a long-winded and somewhat inaccurate critique of
the Basrah PRT and the Basrah Development Commission (BDC). The
BDC was not going to be useful, he said, as it was established
in violation of its own principles and without Iraqi input.


5. (C/REL MCFI) Safi noted that he had met with the UK Consul
General and a PRT (DFID) representative the night before, and he
displayed the 2007 Project Report that the PRT had prepared for
the Provincial Reconstruction Development Committee (PRDC).
Safi had clearly spent much of the day combing through the
report and said he did not understand how the PRT organized
projects, how contractors were chosen, or how project completion
was verified or enforced. (Note: The 2007 Report that the CG
and DFID gave to Safi was a list of all projects executed in
2007 from all donors. Of the USD 553 million totaled in that
report, the PRT's share represents around USD 70 million. The
PRT prepared this report to aid the PC's PRDC in project
planning. The PRT has never tried to, and cannot, track the
execution of projects by other donors. Safi was lambasting the
PRT for what the report made clear were other donors' contracts.
In the CG/PRT meeting, Safi admitted he did not know the
purpose of the PRT until the DFID rep explained it to him. End
Note.)

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SAFI ALLEGES CORRUPTION
--------------


6. (C/REL MCFI) Safi hammered on a theme of mismanaged donor
contracts that were then subcontracted several times. He
repeatedly stated that Iraqi contractors could do all of these
projects for much less. In addition to millions spent to little
effect, there had to be corruption somewhere, possibly even with
the PRT. When the REO Director protested the allegation, Safi
persisted that PRT corruption was a possibility and in any event
there was no oversight to catch any corruption. Moreover, he
said that it was hard to know U.S. project evaluation criteria;
it should be Iraqis evaluating all contracting and project
execution. Safi complained in a previous meeting with CMOC that
the Coalition's high contract awards were making it hard for the
GOI to award contracts at reasonable levels.


7. (C/REL MCFI) Safi spent much time pulling out examples (that
were likely typographic errors) from the 2007 project list as
evidence of corruption. With all of the projects aimed at water
quality, for example, Safi said that all of his contacts had
told him that water quality was still bad everywhere.
Unaddressed delinquencies in contract execution were also a
problem. Safi complained that no action had been taken against
any of the contractors who had not fulfilled their obligations.
REO Director asked if the MOJ had ever investigated an Iraqi
contract for corruption anywhere in the country, and Safi
admitted that the MOJ had not. But, he said, his DepMin
committee would now hold contractors in Basrah accountable.


8. (C/REL MCFI) Note: In his previous meetings with CMOC and the
UK CG, Safi recommended that his GOI committee should evaluate
and prioritize each donor project using the GOI's better
understanding of what Iraq needs to avoid duplication but also
ensure that contract awards were appropriate. The GOI, Safi
said, should also oversee the execution of all projects and be
allowed to take remedial legal action. Safi has already
expressed displeasure at proactive U.S. military efforts to hire
cleanup crews during CoK. End Note.

THE PM'S $100 MILLION FOR BASRAH
--------------


9. (C/REL MCFI) Safi reacted suspiciously when the REO Director
asked how plans were going for expenditure of the PM's $100
million fund for Basrah. He stressed that he solicited input
with every possible group of people. (Note: Admiral Winters
confirmed that Safi has had a steady stream of tribal and other
groups meet with him at the palace. End Note.) Safi was
evasive, but implied that he had completed his list of projects,
that there were too many of them, and that his Deputy Minister
committee would have to vet them when it arrived in a week or
ten days. (Note. We later heard the DepMins were to arrive
April 27. End note.) Safi's current list of priorities
included health, municipalities (power and sewage),education
and youth/sport. The MoJ said the committee would arrive in a
week to ten days but the money (USD 100 million) had already
arrived.

COALITION SHOULD FUND HOUSING
--------------


10. (C/REL MCFI) The Justice Minister renewed his suggestion
that the Coalition fund housing for Basrawis. He waxed eloquent
about a UK housing project in the 1950s that was still in good
repair. People called this the British project, and he said if
the U.S. did the same, all Basrawis would see a favorable gift.
REO Director asked why GOI funds should not pay for this, which
would give the Iraqi face that Safi found so important. Safi
said it was not easy for the GOI to fund housing for Basrah,
because if the central government started funding housing all
over the country it would break the GOI's budget. When REO
Director spoke of oil revenues, Safi retorted that Iraq's output
was only 2.5 million bbl/day and that the Coalition should
invest $1.5 billion to increase oil production.

BASRAH PRISON PROJECT
--------------


11. (C/REL MCFI) REO Director updated Safi on the status of the
State-funded renovation of the Basrah Prison. Safi stressed the
importance of involving Iraqis by putting the notice of tender
in Iraqi newspapers. He chided the U.S. for not consulting with

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the GOI and asked that State coordinate with his DG of
Corrections in Basrah as well as his Deputy Minister Bushar
[sic]. Safi rebuffed suggestions that his USD 100 million
package could be used to fund some of REO Director's proffered
list of projects, which were not covered in the project's scope
of work. He retorted that USD 10 million was a lot for the
prison and the U.S. ought to be able to finance everything
needed to round out the Prison--if we used Iraqi contractors.

GOI TRIBAL INITIATIVE
--------------


12. (C/REL MCFI) When REO Director asked about the dissolution
of the tribal committee, Safi retorted that there had never
really been a tribal committee. He instead described his
organization of around 450 sheikhs into 15 (we have heard 16)
Tribal Support Councils for Regions (TSCs); each TSC has elected
its own leaders. Within each TSC there are committees for
services, security, financial administration and reconciliation.
When asked how he selected the sheikhs, Safi replied that he
had consulted widely; if there were different sheikhs identified
in a given area, he chose both in order to build consensus. The
PM's office would manage the TSCs (not Safi, who said he was
asked but did not have the time); GOI funds (not out of the USD
100 million) would pay for offices and stipends. Safi asserted
that no tribes were excluded and that one of the councils even
had a Sunni president. For reconstruction projects, the TSCs
would make proposals for use of the USD 100 million funds
through the districts.

PROVINCIAL ELECTIONS
--------------


13. (C/REL MCFI) Safi dismissed the REO Director's suggestion
that Safi's presence was needed in Baghdad for passage of the
elections law and for nuancing UNAMI comments, saying there was
no need to return to Baghdad soon. He was managing the election
law by telephone from the Basrah Palace, and besides it was not
the place of the executive branch to interfere in the work of
the Council of Representatives. Moreover, there was a MOJ
committee working on the election law. Safi refused to supply a
MOJ point of contact for the Embassy, saying that he was the
person to contact. Safi predicted that the COR would not agree
to an open list and that the law would probably end up being
half open list and half closed list. In this way the parties
retained some authority but independent candidates would be able
to get on the ballots.

DETAINEES
--------------


14. (C/REL MCFI) REO Director enquired as to reports that some
detained in the course of CoK had been mistreated. Safi
explained that a MOI team in Basrah, led by a Deputy Minister of
Interior, investigates each suspect's case. If grounds existed,
the case was referred to the court system in Basrah, with no
military trials. Safi was initially vague in answering REO
Director's question as to an alleged list of arrest targets that
the PM had brought to Basrah; he then allowed that 60 targeted
persons had been captured but that many others had fled.
Investigative judges, he claimed, had issued arrest warrants for
any persons on the list.

MOVING THE PARTIES OUT OF GOVERNMENT BUILDINGS
-------------- -


15. (C/REL MCFI) REO Director asked Safi why Sayed al Shahada
(SAS) had not yet moved out of its headquarters (the former
governor's house),noting that there might be an appearance of
favoritism. Safi related that SAS was protesting that it had
invested much in refurbishing the headquarters and that he had
agreed to give SAS one more week and then he would take action.
(Note: PM Maliki issued an order prior to CoK that all parties
had to evacuate government-owned buildings. [Ref B] Dawa and
OMS were in such buildings and have moved out. End Note.)

COMMENT
--------------


16. (C/REL MCFI) Safa al Safi continues to show a fervent
hostility towards UK and PRT reconstruction efforts, with plenty
of criticism for U.S. efforts as well. While it appears he has
diligently surveyed popular opinion and needs, his understanding
of reconstruction issues is flawed. We assess Safi's oversight

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of contracting for his USD 100 million fund as possibly too
great a challenge, let alone his ambition to oversee all
Coalition projects. His desire for an Iraqi face is in contrast
to his insistence that the U.S. should pay for any add-on to the
Basrah prison and fund housing development and oil
infrastructure. Safi appears to be scrutinizing Basrah in a way
that the GOI has not done anywhere else in the country. Safi's
inexperience with reconstruction, when combined with the
difficulty that the Deputy Ministers may have in running
reconstruction by committee, may lead to increased GOI
resentment over the relative success of the PRT and CMOC. CMOC,
the PRT, REO, USAID and the UK FCO will work together to engage
Safi as a team and resist Safi's efforts to divide the Coalition.
HHOWARD