Security pact foes cite failure to shield Iraq’s assets
By James Glanz and Steven Lee Myers
New York Times News Service
BAGHDAD — Iraqi lawmakers opposed to the proposed security agreement with the United States have seized on a new argument that had emerged only in recent days: the accord does not explicitly protect Iraq’s vast oil wealth and other assets from seizure to satisfy billions of dollars in legal claims against the former government of Saddam Hussein.
An extension of this protection, which is guaranteed in the soon-to-expire U.N. resolution that the security agreement is meant to replace, will have to be negotiated separately, a wide range of Iraq and American officials who support the security agreement acknowledged Sunday.
They also acknowledged that such a move will be critical to protecting Iraq’s assets, or the government’s main source of revenue — oil exports — could be thrown into disarray when the U.N. resolution expires Dec. 31.
It appeared doubtful that the newfound hole in the security agreement would create enough additional opposition in parliament to defeat final approval in a vote that is scheduled for Wednesday. Supporters of the agreement expressed confidence on Sunday that it would still pass by a significant margin and that ways to extend the protection of Iraqi assets would be found.
But to Iraqi critics, the failure of the agreement to protect those assets reinforced their doubts. They said the defeat of the agreement, which would become the legal basis for the continued American military presence in Iraq after more than five and a half years of war, could not be ruled out.
"There is no respectable government that would sign such an agreement," said Mahdi al-Hafedh, a member of parliament who opposes it and was among the first to raise the issue of the expiring protections. Given all the unknowns, he said, the original U.N. resolution — not just the protection clauses — should be extended six months to enable further study of the security agreement.
The issue first emerged Saturday when parliamentary opponents pointed out that the agreement could not, by itself, ensure that Iraqi assets would continue to be protected against claims that could not only consume billions of dollars but also make it difficult for Iraq to sell oil and move the proceeds through banks around the world, where courts could "attach" — in effect, seize — money to settle legal judgments.
Those judgments have been granted in everything from basic claims of damages by Americans who were badly treated as prisoners of war or used as "human shields," against American bombardment in the 1991 war, to more fanciful assertions that Saddam was, for example, behind the Oklahoma City bombing in 1995 or the World Trade Center attacks on Sept. 11, 2001.
On Sunday, in response to the criticism in parliament, where both Iraqi and American government officials have labored mightily to win votes for the security agreement, the Iraqi minister of finance, Bayan Jabr, told a news conference that the Iraqi government "was not able to achieve all of its wishes" in sections of the agreement relating to the protection of Iraqi assets.
But he said that the agreement was well worth supporting because in it, the United States pledged to press the Security Council to continue the protections if Iraq produced a plan for resolving all legal claims on its assets.
Two senior U.S. officials said the agreement contained assurances that the United States would work to extend the protections by the Security Council.
"It is the highest level of assurance in a bilateral agreement between the United States and Iraq that they’re ever going to get," one said.
The officials said that if Iraq devised a strong plan to resolve outstanding legal claims on its money, they believed the Security Council was likely to extend the protections for a year.
Iraq has already started talks with the State Department to consolidate and resolve some of the cases, said Fadhil Mohammed Jawad, a legal adviser to the prime minister, but progress was slow.
Hoshyar Zebari, the Iraqi foreign minister, said he thought that in the end, his country would gain Security Council support.
"We’ve already consulted with the permanent members of the Security Council and they will be agreeable," he said. Al-Hafedh said such reassurances did not convince him. He pointed out that the American ambassador, Ryan C. Crocker, and other senior American officials from the U.S. Embassy, who have been personally lobbying members of parliament before the vote, "have given us moral and political guarantees that they will support Iraq on the immunity issue, but these guarantees have no legal impact."
In an illustration of the enormous complexity of the issue, both Jabr and the minister of planning, Ali Baban, who also attended the news briefing on Sunday, pointed out that it was not only the Security Council that would have to extend legal protection to Iraqi assets: a separate executive order by President Bush also provides some protections to Iraqi government funds held in American banks, and that order might have to be extended as well.
The order by Bush formally expires in May 2009, although the incoming president, Barack Obama, could presumably review it. Bush has also worked with Congress to reduce the risk that Iraq’s assets could be seized.
Bush’s order is not a mere detail. It is important to enforcing the current U.N. resolution, which requires that all Iraqi oil revenue is first deposited in an account at the New York Federal Reserve Bank before it is sent back to Iraq to satisfy budgetary requirements.
The huge balances in the account have been contentious, because they reflect in part Iraq’s unwillingness or inability to spend money on its own reconstruction, while the United States has devoted $50 billion of taxpayer money for that purpose.
Jabr revealed for the first time on Saturday that the account at the Federal Reserve now contained $20 billion — about twice the amount it contained at the end of 2007, according to the U.S. General Accounting Office. (In a separate interview, Mudher Salih Kasim, a senior adviser at the Central Bank of Iraq, said that the account contained, more precisely, $22 billion as of Oct. 10.)
Despite the interwoven complexities on legal protections of Iraq’s assets, Jabr and other members of Prime Minister Nouri Kamal al-Maliki’s government said they still strongly supported the security agreement, which also in effect pledges to urge Obama to continue protecting Iraq’s assets in the United States.
Obama’s position on the protections has not been made clear, but his transition has been well disposed toward the security agreement overall, since it sets a deadline for U.S. fighting forces to vacate Iraq, a goal Obama supported during the campaign.
As members of parliament considered the new developments in advance of the Wednesday vote, the largest bloc in the parliament, the United Iraqi Alliance, which represents an array of Shiite lawmakers, met Sunday to set a strategy for pushing the measure through. They formed a committee with responsibility for contacting members of the other parliamentary blocs — Sunnis, Kurds and those Shiites who oppose the pact — and listening to their positions, said Abbas al-Bayati, a member of the alliance.
The effort to win consensus is a response to Grand Ayatollah Ali al-Sistani, the most senior Shiite cleric in Iraq, who said in the last 10 days that the measure should be approved by a broad majority.
The United Iraqi Alliance meeting was attended both by al-Maliki, who leads the Dawa Party, and Abdul Aziz al-Hakim, who leads the Islamic Supreme Council of Iraq, the two most powerful Shiite parties.
Regardless of the vote outcome, the United Nations will still have to help Iraq deal with claims on Iraqi assets based on acts committed by Saddam, said Barham Salih, the deputy prime minister who is head of the Cabinet’s economics committee.
"The hope that we have is that the Security Council will decide to maintain these protections for Iraqi oil revenues," Salih said. "Obviously this is very crucial issue for Iraq. It is very complex and very painful that we will have to pay for the sins of Saddam Hussein."