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74–162 PDF 

" ! COMMITTEE PRINT 

112TH CONGRESS

2d Session 

S. PRT. 

2012

112–34 

IRAQ REPORT: POLITICAL 

FRAGMENTATION AND CORRUPTION 

STYMIE ECONOMIC GROWTH 

AND POLITICAL PROGRESS 

A MINORITY STAFF TRIP REPORT 

TO THE 

COMMITTEE ON FOREIGN RELATIONS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

APRIL 30, 2012 

Printed for the use of the Committee on Foreign Relations 

Available via World Wide Web: http://www.gpo.gov/fdsys/ 

COMMITTEE ON FOREIGN RELATIONS 

JOHN F. KERRY, Massachusetts, Chairman 

BARBARA BOXER, California 

ROBERT MENENDEZ, New Jersey 

BENJAMIN L. CARDIN, Maryland 

ROBERT P. CASEY, JR., Pennsylvania 

JIM WEBB, Virginia 

JEANNE SHAHEEN, New Hampshire 

CHRISTOPHER A. COONS, Delaware 

RICHARD J. DURBIN, Illinois 

TOM UDALL, New Mexico 

RICHARD G. LUGAR, Indiana 

BOB CORKER, Tennessee 

JAMES E. RISCH, Idaho 

MARCO RUBIO, Florida 

JAMES M. INHOFE, Oklahoma 

JIM DEMINT, South Carolina 

JOHNNY ISAKSON, Georgia 

JOHN BARRASSO, Wyoming 

MIKE LEE, Utah 

WILLIAM C. DANVERS, Staff Director

KENNETH A. MYERS, JR., Republican Staff Director

(II)

C O N T E N T S 

Page 

Letter of Transmittal ............................................................................................... v 

Introduction .............................................................................................................. 1 

Economic Opportunity ............................................................................................. 5 

Visa Processes for American Businessmen ............................................................ 8 

Helping U.S. Firms Navigate Iraq ......................................................................... 12 

The Strategic Framework Agreement .................................................................... 13 

Oil Production Growing, But . . . .......................................................................... 14 

Corruption Continues .............................................................................................. 17 

A Rosier View From the Iraqi Kurdistan Region .................................................. 18 

OSC–I .......................................................................................................................

Cost of the Mission May Be Its Death Knell ......................................................... 19 

Recommendations .................................................................................................... 21 

(III)

LETTER OF TRANSMITTAL 

UNITED STATES SENATE, COMMITTEE ON FOREIGN RELATIONS, Washingston, DC, April 30, 2012. 

DEAR COLLEAGUES: The departure of the U.S military from Iraq 

at the end of 2011 further reduced Iraq’s profile for the media and 

the public, but the U.S. Mission in Iraq, comprising Embassy Baghdad, two consulates, and 11 other training sites, is the largest in 

the world. It employs almost 2,000 U.S. Government personnel and 

16,000 contractors. The State Department’s Iraq mission in 2011 

cost the taxpayer about $6.5 billion. 

Iraq itself is far from the stable, reliable ally the administration 

had envisioned and American influence, according to some, is waning swiftly. Iraqi Prime Minister Nouri al-Maliki projected an air 

of normalcy claiming at a December 2011, U.S. Chamber of Commerce luncheon, declaring that Iraq is ‘‘open for business.’’ Several 

articles written in major magazines over the last several months 

dispute this claim. The Atlantic published two such articles, entitled ‘‘Doing Business in Iraq’’ and ‘‘Freedom is Bad for Business,’’ 

both by Megan McArdle. Another entitled ‘‘Under Worse Management’’ appeared more recently in BusinessWeek. The chronic joblessness and poverty seen in Iraq are problems that only a vibrant 

private sector can overcome, and a business friendly Iraq would be 

a substantial improvement. 

Prime Minister Maliki is also accused of being a pawn of Iran, 

a charge U.S. Ambassador to Iraq James Jeffrey disputes. He sees 

Mr. Maliki as a master politician, a man who has friends in 

Tehran, but also one who wants a relationship with the U.S. and 

other Western powers. Such relationships provide Prime Minister 

Maliki with an alternative to Iranian influence, the Ambassador 

argues, and empower him to say no to his Iranian friends, particularly when it is not in Iraq’s best interests. 

To assess Iraq’s openness to business, the status of American influence, and the operational makeup and effectiveness of the U.S. 

mission, I requested Senior Professional Staff Member Patrick Garvey make another trip to Iraq. This was his sixth trip to Iraq on 

behalf of the committee. His first ‘‘visit’’ to Iraq was on behalf of 

the U.S. Navy in 2003, when he was recalled to active duty service 

from our staff. 

The following report is derived from a December 2011 

STAFFDEL to Iraq and subsequent research and analysis. I hope 

you find the report and its recommendations useful as the Senate 

works to assess the administration’s strategy and U.S. involvement 

in Iraq. 

Sincerely, 

Richard G. Lugar, 

Ranking Minority Member. 

(V) 

(1) 

IRAQ REPORT: POLITICAL FRAGMENTATION AND CORRUPTION STYMIE ECONOMIC GROWTH AND POLITICAL PROGRESS 

At the direction of Senator Richard G. Lugar, Ranking Republican Member of the Senate Foreign Relations Committee, SFRC 

Minority staff has over the past 3 months conducted an inquiry 

into the progress of U.S. efforts in Iraq with particular attention 

to Iraq’s economic vitality, commercial prospects, and energy development. The proceeding report is derived from a December 2011 

STAFFDEL to Iraq and subsequent research and analysis. At the 

heart of the inquiry is the assertion, which has been repeatedly 

propounded by the Government of Iraq and its Prime Minister, 

that Iraq is open for business. Several articles have appeared in 

major newsmagazines over the last several months disputing this 

claim. The Atlantic published two such articles, entitled ‘‘Doing 

Business in Iraq’’ and ‘‘Freedom is Bad for Business,’’ both by 

Megan McArdle. Another entitled ‘‘Under Worse Management’’ appeared more recently in BusinessWeek. 

The December 2011 STAFFDEL coincided with the last weeks of 

the nearly 9-year long mission of United States Forces, Iraq (USF– 

I). Over these 9 years, the United States military has been the 

main guarantor of security and stability in Iraq, while also serving 

as the dominant political force in the country. The military’s withdrawal uncorked a new wave of political wrangling and violence, 

and it has also left the U.S. Department of State in charge of a 

ground structure that more resembles a military metroplex than an 

embassy campus. Ambassador Jim Jeffrey, himself once an Army 

officer, understands that the operation is unsustainable and is 

looking for ways to shrink the footprint and the budget, which will 

have an annual cost of about $6.5 billion. 

Staff sought to answer the following questions: 

1. Is Iraq really open for business? Does it matter? 

2. What does the military’s departure mean to Iraq and U.S. 

interests? 

3. How can State downsize the operational size and or cost 

of its mission without sacrificing U.S. national security objectives? 

INTRODUCTION

Iraq held a national election in March 2010. While Nouri alMaliki was able to form a government 9 months later, the cabinet’s 

security ministry posts have never been filled and there has been 

neither a political ‘‘grand bargain’’ between competing sectarian interests nor evidence that such an agreement is on the horizon. 

Such an agreement is necessary to make up for the lack of instituVerDate Nov 24 2008 09:08 May 24, 2012 Jkt 072394 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 S:\HEARING FILES\112TH CONGRESS, 2ND\TOPIC REPORTS\74162.TXT MIKE
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tional underpinnings, checks and balances, or traditions of democracy. Without a power-sharing grand bargain that provides partners in the governing coalition some autonomy within their own 

ministries, gives some legitimacy to the opposition, and guarantees 

governorates and provinces rights, Iraq will remain dysfunctional. 

Maliki will continue to be accused of running roughshod over the 

rights of the people, at best, or at worst, of being another dictator. 

A grand bargain might not be necessary if the constitution were 

not full of gaping loopholes or if the Parliament would enact the 

54 pieces of legislation that the document requires: only about 15 

or 20 of which have been completed. 1 One of those requirements 

is for the creation of a second parliamentary body, referred to in 

the constitution as the Council of Union or Federation Council 

(Majlis al-Ittihad). It strains the imagination to believe that any 

Parliament would cede power by creating a competing legislative 

body, so Iraq may remain a unicameral legislature. On the whole, 

without the legislation it requires or a constitutional review and 

amendment effort that seemed to show promise in 2007, the constitution remains what one analyst called ‘‘an empty suit.’’ 

The Erbil Agreements, a collection of power-sharing agreements 

reached in November 2010 that paved the way for government formation, contain the elements of such a political bargain, but they 

have been cast aside for a variety of reasons. The documents are 

not public. They are probably not even legal or constitutional. Instead, individual aspirations, age-old vendettas, longstanding 

feuds, party politics, and legal uncertainties continue to prevail in 

Iraq. 

Beyond legal uncertainties, distrust and finger-pointing are 

rampant. Minority Sunnis complain that Maliki is Shia Iran’s puppet, that he and his Iranian masters want absolute power in Iraq, 

and that all Sunnis are to be rendered powerless (with the Kurds 

next). The competing narrative heard in Shia circles argues that 

the Sunnis want to take back control and return a dictator to 

power who will once again marginalize the Shia. 

The lack of a grand bargain is borne out in the political fragmentation and corruption that block both economic growth and political progress. Its absence is seen in even starker tones now that 

the U.S. military has departed. The civil war that was feared imminent in 2006 and 2007 is once again being talked about. The alliance that elected Maliki Prime Minister has weakened. There are 

rumors that the Islamist movement led by Muqtada al-Sadr may 

have a credible candidate for Prime Minister should the votes be 

assembled for a vote of no-confidence. Iraqiya, the bloc led by the 

2010 popular vote winner, Ayad Allawi, however, has not grown 

stronger. Its membership could not hold together on a recent boycott, and Allawi has not demonstrated skilled leadership. 

Some individuals interviewed by staff suggest that the December, 2011, indictment of Sunni Vice President Tariq al-Hashemi, 

could stimulate a Grand Bargain by forcing the political parties to 

take sides and break apart Maliki’s coalition in Parliament with a 

no-confidence vote. Whether true or not, the type of charges against 

Hashemi (that he directed death squads to carry out political assassinations) could be lodged against anyone in the governing coalition. According to Hashemi’s advisors, the action came after the 

3 

Vice President changed his position on the province of Anbar filing 

to become a ‘‘region,’’ but his advisors say the legal action is more 

personal than anything. Status as a region would be advantageous 

for Anbar because under the constitution, regions are granted 

greater economic autonomy, while provinces must seek approval 

from Baghdad for certain initiatives and investments. 

One close observer suggested that the threat of external pressures (Syria, Iran, etc.) leading to renewed sectarian violence in 

Iraq could also provide impetus for a broad-based push for reconciliation. That may mean someone other than al-Maliki has to be 

at the helm, since he may not be capable of re-earning Sunnis’ 

trust. This is likely to cause great consternation among U.S. policymakers and the Embassy, but the change from dictatorship to democracy is often turbulent, and rarely follows a linear path. A 

Spanish diplomat who met with staff in Jordan offered his country’s post-Franco period as an overlooked historical example. While 

that conversation centered on the transition in Egypt, there are 

similarities with Iraq as well. 

Without a grand bargain, and without the safety net provided by 

the U.S. military, the best hope for Iraq and its citizens may actually be that the economy does not develop too quickly. In even the 

best case, significant oil production growth is more than 5 years off 

and the government of Iraq will need outside assistance to develop 

the sector’s full capacity. Slow growth will force the government 

into making careful choices in its budget that could lead to a more 

open economy and a more efficient public sector. The government 

cannot afford generous handouts to placate the citizenry. For example, the Iraqis are trying to figure out how to wean the country off 

of the legacy monthly food-ration for which all Iraqis are eligible 

and which costs more than $7 billion annually. Furthermore, in 

terms of Iraq’s broader (non-oil) economic development, it is an underdeveloped resource-rich economy. International companies are 

uniquely positioned to drive change and bring transparency into 

the economic lifeblood of Iraq. But many international firms will be 

skeptical of involving themselves in an Iraq venture as long as the 

Iraqi narrative is one of uncertainty, corruption, danger, and legal 

ambiguity. 

Given that Iraq’s fate will be decided in large part by the economic growth trajectory it realizes, the top priority for the U.S. 

Embassy should, in the wake of the military’s departure, shift to 

helping American companies do business in Iraq. Although staff 

found this to be the case to some extent, a great deal of work needs 

to be done by both the Embassy and the companies themselves. 

The Government of Iraq has an even more important role to play 

in this regard. While PM Maliki and other government officials declare that Iraq is open for business, staff found the reality to be 

quite different. Outside the oil sector, one finds a business community comprised of the lucky, the shady, the very adventurous, and 

companies who have FMF or FMS deals. 

Iraq has many improvements to boast, but it might be another 

10 years before it is a thriving economy or functioning democracy 

capable of acting as a stable and reliable ally. The time has passed 

when the United States could seek to alter Iraq’s political realities 

through military means or propound text for legislation. The adVerDate Nov 24 2008 09:08 May 24, 2012 Jkt 072394 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 S:\HEARING FILES\112TH CONGRESS, 2ND\TOPIC REPORTS\74162.TXT MIKE
4 

ministration must provide greater leadership and a strategic vision 

that keeps this in mind and can adjust to realities. It should expand exchanges under the oft-mentioned Strategic Framework 

Agreement (SFA) that was signed alongside the now expired Status 

of Forces Agreement. Vice President Biden highlighted the SFA in 

his early December visit: ‘‘The relationship will be guided by our 

strategic framework agreement which outlines partnerships across 

a range of strategic issues, including energy, trade, the rule of law, 

diplomacy, agriculture, education and many others.’’ The administration must continue to assign its most skilled and experienced 

Arabist diplomats to ensure Iraq’s complex problems are considered 

in the broadest possible regional terms. 

Among Iraqis, there is a great deal of apprehension about what 

will happen next. On one hand the troops have been out of the cities and the Iraqis have been providing their own basic security 

since 2009. Overall violence is down markedly. Yet there is a growing fear that as Iran becomes further isolated, it will use the relationships and terrorist groups (most prominently Asaib al-Haq 

(AAH)) it has cultivated in Iraq to drive a wedge deeper into the 

Sunni-Shia relationship, to embarrass Iraq in the eyes of its nascent western allies, and to scare off foreign investors. Iran’s proxies 

could also attack U.S. activities and further reduce their effectiveness. For example, movement for the STAFFDEL was constrained 

by a ‘‘credible kidnapping threat’’ coming from the ‘‘friends’’ of Lebanese Hezbollah member, Ali Musa Daqduq, the last prisoner held 

by the U.S. who was released in late December. 

The most apprehensive Iraqis include those who have worked for 

the United States, the hundreds of thousands of refugees in the region, and the internally displaced. These Iraqis were scared before 

but feel more vulnerable now. Since the spring of 2011, there has 

been a drastic decrease in refugee and SIV (special immigrant visa) 

admissions to the United States. New ‘‘interagency check’’ processes put into place by the administration have led to a worldwide 

drop in refugee admissions from a rate of 73–74,000 per year to a 

total of 56,424 (9,388 Iraqis) for the current fiscal year. The check 

system is cumbersome, lengthy, and very costly. 

According to the refugee coordinator in Embassy Baghdad, the 

refugee program has a 2-year wait before an initial interview can 

even be conducted. There is currently a 6-month (almost 13,000 

case) backlog awaiting a Security Advisory Opinion.2 Even worse, 

most who have applied and been interviewed think they may get 

approved and thus afforded the opportunity to start their lives over 

the United States. Despite this common perception, staff learned 

that while the overall rejection rate of the security check may only 

be 25 percent, 99 percent of those cases have not received a rejection letter. In other words, applicants that the system has rejected 

are not being told they will not be admitted to the United States. 

In Jordan, staff met with several such families who were in various 

states of limbo and desperation awaiting the outcome of these processes. 

In terms of Iraqi politics, staff heard predictable Sunni resentment toward Maliki, who they feel has shown a heavy hand in 

dealing with internal security threats but has no political backbone 

when it comes to facing down Iranian malfeasance or even dissent 

5 

among his own parliamentary bloc. Staff also heard substantial apprehension on the part of the Kurds, who worried that they will be 

again alone to face a Baghdad strongman (whom the United States 

is arming and training). Tensions along the disputed internal 

boundaries and around Kirkuk continue. This state of affairs was 

made fully apparent when the U.S. turnover of Hurriyah airbase 

near Kirkuk to Iraqi control nearly led to armed conflict in November. 

The U.S. military withdrawal gives the Americans little ability 

to protect Maliki against a coup attempt or to continue counterterrorism operations in our own interests. However, as insurance 

against more involved plots against the Iraqi Government, we retain significant military assets in the Arabian Gulf, which include 

the U.S. Fifth Fleet and a 1.5 carrier presence,3 a heavy brigade 

and some 13,500 troops in Kuwait, and significant air forces in 

Qatar. This presence will continue for the foreseeable future. 

American diplomats judge that Prime Minister Maliki is under 

competing political pressures yet is a master navigator of political 

winds. They feel he is competent in holding his own and backing 

down the Iranians when necessary, and he does this particularly 

by building and maintaining a visible strategic relationship with 

the United States and the West. When asked about Maliki’s continued support for the Assad regime in Syria, for example, Ambassador Jeffrey did not condemn the Prime Minister, nor see any 

great gain in Maliki’s calling for an end to Assad. It would make 

no difference to Assad’s longevity and would only hurt what Maliki 

views is an essential relationship with Iran. Plus, Maliki spent 

much of his exile in Syria. 

ECONOMIC OPPORTUNITY

On December 13, 2011, Prime Minister Maliki spoke at the U.S. 

Chamber of Commerce in Washington, DC. Iraq, he said, welcomes 

American companies, which risk losing out if they fail to get more 

aggressive. But Maliki failed to drive the pitch home. He made no 

promises on the merits about a level playing field, accountability 

or transparency, or reducing bureaucratic impediments. Instead he 

underlined that he and his Iraqi Government colleagues will be 

glad to help American companies. Staff heard this in Baghdad from 

the Chairman of the National Investment Council, Dr. Sami Al 

Araji, a prominent Sadrist politician, who said he could sign visas, 

would take care of lodging, cars, and protection for anyone who 

wanted to come to Iraq to ‘‘look around.’’ Targeted, logistical assistance of this sort is of little utility without concomitant efforts by 

the Government of Iraq to address interrelated economic, regulatory, infrastructural, and political difficulties that continue to 

hinder American investment. 

On the positive side, Iraq is exporting about a half million more 

barrels per day than a year ago, and exports are expected to increase by that quantity again next year. Positive developments 

have also occurred with regard to Iraq’s budget. The 2012 budget 

was approved by the Parliament and received the IMF seal of approval. It contains many welcome provisions from the economic 

standpoint. Outside of these two issues, however, success is much 

harder to see. 

6 

Doing business in Iraq remains extremely challenging. Capital is 

hard to acquire. The government is slow in paying its bills. The law 

remains complex and at odds with itself. Public utilities and services are not up to standards. Investors are scarce and a sense prevails among them that the Iraqi Government is not friendly toward 

business. ‘‘Investors come to make money, not to make charity,’’ 

said the Deputy Minister of Finance, who had a good grasp on 

Iraq’s faults, but like many in government, feels powerless to do 

anything about it.4 For example, ExxonMobil, made a deal in the 

North because they got better terms, Dr. Al Jaberi said: ‘‘Who can 

blame them?’’ 

American firms who were interviewed by staff offered a collective 

shrug, not wanting to lay blame, but they are noticeably frustrated 

with the lack of progress on tenders that are never considered, nor 

offered. For example ITT Exelis, which has been working for many 

years on foreign military sales, has for 3 years been involved in a 

bid to provide a military communications system on a direct commercial sales basis to the Iraqis, but it ‘‘never comes to fruition despite best prices and interoperable equipment—same as delivered 

through FMS.’’ 5

Dr. Al Jaberi expressed gratitude for what the Americans had 

done for his country and said his government should be ashamed 

for how the Americans are being treated, especially in light of 

what, in his view, is the great gratitude the Kuwaitis continue to 

show the Americans. In this regard he said, you have ‘‘the U.S. 

begging us to [let them] stay.’’ 

If Iraq is really open for business, the government must get out 

of the way rather than intervene. In an open and competitive system, assistance should only be needed rarely. ‘‘Doing Business 

2012,’’ an annual World Bank report that analyzes quantitative indicators on business regulation and the protection of property 

rights across 183 economies and over time, ranked Iraq at No. 164, 

down five slots from its 2011 survey. Singapore ranks first, the 

U.S. fourth, while Afghanistan at No. 160 ranks ahead of Iraq. According to the report, Iraq has instituted no reforms the World 

Bank would recommend, but it did institute a reform that made it 

more difficult to do business. ‘‘In Iraq starting a business became 

more expensive because of an increase in the cost to obtain a name 

reservation certificate and in the cost for lawyers to draft articles 

of association,’’ the World Bank said.6

With the multitude of hurdles detailed by the World Bank (and 

Ms. McCardle in‘‘ The Atlantic’’), it is no wonder that Iraqis continue to prefer government jobs to opportunities in the private sector. This general finding was reaffirmed by the International Rescue Committee, which works on behalf of the U.S. Government in 

assisting internally displaced persons (IDPs) in Iraq. IRC conducted a ‘‘Livelihoods Survey’’ reviewing the ‘‘labour market and 

the relevant openings to enhance livelihood opportunities for youth 

who are currently living in IDP camps in Baghdad.’’ The study, 

published in May 2011, conducted focus-group interviews with 

about 110 youths (15–24 year olds) from urban slums. About 65 

percent of the males are doing some work, while only 2 percent of 

females are engaged in any income-generating work. Most lack the 

skills to create opportunities or even engage in the economy and 

7 

therefore see few prospects for themselves. Further, ‘‘many youth 

perceive government employment as an ideal work environment 

due to the level of job security and provision of benefits.’’ 7 Yet in 

reality they do not have the education or even physical mobility to 

get to a government job, so their best option is self-employment, 

microenterprise, or day labor work. Efforts such as these represent 

a slow and tedious path out of the slums, particularly in the absence of focused policies or practices by the Government of Iraq. 

But the lack of jobs is not only a problem for the youth in Baghdad’s squatter slums. Approximately 2.0 to 2.5 million young people in Iraq are unemployed or only work part time and want to 

work more. A study done for USAID in 2011 reports that unemployment among the entire population, including what they refer to 

as ‘‘disguised unemployment,’’ might be as high as 38 percent. Additionally, as USAID has documented, ‘‘each year, there are 

450,000 [more] young people seeking work.’’ 8 But with Iraq’s public 

sector more than doubling in size since 2005 and providing perhaps 

half of all jobs in Iraq (60 percent of all jobs in the Kurdish Region), the call for policies that facilitate private sector job creation 

should be loud and clear. 

Staff did encounter individuals and organizations that displayed 

a commitment to changing Iraq’s commercial legal framework for 

the better. Among the most pragmatic are the entire staff of the 

Commercial Law Development Program (CLDP), who told staff, 

‘‘Iraq doesn’t know how to transition to a market-based system.’’ 

CLDP, a small division of the U.S. Department of Commerce, helps 

developing and post-conflict countries implement commercial legal 

reforms, and is showing them how in an understated, measured, 

and cost-effective fashion.9 CLDP’s current mandate is twofold: ‘‘to 

build capacity conducive to the modernization of Iraq’s economic infrastructure’’ and to ‘‘create a legal environment conducive to economic diversification and private sector growth.’’ Among CLDP’s 

challenges in 2010 was to build capacity for the Ministry of Oil’s 

Petroleum Contracting and Licensing Directorate (PCLD). The 

PCLD lacked the knowledge and skills it needed to negotiate on an 

equal footing with the international oil companies. CLDP designed 

workshops to explain the legal, economic, and financial intricacies 

of oil and gas and provided 3 weeks of consultations in the U.S. 

that culminated in a 2-day simulated negotiation with seven U.S. 

lawyers. In order to help overcome some of the distrust of foreign 

participation in the Iraqi oil market, which has hamstrung the 

Ministry of Oil, CLDP also created some financial models for the 

Ministry of Oil to use in educating members of the Council of Representatives about the type of contract being used in the bid 

rounds. 

CLDP has achieved modest success because of its realistic, factbased appraisal that Iraq’s challenging history can be overcome 

neither quickly nor forcefully. There are many bureaucratic and 

human obstacles as well as the legal ones. But like the arcane business practices analyzed by the World Bank, these broader issues 

must be tackled because they slow progress and discourage honest 

private companies from pursuing opportunities, which is the most 

sustainable path to job creation. 

8 

An additional challenge to economic growth, and a drain on the 

federal budget, which staff discussed with Thamer Ghadban, 

Chairman of the Prime Minister’s Advisory Council, are stateowned enterprises (SOEs). SOE employees are paid out of the 

budget. They receive subsidized means of production (which often 

include free fuel, petroleum byproducts, and electricity). Ghadban 

stated that subsidies and government-paid salaries are being 

phased out. To facilitate this phase-out, the budget is going to 

allow ministries to pay salaries to laid-off employees for 1 year. 

Ghadban said this provision will end in a year, after which there 

will be no more salary subsidies or free electricity for SOEs. 

Ghadban’s claims were mostly substantiated in analyzing the 

budget itself, but there were inconsistencies, and some of this may 

be a little bit of a shell game. For example Article 31 states that 

self-financed public companies should not be funded in the federal 

budget, but that those companies can obtain loans from the stateowned banks. Meanwhile, Article 23 has a provision that allows the 

Minister of Finance to settle loans given to the SOEs, implicitly 

supporting the SOEs. So, instead of the current practice of subsidies, the state-owned companies can get state loans, which can 

then be written off. As for salary phaseouts, Article 21 contains 

provisions for people who have been integrated from the militias, 

suggesting they should not be phased out, and it also states that 

vacated positions should be deleted and not refilled. Finally, Article 

11 provides budget assistance to allow ministries to pay for onehalf of the salaries for 3 years (not one as Ghadban stated) for personnel transferred to the private sector. 

VISA PROCESSES FOR AMERICAN BUSINESSMEN

Any country that professes to encourage business must start by 

making its processes transparent, predictable, and easy to follow. 

That is far from the case in Iraq. One simple step toward opening 

Iraq for business would be to standardize its visa processes. Over 

the past several months, the procedure for getting a visa for Iraq 

has become increasingly laborious. According to one U.S. senior executive, ‘‘Before December 15, getting a visa for Iraq took 4–5 days. 

Now you never know.’’ 

Iraqi officials say their system is faster than that of the United 

States. Implying that there might be some tit-for-tat for poor treatment given to Iraqi travelers, they stated that it must be a twoway street. A personal example: unlike prior trips, where staff were 

given a ‘‘multiple entry’’ visa good for an entire year, for the December 2011 visit, staff were given a ‘‘single entry’’ visa valid for 

3 months. Businessmen and journalists state the 3-month singleentry visa has become standard for them as well. As a result, many 

private companies who work for the U.S. mission have a difficult 

time managing leave or rotation cycles for their employees because 

they must reapply for visas each time they enter or leave the country. 

Table 1.1 was compiled using publicly available information to 

compare the requirements for Americans seeking to visit foreign 

countries for the preliminary activities necessary to determine 

whether they should expand their business interests abroad. Such 

activities include, but are not limited to, participating in fact-findVerDate Nov 24 2008 09:08 May 24, 2012 Jkt 072394 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 S:\HEARING FILES\112TH CONGRESS, 2ND\TOPIC REPORTS\74162.TXT MIKE
9 

ing missions, conducting site visits, and attending meetings. Iraq 

ranks last in this comparison, scoring 45 out of a possible 100 

points. Countries who scored 100 required no visa for Americans 

traveling for basic business. 

The United States longstanding European allies are prominent 

among those who have opened their borders to American private 

investment. Other countries with widely divergent geographical 

dispositions, historical relationships with the United States, and 

levels of economic development have welcomed American businesspeople with open arms. Included among these countries are African 

partners Botswana, Kenya, Tanzania, and South Africa. Botswana, 

in particular, maintains rules and regulations fairly similar to 

those of our European allies. Additionally, several of our partners 

in East Asia have low barriers to business travelers. While the 

Philippines requires Americans traveling for purposes other than 

tourism to obtain a visa prior to departure, processing times are 

short and visas themselves are comparatively inexpensive. 

In South America, longstanding partners Argentina and Chile 

maintain well-reasoned regulations highly conducive to those carrying out exploratory processes that are a necessary precursor for 

investment. In spite of the fact that another friend in the region, 

Brazil, expressed concerns about security measures taken at American points of entry following 9/11 and implemented retaliatory 

policies, the country has remained open to Americans considering 

the expansion of their business interests there. 

Iraq’s own policies are far more prohibitive than not only those 

of the countries of all aforementioned regions but also many of its 

neighbors in the gulf. Iraq maintains an unpredictable regulations 

regarding visa processing times, costs, and legal duration; burdensome requirements on all private American citizens seeking to remain in-country longer than 10 days; inconvenient mandated exit 

processes; and unpredictable exit fees. In contrast, the United Arab 

Emirates’ regulations are somewhat unpredictable and complex, 

but the government maintains reasonable entrance and exit policies. Bahrain and Kuwait continue to leverage their economic potential by managing regulations that are among the most welcoming to potential American investors. 

Table 1.1 offers insight only on measures governing the admission of Americans traveling with the intent of finding markets for 

their products in Iraq. It does not touch on far more complex regulations regarding foreign direct investment. However, liberalizing 

such policies is a prerequisite to make the country’s overall business climate more amenable to foreign investment. Iraq has a 

unique, complicated history with the United States that cannot be 

ignored, but so do many nations where Americans conduct business, often despite truly odd—but consistent—visa requirements. 

American businessmen interviewed are able to deal with reasonable and well-codified regulations. Their frustration stems from the 

lack of consistency with which they are applied and the constant 

uncertainty. 

Ambassador Jeffrey said that without a status of forces agreement, every one of his employees must now have a visa to enter 

and leave Iraq. All contractors, subcontractors, NGO employees, 

and businessmen must get them as well. In Iraq, visa issuance falls 

10 

under the purview of the Ministry of Interior. Interior is one of the 

three security ministry posts that have been filled for well more 

than a year by acting ministers. In the case of Interior, the de facto 

minister is Prime Minister Maliki himself. Staff learned on this 

trip that at MOI Maliki has been rewarding Daawa loyalists and 

made cuts to staff that have negatively impacted the effectiveness 

of the institution. 

Obtaining a visa is not the only slow process. One Western journalist whom staff interviewed stated he has been attempting to get 

a residency permit, but it ‘‘has been pending for more than a year. 

It has been sitting on the desk of the Acting Minister of Interior 

(Adnan al-Asadi) awaiting his signature.’’ Like many, his organization has figured out a workaround for the visa process, going 

through the foreign ministry, or he said, ‘‘Bribes will save you some 

of this hassle.’’ 

The journalist said that the HIV/AIDS test is a requirement for 

the visa, which is single entry and valid for 3 months. Then, he 

said, ‘‘upon arrival you have 10 days to register with the authorities who may or may not demand another HIV test. They put a 

sticker on your passport that takes a whole page. Then you need 

permission to leave Iraq and also maybe another HIV test. This 

exit authorization also earns you a sticker that takes up another 

page of your passport. So for a single visit to Iraq expect the visa 

sticker at the Embassy, the arrival sticker and the departure 

sticker.’’ 

11 

TABLE 1.1 COMPARING VISA PROCESSES FOR AMERICAN BUSINESSMEN ABROAD 10

Country 

Visa for 

AMCIT 

entry? 

Visa available at 

POE? 

Business visa req’d? 

(duration of validity) Cost of business visa? Visa processing time? Legal duration of visa- free stay? Other requirements for entry Exit procedures prior to reaching airport req’d? Entrance or Exit fee apart from ticket cost? Score 11

Argentina ...... No N/A No N/A N/A 60-180 days None None $140.00 entrance 95 Bahrain ........ Yes Yes Yes (14-28 days) $20-$228 2 weeks N/A No HIV/AIDS test, 

but those found to 

have HIV/AIDS 

refused entry 

None No 97 

Botswana ..... No N/A No N/A N/A <90 days/yr None None None 100 Brazil ............ Yes No Yes (90 days-10 

years depending 

on work) 

$140-$160 10-15 days N/A None None None 90 

Chile ............. No N/A No N/A N/A 180 days None None $140 entrance fee 95 France .......... No N/A No N/A N/A 90 days None None None 100 Germany ....... No N/A No N/A N/A 90 days None None None 100 Iraq ............... Yes No Travelers for business apply for 

standard visa (validity determined 

case by case) 

Determined on base 

by case basis 

Determined 

on case by 

case basis 

N/A Must obtain arrival 

sticker, residency 

stamp, and submit 

blood sample within 

ten days of arrival. 

Must obtain exist 

stamp at a designated Residency 

Office prior to 

departure 

$20-$200 (dependent on length of 

stay, type of visa, 

other factors 

45 

Kenya ............ Yes Yes Yes (six months) $100.00 Two weeks None None None No 97 Kuwait .......... Yes Yes Yes (business travelers use standard 

entry visa) 

$175.00 Visas issued 

at all ports 

of entry 

N/A None None $15.00 entrance 92 

Philippines ... Tourism 

only 

No Yes (3-12 months) $30.00-$90.00 

(depending on 

stay length) 

One week N/A None None Exit fee req’d 85 

Poland .......... No N/A No N/A N/A 90 days None None None 100 South Africa No N/A No N/A N/A 90 days None None None 100 Tanzania ....... Yes Only in 

case of 

emergency 

Yes (one year) Determined on case 

by case basis 

Five business 

days 

N/A None None None 87 

UAE ............... Yes Personal 

travel only 

Yes (determined on 

case by case basis) 

Determined on case 

by case basis 

Determined 

on case by 

case basis 

N/A None None None 60 

12 

HELPING U.S. FIRMS NAVIGATE IRAQ

Given that Iraq’s fate will be decided in large part by the economic growth trajectory it realizes, the top priority for the U.S. 

Embassy should be helping American companies do business in 

Iraq. Staff found this to be the case to some extent, but this is a 

long way from being a good news story. A great deal of work lays 

ahead for Embassy Baghdad and the companies themselves. 

Many U.S. companies are doing big business in Iraq, but they all 

have challenges. Large firms such as Fluor, GE, Honeywell, 

Navistar, Northrop-Grumman, Rapiscan, and AECOM have pursued interests in Iraq. Honeywell, for example, has been very aggressive and has two offices in country, one in Basra and another 

in Baghdad. They will be opening a training center this year in 

Basra with 13 employees. Orders for their product are rising too, 

reaching about $100 million in orders for all their businesses combined, and they are considering expanding to work in the Kurdish 

Region. Smaller U.S. firms such as Altergy, Henry F. Teichmann, 

Inc., and Puralytics have been approached by some Iraqi Stateowned enterprises that have interest in their work. Other U.S. 

firms have been working for the U.S. mission in various forms, including working with the Office of Security Cooperation for Iraq 

(OSC–I), whereas others have developed direct commercial sales 

with the Iraqi Government. 

Honeywell gives great credit to both DOD and State. Honeywell 

spent 16 months in a DOD incubator while it tried to put together 

a standalone operation (one of the only positive stories staff have 

heard about the Task Force for Business Stability Operations). In 

particular, they credit Embassy Baghdad and commercial officers 

for their success, naming Commercial Attache ́ Dao Le as ‘‘helpful 

and passionate’’ and willing to ‘‘go out of his way to help.’’ 

Similar compliments about the helpful nature of the Embassy 

team have come from the Indiana firm, Ameriqual, which was solicited to make an offer on a yet to be seen tender from the Ministry of Trade to replace the government distributed monthly ration 

of food commodities with a commercially run operation featuring a 

single prepackaged kit. This would be a huge operation and potentially lucrative commercial enterprise, but even for huge company 

like Ameriqual, it would require a great deal of capital to produce, 

ship, and distribute food kits to every Iraqi family on a monthly 

basis. Ameriqual jumped through a great many hoops, sending senior officials to Baghdad to meet with the Minister, providing figures 

and estimates, etc. There was a great deal of interest on the part 

of the GOI, which sent a commercial officer to Indiana to tour the 

production facility. But in the end, no tender was issued and no bid 

was considered. 

The U.S. and Foreign Commercial Service (FCS) is the trade promotion arm of the U.S. Government and part of the Department of 

Commerce. Its main objectives are promoting U.S. exports, encouraging foreign investment into the U.S., and protecting U.S. business interests. FCS has two staff in Baghdad and another in Erbil. 

They have no locally engaged staff (LES) who understand the Iraqi 

business climate. FCS officers, like most Embassy staff, serve on 1- 

year assignments. U.S. Embassy Kuwait, by contrast, has one FCS 

13 

officer and four LES. American companies (and American brands) 

are all over Kuwait. 

Until 2005, five LES were assigned to work for the FCS in Iraq, 

after which they were left with the one LES staff in Erbil. Locally 

engaged staff underwent quite an ordeal in those days. Fearing for 

their safety, many left the country while others simply found traveling into the Embassy too dangerous and quit. (And, according to 

today’s staff, ‘‘ . . . in a couple of cases KIA.’’) After that, FCS 

eliminated the LES slots and managed the workload by hiring two 

bilingual/bicultural advisors under a DOD contract. That ended in 

the spring of 2011, and another interim solution, a 3161 12 employee, is onboard, and two Iraq cultural advisors (ICAs) were 

under contract with State through April, 2012. Recently, the Department of Commerce and ITA has approved the hiring of one 

LES in Baghdad. To his credit, the Commercial Counselor recognizes he is shorthanded and is trying to work around it. He said 

he will ‘‘ . . . use fees we charge companies for new matchmaking 

and due diligence services we now offer to pay for at least one of 

the ICAs on contract . . . to ensure that we can offer U.S. companies the services they need in order to do business here.’’ 

The Deputy Chief of Mission for Economic Affairs, Ambassador 

Peter Bodde, has also created a task force to help work around this 

handicap, staffing it with additional economic officers and 3,161 

hires. Nevertheless, staff believes the Department of Commerce 

must put more effort into Iraq, particularly by hiring more local 

staff, especially for the FCS mission. 

THE STRATEGIC FRAMEWORK AGREEMENT

Although the Status of Forces Agreement (SOFA) negotiated by 

the Bush administration in 2008 has expired, a second agreement, 

called the Strategic Framework Agreement (SFA), which was negotiated and signed at the same time, provides a framework for activities to ignite Iraq’s economic engine.13 This agreement has been 

much talked about inside State Department and Embassy circles 

and mentioned in briefings to Hill staff, but it can claim few results. Nevertheless, Section V of the SFA entitled, ‘‘Economic and 

Energy Cooperation’’ should be looked at carefully and some big 

ideas should be generated whose goal would be to get Iraq ‘‘open 

for business.’’ 

One of the biggest gaps in expertise in Iraq is in project development, financing, and management. One idea discussed with staff by 

the Commercial Attache ́, and proposed last summer by the Embassy’s Economic Minister with inputs from the Foreign Commercial 

Service, would be modeled on the U.S.–Saudi Joint Commission on 

Economic Cooperation (JECOR) that ran for 26 years beginning 

back in the 1970s. As it did for a long time with the Saudi state, 

it would provide tremendous short- and long-term benefits to both 

Iraq and the U.S. In a subdued ‘‘below-the-radar’’ fashion, JECOR 

provided expertise the Saudis needed to develop such things as its 

civil service, national parks, and its emergency response services. 

The Saudi Ministry of Finance paid the U.S. for a wide range of 

training, advisory, and procurement services. JECOR had as many 

as 300 advisors in Saudi Arabia at its peak. 

14 

A JECOR model, authority for which is found under Section 607 

of the Foreign Assistance Act of 1961, would provide one-stop shopping for economic and technical expertise that the Iraqis need from 

many departments of the U.S. Government. Setting this up under 

the Strategic Framework Agreement might eliminate controversy. 

It could feature, for example, the sort of procurement processes 

that come with the FMS program and the technical assistance attributes of USAID, but for nondefense goods and services. By having the GOI pay for it openly, or through a foreign assistance trust 

fund, one could shield it from various criticisms. Additionally, it 

would create jobs in the Iraqi private sector, bring stability benefits 

by ensuring that essential projects such as power stations, generators, water treatment plants, and hospitals are built on time and 

to international standards. Finally, a JECOR for Iraq would provide a bridge mechanism to the day when Iraq’s legal and business 

regulatory framework are up to standards. 

For the United States, a JECOR would, first and foremost, fully 

fund U.S. personnel and support positions, virtually eliminating 

any sort of unwelcome sense that may linger following the occupation. It would promote U.S. standards and technologies in Iraq— 

seeding the ground for long-term business relationships. It would 

provide incubator or toehold type advantages that defense-oriented 

companies participating in FMS programs enjoy in many countries. 

In addition it would help participating firms with still-problematic 

issues like receiving payments, tender transparency, and procurement processes. 

OIL PRODUCTION GROWING, BUT . . . 

When one speaks about the dire state of doing business in Iraq, 

oil remains an outlier. While oil has complicated realities, it receives great attention from the Maliki government and keen interest from international oil companies. 

According to briefings received from the Embassy and the Department of State, Iraq’s oil production increased by approximately 

500,000 barrels per day over the course of 2011. Net production is 

up to approximately 2.8 million barrels per day, and net exports 

are about 2.2 million barrels per day. Despite improvements to export capacity, particularly the recent opening of additional moorings near the port of Basrah, production continues to lag. The reasons are detailed in oil industry dailies. The infrastructure, including pipelines, tanks, and storage capacity, limit export capacity. 

Iraq has for decades used poor technology and techniques for recovering oil. But the number one reason Iraq’s production lags is politics. The lack of a grand bargain that would facilitate a political 

consensus hampers development of a consensus approach to Iraq’s 

oil future. Politics hampers the creation of a coherent investment 

strategy—or even the creation of a financing mechanism—that will 

enable the funding of the capital to overcome the tremendous infrastructure shortcomings. 

The contracts the Government of Iraq signed so far with international oil companies to develop 14 oil fields call for Iraq to reach 

the extremely ambitious target of 12 million barrels per day by 

2017. An estimated $370 billion must be invested to get Iraq to 

that production target. An authority at PFC Energy interviewed by 

15 

staff in early 2011 stated that this would mean Iraq would ‘‘achieve 

in 7 years what it took Saudi Arabia 70 years to do.’’ The hurdles 

Iraq must clear to make that happen are tremendous, however, 

and industry experts think that Iraq will be fortunate to reach 5 

million barrels per day by the end of 2016. 

To reach even the 5 million per day figure, the equivalent of adding about a half-million barrels per day per year over the next 6 

years, would require absolute commitment by the government. It 

would require that a large share of oil revenues be reinvested into 

oil infrastructure. It would require that security continue to improve. And it would require that oil revenue and investments be 

handled transparently with a minimum loss to corruption. Iraq also 

will have to overcome the brain drain that has occurred in the 

country over the last 8 years and seek an infusion of human capital—much as Saudi Arabia did—to help manage this massive effort. 

Iraq’s capacity for sustaining democracy will depend greatly on 

the outcome of its oil development efforts. If oil revenues are expanded and transparently managed for the good of the whole country, there will be less tension between factions and regions and 

more stability grounded in improved services and education. 

The lack of security is a handicap as well, but oil companies are 

willing to pay for the security if the Government of Iraq will do 

their share. The uncertain security environment made it impossible 

for the STAFFDEL to visit Basrah or the southern oil fields, but 

staff visited the Kurdish capital of Erbil, where a great deal activity can be found. In Erbil, staff met with most of the U.S. firms 

who have operations in the Kurdish territories, including executives from Hillwood, HKN, Hess, and Marathon. Staff met in 

Washington with senior Kurdish Government officials, including 

the Minister of Natural Resources, Ashti Hawrami, Foreign Minister Falah Mustafa Bakir, and Dr. Fuad Hussein, Chief of Staff to 

the President of the Kurdistan Regional Government. 

Experts see real growth capacity in the North, including capacity 

to export in the Ceyhan pipeline. The IKR can be exporting 700,000 

bpd by 2015 (up from more than 175k today). Given that Northern 

Oil Company production is declining, the Kurdish area will be the 

dominant producer in the north. Nevertheless, because no Hydrocarbons or Oil Law has been enacted, this potential growth is jeopardized as well. 

In Baghdad, while staff were unable to secure a meeting at the 

Ministry of Oil, staff were briefed by U.S. Embassy officials and 

met with Thamir Ghadban, Chairman of the Prime Minister’s Advisory Council and former Minister of Oil. Senior Petroleum Expert 

Natik al-Bayati was also in the meeting. Iraqi Oil production will 

reach 3.4 million barrels per day in 2012, about 500,000 more per 

day than in 2011. The 100 billion USD (117 trillion ID) draft budget for 2012 includes a $15–20 billion critical infrastructure fund 

that will function ‘‘much like a sovereign guarantee.’’ This is an essential point because right now the Government of Iraq must finance every single project out of the treasury and needs to establish a sovereign guarantee to qualify for assistance from OPIC or 

the Ex-Im Bank. One interlocutor compared Iraq’s current financing process to buying a house out of your annual salary. 

16 

In the meeting, Chairman Ghadban said that the American companies, aside from ExxonMobil and Occidental, are not playing the 

dominant role in the oil sector that Iraqis had hoped. He said that 

Chevron should be encouraged to invest, and he noted that investors from France, Turkey, South Korea, and Italy are far more active in Iraq than American companies. Ghadban made no mention 

of Halliburton, Baker Hughes, Weatherford International, and 

Slumberger, all of which are handling a great deal of the oil services. 

When asked about Hunt and Marathon, who operate in the 

North, Ghadban waived off that fact, as if the work in the Kurdish 

region was child’s play. Without emotion, he condemned the KRG’s 

awarding ExxonMobil exploratory blocs. He noted that under the 

constitution the contracts would be illegal because the KRG lacked 

the legal right to award such contracts independently of the central 

government. He noted further that three of the blocks are in areas 

outside the borders of the Kurdish region, although they are controlled by Kurdish forces, and it was clear that he felt that 

ExxonMobil would have to make a choice over which contract it 

would pursue. 

Ghadban matter-of-factly described the controversial and elusive 

hydrocarbon law, suggesting there was a reasonable opportunity, 

under an agreement reached between Maliki and KRG Prime Minister Barham Saleh, for the Oil and Gas Committee to review and 

reconcile differences among the versions of the draft law and that 

it could come up for first reading in 2012. The draft in current 

favor is again the February 2007 version of the law.14 In 2007, 

Iraq’s political blocs all agreed to it publicly, but it did not get 

through the legislative process. Each side points to specific shortcomings in the law. The shortcomings have a great deal to do with 

the different approaches to oil development. The Kurds are following a privatization policy in managing their resources, while the 

central government has preferred to work under the slogan that 

‘‘Iraq’s oil is for all Iraqis,’’ which is expressed in general terms in 

the constitution. 

The two approaches are not irreconcilable. Nevertheless, it has 

kept, for example, Baghdad from using production sharing agreements (PSAs), which the Kurds have favored. Baghdad has favored 

technical services contracts (TSCs) to develop its fields. Because of 

their incentive structure, PSA’s are generally favored in the exploration phase, where companies are entitled to part of any crude 

they find in return for assuming the risk of finding none. TSCs, on 

the other hand, pay out a set rate on each barrel of oil drawn out 

of the ground, in Iraq’s case above a certain threshold. Payments 

generally are occurring ‘‘in kind.’’ 

Kurdish officials, meeting with staff in Washington, were less optimistic about the oil law’s chances and suggested Baghdad was 

constantly throwing up obstacles. For example, they said that 

Baghdad’s protests against Kurdish contracts for exploration rights 

in disputed territories were ‘‘an excuse . . . they are against all 

contracts.’’ The Kurds view the hydrocarbon law as good for both 

investors and Iraqi citizens. Staff assess that Parliament could 

make progress in this regard, with the reservation that the Iraqis 

have not been aggressive in brokering solutions across a range of 

17 

legislative issues. The Kurds were also critical of the U.S. Embassy’s efforts in trying to bring about resolution of the hydrocarbon 

law and related issues, but staff assesses that in this regard the 

time has passed when the U.S. can propound a solution and have 

everyone sign on. 

Transparency may still be the best weapon in working through 

the challenges with oil, contracts, and payments. Iraq’s State Oil 

Marketing Organization appears to be publishing its production 

and export records online, but the contracts and agreements are 

not online. And, the Kurdistan Regional Government has its PSA’s 

online but not production figures. 

CORRUPTION CONTINUES

Corruption continues to be a problem in Iraq, stymying economic 

growth and adding to the pervasive distrust and political fragmentation. Transparency International’s 2011 ‘‘Corruption Perceptions Index’’ gives Iraq a 1.8 out of 10, which places it in the bottom 10 of the 182 countries ranked and (right below Haiti) and 

qualifying it as ‘‘highly corrupt.’’ This represents a modest improvement from 2009 and 2010, when Iraq scored a 1.5 and was in the 

bottom five of all countries rated. 

Staff asked several interlocutors about corruption. There is little 

of note to report. Progress is fleeting and many of the same old 

problems persist. Nevertheless, international groups like Transparency International and the World Bank are sanguine about 

Iraq’s potential to improve, noting Iraq’s not-so-distant past. The 

most interesting reply staff received on this subject was from Dr. 

Sami, the Chairman of the Iraqi Investment board who stated with 

emotion, ‘‘Corruption was not known in Iraq. Sanctions created it 

during the 1990s when people did it to survive. In 2003, the institutions were eradicated. From 2004–2008, corruption continued, as 

you had people struggling for their own existence and hundreds of 

people dying. Stealing is better than killing.’’ But he said, ‘‘Judge 

me on my efforts to fight it. We are trying to rebuild, we have a 

long way to go, we are optimistic.’’ Some corruption is to be expected, but according to Embassy officials, it remains pervasive and 

reaches to the highest levels of the government. Couple that with 

what one Iraqi-American businessman said was a ‘‘Socialist, antiWestern mentality, and a fear and loathing of the private sector,’’ 

and you have the recipe for a slower road to recovery than even 

realists have predicted. 

Without stronger laws and institutions, transparency will be the 

Iraqi people’s No. 1 weapon, increasing the importance of programs 

like the Extractives Industries Transparency Initiative (EITI) so 

that as oil production increases, the Iraqi people can note those figures and judge whether benefits are making their way to them. 

Iraq was accepted as a candidate country to (EITI) on 10 February 2008.15 On 23 December 2010, Iraq published its first EITI 

report to which Eddie Rich, Deputy Head and Regional Director for 

the EITI International Secretariat, gave high marks, even if some 

of the figures do not quite match up to auditing standards. This is 

partly because they are provided, Rich said, by 34 different companies who provide figures on a disaggregated basis. It also does not 

cover domestic sales, for which EITI worries there is ‘‘no accountVerDate Nov 24 2008 09:08 May 24, 2012 Jkt 072394 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 S:\HEARING FILES\112TH CONGRESS, 2ND\TOPIC REPORTS\74162.TXT MIKE
18 

ing or explanation.’’ The implication is that such sales could be 

fraught with corruption. The report, like most EITI reports, has a 

2-year lag. It looks at reconciling 2009 figures, not current day 

agreements, contracts, and production figures. 2010, Mr. Rich said, 

will be a different case for Iraq because they entered into new 

agreements and made many payments and signing bonuses that 

were not put on the books.16

By August 9, 2012, Iraq will have undertaken a ‘‘validation exercise’’ or quality assurance check through its multistakeholder process. Stakeholders, including major oil companies like ExxonMobil 

and Shell, civil society organizations, and the government, will rate 

Iraq against the 20 requirements of the EITI standard. It would 

not be unusual for Iraq to not be found compliant. In fact, Mr. Rich 

stated, ‘‘most countries do not become compliant after a single report.’’ It is not a pass-fail system.17

A ROSIER VIEW FROM THE IRAQI KURDISTAN REGION

Staff spent 2 days in Erbil, the capital of the Iraqi Kurdistan Region (IKR). Arriving via commercial airline from Jordan, one is immediately impressed by the glistening, new airport that opened in 

2010 and receives direct flights from Cairo, Dubai, Vienna, and 

Istanbul in addition to Amman. Cranes are moving and new construction is everywhere. Traffic, jammed with imported new cars 

from all over the world, moves with purpose and in rhythm with 

the business day. Visitors can pick a visa up at the terminal. The 

energetic U.S. Consul General is a Foreign Service veteran named 

Alex Laskaris who speaks Kurdish and is a font of knowledge 

about the Kurdish region. He sees his No. 1 job as keeping 

Kurdistan in Iraq. 

The attitude of the Kurdish Regional Government (KRG) toward 

business is to provide security, institute friendly policies, and get 

out of the way. Critics say the security forces are heavy-handed, 

and the government still owns a piece of everything (one Barzani 

brother has a share of the Coke franchise, another has Pepsi), but 

there is no denying Kurdistan welcomes private sector investment. 

It has conquered its electricity supply problem by having a company named Mass Global Energy build 1750 megawatts of electricity generation. Mass Global then sells the power to the government to distribute to customers. Ford, GM, Chevrolet, Caterpillar, 

John Deere and many others have opened up distributors. GM reported that its fastest growing market in 2010 was Iraq due to increased political stability in the country, and it all began in the 

IKR, which licensed the first GM dealership in Iraq in 2010. GM’s 

sales in 2010 rose 52 percent from the previous year and expanded 

another 68 percent in 2011. It sold 32,000 vehicles in Iraq, second 

to Saudi Arabia in the region. 

Staff met with several American entrepreneurs who have made 

the Kurdistan Region their home and are enthusiastic about business prospects and are realistic about tax policies and corruption. 

Their only serious complaints were about the lack of consular services available at the U.S. consulate. One businessman recently had 

a child and he and his wife have to make the dangerous trip to 

Baghdad to get the child a passport. 

19 

According to international oil executives, their top challenges will 

be exporting product and getting paid. Payments are supposed to 

go from New York to Baghdad, and then to the KRG. New production from Kurdistan will come online in 2012. 

OSC–I 

The Office of Security Cooperation—Iraq team is comprised of 

157 uniformed personnel and about 800 contractors and civilians 

who are working on almost 400 FMS cases worth $10.2 billion ($7.7 

billion Iraqi share). OSC–I is led by a U.S. Army 3-star, LTG Robert Caslen, and a 2-star Navy SEAL deputy. LTG Caslen had been 

dual-hatted as the head of NATO Training Mission – Iraq, but that 

mission folded at the conclusion of 2011 because the Iraqis would 

not grant NATO troops immunities from Iraqi law. 

OSC–I’s mission is training and equipping the Iraqi Army. They 

have a huge, uphill battle ahead of them. The relationships they 

have inherited from the 9-year occupation may prove crucial to 

their success. They are well positioned to deliver and are laying the 

groundwork for the long-term ‘‘strategic relationship,’’ while providing a means for American companies to get their foot in the 

door. Their mission statement says they conduct ‘‘ . . . Security cooperation activities to build partner capacity in support of the developing strategic partnership with a sovereign, stable, self-reliant, 

and regionally integrated Iraq.’’ It glosses over the ‘‘nonpermissive 

environment’’ and ‘‘regional instability’’ printed boldly on the briefing slides. 

OSC–I’s plans are aggressive, designed to build ‘‘enduring capacity’’ for the Iraqis. It is investing large dollars in the mission despite the political fragmentation, corruption, and lack of ministers 

atop the security ministries. Many of the major weapons systems 

will build the Iraqi Air Force and air-mobility capacities with 

American-made equipment including C–130 transports, F–16 fighters, trainers, and various helicopter models. The Army will be outfitted with M1A1 tanks, troop carriers, and howitzers. There are 

plans for ground-based air defense systems, and for the Navy, offshore support vehicles, UAV’s, and patrol boats. 

Some of the plans seem off-base, such as pushing to sell 18 more 

F–16s at a time when there is only one pilot in training, no officers 

enrolled at U.S. academies, and as noted above, a visa program at 

a near standstill. But OSC–I is committed. 

COST OF THE MISSION MAY BE ITS DEATH KNELL

The State Department is running the Embassy in Baghdad, consulates in Basra and Erbil, the equivalent of a small combat hospital, several health clinics, an airline, airfields and all of the 

logistical elements involved. There are some dozen sites around the 

country. The price tag for operating all of this (including development and assistance programs) will be around $6.5 billion for 2012, 

well above that cost of any other U.S. diplomatic mission—but far 

lower than the more than $40 billion in U.S. spending budgeted for 

fiscal 2011 in Iraq. 

The civilian mission numbers about 1,800 USG employees, 

backed by about 14,000 contractors of various stripes (care, feeding, 

20 

maintenance, security, NGOs, and USAID implementing partners). 

The bulk of the $6.5 billion is tied up in operations and security. 

Overhead accounts for upward of 80 percent of costs according to 

the Special Inspector for Iraqi Reconstruction (SIGIR). Such costs 

are unsustainable. 

The high cost comes under greater scrutiny when effects are 

measured. Because of pushback from the GOI, and the challenging 

security conditions, many planned programs are not being executed. Embassy staff are frustrated by their inability to have an 

impact. 

Ambassador Jeffrey may have been only slightly exaggerating 

when he told staff that trucking food in from Kuwait to provide 

meals for personnel costs 50 times what it would if the Embassy 

were making purchases on the local economy. In Baghdad, core 

Embassy staff are housed in fully furnished apartments—down to 

ironing boards, vacuums, pots, pans, plates and glassware—yet the 

Embassy has maintained the Army way of feeding the troops: providing, at no cost to all assigned personnel, three meals a day cafeteria style, with four or five different lines of cuisine choices. Ambassador Jeffrey inherited a huge military operation. He expressed 

that he had little choice but to continue operating in the same fashion, although he was fully aware of the need to shed overhead costs 

or programs, and he would rather shed costs. 

Staff was pleased to see that Consulate General Erbil is leading 

in this respect already. Although it, too, provides meals free-ofcharge for its staff, but via meal vouchers which are redeemed at 

a local establishment that is within the security perimeter. There 

is also a minimart that sells basic groceries. This allows many to 

take meals (particularly breakfast) in their own apartments. And 

because the security environment is more benign, staff can even 

stop for lunch while out in town for a meeting. CG Erbil has also 

begun hiring guards from the local population, something State 

does at posts around the world. 

The ratio of contractors to diplomats draws attention. The State 

Department’s reliance on contractors itself is reasonable. According 

to the Department of State, ‘‘Although not as large as that of DOD 

or other federal agencies, State’s contracting activity grew from 

$1.8 billion in 2001 to $8.8 billion in 2011. Most of this growth was 

for programs in Iraq and Afghanistan.’’ 

The U.S. Government does not have in its deployable arsenal sufficient security personnel, janitors, cooks, drivers, landscapers, etc.; 

nor should it. However, the Department of State must ensure it 

has ample contract oversight personnel deployed to ensure that the 

taxpayer is getting all that is being paid for, and that the mission 

is not being sacrificed or slowed because of shortcomings. Audits 

and inspections are important, and the work of the OIG, GAO, 

SIGIR, DCAA, DCMA, and others are invaluable, but greater emphasis should be placed on management. For example, State has 

put on staff in Iraq a retired U.S. Army Medical Service Corps officer who is the COR 18 for its medical contract. The medical contract, with a ceiling of nearly $1 billion, covers a hospital and several clinics scattered across the country and provides for emergency 

evacuations. It is unreasonable to expect one person to adequately 

manage, much less provide oversight and accountability for, a $1 

21 

billion contract with facilities and personnel working all across 

Iraq. 

State has hired an additional 103 procurement staff since 2008, 

but according to analysis done by the Government Accountability 

Office (GAO), across the board, State does not have enough dedicated COR’s monitoring contracts and task orders in country. The 

State Department’s Acting Inspector General, Howard Geisel, stated in a phone interview with staff, ‘‘The biggest single problem in 

these situations is the Department having enough qualified contracting officer representatives (CORs) within the missions and in 

the contingency regions.’’ 

Staff further note that many of the COR’s have other primary 

tasks not related to contract management and that most contract 

oversight personnel are located in the DC metropolitan area, not in 

country. In the case of buying a truckload of tomato paste for the 

cafeteria, you can manage remotely, but when it comes to managing 14,000 people who are essential to mission execution, staff 

strongly believes more direct oversight is necessary. This might require a change from the ‘‘centrally managed’’ approach the State 

Department has found works elsewhere, but Iraq and Afghanistan 

are unique in many ways. 

RECOMMENDATIONS

Concrete policy recommendations are difficult to come by, but 

some pragmatic steps could make a difference in getting Iraq open 

for business and help pave the way for political progress. 

• The Department of Commerce should fund an increase to its 

Foreign Commercial Service staffing in Iraq, particularly to 

hire more locally engaged staff (LES). This would enable them 

to better navigate the oddities of the Iraq commercial sector, 

build corporate knowledge, and provide better advice and assistance to American companies. 

• A large-scale Joint Economic Cooperation (JECOR) program, 

modeled on the Saudi Arabia program that existed for three 

decades, should be initiated with the Government of Iraq 

under Section V of the Strategic Framework Agreement. Under 

U.S. law, authority exists under Section 607 of the Foreign Assistance Act of 1961. Such a program has great potential benefits for both the United States and Iraq. 

• Embassy Baghdad should open a small commissary on the 

premises as soon as possible. Embassy personnel expressed a 

willingness and desire to cook their own meals, but they cannot procure groceries on the Embassy campus, nor make trips 

into town. This would have an immediate impact on dining facility demand and costs, help identify challenges and opportunities, and provide a bridge to the future. Changing the dining 

facility to a fee-for-service from an all-you-can-eat enterprise 

might also be worth considering. 

• Cuts must be made to Embassy staffing. The Department faces 

tough decisions in adjusting the size of the Embassy staff, 

which is larger than it needs to be to accomplish the mission. 

This has probably been postponed because transition was a 

higher priority, but cuts can and should be made now before 

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the next assignment and rotation period commences this summer. • Currently numbering 10 or 11 sites, the United States Government should reduce or consolidate the number of sites from 

which it is operating in Iraq. Each site requires a cadre of static guards and support personnel that add exponentially to the 

cost of the Iraq operation. • In and around Baghdad, no meaningful downsizing can occur 

if the Embassy has to continue to control the sprawling expanse of real estate for which it is currently responsible, including six separate sites in Baghdad alone. The Department 

must look for ways to shrink its footprint. One option would be 

to close FOB Union III, which exclusively houses the OSC–I 

mission. Those offices should transition to the buildings that 

were originally constructed for that purpose on the Embassy 

campus. • The Secretary of State should commission an independent review of the scope and expectations for the Police Development 

Program, perhaps resembling the commission that Gen. Jim 

Jones and former DC Police Chief Charles Ramsey led in 2007 

that included current Senate Sergeant-at-Arms Terrance 

Gainer. From a distance and considering current conditions the 

current program looks unsustainable. Alternatively, the PDP 

could become a core element under JECOR and be funded by 

the GOI. • According to the contracting officials at DCMA, the LOGCAP 

contract provides flexibilities to procure locally and even hire 

local Iraqis. State, through the Defense Contract Management 

Agency, should push KBR, which carries the LOGCAP responsibilities, to hire and train more Iraqis. The same should be 

done to increase local food procurement through the contract 

held by DLA (the Defense Logistics Agency). Start soon. Start 

small. • The Department of State should hire, train, and deploy more 

CORs to actively manage the large contracts and contracthired personnel it relies upon to operate the Iraq mission. In 

addition to providing better in-country oversight now, as it 

transitions from some of the DOD/DCMA-procured contracts, 

the Embassy will benefit from such on-sight expertise. 

• The Department of State should enable ConGen Erbil to, at a 

minimum, provide consular services for American Citizens living in the Kurdistan Region. Staff met with several American 

businessmen who are living with their families in northern 

Iraq. One had recently had a baby and was contemplating the 

requirement to travel to Baghdad to get a passport for the 

child. 

• The Federal Aviation Administration should repeal SFAR 77, 

which prohibits all U.S. air carriers or commercial operators 

from conducting flight operations over or within the country of 

Iraq. Several foreign carriers are operating into Baghdad International, and even more private carriers are flying into Erbil, 

yet American carriers are prohibited—and that includes jets 

belonging to American oil and oil services companies like Shell, 

Hess, Hunt, ExxonMobil, Slumberger, and KBR. 

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• The multilayered screening procedures for Iraqi Refugees and 

Special Immigrant Visa (SIV) applicants are costly, cumbersome, and ultimately defeat the goals of these programs by 

keeping applicants in a state of limbo for extended periods of 

time. The administration should either terminate the SIV program or add $5 million to adequately staff to eliminate backlogs that are more than 21⁄2 years long. • The FY 2007 National Defense Authorization Act (NDAA) expanded the Iraqi SIV program to offer protection to more Iraqis 

who were risking their lives to assist/work for the United 

States mission in Iraq. The program was further expanded by 

Section 1244 of the 2008 NDAA. Previously limited to interpreters and translators who worked for the military and the 

Embassy, more employees became eligible. The program is due 

to expire next year. The program should be allowed to terminate, and seek to accommodate only those who have already 

applied using quotas that have already been established, but 

left unfilled. If a new humanitarian crisis opens, new legislation can be considered. 

APPENDIX I—ISSUES TO BE REGULATED BY LAW UNDER THE IRAQ CONSTITUTION19 

No. Article Issue 

1 ................................. 9(2) ............................ Military service. 

2 ................................. 12(1) .......................... Flag, national anthem and emblem. 

3 ................................. 12(2) .......................... Honors, official holidays, occasions, and calendar. 

4 ................................. 18 .............................. Citizenship (entitlement, withdrawal, reinstatement, multiple nationalities). 

5 ................................. 22(2) .......................... Relationship between employees and employers. 

6 ................................. 22(3) .......................... Forming and joining trade unions. 

7 ................................. 23(2) .......................... Expropriation. 

8 ................................. 24 .............................. Freedom of movement of manpower, goods and capital. 

9 ................................. 26 .............................. Encouraging investment in various sectors. 

10 ............................... 27(2) .......................... Preservation, management and disposal of State property. 

11 ............................... 28(1) .......................... Taxes and fees. 

12 ............................... 28(2) .......................... Exemption from taxes for low income earners. 

13 ............................... 30(2) .......................... Social and health security to old, sick, disabled, unemployed, homeless 

and orphaned. 

14 ............................... 31(2) .......................... State Supervision and building of hospitals and clinics. 

15 ............................... 32 .............................. Care for the handicapped. 

16 ............................... 34(4) .......................... Public and private education. 

17 ............................... 38(C) .......................... Assembly and peaceful demonstration. 

18 ............................... 39(1) .......................... Forming and joining political parties. 

19 ............................... 41 .............................. Personal status. 

20 ............................... 43(1) .......................... Management of religious endowments. 

21 ............................... 45(1) .......................... Strengthening/developing civil society institutions. 

22 ............................... 49(3) .......................... Election of Council of Representatives. 

23 ............................... 49(5) .......................... Replacing members of the Council of Representatives. 

24 ............................... 63 .............................. Rights and privileges of the Speaker, two deputy speakers, and members 

of the Council of Representatives. 

25 ............................... 65 .............................. Formation, conditions and competencies of the Federation Council. 

26 ............................... 69(1) .......................... Nomination of President of the Republic. 

27 ............................... 69(2) .......................... Nomination of Vice Presidents of the Republic. 

28 ............................... 74 .............................. Salary of the President. 

29 ............................... 82 .............................. Salaries of the Prime Minister and Ministers. 

30 ............................... 84(1) .......................... Duties and authorities of the security institutions and National Intelligence Service. 

31 ............................... 86 .............................. Formation and authorities of the ministries. 

32 ............................... 89 .............................. Regulation of federal courts. 

33 ............................... 90 .............................. Establishment, authorities and rules of the Higher Juridical Council. 

34 ............................... 92+ ............................ Number, member of selection and work of the Federal Supreme Court. 

35 ............................... 93(6) .......................... Settling accusations against the President, Prime Minister and Ministers. 

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APPENDIX I—ISSUES TO BE REGULATED BY LAW UNDER THE IRAQ CONSTITUTION19—Continued 

No. Article Issue 

36 ............................... 96 .............................. Establishment of courts, appointment of judges and prosecutors and their 

terms of service and discipline. 

37 ............................... 97 .............................. Discipline and removal of judges. 

38 ............................... 99 .............................. Regulating military judiciary and jurisdiction. 

39 ............................... 102 ............................ Functions of the High Commission for Human Rights, the Independent 

Electoral Commission and the Commission on Public Integrity. 

40 ............................... 103(1) ........................ Work of the Central Bank, Board of Supreme Audit, Communication and 

Media Commission and the Endowment Commissions. 

41 ............................... 104 ............................ Functions and competencies of the Foundation of Martyrs. 

42 ............................... 105 ............................ Establishing a commission to guarantee the rights of regions and 

governorates not organized into regions. 

43 ............................... 106 ............................ Establishing a commission to audit and appropriate federal revenues. 

44 ............................... 107 ............................ Establishing the Federal Public Service Council. 

45 ............................... 112(1) ........................ Management of oil and gas from current fields and distribution of revenue. 

46 ............................... 109 ............................ Oil and gas revenue distribution and regulation. 

47 ............................... 114(7) ........................ Water policy. 

48 ............................... 118? ........................... Procedures to form regions. 

49 ............................... 122(2) ........................ Authorities of governorates not organized into a region. 

50 ............................... 122(4) ........................ Election and powers of Governorate Councils and Governors. 

51 ............................... 123 ............................ Regulation of power delegated to the regions. 

52 ............................... 124(2) ........................ Status of Baghdad. 

53 ............................... 125 ............................ Administration, political, cultural and educational rights for minorities. 

54 ............................... 132(3) ........................ Care and compensation for families of martyrs, political prisoners, victims 

of previous regime, and those injured by terrorist attacks. 

End Notes 

1. According to a report by the Public International Law & Policy Group (PILPG), ‘‘Next Steps 

for Implementing the Iraq Constitution,’’ written in 2006, more than 1⁄3 of the Constitution will 

be ‘‘determined’’ or ‘‘regulated by to-be-written laws. The list of 54 specific mentions is included 

at Appendix I. 

2. A Security Advisory Opinion (SAO) is a multiagency name check required in all cases of 

possible immigration inadmissibility under INA 212(a)(3)(C). US. Department of State Office of 

the Inspector General, Report of Inspection Embassy Baghdad Iraq, Report # ISP–I-09–30A 

dated July 2009 provides good overview of this security review process that it describes as 

‘‘among the most severe in the world.’’ 

3. The term 1.5 carrier presence in Navy parlance means that they will have at least one carrier strike groups patrolling the area, sometimes two. 

4. Interview with Dr. Jaber Al Jaberi, 12/7/2011. 

5. From e-mail discussion with John Greenhalgh, Director Middle East and Africa Electronic 

Systems for ITT/Excelis, 6 March 2012. 

6. The International Bank for Reconstruction and Development/The World Bank, ‘‘Doing Business 2012, Doing Business in a More Transparent World.’’ 

7. International Rescue Committee, ‘‘Youth and Livelihoods Assessment: Baghdad,’’ May 2011, 

p. 16. 

8. ‘‘Unemployment Threatens Democracy in Iraq,’’ USAID Agricultural Policy Dialog Series 

#10, January 2011. 9. CLDP’s Iraq program cost $8.65 million from 2006 to mid-2011. 

10. Sources: U.S. Department of State Web site; Web sites of the Embassies of Argentina, 

Bahrain, Kuwait, the Philippines, South Africa, Tanzania; phone conversations with Embassies 

of Argentina, Botswana, Brazil, Chile, France, Germany, Iraq, Kenya, Kuwait, the Philippines, 

Poland, South Africa, Tanzania, and United Arab Emirates (Feb. 2012). 

11. Perfect score is 100, five points are deducted as follows: if a visa is needed for entry, if 

visas are not available at points of entry (if they are, two points are added), if standard visa 

processing time exceeds 1 month, if additional, nonhealth related bureaucratic demands are 

made after entry, if exit procedures are not conducted at points of departure, and if entrance 

or exit fees are required. Ten points are deducted if the validity of business visas, the cost of 

a business visa, or the visa processing time are determined on a case-by-case basis instead on 

a standardized basis. 

12. A 3161 employee, is a temporary direct-hire employee, so named because of the section 

of the law that governs this type of employee: USC Title 5 Part III Subpart B Chapter 31 Subchapter IV § 3161. 

13. View the SFA online at this link: http://www.acq.osd.mil/log/PS/plvault/SElSFA.pdf. 

14. The 2007 draft law is available on the web at this address: http://web.krg.org/uploads/documents/Draft%20Iraq%20Oil%20and%20Gas%20Law%20Englishl2007l03l09lh17m2s47.pdf 

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15. SFRC staff reported on Iraq’s EITI pursuits in a 2008 report entitled ‘‘The Petroleum and 

Poverty Paradox: Assessing U.S. and International Community Efforts to Fight the Resource 

Curse.’’ 

16. Video teleconference interview between Mr. Rich and SFRC staffmember Patrick Garvey, 

March 2012. 

17. Ibid. 

18. Contracting Officer’s Representative (COR) means an individual who is designated and authorized in writing by the contracting officer to perform specific technical or administrative functions on contracts or orders. The term COR includes any individual (military or civilian) performing these types of functions on contracts regardless of the term used to describe their position, specialty or assignment (e.g., alternate CORs, assistant CORs, Contracting Officers’ Technical Representatives (COTRs), task order monitors, task order managers, performance assessment monitors, etc.). These individuals serve a critical and vital role in assuring contractors 

meet the performance requirements of the contract in terms of cost, quality, quantity, schedule 

and cost/price. Only contracting officers have the authority to delegate these functions and assign a COR, a COR is not authorized to further delegate any responsibility. 

19. Next Steps for Implementing the Iraq Constitution, Public International Law & Policy 

Group (PILPG), 2006, p. 13–15. 

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