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" ! COMMITTEE PRINT 109TH CONGRESS

1st Session

S. PRT.

2005

109–40

IRAQ: ASSESSMENT OF PROGRESS

IN ECONOMIC RECONSTRUCTION AND

GOVERNMENTAL CAPACITY

STAFF TRIP REPORT

TO THE

COMMITTEE ON FOREIGN RELATIONS

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

DECEMBER 2005

Printed for the use of the Committee on Foreign Relations

Available via World Wide Web: http://www.access.gpo.gov/congress/senate

COMMITTEE ON FOREIGN RELATIONS

RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska

LINCOLN CHAFEE, Rhode Island

GEORGE ALLEN, Virginia

NORM COLEMAN, Minnesota

GEORGE V. VOINOVICH, Ohio

LAMAR ALEXANDER, Tennessee

JOHN E. SUNUNU, New Hampshire

LISA MURKOWSKI, Alaska

MEL MARTINEZ, Florida

JOSEPH R. BIDEN, Jr., Delaware

PAUL S. SARBANES, Maryland

CHRISTOPHER J. DODD, Connecticut

JOHN F. KERRY, Massachusetts

RUSSELL D. FEINGOLD, Wisconsin

BARBARA BOXER, California

BILL NELSON, Florida

BARACK OBAMA, Illinois

KENNETH A. MYERS, JR., Staff Director

ANTONY J. BLINKEN, Democratic Staff Director

(II)

CONTENTS

Page

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

Summary/Overview ................................................................................................. 1

The Economy ............................................................................................................ 3

Capacity of Iraqi Institutions and the ‘‘New’’ Strategic Plan .............................. 9

The New Embassy Compound ................................................................................ 16

APPENDIXES

Appendix I. Embassy Staffing Summary ............................................................... 23

Appendix II. Meetings and Interviews ................................................................... 26

(III)

LETTER OF TRANSMITTAL

Dear Colleague:

The committee recently sent Mr. Patrick Garvey of the professional staff to Baghdad to assess progress in the U.S. mission to

stabilize Iraq.

We are pleased to share with you his trip report, which we believe provides significant insight into several areas—particularly

economic reconstruction and the capacity of Iraqi governing institutions—that will be key to a stable and democratic Iraq. The report

pays significant attention to the U.S. strategy to improve Iraqi institutional capacity and engender policy reform that often receive

less attention in the press, providing insight into the successes we

have achieved and the challenges that lay ahead.

The report also provides a number of recommendations that may

be helpful as the Committee on Foreign Relations continues its

oversight of Iraq and the Department of State whose ability to

manage complex stabilization and reconstruction missions is so

critical.

We look forward to continuing to work with you on these issues

and welcome any comments you may have on this report.

Sincerely,

RICHARD G. LUGAR,

Chairman

(V)

(1)

1 IMF Survey, Vol. 24, No. 16, August 29, 2005, p. 251.

IRAQ: ASSESSMENT OF PROGRESS

IN ECONOMIC RECONSTRUCTION AND

GOVERNMENTAL CAPACITY

From November 4–12, 2005, a member of the professional staff

from the United States Senate Committee on Foreign Relations

(SFRC) traveled to Baghdad, Iraq. At the request of the Chairman,

the purpose of the trip was to examine two issues:

1. Reconstruction progress in the area of economic development.

2. Capacity of Iraqi ministries and Iraqi governing institutions,

including those at the provincial level, to function independently of U.S. assistance.

These two pillars in the reconstruction effort were chosen because of their importance to the long-term stability of the country,

the relative lack of media attention they receive, and their relevance to the oversight responsibilities of the committee. This report also explores other areas of concern to the SFRC, specifically:

• The ‘‘New’’ Joint Strategic Plan, which includes Provincial Reconstruction Teams.

• Construction of the new embassy complex, as well as staffing

and security issues.

• The Rule of Law program.

Staff visited with lead Embassy officials, Iraq Reconstruction

Management Office (IRMO) leadership, the Director of the Gulf Regional Division of the Army Corps of Engineers, Project and Contracting Office members, the USAID Mission Director, two members of the Iraqi National Assembly, and numerous embassy personnel (see Appendix II for complete list).

Staff’s movement was restricted to the International Zone for security reasons and Ambassador Khalilzad and many senior Iraqi

government officials were traveling outside the country.

SUMMARY/OVERVIEW

Staff found that U.S. and coalition reconstruction projects, investments and other program and policy reforms implemented

since 2003 appear to be having a stabilizing effect on the economy.

U.S. officials agreed with recent IMF Executive Board comments

citing Iraq authorities for ‘‘having established and maintained a degree of macroeconomic stability under extremely difficult circumstances, and for having initiated structural reforms.’’ 1 While

reliable statistical measurements are hard to come by, embassy

2

economic advisors cite soaring demand for every type of good and

service; improvements in salaries—especially for government workers that are up ten or twenty times pre-war levels; stabilized oil

exports; increasingly reliable electricity generation; and Iraqi government initiatives to reduce subsidies and re-join the IMF. The

country’s economy, while still vulnerable to major disruptions, has

progressed despite the ongoing insurgency and high demand-driven

inflation (measured at 42% from August 2004–August 2005).

Iraq’s legacy as a controlled economy that further suffered the

impact of internationally-imposed sanctions and isolation from the

world financial community looms large in some respects, from a

lack of natural market mechanisms to a business community that

is unaccustomed to having the freedom to develop their own business solutions. Like the Russians of fifteen years ago when the

Communist political economic system collapsed, Iraqis enjoy their

new civic and religious freedoms, but some are finding it hard to

give up the financial benefits of a state-controlled system.

U.S. policy and governance assistance to date was characterized

by one official as ‘‘doing and directing.’’ For example, Iraqi participation in determining spending priorities for the Iraq Relief and

Reconstruction Fund (IRRF) and even the Development Fund for

Iraq (DFI) spending has been minimal. This practice—by which we

make the decisions and then get the Iraqis to accept them (described as getting ‘‘Iraqi buy-in’’) has muted the Iraqi voice and stifled capacity-building. Officials interviewed suggest that simply

giving grants and funding projects outright (hand-outs) should not

continue as the practice can perpetuate governmental mismanagement and laziness. More than one official suggested we could help

Iraq more by requiring matching funds or funding small business

loans rather than making grants. Continuing to state the obvious:

that U.S. funding is finite and designed to jump-start the economy

is also a useful reminder. As one senior advisor stated, ‘‘scarcity

sharpens the mind.’’

Among State and DoD officials leading the Iraq mission, past

frictions seem to have been overcome and State and DoD operate

and coordinate more closely as a team. Ambassador Khalilzad and

General Casey are in the final stages of a joint strategic plan with

numerous metrics and a red-yellow-green indicator system to mark

progress toward milestones. Officials suggest the plan will be finalized by mid-December, but many details have already been worked

out and discussed. Nevertheless, resources to implement the plan

in 2006 and beyond remain untallied and sources have yet to be

identified.

Although the military and civilian cultures do not always understand each other, U.S. government civilians, contractors and military officials have formed a team in Iraq and respect one another’s

expertise. On the one hand you have action-oriented, results-driven

individuals with a penchant for Power Point; on the other hand you

have thoughtful, analytical consensus-builders who are used to

writing diplomatic cables and offering policy options. Style and personality count significantly in such an environment, both at the

operational level and in management. Ambassador Khalilzad and

his Charge ́ d’Affairs Ambassador Satterfield, paired with General

Casey and General Vines are a strong and capable leadership

3

team, but agreement at the top does not always translate at the

operational level, where Army veterans and young, inexperienced

Foreign Service Officers must execute policies.

Mistakes of the past two years are being dealt with directly by

Ambassador Khalilzad and his team. There is open recognition that

disbanding the Iraqi Army and deep level de-Ba’athification were

mistakes. This has gained the Ambassador greater credibility and

respect among Iraqis and U.S. personnel alike. He not only speaks

about a long-term U.S. vision for Iraq, but he has also demonstrated a personal long-term commitment to Iraq, which has further engendered trust among Iraqis. When the Iraqi people elect

and install a ‘‘permanent’’ government in the coming months, embassy leadership is optimistic that government will be able to provide the type of consistent leadership necessary to build lasting, capable institutions and a stable, prosperous and democratic Iraq.

The joint strategic plan mentioned above, contains a one, two

and four year development strategy. It ties into the clear-hold-build

strategy that Secretary of State Rice set forth in testimony to the

SFRC on October 19, 2005 and will require close collaboration of

all the various civilian and military elements of the coalition, including: the Multi-National Force Iraq (MNFI), USAID, NGO’s and

contractors.

The ability to execute the plan is not assured. To be successful,

it will require (1) firm commitment on the part of the Iraqis; (2)

top-notch US civilian personnel; (3) properly-managed and focused

resources; and (4) the dedicated constructive involvement of the

international community and all regional actors.

THE ECONOMY

OBSTACLES TO PROGRESS

Lack of security and a reliable mercantile infrastructure—according to embassy analysts and Iraqi business leaders alike—are preventing the economy from taking off. Mercantile infrastructure includes: power and communications, reliable transportation (move

goods to/from market); and a free market structure to include laws,

subsidy elimination and privatization of state-owned enterprises.

Subsidy elimination will also help control aggregate demand, which

continues to rise unchecked.

The U.S. Treasury Attache ́, who notably has held that position

for two years, suggested that Minister of Finance Ali Allawi is taking on many of these issues and has demonstrated the necessary

acumen, asking for assistance and taking initiatives without waiting for direction. The Minister is expected to continue in the job

after the new government is in place, but even if he does not, many

of the policy reforms are underway and should proceed apace, regardless of who is in that job.

Poverty, as noted in the testimony of Dr. Keith Crane of the

RAND Corporation appearing before the SFRC on 19 July 2005, is

a continuing challenge. Embassy officials suggest that an estimated

25% of the population lives beneath the Iraq-defined poverty level

of $1 per day. Saddam dealt with it through a complex welfare system that provided free food and jobs that may not have required

work.

4

FINANCIAL SECTOR AND PRIVATE INVESTMENT

Officials explained that the financial sector remains constrained.

An estimated 90% of all assets are in the two state-owned banks,

which have ‘‘deeply negative net worth’’ according to detailed assessments. They are not inter-connected. There’s no electronic

funds transfer capacity. Salaries are paid in cash (although a direct

deposit system for government workers will soon come online). Private banks are more like family-owned investment companies.

There is no foreign investment in the Stock Exchange. There is no

demand for 30-year paper, which could fund long-term liabilities

such as pensions or large capital investments. There is no credit,

which could enable short term loans.

The Senior Consultant for Private Sector Development, who has

been in that position for 21 months, reported that a lending program she has overseen, providing loans of up to $25,000 through

Iraqi-trained loan officers working in a dozen neighborhood offices

to provide seed money for small or start up local business, has

made more than 16,000 loans disbursing more than $31 million

with no write-offs in two years. Women make up 9% of the borrowing pool. A program audit is forthcoming.

She explained that it has been her experience that there is tremendous pent-up demand for credit to rebuild and begin entrepreneurial endeavors. It is her view that Iraqis respect the loan regimen and that she could easily expand the program to enable even

larger businesses to get on their feet. She expressed her frustration

with other programs (i.e. USAID) that provide public sector grants

rather than private sector loans. She said her programs were looking for another $70 million, and demurred when prompted for further thoughts on the scalability of the programs to accomplish

large-scale reconstruction.

Recommendation 1—SFRC should formally request a

proposal and feasibility commentary on how aid could be

structured to capitalize on the commercial lending concepts

the Private Sector Development office has implemented. The

question is to what extent these private sector solutions can

be expanded effectively in Iraq.

IMF STANDBY ARRANGEMENTS (SBA)

Iraq has been negotiating with the IMF for standby arrangements (SBA), which are the second step in Iraq’s re-entry into the

IMF and the world economy. The first was the Emergency Postconflict Agreement (EPCA) entered into in November 2004, which

laid out policy and performance goals to develop fiscal and monetary data; financial management and information systems; a national payments system; a national budget process; a plan to restructure state banks; and a subsidies reform plan. The EPCA allowed small IMF borrowings and led to the first tranche (30%) of

Paris Club debt reductions.

The SBA will govern the Iraq-IMF relationship for the long term.

It requires Iraq to significantly reduce subsidies. On 18 December,

fuel prices for premium gas at the pump will increase from 20–50

ID/liter (about 5 to 13), and according to Embassy Baghdad Economic advisors, will step up in 2006 to reach market prices (700

5

2 Numbers provided by IRMO. Oil revenues based on $9 less than West Texas Intermediate

Reference prices. 3Post war production levels were about 0.6 mbpd and pre-war levels were approx. 2.6 mbpd.

ID) for premium by the end of the year. SBA will allow larger IMF

borrowings (< $1.5 billion) and the 2nd and 3rd tranches of Paris

Club debt reduction on the agreed upon schedule of 20% in January 2006, and the final 20% in January 2007. Of note, black market fuel prices were already at market level.

Embassy Baghdad’s Economic section has prepared several cables on subsidies and the IMF agreements, which SFRC Staff has

requested be made available to Members.

IRAQ’S OIL SECTOR

Oil is the lifeblood of Iraq’s economy. More than 95% of government revenue is derived from oil exports. Oil will generate $24 billion in export revenue this year, an estimated $27 billion in 2006

and $40 billion in 2007.2 Iraq is the world’s second largest oil reserve, with large upside potential from future exploration. The industry, however, remains crippled after decades of sanctions and

Saddam’s mismanagement. Current production hovers around 2.3

mbpd (million barrels per day), about a half million below existing

feasible capacity because of insurgent attacks in the North and

‘‘field decline’’ in the South.3 The U.S. government is investing $2.4

billion to restore production capacity to meet or exceed pre-war capacity. The goal is 3.0 mbpd, and work should be completed in

2006. Because of steady attacks, money originally allocated for this

sector is now limited to repairing existing infrastructure, helping to

sustain operations and set the stage for revenue growth. Despite

lagging production, the world market oil price increases have boosted revenues.

Fuel crises exist in the country on a daily basis because refineries produce only 55% of fuel demand, requiring Iraq to import the

rest at market rates. The Economic section has prepared a cable

on this subject and staff will provide that analysis to Members

when it is made available.

The Project & Contracting Office (PCO) stated that their number

one priority is to complete the repair on the pipeline at Al-Fathah

crossing. This bridge crossing in the pipeline leading to Turkey has

been previously repaired, but has been sabotaged. The Corps of Engineers is now proceeding to bury the pipeline under the river at

that point. This repair will enable exports to Turkey once again

and improve progress toward a 3.0 mbpd production capacity.

U.S. efforts have also improved efficiencies in the Oil-Natural

Gas sector. Iraq continues to flare more than 1,000 million cubic

feet per day (mcfd) of natural gas, which could be used to fuel gas

turbine electric generators that currently burn less efficient liquid

fuels. Experts suggest that perhaps as much as 100% of Iraq’s domestic power could be generated if the natural gas that is now

being flared was captured and distributed.

Smuggling, corruption and diverted deliveries persist, as noted in

recent SFRC hearings. See below for more on the corruption issue.

Assessment: In order not to look as if we had designs on

Iraqi oil, the United States has foregone meaningful inVerDate 11-MAY-2000 12:13 Dec 06, 2005 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 TRIP.TXT SFRELA2 PsN: SFRELA2
6

4Of note, USAID’s chief electricity advisor has been in Iraq for more than 30 months, and

the two advisors from the U.S. Department of Energy have been in country for more than 21

months each. 5Figures provided by IRMO.

6 $7.74B total includes DFI ($1.8B), Donor ($0.6B), IRRF I ($0.94B), IRRF II ($4.3B) and

CERP ($0.1B); source IRMO. UN and World Bank assessments from October 2003 suggest a

total of $20 billion is needed to reach national targets of 20% over demand.

vestment in the one area that would have made the biggest difference, namely Iraq’s oil-exporting infrastructure.

Coupled with economic and subsidy reforms, the Iraqis

need to repair the pipeline, install storage tanks at the

ports and borders so that a pipeline interruption doesn’t

mean export interruption, build refineries, and secure the

whole system. Capacity in the Oil Ministry is assessed as

‘‘good.’’ The ministry managed their budget well this year,

unfortunately to the point that the nearly $3 billion allocated for capital improvements was not programmed. This

is symbolic of the challenges many ministries face in overcoming the command-directed style of Saddam. Deputies

still insist that every action be authorized in writing, and

there is little delegation of authority.

ELECTRICITY

Since mid-2003, the SFRC has followed closely the electricity sector as our aid workers, the US military, contractors and the Iraqis

have struggled to improve this crucial sector that the Saddam regime left in a fragile and decrepit state. Our three senior advisors

on electricity report marked progress against the unchecked tide of

demand for power from an influx of electrical good—refrigerators,

air conditioners, washers, dryers, TV’s and microwaves—and industrial demands such as oil refining.4 Electricity remains a virtually

free commodity, and most Iraqis make little effort to conserve.

There is metering, but no collection, which is further complicated

by the lack of a postal service. Without a check on demand, Iraq

will not be able to meet 100% of its power needs (or supply more

than 16 hours per day of power) for the foreseeable future. Technology is available to govern demand through current limiters,

whereby a home would only be able to use a certain kilo-wattage

per day. Bearing Point is conducting a feasibility study of this practice.

Demand this winter is expected to reach a daily peak of

9000MW, while current peak generation is 4750MW. IRMO advisors stated that even now, further generation would not improve

the situation as transmission and distribution capacity is weak.

Transmission projects underway will improve Iraq’s ability to import power from Iran, Syria and Turkey, and make the grid more

resilient to sabotage by creating redundant line routes and additional substations.5

By the end of 2006, investments managed by the U.S. of $7.74

billion in the power sector will have brought Iraq’s power generation capacity to 6000MW while improving operations and maintenance procedures, increasing transmission capacity and continuing

distribution improvements. Approximately $2.9 billion worth of

projects are underway, with another $955 million funded and

awaiting award.6

7

7Several UN Security Council Resolutions have amended the original terms of UNSCR 687,

but the commission continues its work.

The capacity of the Ministry of Electricity is improving. Policies

have improved load-sharing and reduced brownouts, but the ministry awaits cabinet or assembly-level decisions on subsidy and rate

reform. The ministry understands the need to invest in operational

sustainment, and build redundancy into the system, but have

fought US advice to run their grid at normal frequency. Iraqis run

their grid under frequency—at 49Hz—which the ministry believes

saves power, but U.S. engineers say is very damaging. The Ministry of Oil has begun to cooperate with the MoE to invest in generation requirements, which will allow the MoO to pump and refine

more oil and take some of the pressure off of the budget in the long

term.

2006 IRAQI BUDGET

Iraq Budget Outlook in Summary1

($ billions)

2005

Plan

2006

Draft

FY 06(–)

FY 05

2005

Actual2

Revenue 19.3 28.2 8.9 23.4

Oil 17.1 27.2 10.1 22.2

Other 2.2 1.1 –1.2 2.2

Expenditures 24.0 33.2 9.2 23.0

Surplus/Deficit –4.7 –5.0 –0.3 1.4

1From briefing documents provided by Treasury Attache/IRMO-FFA.

2Assumes Oct.–Nov. oil revenues at the 9 month mean, oil product arrears, underpending

elsewhere.

The 2006 Budget draft forecasts a $5 billion deficit. Embassy

briefers suggested this gap could easily be overcome by updated

revenue figures or expenditures that will be determined once the

new government is in place and oil and revenue figures are firmed

up. The Budget is summarized in the table. The nearby pie chart

depicts expenditures by category for 2006. Note that 21% of the

budget is subsidies, and Iraq continues to pay 5% of oil revenues

into the UN compensation fund. The UN Compensation Commission is a subsidiary organ of the UN Security Council. It was established by the Council in 1991 to process claims and pay compensation for losses resulting from Iraq’s invasion and occupation of Kuwait. Compensation is payable to successful claimants from a special fund that receives a percentage of the proceeds from sales of

Iraqi oil. The Security Council established Iraq’s legal responsibility for such losses in resolution 687 of 3 April 1991.7

8

8 Interview with Treasury Attache ́, 9 Nov. 2005.

2006 Expenditures

CORRUPTION

While U.S. efforts have helped put in place several institutions

to fight corruption and have worked to train and empower Inspectors General, corruption has not abated and we should not expect

that it will for quite some time. As one official pointed out, ‘‘it is

not only endemic, it is systemic.’’ The Treasury Attache ́ offered that

one cannot just fight corruption by itself. He said that the largest

source of corruption is ‘‘simply the lack of proper modern administration and controls.’’ Iraq continues to be a cash economy, and

there are no checks and cross-checks in the system. They are very

good at record-keeping and receipts, but, ‘‘you can’t have the guy

that wrote the contract paying it too.’’ 8

Reformed systems are coming online. USAID has developed a

government-wide strategy to support the automation of planning,

budgeting and reporting processes across ministries, including the

creation of a Financial Management Information System (FMIS),

an accounting and reporting system for all Iraqi ministries.

Montran, a payment solutions company, is working with Treasury

and OTA to install a direct deposit system for government workers.

These and other systems, however, must ultimately be paid for by

Iraqi banks and the government of Iraq; a fact the Ministry of Finance understands.

Embassy Economic Officers promised to provide the SFRC with

cables analyzing the effects of corruption.

In a Fall 2005 survey by Zogby International and the US Center

for Private Enterprise, 62% of Iraq business leaders surveyed said

corruption is a serious problem and more needs to be done to comVerDate 11-MAY-2000 12:13 Dec 06, 2005 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 TRIP.TXT SFRELA2 PsN: SFRELA2
9

9 ‘‘Business Leader Attitudes Toward Commercial Activity, Employee Relations, and Government in Iraq.’’ a Fall 2005 survey by CIPE and Zogby International, p. 11.

bat it. Unfortunately, some 32% hold out little hope for change.

Thirty-eight percent of respondents estimate that corruption adds

more than 40% to their business costs and blame corruption on a

combination of weak property rights and civil servants who extract

bribes.9

FOOD, AGRICULTURE & AGRIBUSINESS

In many sectors of Iraq’s economy, the forces of supply and demand do not act normally. Food is a good example. Most of the

country continues to rely on the free food provided by the government through the Public Distribution System (PDS), a legacy of the

UN Oil-for-Food program now managed by the Ministry of Trade,

which no longer employs advisors from the World Food Program

(WFP) to help manage this complex system. At an annual cost of

approximately $4.5 billion, the government buys these staples offshore, undercutting and virtually eliminating the domestic market

for wheat, vegetable paste and cooking oil. Despite these expenses,

because of poor management and dissipated stockpiles, most Iraqis

did not receive rations for the months of August, September and

October.

USAID and IRMO advisors state that there is significant room

for development in agriculture, and the wider aspects of agribusiness. USAID’s $100 million contract for agricultural revitalization has restored veterinary clinics, introduced improved cereal

grain varieties, repaired equipment, and trained farmers and ministry staff. USAID has also invested significantly in rehabilitating

the Mesopotamia Marshlands. The Marshlands and its people were

the object of many an atrocity under the Saddam regime. Food subsidy reform and further private sector agribusiness development

would have significant sector-wide and economic impact and help

cut poverty, reduce the significant budget burden and revitalize the

country’s third largest value sector and the country’s largest employer.

Embassy Baghdad Economists and the WFP assess that Iraq

could easily face a food crisis in the coming months. Staff has requested cables prepared by the Econ Section and will provide further information and analysis when they are received.

Recommendation 2: Our policies should continue to encourage Iraqi government officials to make the bold moves

necessary to remove the subsidies, reduce the PDS to a

means-tested entitlement for the poorest Iraqis, and provide

the commercial legal framework to stimulate not only agriculture, but canning and other agribusiness.

CAPACITY OF IRAQI INSTITUTIONS AND

THE ‘‘NEW’’ STRATEGIC PLAN

NATIONAL LEVEL

Whether or not Iraqi ministries and Iraqi governing institutions,

including those at the provincial level, are capable of functioning

independently of U.S. assistance depends upon a combination of

10

stability, planning, leadership, resources and dedicated personnel

at all levels of the particular organization.

Stability has not been helped by the various iterations of Iraqi

governments in the past two years, and by changes in U.S. leadership and emphasis. Charge ́ d’Affairs Satterfield expressed the expectation that the election and installation of a new ‘‘permanent’’

government will provide leadership committed to the serious tasks

at hand. (More than one U.S. official expressed their frustration

with the interim governments’ inability to focus on basic governing

necessities.) Ambassador Satterfield emphasized the importance of

the next year becoming a collective effort led by the Iraqis with

strong participation by the Coalition, regional nations and the

international community. He further highlighted the outreach the

Iraqis are leading to generate regional and international support,

such as the Arab League organized conference held 19–21 November in Cairo.

Although it is unfair to compare a coalition government operating in a parliamentary system to U.S. politics, as yet, no one

Iraqi leader has emerged with a vision for Iraq that has captured

the imagination or provided a rallying point for the people. This

will be a challenge for whoever is elected in December to lead the

country for the next four years.

MINISTERIAL LEVEL CAPACITY

The right formula appears to be in place, with excellent relations

established between experienced U.S. advisors and their respective

Ministers at the Ministry of Electricity, the Ministry of Oil, the

Ministry of Finance, the Ministry of Planning and International

Cooperation and the Minister of Municipalities and Public Works.

A great deal of controversy surrounds management and advisement

at the Ministry of Interior, which is perhaps the most critical to establishing law and order. Recent news stories about abused prisoners in MOI jails and the comments of Minister Bayan Jabr

presage challenges that lie ahead. The Ministry of Transportation—run by a Sadrist who has literally thrown the American advisors out of his office—is also struggling.

Under Saddam Hussein, the Ministry of Interior leadership was

100% Ba’ath and the enforcer of Saddam’s rule. Purged of its senior

Ba’ath party elements, the MoI faces great challenges in building

capacity to handle not only the insurgency and law and order challenges but also the routine business of training and discipline, providing pay and benefits, writing regulations and managing personnel. Staff visited the Ministry and met Assistant Deputy Minister Ayden Qadir to discuss Elections Security, Deputy Minister

Ali Ghalib to discuss police training and policy matters, and General Ghazi who led a tour of his National Joint Operations Center.

Staff also visited the Karida-Marium District Police Station in the

International Zone.

Deputy Minister Ayden Qadir had a solid grasp of the mission

of elections security. He described with pride, and with nodding

heads of the U.S. advisors, the progress the Iraqi Security Forces

demonstrated from January to October and looks forward to December elections for which they have a solid plan to maintain control with greater autonomy from U.S. forces.

11

Other Ministry leaders fail to grasp the basics of problem-solving, management, programming and budgeting. The deputy minister in charge of the Iraqi Police spent the better part of an hour

listing the problems in his forces, but when asked what he was

doing to remedy the problems, he had no answer. He did not seem

to grasp that problem-solving and policy direction was his responsibility, not this staff member’s or the U.S. advisors.

Finally, because ministers were not appointed by the Prime Minister, but rather by the Presidential Council, most do not owe their

allegiance and are not accountable to him, but rather to their

party. This creates management challenges that are likely to continue in the new government.

RULE OF LAW PROGRAM.

The Rule of Law program should be operated in partnership with

the Ministries of Interior, Justice and Defense. Because of the recent shift that placed MNF-I in the lead advisor roles at MOI and

MOD, the Rule of Law Program is now the lead civilian program

designed to build understanding and capacity in the wider concepts

of rule of law.

The embassy provided a briefing slide that summarizes the challenges:

• Where we started: A police state that ignored the rule of law,

and used police and other security forces as instruments of oppression.

• Where we are now: Relatively advanced legal framework.

Human rights—improved, but abuses persist at unacceptable

rate. Judiciary—most capable institution in the justice system,

but lacks adequate security and productive working relations

with police and prisons.

Rule of Law program officials remain concerned about the level

of effort and commitment to these challenges. They have $380 million in unfunded requirements for the next two years, and hope

that the international community will step up in these areas where

they have been traditionally very strong. The Rule of Law Coordinator also expressed concern that the military and even U.S. Department of Justice officials ‘‘think that Rule of Law is simply Rule

of Law and Order,’’ or, in other words, arresting people and putting

them away. Many other elements of an appropriate Rule of Law

program are not being resourced or emphasized at all, she said. In

a complex civil society, and one emerging from conflict and tyranny

perhaps more so, a Rule of Law program must cut across the entire

spectrum of capacity-building, access to legal aid and information

about human rights, commercial and civil law-making, legal professional training, etc.

SFRC staff inquired of embassy officials about the decision to put

the military in charge of advising the MoI. Training and developing

civilian police is a traditional State Department rather than a Defense Department mission. Nevertheless, embassy leadership defended the decision as making sense at this time because of

logistical challenges that DoD was better equipped to handle. Staff

expressed concern that DoD had neither the interest nor the expertise to pursue overarching rule of law issues. Embassy leadership

12

10 United States Department of State and the Broadcasting Board of Governors Office of Inspector General, Report of Inspection, Rule-of-Law Programs, Embassy Baghdad, Report Number ISP-IQO-06-01, October 2005.

assured staff that the Chief of Mission maintains overall policy

oversight. Nevertheless, several embassy and State Department

personnel shared their concern over this move with staff. They

worry about the long-term stability of perhaps the most crucial

ministry in the law-and-order equation, especially once the military

withdraws. One advisor to the Ministry of Interior told staff that

the ‘‘The MOI situation with DOS/DOD is screwed up . . .’’ He

said, ‘‘There are a lot of good DOD people working on it but they

have their own faults, and now they don’t have any interference

from people who can provide oversight, policy and long term direction . . . ’’ He shared further his view that ‘‘ . . . the military

is developing solutions that cost a lot of money, which dramatically

change the way that the Iraqis do things and in my opinion won’t

last when we leave.’’

Staff also raised questions about the findings made in OIG Report No. ISP-IQO-06-01 of October 2005 regarding the Rule of Law

program.10 Everyone indicated that a strategy had been put together to address the first major finding that ‘‘a fully integrated approach to justice sector reform in Iraq does not exist at the

present.’’ Time limitations prevented a more extensive inquiry, so

progress in addressing the serious shortcomings found in the IG report was difficult to assess. It is important to note, however that

neither the new senior Rule of Law coordinator nor the INL program chief have any prior experience in Rule of Law or INL programs.

Recommendation 3: (a) To ensure success in this area,

the Department of State must put in place experienced INL

experts whom the Iraqis will respect and seek out. They

must engage actively with the military and Iraqis to provide long-term policy guidance. (b) International donors

must be pressed harder for contributions in this area, not

only financially, but also with experienced trainers and

programs. (c) The SFRC should follow-up with Embassy

Baghdad officials for details on the corrective measures undertaken to address the OIG’s findings about the Rule of

Law program.

PROVINCIAL LEVEL CAPACITY

According to embassy officials, the capacity of Iraqi provincial

governments, with the exception of the Kurdish territories, has not

been developed. Their legal mandate is not clear, they lack experience and resources, and many have been officially in position only

since January 2005. Nevertheless, their capacity is essential to the

long-term success of the Iraqi mission and the stability of the country. This is where the Provincial Reconstruction Team plan announced 11 November by Secretary Rice in Mosul is intended to

play a strengthening role.

13

THE ‘‘NEW’’ STRATEGY

USAID officials provided information regarding their portion of

the plan (see graphic). In the first year (or the third year of the

U.S. reconstruction mission) the emphasis will continue to be on restoring essential services through fulfilling the IRRF commitments,

completing construction projects, re-establishing social services,

building governance and stabilizing the economy. From now

through 2008, efforts will be on ‘‘building and sustaining systems.’’

The idea is to accelerate Iraqi ownership and develop capacity at

the national level. USAID and PCO will lead the capacity-building

effort at key ministries, with a two-year focus beginning once the

permanent government is in place. The provincial and local level

plan involves Provincial and Regional Reconstruction Teams. The

third phase for 2008 and beyond suggests a more traditional relationship among U.S. government, Iraqi government and the international community and will seek to ‘‘consolidate national sovereign capacity.’’

PROVINCIAL/REGIONAL RECONSTRUCTION TEAMS (PRT/RRT)

One of the significant elements in the strategy is the implementation of PRTs. The plan calls for 15 PRTs and one RRT, which will

cover the Kurdish region. The emphasis will be on partnering with

local government officials to build security, improve governance

and bring about economic development. By recasting the Regional

Embassy Offices (REO’s) that have been in place for 18 months, the

first three are already formulated in Ninewa (Mosul), Babil (Hillah)

and Tamim (Kirkuk). The next three will rollout following the December elections, and the remaining ten will be in place by the end

of Spring 2006.

14

11Perito, Robert M., ‘‘The U.S. Experience with Provincial Reconstruction Teams in Afghanistan, Lessons Identified.’’ United States Institute of Peace Special Report 152, October 2005, p.

14.

Program lead for the PRTs will lie with the Chief of Mission and

Department of State, who will provide central management via a

National Coordination Team, as well as through the PRT Leader,

who will be Officer Counselor level Foreign Service Officers from

either the Department of State or USAID. PRTs will be made up

of from 97–140 personnel, broken down as follows: 28–30 U.S. civilians, 49–85 U.S. military and 20–30 locally employed staff.

Analysis: On paper, the concept appears to be a substantive and logical follow-through on the reconstruction

mission. Many of the lessons identified from Afghanistan

have been incorporated in this plan; for example, the PRTs

are comprised of a significant civilian component and there

is a central command element. It is worth noting, however,

that the first three PRTs are re-cast Regional Embassy Offices that have been in place for 18 months, and it appears

that subsequent PRTs will envelop the State Embedded

Teams or SETs that work with the Major Subordinate

Commands. It appears to be more an evolution than a

change in strategy, but without a visit to the regional offices, further assessment was difficult. Nevertheless, other

than among those involved directly with the planning, the

Iraq PRT concept is discussed with a healthy degree of

skepticism.

Robert M. Perito of USIP has looked at the use of PRTs and postconflict reconstruction missions. In a recent publication that the

Staff Delegation shared with IRMO leaders who briefed the plan,

Mr. Perito draws a comparison to the Vietnam-era CORDS program:

Much could be achieved if the military component of the

PRT was matched with a robust staff of civilian personnel.

The Civil Operations and Rural Development Support

(CORDS) program in Vietnam might provide a model for

such a program. CORDS was an integrated civilian-military organization, but USAID was the lead agency and its

personnel were overwhelmingly civilian. Even in the hotly

contested I Corps area of Vietnam, only 750 of 2,000

CORDS personnel were military. The State Department

assigned several hundred FSOs to serve on CORDS Provincial and District Advisory Teams, according to a veteran FSO who served in CORDS and in a PRT in Afghanistan. These officers received four to six months of Vietnamese language and area training prior to eighteenmonth to two-year assignments. CORDS received funding

for development assistance and was provided its own

transport and logistical support. CORDS was developed

when it became apparent that U.S. military operations

were alienating the rural population they were trying to

protect. 11

15

CORDS may provide a better model for Iraq than the Afghanistan PRT program, which has worked well in some areas, but has

struggled in others because of lack of qualified civilian personnel,

lack of central coordination and inadequate resources.

CONCERNS WITH THE PRT PLAN

• Collaboration: The PRT concept appears again to be a largescale U.S.-imposed solution. It was not developed in concert

with the Iraqi Interim Government, provincial governments or

coalition partners. Although no resistance has been met, further calibration may be needed when the New Iraqi Government takes office in January.

• Personnel: The list of more than ten ‘‘task focused activities’’ is

extensive and far-reaching. This will require a robust complement of qualified civilian experts. The Iraq reconstruction

mission has, from the General Garner days, been challenged to

recruit and retain qualified civilians to serve lengthy tours of

duty. There is no evidence that this challenge has abated. Stability operations, capacity building and reconstruction are not

military missions and should not be left to the MNF-I. There

is no surge capacity in the civilian agencies. USAID, whose expertise is essential, has had trouble filling the seats it has in

Baghdad (see Appendix I). The Army’s ready supply of Civil Affairs Teams, which have been hard hit by serial recalls to

Kosovo, Afghanistan and Iraq, is another potential problem.

• Security/Force Protection: The Mission Regional Security Officer demonstrated a clear understanding of the risks involved

in this plan. On one hand, the challenge is to protect people

outside the Forward Operating Bases, where they will be living

and having offices. On the other hand, if people are protected

such that they travel around like a squad of storm troopers,

how can they interact directly, humanely and in a culturallysensitive manner? Extending the reach extends the risk.

• Mission Integration: The PRT design includes a Rule of Law

Coordinator. Is this piece integrated with the P3 - Police Training Program?

Recommendation 4: The SFRC should continue to press

the Department of State and USAID for the substance of

this joint strategic and PRT plan, including how it will be

funded and how personnel will be identified to fill positions. The SFRC should also inquire of State/USAID and

DoD about training they are providing PRTs before they deploy.

FUNDING FOR THE JOINT STRATEGIC PLAN

Mission leadership is concerned about the lack of funding for

2006. During the visit to Baghdad, word arrived that the Conference on Foreign Operations Appropriations had allocated $60

million in Economic Support Funds (ESF) for Iraq in 2006. The

President’s had requested $360 million. IRMO and USAID leaders

were unanimous in their disappointment at this news.

Ambassador Khalilzad recently directed a review team to see

what money had not yet been obligated that could be fenced off to

16

12The 21 Structures are: the NOB (New Office Building), containing the classified portions

of the embassy and the unclassified areas that support those functions; the NOX (New Office

Annex) an unclassified office building containing such sections as Public Diplomacy, Consular

Affairs, USAID; the IOB (Interim Office Building) designed for future use as a school (the core

and shell will be completed now and used as office space for many of the functions now in the

Palace); the GSO Annex—offices for facilities management, break areas and locker-room facilities for warehousemen, maint. staff, local guard force, etc.; Staff Housing—6 apartment buildings containing 619 one-bedroom (700SF) apartments; CMR (Chief of Mission Residence); the

DCMR (Deputy Chief of Mission Residence); the MSGQ (Marine Security Guard Quarters);

CAC’s (Compound Access Control buildings) two service CAC’s, a Consular CAC, two main

CAC’s, an emergency exit/entrance CAC; a Recreation Building—gym, exercise room, swimming

pool, locker-rooms, the American Club, commissary, food court, barber/beauty shop; a Warehouse; a Motorpool/Maintenance building for vehicle maintenance, facilities management shops;

the Utility Building—power generation; a Water treatment plant—water storage, fire pump,

water treatment; and a Waste water treatment.

fund some projects and seed money for the New Iraqi Government

come January 2006. Between $750 million and $1 billion has been

identified for these purposes. But this figure does not include

money for the PRT strategy, USAID’s programs, IRMO initiatives

(which extend until June 2007 when IRMO will officially sunset),

or embassy operations.

An IRMO deputy stated ‘‘it would be a real shame if we were to

risk failure in this mission for a lack of a billion dollars or two.’’

It was difficult to pin down a figure backed up by hard data, but

$2 billion was mentioned by more than one official, or as they indicated, the amount that was re-programmed from the IRRF to pay

for army and security force training. Others compared the figure to

the MNF-I expenditure rate of about $1 billion per week or annual

foreign aid figures in the billions for Egypt and Israel, suggesting

that $1 or $2 billion per year in assistance for Iraq would not seem

a unreasonable investment, recognizing the investment that has

been made thus far.

Recommendation 5: Ensuring a steady funding stream

for civilian reconstruction missions, many of which require

contract negotiations and long lead time planning, as well

as military operations is essential. The SFRC should continue active oversight of reconstruction funding, engage foreign officials to make good on their pledged contributions,

and encourage the Department of State and DoD to share

plans for funding Iraq operations for 2006 and beyond.

THE NEW EMBASSY COMPOUND

The 104-acre construction site of the New Embassy Compound is

on the edge of the International Zone, on the banks of the Tigris,

west of the 14th of July bridge and approximately 1⁄2 mile south

of the Festival and Parade Grounds and the Unknown Soldier

Monument. The ambitious project with 21 structures is slated to be

completed in 24 months.12 Underway for four months, it is on

schedule and approximately 16% complete. The Senior Project Director stated, ‘‘We have every confidence that we will be completed

by June 2007.’’

17

Embassy Baghdad Construction 11/06/2005

Four Tower Cranes

18

All excavation has been completed and more than 10,000 m3 of

concrete have already been poured from concrete batch plants

erected on the premises. A great deal of effort has been made to

secure the site and to pre-load materials to alleviate work stoppages due to waylaid deliveries, as materials make the journey

from outside Iraq. The third-country national workforce of more

than 900 men is housed on the premises.

The Overseas Building Office staff collaborates closely with Diplomatic Security personnel. They have incorporated into the design

additional set-backs, additional perimeter clearance areas, structures are reinforced to 2.5 times the standard and they will build

systems to allow 100% independence from city utilities, including

wells, electric generation and sewerage.

First Kuwaiti is the lead contractor for the project that is budgeted at the Congressionally-appropriated level of $592 million.

$483, 202,966 has been awarded to date.

The progress that has been made in only four months is impressive, reflecting a high level of planning to allocate and distribute

risk in this unprecedented effort to build an embassy in a war zone

on time and on budget. Most major construction projects undertaken in Iraq since 2003 have not met these standards. The Senior

Project Director stated that the Iraqi government has reacted very

positively to the building efforts, as they demonstrate that the U.S.

is committed to staying and seeing the Iraq mission through. It

also shows that that we are committed to returning properties to

the Iraqis, such as the Republican Palace, that we have been occupying.

Recommendation 6: The SFRC should maintain its close

scrutiny of this program. No large scale, US-funded construction program in Iraq has yet met its schedule or budget. First Kuwaiti, the lead contractor, should be encouraged

by the Department of State’s Overseas Building Office to

consider hiring more local nationals as personnel screening

and security conditions allow.

CIVILIAN PERSONNEL SECURITY ISSUES

This SFRC staff member was not permitted to travel outside the

International Zone (IZ), which may say more about the security situation in Iraq than anything. Interactions between US officials and

their Iraq counterparts do not occur frequently, and when they do,

Americans travel in five-vehicle convoys with a very heavy complement of security. Many Foreign Service Nationals, Iraqi Assembly members and other government officials live in the IZ, either

in homes or apartments or in the al-Rasheed Hotel, because they

have been threatened directly or fear that their association with

the government or the Americans endangers them or their families.

The brother of one of the deputy ministers staff met during this

trip was assassinated, and one of the Iraqi National Assembly

members interviewed said that members of his family have been

threatened.

The Regional Security Officer (RSO) has 44 permanent officers

and 2237 contractors providing security for the Embassy and its

personnel. The RSO is very engaged in working to manage the

19

risks embassy personnel face every day. He told staff that he challenges the necessity of meetings outside the International Zone

that appear overly risky, noting that almost all Iraqi officials have

U.S.-issued cell phones to facilitate communications. Most embassy

and USAID staff said they go outside the IZ rarely if at all. Staff

and the RSO discussed the net worth of having an Embassy when

it is so isolated, because of the risk avoidance posture he enforces,

the ability of its personnel and the USAID team to carry out their

responsibilities, and the challenges of working with the military

who operate under different regulations. It causes friction and challenges the mission’s effectiveness when the civilian advisor cannot

go to a meeting, but military advisors can.

The RSO stated candidly that there are no rules for this mission—ensuring the safety of civilian personnel and securing an embassy in a war zone. Normally, there is an Emergency Action Plan

that outlines the tripwires that would lead to a closure and evacuation of an embassy. And, he said, ‘‘We cross those tripwires every

day. EVERY day.’’

The Assistant Secretary of State for Diplomatic Security confirmed that there is not a clearly defined arrangement for operating an embassy in a war zone. Safety of the Mission and its personnel is delegated to the Ambassador and his principle security

advisor, the RSO.

U.S. Embassies have been the target of large scale attacks as recently as the 1998 al-Qaeda bombings in Kenya and Tanzania. The

Department of State makes considerable efforts to manage the

risks undertaken by diplomats living in dangerous places around

the world. Unlike the U.S. military, it does not ‘‘accept’’ casualties.

Iraq embassy personnel, all of whom are volunteers and who receive limited crisis reaction training to deploy to Iraq, are not expected to sacrifice their lives for the mission. State will need to become an even more effective risk manager to be truly effective in

an environment like Iraq. Officials in Baghdad and Washington

recognize that these issues will be compounded by the ‘‘PRT’’ plan.

Recommendation 7: The SFRC should continue active

dialogue with Diplomatic Security personnel on these challenging issues, which are not unique to Iraq. Funding improved telecommunications, such as video-teleconferencing

systems in countries where risks are high, can save lives

and improve interaction.

PERSONNEL AND EMBASSY STAFFING

Embassy management, staffing and personnel issues were raised

with the Embassy’s Management Counselor, Ambassador Greg

Engle, with respective section heads and with the Charge ́ d’Affairs.

In short, State Department personnel are out-gunned by the military. Ambassador Engle joked that when he has meetings with the

military, a half-dozen colonels will file into the room and wonder

why there is only one official on his side of the table. There is no

redundancy in embassy staffing. An empty position or vacationing

official means that work is left undone. It also means that Foreign

Service Officers find themselves at their desks for long hours, often

spending as much time keeping up with Washington as with Iraq.

20

13SFRC Staff Inquiry Report, December 2004. 14 Unaccompanied posts include Kabul, Afghanistan; Algiers, Algeria; Banja Luka, BosniaHerzegovina; Bujumbura, Burundi; Bangui, central African Republic; Brazzaville, Republic of

Congo; Abidjan, Cote d’Ivoire; Baghdad, Iraq; Pristina, Kosovo; Beirut, Lebanon; Monrovia, Liberia; Islamabad, Karachi, Lahore, and Peshawar, Pakistan; Riyadh, Jeddah, Dhahran, Saudi Arabia; Khartoum, Sudan; and Sanaa, Yemen.

One year ago, following a trip to the region, SFRC staff reported:

There are too few civilian and military civil-affairs personnel available for the scope of Iraq reconstruction efforts.

Those available reportedly do not have the right expertise

and language skills and the duration of their assignments

are too short (90–120 days) with few incentives available

to encourage the civilians to continue to serve in Iraq. Several people who had or were serving in Iraq expressed astonishment at the responsibilities they were given for

which they felt unprepared. For example, personnel with

no budget or program management experience were overseeing enormous budgets and developing technical assistance programs. Learning on the job took time. Civilian and

military linguists, budget and contracting specialists are

also in too short supply to adequately support the mission.13

Some of the problems found a year ago have been addressed. In

their place, however, new challenges constantly present themselves. Reconstruction and stabilization missions such as Iraq and

Afghanistan are a new paradigm that require a combination of innovative incentives to bring in the right people. So-called ‘‘directed

assignments’’ is one solution that may be considered but has been

thus far resisted by the civilian agencies. In a directed assignment

a civilian employee whose contract stipulates worldwide availability, such as a Foreign Service Officer, is directed to serve in a

particular post and risk promotion or their career in refusing the

assignment.

As mentioned above, to staff the Provincial Reconstruction

Teams, State will be challenged not only to find the senior FSOs

that are indicated in the briefed plans, but also to find those with

the necessary skills. Reconstruction and stabilization missions demand program management skills and hands-on field experience,

rather than the policy management and analytical skills needed in

traditional embassy positions, a point with which Ambassador

Engle agreed. Several Foreign Service Officers shared that many

who enter the Foreign Service today are eager for the chance to engage in such missions when they join the service, but they quickly

find themselves working the visa window and staffing embassy

desk jobs. By the time many FSOs have developed the seniority to

lead such a mission, they have not engaged in running programs

or spent much time operating outside embassy confines.

These challenges are not unique to Iraq. The Department of

State has over 600 positions in ‘unaccompanied’ posts (where

spouses and family are not allowed because of the risk).14 While

Iraq and Afghanistan are the highest priority, getting staff to the

priority areas is increasingly difficult due to security issues and the

21

15There are 12,666 members of the U.S. Foreign Service. Of those, 11,066 are at the State

Department, 1131 are at USAID, 255 serve in the Foreign Commercial Service, 170 serve in

the Foreign Agricultural Service, and 44 serve with the International Broadcasting Bureau.

absolute quantity of these needs relative to the size of the entire

Foreign Service corps.15

Charge D’Affairs Ambassador Satterfield stated that the Department made some mistakes in staffing the Embassy on the first rotation. In too many cases, positions were filled with junior personnel, instead of FS-02s, and FS-03s. In some cases there were

Ambassador and Minister Counselors heading sections with no one

in between them and the first tour officers. Like any organization,

mid-grade officers carry the load, mentor, and convey essential onthe-job training. They are also needed to interact competently and

authoritatively with seasoned Iraqi and US military personnel.

USAID has done better, but is facing a challenge filling positions

for its next rotation.

U.S. Mission Staffing Summary*

Agency Authorized

U.S. positions

U.S.

onboard Percentage

State Department 157 145 92.5

IRMO/Other State 348 286 82.2

Defense 245 210 85.7

Agriculture/FAS 2 2 100

Commerce/FCS 2 2 100

HHS 2 2 100

DHS 21 1 4.8**

Justice 62 26 41.9**

Labor 1 0 0

Treasury 4 2 50

Transportation 3 3 100

USAID 99 62 62.6

Other — — —

Baghdad Total 946 739 78.1

* See Appendix I for full staffing summary, as of 4 November 2005.

** This summary table does not reflect TDY personnel. DHS and DoJ fill many positions TDY.

Staffing challenges will intensify with the new initiative to build

Iraqi governing capacity in the regions. The first three PRTs have

been manned, but 11 of the remaining 12 and the one Regional Reconstruction Team destined for the Kurdish region, will be headed

by as yet unnamed Officer Counselor (flag equivalent) Foreign

Service Officers.

Satterfield reported that the entire Department—all the way up

to the Secretary—had committed to making personal appeals to individual candidates to fill the positions with the right people. The

Iraq desk at State indicated that bids were not coming in for the

PRT positions that had been posted. Staff asked if ‘‘directed assignments’’ were being considered. Feelings were mixed on this issue.

The Management Counselor suggested that would have far-reachVerDate 11-MAY-2000 12:13 Dec 06, 2005 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 TRIP.TXT SFRELA2 PsN: SFRELA2
22

ing effects in the Foreign Service and that the union (American

Foreign Service Association) would react loudly. Ambassador

Satterfield told Staff that directed assignments made sense if it

were up to him. Others agreed, saying that the only way State can

show it means business and is committed is to ‘‘call up its best

FSOs and put them in charge of the PRTs.’’

Traditional State Department positions in Iraq are filled to 92%

(145 of 157). But, it is worth noting that six of those unfilled permanent positions are allotted to the Office of Inspector General

who currently has no staff in Baghdad. Asked about this shortfall,

State OIG Howard Kroengard stated that although he has been

able to inspect the Rule-of-Law Program as mentioned above, he

has received no funding to do Baghdad work. Most of the work the

OIG does is mandated by Congress, and to do program audits or

inspections of reconstruction efforts, he would have to surge and

probably hire additional people.

Recommendation 8 (Staffing):

(a) The SFRC should initiate an inquiry into State Department staffing patterns at post-conflict reconstruction

and stabilization missions, including a review of the training received prior to deployments specific to the mission.

(b) The SFRC should inquire as to whether the State Department, USAID and other cabinet agencies are willing to

go to ‘‘directed assignments’’ to fill positions with persons

of appropriate rank.

(c) The SFRC should ask the State Department management experts to suggest what other options are available—

long and short-run—to remedy these challenges. This complex environment demands not only people who can live on

adrenaline and cope with some level of chaos, but also that

have experience.

(d) The State Department should consider recruiting

more mid-level personnel with skill sets appropriate to

leading PRT-like missions.

(e) The SFRC should continue to push the State Department to establish a Ready Response Corps within the Department of State (the so-called ‘‘Lugar Corps’’) made up of

250 experienced civilians trained to work in hostile environments as detailed in Title VII of S. 600.

(23)

APPENDIXES

APPENDIX I.—EMBASSY STAFFING SUMMARY

U.S. Mission Iraq Staffing Summary

(As of 11/04/2005)

Agency Notes U.S.

Authorized

U.S. on

board

(12)

TDY

(13)

Locally

Eng. Staff

Authorized

Locally

Eng.

Staff on

board

Estimated

Contractors

(supporting

COM) (9)

1. Embassy Baghdad NSDD-38

positions under COM

State ...................................................... (1)

Consular ............................................ 7 6

Econ ................................................... 10 8

Executive Office ................................. 12 10 50

Executive Secretariat ......................... 4 4

Management ...................................... (14) 37 36 13

Political Section ................................ 18 17

Pol-Mil ............................................... 6 6

INL ..................................................... (2) 3 3 500

Public Affairs .................................... 7 7

Security .............................................. (3) 44 44 2237

OBO ................................................... 9 4

State Subtotal ............................... 157 145 16 155 75 2800

Temporary/Other State Units ................. (4)

Iraq Reconstruction Mgt Office

(IRMO) ........................................... 219 163

Legal Office ....................................... 3 3 3 1

ORA .................................................... 120 120

State OIG ........................................... 6 0

Temp/Other State Unit Subtotal ... 348 286 3 1 0

Agriculture/FAS ...................................... 2 2 4 1

Commerce/FCS ....................................... 2 2 8 2

Defense ..................................................

PCO/JCC-I (requested) ....................... 134 123 419

Def. Contract Audit Agency (DCAA) .. 20 19 0

SIGIR (requested) .............................. 45 45 0 2

MSG Det ............................................ 14 14

DCMA ................................................. 32 28

DIA ..................................................... 4

DoD Subtotal ................................. 245 210 23 0 2 419

DHS ........................................................

DHS Headquarters ............................. 2 1 1

TSA .................................................... 1 0 2 1

CBP .................................................... 18 0 17 6

24

U.S. Mission Iraq Staffing Summary—Continued

(As of 11/04/2005)

Agency Notes U.S.

Authorized

U.S. on

board

(12)

TDY

(13)

Locally

Eng. Staff

Authorized

Locally

Eng.

Staff on

board

Estimated

Contractors

(supporting

COM) (9)

DHS Subtotal ................................ 21 1 19 8 0

HHS ........................................................ 2 2 1 0

Justice .................................................... (2)

Justice ............................................... 2 1 0

Alcohol, Tobacco, & Firearms (ATF) .. 4 0 3 0

CRIM/OPDAT ...................................... 2 3 0

FBI ..................................................... 9 6 67 0

Int. Criminal Invest. Training Asst

Pgm. (ICITAP) ................................ 2 1 0 259

Regime Crimes Liaison Office (requested) ........................................ 41 15 33 0 3

U.S. Marshals (requested) ................ 2 0 4 0 1

Justice Subtotal ............................ 62 26 107 0 4 259

Labor ...................................................... (5) 1 0 0

Transportation ........................................ 3 3 2 1

Treasury .................................................

Treasury ............................................. 2 1 1

Treasury/IRS-CID ............................... 2 1 0

USAID .....................................................

USAID ................................................. (6) 68 37 14 134 100 76

Army Corps of Engineers .................. 23 18 14 7

RIG ..................................................... 8 7 2 1

USAID Subtotal ............................. 99 62 14 150 108 76

Baghdad TOTAL: .................................... 946 739 182 330 193 3554

2. REO/SET NSDD-38 positions under

COM (11)

State ...................................................... (10) 38 32 14 14

Temporary/Other State Units .................

IRMO .................................................. 30 11 2 2 2

ORA .................................................... 28

Defense ..................................................

JCC-I (requested) .............................. 20 11

DCMA ................................................. (7) 36 35

DIA ..................................................... (8) 4

USAID .....................................................

USAID ................................................. (6) 25 8 1 12 10

Army Corps of Engineers .................. 0 0 0 3

Support Contractors ............................... 738

REO/SET Total: ....................................... 149 97 33 28 29 740

Total Baghdad + REO/SET: ................... 1095 836 215 358 222 4294

Total positions under COM authority: ... 1453

Grand Total Positions: ........................... 5747

25

U.S. LES Contractors

3. Not under COM located at Embassy

Defense (in Support of COM) ..........................................................

MNF-I in Embassy ....................................................................... 487

MNSTC-I ...................................................................................... 15 6

MNF-I Legal Office ...................................................................... 3

MNF-I Area Support Group .......................................................... 130

FAST Marines .............................................................................. 151

Special Tribunal (Contract) ............................................................. 50–70

NOTES:

(1) Baghdad State phasing FSN: up to 155 in FY06.

(2) INL/DOJ contractors are Police Trainers, Advisors, and Corrections (IPLO; IPT; PSD, Static, Support, Dog Teams).

(3) Contractors include PSDs in Direct Support of RSO, USAID, PCO; also includes Fixed Security Guards at Five Sites.

(4) Other State units—all numbers are estimates, except for Ministry Advisors; phase in and out depending on need,

normally 3161 or TDYers. This category includes all functions previously performed by CPA.

(5) Labor Falls under Econ Section.

(6) USAID authorized includes 69 PSCs. USAID FSN numbers include 7 TCNs. On Board Count includes Irbil.

(7) DCMA has teams outside Baghdad in 18 locations.

(8) DIA under Commander at this time.

(9) Estimated number of contractors in support of COM as of Aug. 1.

(10) REO/SET Security positions and on-board personnel are Baghdad FTE—thus they are already counted in the Baghdad Security section.

(11) REO/SET authorized and on-board numbers for IRMO, USAID and DCMA include some personnel in other regional

locations in Iraq.

(13) TDY staff data is estimated except for State numbers. Because many TDYs are augmenting US authorized positions, they are not included in the total position count to avoid double-counting.

(14) Information Management contractors include Northrop Gruman, SPAWAR, USIS, BE, and Global Sat.

26

APPENDIX II.—MEETINGS AND INTERVIEWS

New Embassy Compound Briefing and Tour

Mary French, New Embassy Senior Project Director

Discussion of Embassy Operations and Structure

Clarke Cooper, Legislative Affairs Advisor

Discussion of Human Resources, Staffing & Mission Management

Ambassador Greg Engle, Management Counselor

Discussion of Inspector General Issues

State Department Inspector General Howard J. Krongard

SIGIR discussion

Mike Boisvenue, Chief of Staff; James Connolly, Special Agentin-Charge; Brian Flynn, Assistant IG for Special Operations

Privatization, Private Sector Development, Stock Exchange and Securities Commission

Ms. June Reed, Senior Consultant for Private Sector Development (IRMO)

Iraq Reconstruction Management Office Briefing

David C. Harris, Chief of Staff and Director of Development; MG

Robert Heine, Deputy Director Civil-Military Regional Operations;

Mr. Brad Higgins, Deputy Director and CFO

Essential Services Briefings

Oil: Mr. Robert Todor, Senior Consultant Iraqi Ministry of Oil

Electricity: Mr. Scott Hutchins, Senior Ministerial Advisor

Water: Dr. Linda Allen, Water Resources Advisor

Water: Mr. Wayne Curry, Senior Consultant

Reconstruction Management Briefing (PCO/GRD)

BG McCoy, Commander of Gulf Regional Division Army Corps of

Engineers (and staff)

International Republican Institute

Richard Hougton, IRI Resident Governance Program Director

Discussion on Human Rights and the Rule of Law

Dr. Ellen Klein, Human Rights Officer

Rule of Law Program Briefing & Discussion

Ambassador James Yellin, Senior Justice and Rule of Law Coordinator; Ms. Karen Hanrahan, Rule of Law Coordinator; Mr. Robert Witajewski, Director International Narcotics, Law Enforcement

Ministry of Interior Visit and Briefings (Adnan Palace)

Assistant Deputy Minister Ayden Qadir (Elections Security);

Deputy Minister Ali Ghalib (Police Capabilities and Challenges);

Mr. Thomas Bishop, National Security Advisor to the Ministry of

Interior; Mr. Jerry Burke, International Police Liaison Officer; Mr.

John Bozicevich, International Police Liaison Officer

Police Station Visit (Karida-Marium District Station)

Capt Faiz; Mr. Jerry Burke, International Police Liaison Officer;

Mr. John Bozicevich, International Police Liaison Officer

Saddam Trial Brief & Courthouse Visit

Regime Crimes Liaison Office Staff; Mr. Michael Kulstad, U.S.

Department of Justice

27

Public Diplomacy Discussions

Public Affairs Counselor Jim Bullock; Cultural Officer Ilya Levin;

Ms. Fatima Fleifel (Political Section FSN); Political Officer Vince

Campos

Daily MNF-I Battle Update Assessment Briefings

MNF-I Corps Staff

Meeting with Treasury Attache ́

Mr. Kevin Taecker, Department of the Treasury

Meeting with Iraqi National Assembly (INA) members

Dr. Saad Jawad Qindeel; Ms. Wijdan M. Salim

Roundtable with Iraqi-Americans working in Iraq

Regional Security Officer Interview

Mr. Mark Hunter, Regional Security Officer; Mr. John Flynn,

Deputy RSO

Economic Section Meeting

Mr. Thomas Delare, Minister Counselor; Ms. Martha Patterson,

Economic Officer

Meeting with Charge ́ d’Affaires

Ambassador David Satterfield; Ambassador Dan Speckhard, Director of IRMO; Ambassador James Yellin, Senior Justice and Rule

of Law Coordinator

USAID meeting

Ms. Dawn Liberi, Country Director

Visit to the Joint International Police Training Center in Amman,

Jordan.

Note: this event was cancelled due to Nov. 10 bombings in

Amman hotels.

After-action/follow-up meetings:

Ambassador Richard J.Griffin, Assistant Secretary of State for

Diplomatic Security; Mr. Bob Perito, USIP; Ms. Carina Perelli, UN

Elections Chief; Mr. Jengahir Khan, UN Iraq Desk Officer

Note: this list is not all-inclusive. Additional conversations were

held in Washington in advance of the trip and with other members

of the Embassy team that contributed to this report.

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