GREASING IRAQ'S POLITICAL TRANSFORMATION WITH OIL MONEY

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 01327047
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 3
• Document Creation Date: March 8, 2023
• Document Release Date: July 31, 2019
• Case Number: F-2018-02409
• Publication Date: October 1, 2002

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Greasing Iraq's Political Transformation With Oil Money
The quieter and more decisive a military victory in Iraq; the mor e y large
pare of the Saida177-drit elite wit/ remain In power--especiaBy Kehler help
oust Saddam and avert a key role In the new wean postf.feristain petrOMM,
board under tis-Llif oversight that uses Iraq's c//money to build up,
stakeholders/ft a new polities/ order might heduce the resklual power *fold
elites stab/Are relations between post-war factions, and buy time for new
leaders to emerge. Because the nexus between off and politica/power Is
Intuitive to Gulf leaders reorganizing !rag/ politictt Awed on creative revenue
astributfon schemes might defuse C017COMS about whet US-sponsored change
in Iraq means elsewhere in Me region
The Red Cell speculated on post-Saddam political options and prospects for
transition in an Iraq that has had no experience of popular government
Quick Victory Means Intact Elites
Iraq's history has been marred by deep differences among its elite Sunni groups. In our
reading, the country has never developed a sense of nationhood that transcends key
families and tribes. Iraq has maintained its unity only by autocratic leadership.
� Iraq is bereft of political traditions like Afghanistan's Loya Jirga that might provide an
indigenous basis for democracy And Sziddarn's active cultivation of anti-Americanism
mixed with Iraqis' traditional abhorrence of foreign domination�probably the most
potent unifying force in Iraq's history�poses a stubborn legacy, even if the
overthrow of Saddam himself is welcome.
� Exile organizations such as the Iraqi National Congress (INC) have little legitimacy
inside Iraq, where few are likely to accept the INC in leading roles unless imposed
by allied arms.
The quicker a military victory over Saddam, the more likely the Sunni elites that play a
leading rote under Saddam would remain in place, expecting to figure prominently In a
new order�particularly if they desert Saddam at the right time. Although the Sunni elites
have the expertise needed to keep the country running, most are also /teeters of
Saddam's hated Bath Party A longer, more destructive struggle would bring Iraq closer
to a clean sweep of the slate that would approximate Germany's "year zero" in 1945.
� An Iraqi general might present the US and allies with a real dilemma by simply
following the precedents of Iraqi history, knocking off Saddam, and declaring
himself leader, backed by undamaged military units. Such a move would give the
international community the satisfaction of a Saddam-free Iraq willing to surrender
its W1441) but otherwise preserving Iraq's authoritarian regime.
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After decades of repression and exclusion from power by successive Sunni Arab governments,
Iraq's other ethnic and religious groupings will be loath to reconcile with a regime identical to
its predecessor except for the dictators absence.
� In the north, the Kurds have their own political institutions�two competing sets, in
fact�developed under the protection of US and UK air power. The Kurds are much better
prepared than other groups for immediately assumWsg a post -Saddam political-mlittary
role. Anxious to press their political aspirations, they may act on a long-held desire for
independence despite the risk of armed Turkish intervention. The Kurds also pose a
threat to seize the rich oilfields immediately to their south.
� A majority of Iraq's population, the Shia of the south have long been suppressed and
are poorly organized to press their interests�a managerial gap Iranian hardliners might
be glad to fill as Saddam% grip is loosenecL Longtime Shia resentment of their shabby
treatment by Baghdad�es well as by foreign oppressors�might result in violence, as
was the case in 1992 when Saddam was vulnerable. To stave off trouble, Saddam has
relied more on tribal sheiks in shix're,as, which might provide a basis for a Shia political
role post Saddam
OK Revenue as Agent of PotItical Change
.Using Iraq's oil wealth to facilitate a new political order may be a practicable way of easing
potential post-Saddam frictions. By tapping Iraq's oil money and giving key groups a stake in
how the revenues are used, the US and its partners might provide a major incentive for
cooperation among Iraq's competing players while, for a time, keeping decisive influence
in their own hands.
Oil money is a traditional tool of control in the region and has provided a basis for
political legitimacy in Iraq and other oil rich states. Indeed, Iraq's oil wealth has
been one of its few sources of national identity.
� Although the danger exists that Saddam might try to destroy Iraq's oil production
capabilities, we believe that as Saddam % demise appears imminent the odds will
increase that many technocrats would refuse to destroy their national
treasure�just as Speer and others refused to obey Hitler's "scorched earth- orders
in 1945. Visible steps to protect The oil aids�either with military forces or a clear
message to the workforce of rewards for those who hold their posts and punishment
for those who destroy facilities�might reduce the risk
After Saddam's ouster, the creation of a "petroleum board" consisting of key Iraqi political
groups may be a way to help dilute the authority Of any one group (especially remnants of
Saddam's regime who help the US and its partners during the war), promote political
cohesion, arid lay the groundwork for democratic development Rattier than turning the
revenues over to a new regime or having them directly managed by foreigners, key
post Saddam groups could be given a stake in dealing with resource sharing and the
compromises needed to make It work
� In the post-Saddam era, without clandestine weapons programs and the dictator's
household expenses, Iraq will probably have more oil revenue available for the needs
of Its populace. If Iraq's oil facilities remain intact, production might approach double the
current level. Income would recetveanother1 boost from eliminating discounts on Iraqi oil
sold in violation of sanctions.
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To complement an oil board that reaches out to key post-Saddarn figures, states with financial
and political interests in Iraq might be receptive to a UN sponsored "Iraq Advisory
Commission" designed to link favorable domestic political change to the interests of important
Outsiders. Such a Commission might be made up of states already on the ground with military
forces as well as others�perhaps including Iran, Russia, and Turkey�that contributed to
Saddam's deposal and hold special equities in any succession arrangements.
� An "Iraq Advisory Commission" might also link allocation of oil revenue to the repayment
of Iraq's foreign debts, which might speak to Russian and French calculations about how
far to support the policy of regime change.
In our reading of Iraq's likely post-Saddarri environment, institutions like a "petroleum board"
and an "advisory commission" offer several potential advantages:
� The key political players In Iraq would need to cooperate to get their share of oil
revenues. This would provide tangible economic incentives for cooperation and for
developing processes of political ban:it:tiling and compromise.
� AS the petroleum board helped restore order to Iraq's economic housei a measure of
"breathing space" for building a new polidtal order would result. Indeed, given the lack
of institutions and traditions to build on�other than those closely associated with
Saddam or the Kurds�a political process linked to oil revenues might buy the time fot
new political groupings and personalities to emerge.
� A political transition based on bargaining over, oil- revenues would, on the surface, look
familiar to Gulf states and may be more likely to win acceptance by reducing perceptions
that the US will impose a new political order While US-UK predominance in an ell board
would be expected, transparency in dealings would show both Washington and London
to be "honest brokers" among post-Saddam Iraqi groups. This may allay concerns In the
region and elsewhere that the real US goal is Iraq's oil wealth.
Such a scheme has associated risks, as would be the case with the creation of any institution
and its resulting politics. Indeed, post-Saddarn politics could be defined as opposition
to foreign dominated institutions such as an oil board, much as late 19th century Muslim
critics defined nationalist politics by opposition to the European-dominated debt commissions
that controlled Egypt and the Ottoman Empire and that were seen as serving the interests
of foreigners.
� In other states, oil boards have become corrupt and liable tote viewed as serving
narrow political interests. To the extent an oil board is perceived as creating, economic�
and poltical�winners and -losers, a dangerous "zero-sum" mentality might emerge and
play to old Iraqi suspicions. That said, as long as such debates transpire an open
environment guaranteed by the US and its partners, a healthy learning process might
result.
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