December 11, 2006
With Oil Funds on Hand, Iraq Fails to Spend Billions to Rebuild

By JAMES GLANZ
BAGHDAD, Dec. 10 — Iraq is failing to spend billions of dollars of oil revenues that have been set aside to rebuild its damaged roads, schools and power stations and to repair refineries and pipelines.

Iraqi ministries are spending as little as 15 percent of the 2006 capital budgets they received for the rebuilding — with some of the weakest spending taking place at the Oil Ministry, which relies on damaged and frequently sabotaged pipelines and pumping stations to move the oil that provides nearly all of the country’s revenues. In essence, the money is available — despite extensive sabotage, the oil money is flowing — but the Iraqi system has not been able to put it to work.

The country is facing this national failure to spend even as American financial support dwindles. Among reasons for the problems — like a large turnover in government personnel — is a strange new one: bureaucrats are so fearful and confused by anticorruption measures put in place by the American and Iraqi governments that they are afraid to sign off on contracts.

The inability to spend the money raises serious questions for the government, which has to demonstrate to citizens who are skeptical and suspicious of government corruption that it can improve basic services, and that at a time when American funds for reconstruction are being reduced, it can prove to other foreign donors that it can quickly put to use the money they may be willing to commit.

After the expenditure of roughly $22 billion in American taxpayer dollars on Iraq reconstruction, the increase of the Iraqi capital budget was seen by many as a sign that oil revenues could finally begin paying for the rebuilding, four years after Bush administration predictions that the country could afford the program on its own.

Iraq’s overall capital budget in 2006 was nine trillion Iraqi dinars, or about $6 billion, said Abdulbasit Turki Saeed, president of the Iraqi Board of Supreme Audit and a member of the Iraqi cabinet’s economic committee.

But Mr. Saeed said that across the entire government, only about 20 percent of the capital budget had been spent, according to the committee’s recent figures. A senior Western official agreed with that estimate.

“It’s slow. It’s disappointing,” the Western official said, speaking on the condition of anonymity because he was not authorized to discuss the subject publicly. “In general, they have had trouble getting projects started.”

The problem was briefly acknowledged in the report last week by the bipartisan Iraq Study Group, which gave similar figures for capital expenditures and said that “many ministries can do little more than pay salaries.”

In interviews, alarmed Western and Iraqi officials sought to put the best face on the problem, saying they thought that the pace of spending had picked up in the last two to three months as the government began taking steps to improve its performance.

Those officials said that in a nation with reconstruction needs around every corner, the puzzling phenomenon of unspent money was partly explained by the rapid turnover in governments, security woes, endemic corruption and a lack of technocrats skilled at jobs like writing contracts and managing complex projects. In short, nearly all the ills that have undermined the American rebuilding program seem to be plaguing the Iraqi one.

Hussain al-Shahristani, the Iraqi oil minister, said he thought that he could spend substantially more of this year’s budget if he could resolve administrative bottlenecks, like Finance Ministry delays in authorizing payments.

“It’s the bureaucracy,” Mr. Shahristani said. “Particularly financial people take too long to change their old habits.”

But some American and Iraqi officials here are also saying that the stringent measures they had favored to slow the rampant corruption may be especially daunting for bureaucrats who have little experience with Western-style regulations and oversight. Those officials say that Iraqis who have seen their colleagues arrested and jailed in anticorruption sweeps are reluctant to put their own name on a contract.

“As it’s applied right now, this new thing scares the hell out of everybody,” one Western official here said.

The colliding priorities of oversight and spending have left American and Iraqi officials in a quandary as they work behind the scenes on the so-called “Compact with Iraq” — the centerpiece of the American Embassy’s effort to create economic and political milestones that this nation promises to meet in exchange for pledges of foreign investment and support.

Anticorruption officials themselves are facing a loss of support, with the most serious impact felt by Rathi al-Rathi, the head of Iraq’s Commission on Public Integrity, who has been privately accused by Western and Iraqi officials of zealotry, political bias and other failings.

A previously undisclosed letter to Mr. Rathi from prime minister Nuri Kamal al-Maliki, dated Sept. 6, is close to an accusation that Mr. Rathi himself is guilty of corruption. The letter, a copy of which was provided to The New York Times, directs him to account for what the prime minister asserts are hundreds of thousands of dollars of undocumented expenses by the commission.

Ali al-Shabot, a spokesman for Mr. Rathi, who was traveling last week, at first insisted that the letter was secret and that he could not discuss it. But finally he dismissed its charges as based on bad information. Mr. Shabot indicated there was at least one good reason that, despite the pressure, the commission would remain in business. He confidently pointed out that international donors who provide financing to Iraq do so “with the guarantee that there are institutions to oversee the money.”

While it is clear that new financial support is unlikely without a strong anticorruption campaign in place, Iraq’s inability to spend its own money undermines the message that the country will actually be able to use the support if provided.

“People we are trying to deal with and obtain additional funds for Iraq will come back and say, ‘Iraq is not spending its own resources,’ ” said Yahia Said, a research fellow at the London School of Economics who is working as a consultant to the United Nations on the compact.

Mr. Shahristani, the oil minister, who has put new anticorruption measures in place on top of those imposed from the outside, said the solution was to teach the bureaucrats how to cope with the new rules.

“Obviously I’ve heard of these complaints,” he said of the criticisms of the anticorruption organizations. “I don’t think that they have gone too far. I think this is necessary given the level of corruption that we have inherited.”

Iraq’s total budget is about $32 billion in 2006 and is projected to be more than $40 billion in 2007, said Bayan Jabr, the Iraqi finance minister, in an interview. Most of the budget, which comes almost entirely from oil revenues, is consumed in operating expenses, including roughly $8 billion for ministry salaries and pensions and $6 billion for Iraq’s socialist-style food and fuel subsidies.

The nation has spent those funds much more easily than it has spending the $6 billion for capital improvements — a number that by some projections could roughly double next year in view of Iraq’s vast infrastructure needs.

According to a report by the Oil Ministry, about half of the money was to go for repair of pipelines, building refineries, improving oil fields, repairs on export terminals, and other improvements to the oil industry. The remainder was to be spent on projects ranging from improving the electrical system to irrigation systems to roads and government buildings of various types.

The same report says that, for example, Iraq is in need of major new oil storage tanks, a 42-inch-diameter pipeline in the south and better electrical generation to run the oil pumps.

Officials are still sorting out what went wrong in the early months of the 2006 program, but some of the problems were similar in kind if not in detail to the ones that derailed major portions of the American effort.

First, after the December 2005 elections, politicians jockeyed for ministerial posts for months, creating uncertainty about whether priorities would change, and then the newly seated officials were unfamiliar with their jobs. At the same time, deepening security problems not only made purchasing and construction difficult, but continued to drive skilled midlevel ministry employees out of the country.

Final numbers across the ministries will not be available until year’s end, but Mr. Jabr, the finance minister, said that a few trends had emerged. Expenditures at the Housing and Construction Ministry and the Oil Ministry were low, while at the other end of the spectrum, the Electricity and Water Resources Ministries were spending as much as three-quarters of their allocations.

But the overall picture is clear, said Lt. Gen. Martin E. Dempsey, who as commander of the Multi-National Security Transition Command-Iraq works extensively with the Interior and Defense Ministries, which he expects to spend about half of their capital budgets this year.

“I think the government of Iraq has got a challenge writ large,” General Dempsey said. “The 27 ministries will not execute their 2006 budgets.”

American and Iraqi officials are already taking steps to improve the situation, streamlining the contracting process, giving training sessions on the process to ministry employees and, Mr. Jabr said, putting in place measures to penalize ministries that do not spend money fast enough.

General Dempsey said the unspent money in the security ministries in 2006 would not be lost, because Iraq had agreed to allow the funds to be held in the same foreign accounts that are used to coordinate the Pentagon’s military purchases until the agencies were ready to use it.

As the financial and political stakes rise within the Iraqi-financed rebuilding program, few officials have escaped blame.

The public integrity commission is cited most often as intimidating. But those who deal with investigations of questionable deals and officials on the take in a historically corrupt country are not surprised by those complaints. “This is normal,” said Mr. Shabot, the integrity commission spokesman. “They hate us because we are monitoring them.”

Mr. Jabr expressed deep impatience with ministry officials who, he said, told him that part of the reason they were moving so slowing was to avoid running afoul of the integrity commission.

“I said, ‘Why are you afraid? If you are not a thief, don’t be afraid,’ ” Mr. Jabr recalled.

The Times December 11, 2006

Prison staff are arrested after Saddam nephew flees from his cell
Ned Parker in Baghdad
Al-Sabawi helped to fund Sunni revolt
Officials believe he bribed his guard

Saddam Hussein’s nephew has escaped from prison, prompting the arrest of the facility’s warden and his deputy.

Ayman al-Sabawi, who is accused of funding the Sunni insurgency, broke out on Saturday, triggering a huge manhunt.

Al-Sabawi’s flight coincided with more sectarian violence in Baghdad and bitter criticism of the US Iraq Study Group report by Jalal Talabani, the President of Iraq.

Al-Sabawi escaped from Badoush prison, near the northern city of Mosul, after most probably bribing the night captain of the facility to free him, Interior Ministry officials said.The captain, who convinced guards to release al-Sabawi by showing them a fake transfer order, has disappeared along with his family, the officials said.

The Interior Ministry has jailed the prison warden and his deputy and opened an investigation, Major-General Abdul Kareem Khalaf, the Interior Ministry spokesman, told state television.

Mosul police said that the two officials had been detained late on Saturday night and were being questioned yesterday. Al-Sabawi, who was serving a life sentence, had attempted to escape a month ago in a scheme orchestrated by a group of Saddam loyalists identifying themselves Aawda (the Return Group).

Sixty police cars were hunting for al-Sabawi in and around Mosul, a stronghold of former military officers and members of Saddam’s regime.

Al-Sabawi is the son of Saddam’s half-brother Sabawi Ibrahim al-Tikrit. He was captured last year near Saddam’s home town of Tikrit.

Al-Sabawi’s father, who was No 36 on the US list of the most wanted 55 officials of the former regime, was captured by Iraqi security forces near the Syrian border in February 2005. Damascus was believed to have played an important role in his arrest.

Meanwhile, Mr Talabani, a Kurd, savaged the US bipartisan Iraq Study Group’s findings to reporters summoned to his residence. “It contains very dangerous articles that undermine the sovereignty of Iraq and its constitution,” he said.

“I consider the report to be a type of insult to the Iraqi people.”

The panel, led by James Baker, the former US Secretary of State, and Lee Hamilton, the former Democratic congressman, recommended more centralised control of the vast oil wealth of Iraq and placing thousands more US advisers in the country’s security forces.

The Kurds, in particular, have felt threatened by the Iraq Study Group’s recommendations advocating a bigger role for the central government, which they are concerned could endanger the regional autonomy that they have enjoyed since 1991.

Sectarian violence swept Baghdad over the weekend.

Shia militias assaulted Sunni homes in Baghdad’s religiously mixed Hurriya district on Saturday, forcing more than 30 families to flee after militias burnt their homes, Interior Ministry officials said.

In another development, Donald Rumsfeld, the outgoing US Defence Secretary, paid a surprise visit to Iraq yesterday and said that US forces should not quit the war until the enemy is defeated.

Iraq, 10.12.06

95 suspected insurgents arrested in Baghdad
40 bodies, many shot and tortured, were found across the Iraqi capital
30 Sunni families forced to flee Baghdad's religiously mixed Hurriya area by Shia militias
5 Shia brothers, one a policeman, shot dead

Source: Reuters

The Times is the only British paper to maintain a full-time Baghdad bureau

Ned Parker blogs live from Baghdad

www.kurdishmedia.com
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Political Project for a Democratic Change in Syria

Sunday, December 10, 2006

Kurdistan National Assembly of Syria

Draft work plan

The Syrian opposition aims and supports the idea of regime change and spreading of democracy; the Kurdish National Assembly – Syria has contacted various forces and oppositions from various elements of Syrian society including different religions and nationalities in Syria to form a wide coalition in preparation for regime change. What follows is a concise summary of the draft plan for the change in Syria in its preliminary form. In summary, it envisages the implementation of the following stages:

Section one: Preparation and self-preparation:

• Planning and preparation
• Appointment of executive committee
• Review and critic of the plan
• Media preparation stage

Section two: Implementation:

• Bringing together of the individual objectives
• The stage of combining of the various executive objectives
• The stage of bilateral alliances: It is necessary to undertake this step immediately and concomitantly with the stage of bringing together the individual objectives. This is a stage when bilateral or trilateral blocs are formed in more than one group. The draft of a plan for bilateral blocs is parallel to the first stage and does not interfere with it.
• The last stage: A general national conference is to be created: a big bloc to which all sides are invited. The results are submitted to the US side with a request for assistance for its implementation.

Blueprint for a preliminary draft agreement

Location of implementation: Syria and the Syrians in the country and abroad.
Subject: a joint draft work agreement for political and organizational cooperation in the following spheres:

Research/Study points:

• Setting up a joint organization for political, organizational and media cooperation
• Holding bilateral and multilateral meetings not open to the media until an agreement is reached at.
• Setting up common organization under international agencies and with international guarantees, which will be in the format (bloc, coalition, front or something else)
• Setting up a joint media centre, promoting democracy and change – Washington Center
• A steady source of financing supporting until the transfer of authority or regime change occurs with the least possible losses or costs.

Preparation Stage:

• Uniting all the public and political activities as well as the powers striving for the change of the system to a representational regime via elections under the international agencies and with international guarantees
• Invitation to a national conference (oval table), repeal of the emergency laws; the interim government is to separate from the army and the security forces to be separate from the politics
• An oval table to draw the steps of the peaceful transition to democracy without violence
• Forming an interim government ready to govern the country for a set period. It must not have a political affiliation and should be composed of independent Syrian technocrats.
• Drawing up of electoral law and setting the date for holding the elections.
• At least one representative from each group (ethnic, religious, doctrinal, etc.) is to participate at the oval table.

Transfer-of-power stage

The draft oval table discussion is to include the following points:

• Establishing of a national Security Council and temporary suspension of the Ministry of Interior. The council supervisor is responsible for the internal security in the transition stage. Determining its prerogatives
• Retaining the army and police to provide for the internal security, transformations of the political police into a civilian police, protecting the borders and customs, etc.
• Providing guarantees for the non-occurrence of acts of revenge, murders, retroactive settling of accounts between doctrinal groups, as well as avoiding instances of vengeance, gloating and revenge.
• The executive committee is to respect the interests of the all involved sides, in keeping with the will of the international community.
• Proclaiming the Kurds' right of a federation and to strive to fixing it in the constitution - terms as an independent/separate ethnic group along with the Arabs and the return of the regional system in the administrative division.
• Taking into consideration the interests of all ethnic, religious and doctrinal minorities without shutting out.
• Ensuring the good relations with all neighboring countries.
• Recognition of the right of Israel to exist and to coexist peacefully with it, as well as to solve all conflicts by means of the international organizations and the international law.
• To fight and eradicate all forms of terrorism and to boycott the regimes and states, supporting the terrorism and communism.
• To call for the amendment of the constitution and the laws inherited from Baath via a democratically elected Parliament.
• The setting of a mechanism for making the Islamists part of the change, provided that they do not expropriate the power.
• The strife for new administrative division in the Syrian republic, taking into account the demographic, ethnic and doctrinal distribution within the Syrian state as a whole.
• Solving the problem of the Arab belt and an emergency census in Syrian Kurdistan.
• The strife for a constitutional parliamentary republic, in which the president has representational prerogatives.
• The strife for separation of the legislative, executive and judiciary.
• Providing for the participation of the women at all administrative levels in the state
• Separation of the religion from the state and the drafting a secular democratic constitution.

Kurdistan National Assembly of Syria
P. O. Box 80175
Rochester Hills, MI 48308 USA

Sherkoh@gmail.com www.kurdnas.org

Talabani Says Iraq Report 'Very Dangerous'
BAGHDAD, Iraq, Dec. 10, 2006
(AP) Iraqi President Jalal Talabani on Sunday harshly criticized the bipartisan report recommending changes to U.S. war policies, saying it contained some "very dangerous" recommendations that would undermine the sovereignty of Iraq.

Talabani, a Kurd, said the report "is not fair, is not just and it contains some very dangerous articles which undermine the sovereignty of Iraq and the constitution."

He singled out the report's call for the approval of a de-Baathification law that could allow thousands of officials from Saddam Hussein's ousted party to return to their jobs.

"There is an article to bring back the Baathists to the political scene, which is very dangerous," he said in an interview with reporters at his office in Baghdad.

Other top Shiite and Kurdish leaders have disparaged the Iraq Study Group report. Sunni Arabs said they agree with the report's prognosis of Iraq's problems — but not the proposed cure.

Reaction to the 96-page document released Wednesday has underlined this nation's political and sectarian fissures, signaling the magnitude of the task ahead for a Bush administration anxiously searching for a change of course in troubled Iraq.

The divisions over the report, reflecting Iraq's ethnic and religious fault lines, center around some of the most highly charged issues afflicting today's Iraq — national reconciliation, sharing oil wealth and the role of neighboring nations in efforts to end Iraq's problems.

They also come at a time when serious doubts have been raised on whether the ruling Shiite-led government and its leader, Prime Minister Nouri al-Maliki, have the strength to place the nation on the road to stability at a time when its U.S. backers are publicly pondering an exit strategy that would leave Iraq's nascent security forces taking the lead in efforts to end the violence.

Facing rising dissent from within his government, al-Maliki last week said an often-delayed national reconciliation conference would be held this month. A senior aide at the Ministry of National Dialogue, who declined to be identified because he wasn't authorized to release the information, said the meeting would open Dec. 16.

The opposition by the myriad ethnic and religious factions is going to make the report's recommendations for changes in U.S. Iraqi policy a hard sell here, despite calls by the bipartisan commission to reduce political, military or economic support if the government in Baghdad cannot make substantial progress.

U.S. President George W. Bush has sought to play down the significance of the report's recommendations, saying he would weigh them along with other possible courses of actions on the table. Iraqi opposition might embolden him to ignore those he already publicly disagreed with, like engaging Syria and Iran.

The report's recommendations, which are not binding, also have met stiff opposition from some in the United States for its suggestion to pull out nearly all combat brigades from Iraq by early 2008.

"The report includes inaccurate information that's based on dishonest sources," Abdul-Aziz al-Hakim, a top Shiite politician, said of the report. He also rejected the report's linkage between ending Iraq's problems and a settlement of the Arab-Israeli conflict.

Another Shiite politician, Saad Jawad Kandeel of al-Hakim's Supreme Council for the Islamic Revolution in Iraq, objected to the report's contention that a review of a new constitution adopted in a referendum last year was essential to national reconciliation.

"The report made many errors ... that is one of them," countered Kandeel, charging that the report was biased in favor of one group. He did not name that group, but he was alluding to the once-dominant Sunni Arabs who overwhelmingly voted against the constitution.

An aide to al-Maliki said the Iraqi leader had unspecified reservations on the report but has yet to form a detailed response. A meeting Sunday of the prime minister, coalition partners, the president and his two deputies will discuss the report, said the aide, who spoke on condition of anonymity because he was not authorized to speak to the media.

The government's initial reaction to the report came last week from Deputy Prime Minister Barham Saleh, a Kurdish politician. He said its recommendations generally conformed with the government's own timeline for meeting objectives.

But his upbeat assessment has since been overtaken by less welcoming comments.

The strongest criticism has come from the Kurds, an influential minority whose leaders zealously guard their 15-year-old self-rule region in the north, worried that the chaos and violence sweeping the rest of the country could spill over into their enclave.

"We think that the Iraq Study Group has made "unrealistic and inappropriate" suggestions, said Massoud Barzani, president of the Kurdish region. He also objected to recommendations on sharing the oil wealth, reinstating Saddam loyalists in their old government jobs and giving Iraq's neighbors a role in efforts to end the violence.

Barzani, whose stand was backed by Iraq's Kurdish President Jalal Talabani, saved his harshest words for a recommendation that a referendum to decide the fate of a northern oil-rich region claimed by the Kurds be delayed. Arab and Turkomen residents of the Kirkuk area reject the Kurdish claim. The constitution states that the vote must be held before the end of 2007.

"Any delay in the implementation of this article will have grave consequences and it will in no way be accepted by the people of Kurdistan," Barzani warned in a statement.

Sunni Arab leaders, perhaps sensing that the report appeared to support some of their own stands on key issues, have generally been welcoming of its recommendations.

Adnan al-Dulaimi, leader of parliament's largest Sunni Arab bloc, said many of the recommendations made by the report were "positive," including the call for engaging U.S. adversaries Iran and Syria in the search for an end to the violence raging in Iraq.

"There are many very positive recommendations, but this government will not be able to carry out any of them," he said. "It is a sectarian and biased government."

The Association of Muslim Scholars, an influential Sunni Arab group thought to have links to the insurgency, said the report gave a "very accurate and commendable" summary of Iraq's problems. "But the solutions it proposed did not match the strength of the prognosis," said the association's spokesman, Sheik Mohammed Bashar al-Fayadh.

Meanwhile, Syria on Sunday warned that United States that it would face hatred and failure in the Mideast if the White House rejects recommendations made by a U.S. advisory panel on Iraq.

Syria's ruling party's Al-Baath newspaper urged U.S. President George W. Bush to take the Iraq Study Group's report seriously because it would "diminish hatred for the U.S. in region."

"But if it failed to pick up the positive signals either in the report or in the Syrian welcome of what the report has contained, it (the U.S.) would remain drowned in the quagmire and the situation in the region and the entire world would remain unstable," the newspaper said.

Blair: Fast Iraq Pullout Entails 'Serious' Repercussions
By Gerry J. Gilmore
American Forces Press Service
WASHINGTON, Dec. 10, 2006 – An early withdrawal of U.S. and British forces from Iraq before the Iraqis can stand on their own could produce serious consequences for the region, British Prime Minister Tony Blair said on ABC's "This Week" television news show today.

Therefore, "I think we've got to plan to succeed," Blair told "This Week" host George Stephanopoulos. "And, I think that if we start saying to the people that we're fighting in Iraq that we're ready to get out, irrespective of the success of the mission, I think that would be very serious."

There are now about 130,000 U.S. troops in Iraq. About 7,000 British troops are stationed in southern Iraq.

Blair told Stephanopoulos that sending more troops to Iraq now doesn't make much sense, noting the Iraqi security forces aren't yet ready to assume full responsibility.

"The problem is this. If, when you surge the American forces, the Iraqi capability isn't there to come in behind it, then your respite is only temporary," Blair said.

"I think you've got to build the Iraqi capability," the prime minister said, "I think this is the key thing."

Blair acknowledged the stakes in Iraq are high, noting there's no question in his mind about the necessity of defeating extremism there and across the region.

"My point is not that there's any doubt about either the strength of our cause or, in a sense, the worth of our mission," Blair said. "What we've got to do is get the right strategy to achieve it."

During his national radio address yesterday, President Bush said he and Blair discussed the sectarian violence in Iraq and the Iraq Study Group report during breakfast Dec. 7.

Bush also said he and Blair agree the sectarian violence seen in Iraq is the result of a deliberate strategy employed by extremists, including al Qaeda, who are bent on destroying the new Iraqi government before it can get onto its feet.

"People are deliberately creating a situation of destabilization in Iraq," Blair told Stephanopoulos today.

Failure in Iraq is no option, the prime minister said.

"Well, I think, to be absolutely blunt about it, we have to make sure that this works," Blair said. "And, I don't think, at the moment, this is a time to start hypothesizing if it doesn't work.

"It's got to be made to work because the consequences, as they rightly say, of strategic failure are immense," he said.