US threatens Iraq's foreign reserves in bid to prolong occupation

[motivez]

The US is holding hostage some $50bn (£25bn) of Iraq's money in the Federal Reserve Bank of New York to pressure the Iraqi government into signing an agreement seen by many Iraqis as prolonging the US occupation indefinitely, according to information leaked to The Independent.

US negotiators are using the existence of $20bn in outstanding court judgments against Iraq in the US, to pressure their Iraqi counterparts into accepting the terms of the military deal, details of which were reported for the first time in this newspaper yesterday.

Iraq's foreign reserves are currently protected by a presidential order giving them immunity from judicial attachment but the US side in the talks has suggested that if the UN mandate, under which the money is held, lapses and is not replaced by the new agreement, then Iraq's funds would lose this immunity. The cost to Iraq of this happening would be the immediate loss of $20bn. The US is able to threaten Iraq with the loss of 40 per cent of its foreign exchange reserves because Iraq's independence is still limited by the legacy of UN sanctions and restrictions imposed on Iraq since Saddam Hussein invaded Kuwait in the 1990s. This means that Iraq is still considered a threat to international security and stability under Chapter Seven of the UN charter. The US negotiators say the price of Iraq escaping Chapter Seven is to sign up to a new "strategic alliance" with the United States.

The threat by the American side underlines the personal commitment of President George Bush to pushing the new pact through by 31 July. Although it is in reality a treaty between Iraq and the US, Mr Bush is describing it as an alliance so he does not have to submit it for approval to the US Senate.

Iraqi critics of the agreement say that it means Iraq will be a client state in which the US will keep more than 50 military bases. American forces will be able to carry out arrests of Iraqi citizens and conduct military campaigns without consultation with the Iraqi government. American soldiers and contractors will enjoy legal immunity.

The US had previously denied it wanted permanent bases in Iraq, but American negotiators argue that so long as there is an Iraqi perimeter fence, even if it is manned by only one Iraqi soldier, around a US installation, then Iraq and not the US is in charge.

The US has security agreements with many countries, but none are occupied by 151,000 US soldiers as is Iraq. The US is not even willing to tell the government in Baghdad what American forces are entering or leaving Iraq, apparently because it fears the government will inform the Iranians, said an Iraqi source.

The fact that Iraq's financial reserves, increasing rapidly because of the high price of oil, continue to be held in the Federal Reserve Bank of New York is another legacy of international sanctions against Saddam Hussein. Under the UN mandate, oil revenues must be placed in the Development Fund for Iraq which is in the bank.

The funds are under the control of the Iraqi government, though the US Treasury has strong influence on the form in which the reserves are held.

Iraqi officials say that, last year, they wanted to diversify their holdings out of the dollar, as it depreciated, into other assets, such as the euro, more likely to hold their value. This was vetoed by the US Treasury because American officials feared it would show lack of confidence in the dollar.

Iraqi officials say the consequence of the American action was to lose Iraq the equivalent of $5bn. Given intense American pressure on a weak Iraqi government very dependent on US support, it is still probable that the agreement will go through with only cosmetic changes. Grand Ayatollah Ali al-Sistani, the immensely influential Shia cleric, could prevent the pact by issuing a fatwa against it but has so far failed to do so.

The Grand Ayatollah met Abdul Aziz al-Hakim, the leader of the Islamic Supreme Council of Iraq (ISCI), which is the main supporter of the Iraqi government, earlier this week and did not condemn the agreement or call for a referendum. He said, according to Mr Hakim, that it must guarantee Iraqi national sovereignty, be transparent, command a national consensus and be approved by the Iraqi parliament. Critics of the deal fear that the government will sign the agreement, and parliament approve it, in return for marginal concessions.

US issues threat to Iraq's $50bn foreign reserves in military deal - Middle East, World - The Independent

Wow, this is pretty sad. I remember Bush talking at length about how the rest of the world should forgive Iraqi debts under Saddam in order to give them a clean slate moving forward without having to spend years under the crushing weight of such a debt

And now, because they want us to leave.. want to diversify their holdings outside of a faltering US dollar, we're saying unless they do as we want, we'll bring that crushing debt crashing down on the fragile government that Republicans have touted as one of the few legitimate successes

Yet another reason I'll happily be voting for someone who wont continue Bush's foreign policy.. the idea that we will continue our occupation of their country against the wishes of the government we helped install is ridiculous to me.

The more pressure we put on them to allow us to erect permanent bases, the more I wonder if it's because we want some sort of sweetheart deal with regards to their oil. I mean, what else makes sense?

[Smull]

Motivez, you worry too much, you see we want Iraq to be a democracy, where they can be free and choose for themselves, but the only way to do this is to force them to do exactly what we say. Probably for a few more decades.

Seriously, how is this not empire? Why not just call it the 51st state and be done with it. Any one know if McCain has openly supported this?

[motivez]

More:

Iraq lawmakers want US forces out as part of deal

WASHINGTON, June 4 (Reuters) - A majority of the Iraqi parliament has written to Congress rejecting a long-term security deal with Washington if it is not linked to a requirement that U.S. forces leave, a U.S. lawmaker said on Wednesday.

Rep. William Delahunt, a Massachusetts Democrat and Iraq war opponent, released excerpts from a letter he was handed by Iraqi parliamentarians laying down conditions for the security pact that the Bush administration seeks with Iraq.

The proposed pact has become increasingly controversial in Iraq, where there have been protests against it. It has also drawn criticism from Democrats on the presidential election campaign trail in the United States, who say President George W. Bush is trying to dictate war policy after he leaves office.

"The majority of Iraqi representatives strongly reject any military-security, economic, commercial, agricultural, investment or political agreement with the United States that is not linked to clear mechanisms that obligate the occupying American military forces to fully withdraw from Iraq," the letter to the leaders of Congress said.

The signatures represented just over half the membership of Iraq's parliament, said Delahunt, a House Foreign Affairs subcommittee chairman.

Two Iraqi lawmakers whose parties were listed as signatories testified to Delahunt's panel on Wednesday that U.S. troops should leave Iraq, and that talks on the long-term security pact should be postponed until after they are gone.

"What are the threats that require U.S. forces to be there?" asked Nadeem Al-Jaberi, a co-founder of the al-Fadhila Shi'ite political party, speaking through a translator.

"I would like to inform you, there are no threats on Iraq. We are capable of solving our own problems," he declared. He favored a quick pullout of U.S. forces, which invaded the country in 2003 and currently number around 155,000.

A Sunni Iraqi lawmaker, Khalaf Al-Ulayyan, founder of the National Dialogue Council, said bilateral talks on a long-term security deal should be shelved until American troops leave -- and until there is a new government in Washington.

"We prefer to delay until there is a new administration in the United States," he said. The United States elects a new president in November; Democrat Barack Obama, who clinched his party's nomination this week, is among senators sponsoring a bill requiring any long-term pact with Iraq be submitted to Congress for approval.

A senior U.S. official said in Baghdad earlier this week that the United States still hopes to reach a new security agreement with Iraq by July, even though officials in the government of Prime Minister Nuri al-Maliki say negotiations are at an early stage.

Iraq lawmakers want US forces out as part of deal | Reuters

So, we're trying to prolong the occupation while they want us out. I don't understand how this isn't imperialism?

I mean, that's the word lots of middle eastern nations, groups,l and individuals use to describe the US.. as an imperialist force.. and it seems like we're proving them correct.

[David Octavius]

Here is the part that worries me -

The threat by the American side underlines the personal commitment of President George Bush to pushing the new pact through by 31 July. Although it is in reality a treaty between Iraq and the US, Mr Bush is describing it as an alliance so he does not have to submit it for approval to the US Senate.

Presidents have been doing this unconstitutional act for years - by going around Senate approval the President has total control over foreign relations which could drag us into more conflicts and wars

[Smull]

This is one of the things that bothers me most about the Iraq war. Congress gave the President the authority wage war against Iraq and then got angry when he used that authority inappropriately, which is EXACTLY what happened in Vietnam with the whole Gulf of Tonkin Resolution thing. Congress has abdicated is responsibility to wage war TWICE now. Hopefully the lesson sinks in this time.