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Cablegate: Two Issues Regarding Irrf Re-Obligation Authority

VZCZCXRO0909
OO RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #1654 1410700
ZNR UUUUU ZZH
O 210700Z MAY 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1260
INFO RUCNRAQ/IRAQ COLLECTIVE PRIORITY

UNCLAS BAGHDAD 001654

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: EAID IZ PREL
SUBJECT: TWO ISSUES REGARDING IRRF RE-OBLIGATION AUTHORITY

Summary
-------

1. As the infrastructure programs supported by Iraq Relief
and Reconstruction Funds (IRRF) come to an end over the next
year, it is important that we retain the ability to shift
funds among projects through re-obligation authority. We also
need to make the de-obligation/re-obligation procedures more
efficient, both in Washington and in Baghdad. End Summary.

De-obligation/Re-obligation in the Supplemental
--------------------------------------------- --

2. The latest conference version of the FY07 Supplemental
Appropriations Bill that we have seen does not include
language giving us the flexibility to de-obligate funds from
some IRRF projects and re-obligate them to others. If such
language is not added, the Administration will lose the
flexibility to shift remaining funds to meet our needs. Lack
of this flexibility will make it difficult to successfully
complete the remaining important infrastructure projects in
Iraq.

3. The FY06 Supplemental Appropriation included authority
for us to re-obligate money. Some projects were not needed,
were closed because of security concerns, or were handed over
to the Iraqi Government to complete at lower cost. Others
suffered cost overruns because of unforeseen expenses or the
need for more capacity. The ability to shift funds among
them has been valuable - we have de-obligated $300 million
using our current authority. The de-ob/re-ob process is
rigorous and transparent. If we shift funds between projects
in different sectors, Congressional notification is required.

4. I understand that the Department has made inclusion of
re-obligation authority a top priority and that the Deputy
Secretary personally has engaged Congressional leadership on

SIPDIS
this point. Please let me know if I can reinforce the
importance of this issue by making calls or by having my
staff provide examples or details. MNF-I tells me that the
Defense Department is also pressing this issue on the Hill.

Increasing De-obligation/Re-obligation Efficiency
--------------------------------------------- ----

5. The second issue is the time required by the current
de-ob/re-ob process. This will become especially critical if
re-obligation authority is not extended. It can take more
than 60 days from the point at which we identify a need to
the point at which we receive authorization to shift funds -
not including Congressional Notification (CN) period.

6. I recommend that State, Defense, and OMB take a look at
whether the process of de-ob/re-ob can be speeded up in
Washington. For our part, I have instructed my staff to make
sure that we are acting as quickly as possible on de-ob/re-ob
in Baghdad. We cannot short-circuit the process, but we
should ensure that requests receive prompt review at every
stage as we enter this crucial period. IRRF is still making
a major contribution but largely will be judged on how it
ends. We owe it to the people of Iraq and to U.S. taxpayers
to spend the remaining $3 billion as wisely as possible.
CROCKER

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