PM MALIKI ON BLACKWATER, OIL CONTRACTS, UM QASR

C O N F I D E N T I A L BAGHDAD 000052 SIPDIS E.O. 12958: DECL: 08/18/2019 TAGS: PGOV PREL ECON PTER IZ IR SUBJECT: PM MALIKI ON BLACKWATER, OIL CONTRACTS, UM QASR PORT, AND ELECTIONS Classified By: Ambassador Christopher R. Hill, for reasons 1.4 b and d. ¶1. (C) SUMMARY: Iraqi PM Maliki told the Ambassador January 7 that he was very satisfied with recent counterterrorism operations mounted in the Mosul area, attributing some of the success to measures he had implemented in the past that were providing the critical institutional support required to mount such raids. The Ambassador told PM Maliki that he had spoken with Attorney General Holder a few days earlier and had explained to the AG the serious difficulties that the recent Blackwater decision was creating in Iraq. The PM expressed appreciation that the issue was getting serious attention in Washington and noted that public outrage helped explain the emotional climate in which GOI officials had responded to the decision. Switching gears to economic issues, Maliki welcomed Embassy recommendations for assisting the operation of the port of Um Qasr, given ambitious GOI plans to increase oil production and rebuild Iraq's crumbling infrastructure. Regarding reports that the GOI planned to re-open certain signed oil contracts, the PM insisted that the changes were not substantive and that the oil companies had accepted them. The PM spoke briefly about the upcoming elections and noted reported that three candidates had been banned and that others were under scrutiny. He closed the meeting by pressing the Ambassador for help in re-settling abroad some of the MEK residents at Camp Ashraf. END SUMMARY. CT SUCCESSES IN MOSUL -------------- ¶2. (C) The Ambassador opened his January 7 meeting with PM Maliki by congratulating the PM on the successful joint counterterrorism raids mounted in the Mosul area in the past few days. Maliki acknowledged the successes and noted that the GOI had implemented several measures in the past that were providing the critical institutional support required to mount such raids. In particular, he mentioned improved coordination among various GOI intelligence bodies as well as with the Baghdad crisis center that is manned 24 hours a day, seven days a week. The PM noted in an aside that in reviewing the photos of many of those caught or killed, the overwhelming first impression is that "They all looked like common criminals and thugs." BLACKWATER -------------- ¶3. (C) The Ambassador told PM Maliki that he had spoken with Attorney General Holder a few days earlier and had explained to the AG the difficulties that the recent Blackwater decision was creating in Iraq. The Ambassador reported that the AG had expressed disappointment with the judge's decision and said that Department of Justice lawyers were studying the lengthy decision to see what options might be available. (Note: The PM murmured "good" as the Ambassador made his points on the Blackwater case.) The Ambassador assured the PM the U.S. took the issue very seriously and would continue to take an active interest in the development of the case and press for good cooperation between the State Department and DOJ. ¶4. (C) The PM responded appreciatively and noted that both the GOI and the USG had examined the incident upon which the charged were based and reached the clear conclusion that excessive force had been used. Maliki added that the Iraqi people still have confidence in the U.S. judicial system and that most of the leadership understood that this was not the final verdict of guilt or innocence, but a judge's opinion on the technical merits of the case. Nonetheless, he noted, "people were shocked." That explains why the matter was Q"people were shocked." That explains why the matter was discussed at the Cabinet level and in the Council of Representatives, as well as the tone of some of the GOI's public statements. The PM explained that the GOI's attorney in the U.S. was reviewing the decision and would provide the GOI with his assessment and recommendations later that day. THE PORT AT UM QASR -------------- ¶5. (C) Moving to a very different subject, the Ambassador raised the status of the port at Um Qasr and told the PM that in a few weeks the Embassy would provide the PM's office with recommendations on how to address some bureaucratic difficulties that may be holding down the capacity of the port. The PM sought and received clarification that the Ambassador was referring to the commercial port and not oil exporting facility. He welcomed any suggestions the Embassy would provide. ¶6. (C) The Ambassador noted that within 10-15 years Iraq might even need a completely new, much larger port, assuming that the GOI is successful in following through on current initiatives, including tripling to even quadrupling oil production capacity in the next decade. In the next five years, however, the GOI would need to do a lot of near-term work. The organization of the existing port could be improved and its capacity expanded, said the Ambassador. The PM reiterated his office's openness to the Embassy's suggestions for improvements in the near term, underscoring that Iraq's infrastructure was near collapse and would need re-building in the coming decade. Maliki also noted that the GOI was updating ambitious plans for a new port. An Italian company had worked on the design of the project. Maliki added that within a few months the GOI hoped to finalize the details on this project and prepare the way for companies to bid on the project. RE-OPENING SIGNED OIL CONTRACTS? -------------- ¶7. (C) Regarding signed oil contracts, the Ambassador questioned the PM about reports that the GOI planned to re-open certain contracts to change some of the provisions. He urged the PM to be very careful with such exercises since it could create serious problems and could undermine the reputation for transparency and openness cultivated by the GOI in the second oil bid round. Maliki responded that the Iraqi side was aware of the dangers but that some limited action was necessary to avoid problems with certain oil companies in the future. He insisted at several points, citing his legal advisor, that the changes were not substantive but instead focused on "minor procedural or formulaic changes" and would not affect the "core" of those contracts. The PM also claimed that the oil companies had accepted these changes. He explained that he had met recently with his Minister of Oil, his legal advisor, and several other senior officials to review the action and said that they had endorsed these non-substantive, technical changes. Speaking somewhat elliptically, the PM also noted he and these senior advisors were well aware that "some politicians" were basically against these contracts. Maliki hinted that he accepted the recommendation of minor changes in the contract to take the steam out of this political resistance to this group of contracts. The Ambassador pushed back one final time on the issue and urged the PM to exercise extreme caution before re-opening signed or initialed contracts, noting that the potential damage to Iraq's reputation greatly exceeded the benefits of such changes. ELECTIONS CONTEXT SHAPING ALL ISSUES -------------- ¶8. (C) The PM spoke briefly about the upcoming elections, noting that in the coming two months, "everything in Iraq" would be seen through the prism of electoral politics, including government decisions, possible visits by senior U.S. officials, and even judicial decisions like the Blackwater decision. He acknowledged that after the elections, the prism would change and everything would be viewed in terms of how it affected government formation. Maliki said that so far official campaigning had not yet begun. (COMMENT: The PM was noticeably taciturn in discussing his own or his party's election prospects. END COMMENT.) POSSIBLE BAN OF SOME CANDIDATES -------------- ¶9. (C) He also reported possible "problems" with certain candidates, whom he described as either "Ba'athists or criminals," who would not be allowed to run. The PM reported that three candidates had been banned and that other candidates and their political parties were under scrutiny. Qcandidates and their political parties were under scrutiny. (COMMENT: We have seen a flurry of news reports on this issue, indicating that one of the candidates banned -- at least preliminarily -- is prominent Sunni Council of Representatives member Saleh al-Mutlaq, who is considered to be a former Ba'athist. We are reaching out to contacts to verify these reports. So far, it is not clear which GOI body is making these preliminary findings of ineligibility. We will report details septel. END COMMENT.) THE MEK -------------- ¶10. (C) In closing the meeting, the PM asked the Ambassador what he had been able to achieve on a solution to the future of MEK residents at Camp Ashraf. "You promised to help me," insisted Maliki, indicating that some of them needed to be settled in the U.S. and elsewhere outside Iraq to facilitate broader resettlement elsewhere and avoid a force relocation. The Ambassador told the PM that he was engaged on the issue and seeking appropriate solutions. "OK," said Maliki. "I'm waiting." HILL