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Assistance to Iraq in the FY 2006 Supplemental

Assistance to Iraq in the FY 2006 Supplemental Budget and FY 2007 Budget Request

James F. Jeffrey, Senior Advisor to the Secretary and Coordinator for Iraq
On-the-Record Briefing
Washington, DC
February 28, 2006


Advancing the President's National Strategy for Victory in Iraq (PDF)

(2:10 p.m. EST)

MR. ERELI: Welcome back, everyone. We're pleased to see you again and we're also pleased to have with us today Ambassador James Jeffrey, who is the Senior Advisor to the Secretary and Coordinator for Iraq. He is here to brief us on assistance to Iraq in both the FY06 Supplemental as well as the FY07 Budget Request. He'll begin with a few comments and then open it up to your questions.

AMBASSADOR JEFFREY: Thank you, Adam. Good afternoon, everybody.

What I would like to do now is to go through the President's FY06 Supplemental and FY07 Budget submissions for Iraq, the logic behind it, some of the facts and figures, and open it up for questions, as Adam said. First of all, I'd like to also introduce Jim Kunder from USAID and George Folsom from the Department of State who have worked very closely with this and can answer the technical questions that I may not.

You have before you, I think, a five-page brochure on the budget, but what I'd like to do is to talk a little bit about the logic of it, which is also covered in there. First of all, as the President noted in his victory strategy for Iraq, we are working on three separate tracks: one is economic; one is security, or military; and one is political. All three require U.S., international and Iraqi engagement and funding and we have been funding all three under the IRF, which I'll get into in a second.

Our logic is that you cannot fund simply one portion of this program, one track or two tracks, because all three tracks support the other. And there are many examples of this in post-conflict scenarios and in our efforts to build up the Iraqi security forces, our efforts to work with the political parties and such, where we need a great deal of money in all of these areas.

The other guiding philosophy of this budget is that 2006 is going to be a "year of transition in Iraq, transition to the Iraqi lead ever more in the security area, but also with the standup of a permanent parliament and we hope a permanent four-year government in the near future; an Iraqi lead in the political and capacity-building areas as well. And the budget is organized to support just that.

In setting up the budget, Secretary Rice, in consultation with USAID, with U.S. military and with the President and the National Security Council, decided that we would put all of our security track funding requests as an emergency supplemental in this fiscal year, and they make up the bulk of the $1.61 billion we're requesting for foreign assistance. We're also requesting a little over $1.6 billion for State Department operations and some for USAID operations in the supplemental as well. For Fiscal Year '07, we're asking for $771 million in the economic and the political tracks.

What I'd like to do is to go through the three tracks beginning on page four of your document and spell out what exactly we're doing. Once again, the security track is a total of $962 million, all in the supplemental for '06 because we see this as emergency funding. What are we going to do with this? Most of it, about two-thirds, is supporting our regional outreach through a variety of programs, one of them being the PRDCs, which is a Provincial Reconstruction and Development Council programs that we initiated early last year and are now trying to support with the standup of PRTs but we have other U.S. elements out there that are working with the PRDCs right now. And in addition, we are also supplementing this with a USAID focused development of strategic cities program. This is to deal with cities in post-conflict environments, as we saw after the fighting in Najaf and the fighting in Fallujah in 2004 and the fighting in Tal Afar in 2005. We need to get in with an integrated approach to do initial relief work but also to do some reconstruction, to prime the pump for the Iraqi government, to restore basic services and to begin employing some of the local people. USAID has several programs in that for that purpose.

Finally, we have $287 million for infrastructure security. One of the biggest challenges we have right now in Iraq is focused attacks on the oil and electrical infrastructure, and 287 million of that is focused on hardening the infrastructure, burying it, putting up barriers, putting up fences, watchtowers, training guards and such.

On the economic track, we're asking for 355 million in the supplemental and 276 million in the '07 budget.

For the supplemental, that money is focused -- all 355 million -- on infrastructure operations and maintenance. Our logic in putting together this budget is that the IRF, which -- IRF 1 and IRF 2, the reconstruction fund that Congress gave us back in 2003 and 2004, a total of $20.9 billion, was largely oriented on the Iraqi security forces and on major construction programs, although there was a large governmental capacity program as well in there.

The IRF is almost completely obligated. We're down to about 2.6 billion right now of the total 20.9 in the program, and so we see ourselves moving away from large-scale construction -- mortars and steel and brick -- and into capacity developing and again letting the Iraqis and the international community take the lead.

However, we do want to assist the Iraqis in maintaining, through training and through provision of expendable supplies such as chemicals, lubricants and spare parts, that which we have put together, which is what the 355 million is for in the '07 -- correction, the '06 supplemental. In '07 we're asking for a smaller amount for infrastructure sustainment, about 154 million -- that would basically cover about 25 percent of the cost of sustainment but the rest of it being up to the Iraqis or international donors; and in addition, some funding for economic activities in the more traditional sense as USAID does development programs, 122.5 million for agricultural and private sector development.

Finally, the political track. The political track in the supplemental, we're putting in $292.7 million. The two primary foci of that is, first of all, a new initiative of over $100 million to work with the Iraqi ministries in a USAID contract program to supplemental our ministry advisory effort that we've had since CPA days with targeted training in six key areas across the board for all of the ten important ministries and the prime minister's office, followed up by what we call "tiger teams," six of them, that would go out and deal with specific issues of budget, of personnel, of strategic planning, of basic ministry leadership and anti-corruption efforts in these ministries. Again, Mr. Kunder can talk more about that if you have questions on that.

In addition, we're asking for in the supplemental over $100 million for rule of law. Specifically -- and this is the one bit of construction we will be doing -- $100 million for additional bed capacity for the Iraqi legal system. We think that with the transition, eventually Iraqis will be taking more of the people we've detained as we put them into the -- or the Iraqis put them into the legal system, and they need to have a greater capacity there. There's also some money for the protection of judges and other things.

For Fiscal Year '07, we have a program of 494.69 million. That will continue on with the ministry support, particularly in the Finance Ministry and the central bank; but in addition, there is a large democracy component, and there is a very large rule of law component, a total of $254.6 million for rule of law. Now, that funds a variety of different things and I want to talk a little bit about that because it's a very important part of our overall effort to try to transition Iraq, support not only the democratic political process, that political track I talked about, but also to support, frankly, the security track.

One thing it will do will be to support integration of the various elements of the legal system. We've had to do this on an ad hoc basis, I think successfully with the Central Criminal Court of Iraq, the CCCI, which has been very successful, particularly charging and sentencing insurgents and terrorists, but it needs to better integrated into the police, it needs to be better integrated into the Ministry of Justice and to the Ministry of Interior and the corrections facility. We also have a large human rights program to introduce human rights principles and the ability to monitor them into the system.

Furthermore, we are working on a program to continue and expand our Department of Justice prosecutors working with Iraqi prosecutors. We would have about ten U.S. Department of Justice, basically, assistant district attorneys out there. We also have a program, $31 million, to keep 50 corrections advisors with the Iraqi corrections system. We have another program to continue support, protection and hardening of facilities and such for the judges who are exposing their lives. We have money in both the supplemental and the '07 program for the Regime Crimes Liaison Office that is a special, Department of Justice-led interagency task force with a lot of people on the ground in Baghdad that works with the Iraqi Special Tribunal in the cases against Saddam Hussein and other high-value people.

So the rule of law element of this is very, very important, complementing our traditional human rights programs and our traditional democracy support which we have seen playing such an important role in the three polls we've had, the two elections in January of last year, last December, and the constitutional referendum.

I'll stop there but I'll take your questions. Thank you.

QUESTION: Can I ask you about the promotion of democracy, political parties, and media? It's very hard to understand "support," "promote." And I don't know why I'm focused on this one because this one, maybe I can make a stab at trying to understand it. Are you going to spend money, give money to Iraqi politicians or political parties? How do you -- what are you going to do for the media? Are you going to pay reporters? Are you going to select which are responsible media? You know what I'm trying to say? How deeply are you going to get into these matters that in democracies usually are -- well, not always, but often are homegrown?

AMBASSADOR JEFFREY: Sure. These are traditional programs, very similar not only to what we have done in Iraq previously but also what we do, for example, in the Balkans, in the Middle East and elsewhere. And they have many different components. First of all, we typically have partners such as the National Endowment for Democracy, the International Republican Institute, the National Democratic Institute, the U.S. Institute for Peace. They are all active in this and what they do is a variety of training programs. They bring in consultants. They support the UN. They work with civil advocates and with NGOs themselves. They provide some kinds of support, not to the political parties but to basically facilitate training and facilitate what we call capacity building.

Jim, would you want to go further on that?

MR. KUNDER: I think Jim's got it right. This -- we're not talking about picking winners and losers. We're not talking about that at all. We're talking about the kind of media training we would normally do, what constitutes good reporting, how do you do good broadcasting, how do you get civil society organizations to have organized budgets systems and so forth, standard package --

QUESTION: (Inaudible) but you told us what good reporting is, we would take it as you try to control the way we report on the State Department. You know what I mean?

MR. KUNDER: Of course, you would.

QUESTION: But if you mean, you know, put the subject begins a sentence and then a verb, you know, that's innocuous enough.

MR. KUNDER: Journalism training, the kind of thing we're doing in Afghanistan, sure.

QUESTION: But, can I ask you one fast one, just generally speaking, but what is new here? All this breakdown is new or this has been provided to Congress?

AMBASSADOR JEFFREY: Well, we have -- first of all --

QUESTION: I'm not trying to -- this is what reporters do.

AMBASSADOR JEFFREY: -- (a), this has all been provided to Congress and we have organized it in exactly this way because we want to tie it directly to as it flows from the President's strategy; (b) in terms of the programs we're doing, we did all of this under the IRF. It's just that with the IRF, with $5 million of the IRF going to the Iraqi security forces and over 10 billion more for construction of one or another, so at these capacity building programs basically were in third place. Now they're much more prominent. It's the major element and that's what's new. We're shifting from reconstruction to a transitional focus on capacity building in all three of these areas.

QUESTION: Thank you.

AMBASSADOR JEFFREY: Please.

QUESTION: I just want to be sure on the figure. So the total amount that you're asking for in both the supplemental and for '07 is 4.0 (inaudible). Is that the total?

AMBASSADOR JEFFREY: If you take the 1. -- the 610 for our foreign assistance that I just described in a supplemental, the 1.625 for State Department operation, that funds our own internal getting people on the ground and providing security and everything for them. And the 771, you come to $4 billion.

QUESTION: Okay. And my second question is of the 20-odd billion that you've had for one and for the two reconstruction funds, how much of that has gone towards paying for security plus insurance and how much has actually gone into bricks and mortar stuff that helps the Iraqi people whether it's water, electricity, et cetera?

AMBASSADOR JEFFREY: Mm-hmm. Okay.

QUESTION: The figures I know vary very widely. But what are you working --

AMBASSADOR JEFFREY: OK. First of all, the first apples and oranges, we have to disaggregate here is that the 20.9 in IRF-1 and IRF-2 does not include the -- our own internal operations, which 771 of the 4 billion that we're asking for in the '06 Sup and '07 does, so the comparison would be 20.9 over that three-year period, compared to, roughly, 3.2 -- 2.3 -- 3.24.

In terms of how it's broken down, we don't have an exact breakdown. First of all, we haven't finished the program yet, although it's pretty well finished and will be finished by the end of the fiscal year. But of the 20.9, 5 billion went for the Iraqi security forces. This is not all of the money that went to Iraqi security forces. There's 5.7 billion in the '05 Defense Department supplement and 3.7 billion more is being asked for in this year's -- the '06 Defense Department supplemental.

QUESTION: No 3.7?

AMBASSADOR JEFFREY: 3.7. Mm-hmm.

QUESTION: And of the --

AMBASSADOR JEFFREY: But -- to finish the -- of the total IRF, we operate on the assumption that roughly -- almost two thirds went to construction, but that includes a big chunk of the 5 billion that went to defense because a lot of that was for barracks and police academies and that kind of thing and the rest for capacity building of one or another sort, in terms of training and bringing in advisors and such. In terms of security, per project, estimates between us and the Special Inspector General, SIGIR, for Iraq average somewhere between -- for the projects that we're looking at in the '04-'05, when the insurgency had gone up, often in the 16-25 percent, if those projects involved construction, in particular, out in the hinterland.

QUESTION: Okay. Sorry, just one more. You're shifting money, away to capacity building or helping the new Iraqi authorities to go. But so what are you taking money away from, from water and electricity?

AMBASSADOR JEFFREY: Well, we're not -- in this program that we're asking for, we're not shifting money. This is all new money, the $4 billion the supplemental. We did shift about $2 billion in '04 from primarily water and electricity to a variety of programs related to near-term security and political needs, support for the elections and about $1.8 billion into the Iraqi security forces. That's correct.

QUESTION: If I could just follow up on Sue's question because there's like a blizzard of numbers that you're throwing at us. Out of the 21 billion there, is it possible to give ballpark how much is security? And the second part of the question is: Is that a figure, whatever the figure is, is it higher than you'd anticipate at the beginning that has sort of -- has slowed down the whole reconstruction process?

AMBASSADOR JEFFREY: Well, of the 20.9, 5 billion went for the Iraqi security forces. In the original allocation from the U.S. Congress, it was pegged at $3 billion. So all in all, we've put another 2 billion into that. But as I said, there have been -- there's been funding outside of the IRF specifically, the 5.7 billion. And in addition, we always anticipated significant security costs in Iraq for our individual projects, basically force protection, and as I said, those vary. You can't take -- you know, I would advise you not to take, you know, 20.9 and subtract out for the security forces and the rest of it apply a 16 to 25 percent security premium because some of the projects that involved folks who were working in the Green Zone or folks who were working in the north or in the south or folks who were working early on didn't have very high security costs and others had quite significant ones in the 16 to 25 percent range.

QUESTION: So would it be fair to say that the security factor has significantly slowed or made more costly just the whole reconstruction?

AMBASSADOR JEFFREY: It is made more costly. I would be careful about "significantly slowed."

QUESTION: Okay.

AMBASSADOR JEFFREY: Please.

QUESTION: This supplemental is entirely separate from the Defense Department supplemental that came through, what, in January, right? So this is -- at that time, the Administration was saying, no, we're not asking for billions more for Iraq. But this is a separate supplemental that is billions more for Iraq. And I'm just trying to make sure I have a correct understanding that this is separate. But my real question is about the sustainment funding. So yes, those two are separate. Yeah?

AMBASSADOR JEFFREY: Right. Yes and no. First of all, the Defense Department supplemental, went up with this a week ago Thursday, that is 10 days ago, roughly and -- 12 days ago. Now -- and it's part of a combined package the Defense Department, in fact, typically sends a briefer with me to present my side of it and we're supporting, when General Casey comes back the Defense Department part of the budget because, once again, we see all three tracks -- the 70-plus billion that Defense is asking for Iraq and their supplemental and our 3.2 billion in our supplemental as supporting one strategy. Some of it's funded through the Department of State, through certain committees of Congress, others are funded through others. But nonetheless, it's all supporting the same thing.

And in terms of -- we weren't going to ask for more money, this was a bit of confusion that came up recently over the word "reconstruction" and I've talked to some of you about this. When we use "reconstruction," we use it in the broad sense of capacity-building, having a USAID democracy advisor with the Iraqi and UN Electoral Commission and that kind of thing. In the narrower sense, reconstruction in people's minds is building plants, is putting electricity on and that kind of thing. What we said was we weren't going to be doing much more of that. And in fact, in these two budgets, the only new construction is related to prisons, you know, which we see as a rule of law, capacity-building. So we have shifted away from that. There is no significant new money apart from that in our accounts for reconstruction in the narrow sense of building up the infrastructure.

QUESTION: All right. So sustainment is a major question that a lot of people have been talking about for the last six months. SIGIR was very concerned that there might have been no money planned in the original budget or very little to actually ensure that these very expensive plans that the U.S. is building would be, you know -- kept operating would have the spare parts and other things that you're talking about now. So at the time when SIGIR raised this, it seems like there was a team set up in Baghdad to figure out, okay, how are we going to make these plants -- ensure that these plants will continue to run until the Iraqis can afford to run them. And that's what I see here as, you know, under sustainment funding. But at that time, I was told that the Ambassador had found 350 million in the budget that he already had and that he was only going to be asking Congress for a small amount. Is any of the IRF funding going to be put towards sustainment or are you just basically asking Congress for the entire thing?

AMBASSADOR JEFFREY: Well, once again, particularly as this program has evolved and we work very closely back here and particularly out in Baghdad with SIGIR, who serves as both a management oversight operation but also a consultant in many respects to advise us on how we should do things better. We did do sustainment elements to our contracts to write into them the need for our subcontractors to train Iraqis to take over, to plan for -- basically when you're doing this kind of thing you need a list of repair parts and some sort of timing trigger mechanisms on when to order new spare parts, inventory management, these kind of very basic things that a Wal-Mart could tell you how to do. And we did a fair amount of that in the current IRF program, but in addition this is new money to augment and continue on in the out years for that.

QUESTION: So the entire figure for sustainment is actually higher than this?

AMBASSADOR JEFFREY: That is right. Yes, considerably. Considerably.

QUESTION: Do we know what that -- maybe I can ask you afterwards.

MR. KUNDER: We can get you that number.

AMBASSADOR JEFFREY: This is new money for sustainment, the 355. And then it's going down because, again, we are trying to transition this to the Iraqis.

Yes, sir.

QUESTION: I have a political question. Most recently, Congressional Research Service, CRS, a report of 25 pages, is claiming extensively that there's a great fear, including the Pentagon, that a number of (inaudible) terrorists are traveling from Iraq to the Balkans peninsula and vice versa. Otherwise, there is a traffic of terrorists between Iraq and the Balkans, and I'm wondering if you could comment on that since there is a great concern in the Balkans and in Southeast of Europe countries for this (inaudible) traffic of terrorists which means instability in the area and has been (inaudible) only from the American side.

AMBASSADOR JEFFREY: I have to say that's a new one on me. We'll look into that. I've seen a lot of traffic of foreign fighters between Iraq's neighbors to the east and west in particular, but not to and from the Balkans. And we'll see very few -- I've seen one incident back in the spring of 2004 where there were a number of people from Chechnya there. Other than that, I haven't seen anybody from outside the --

QUESTION: May I provide the report to you via the Deputy Spokesman --

AMBASSADOR JEFFREY: Sure, okay.

QUESTION: And a follow-up? A follow-up. To which extent PKK Kurdish rebel forces are using by Jalal Talabani are helping the American military forces to patrol the Kirkuk and Mosul area for security reasons?

AMBASSADOR JEFFREY: We consider the PKK a terrorist organization. We have nothing to do with them. Thank you.

Please.

QUESTION: Sir, much of this money is all domestic U.S. money, but do you also factor in monies from various coalition partners?

AMBASSADOR JEFFREY: Of course. What we have is a donor operation that began with the Madrid conference in 2003 and there's a total pledge of about $13.5 billion. Of that, 3.2 billion has been obligated -- not obligated, it has been disbursed at this time, and there are new programs and projects in contracts that go beyond that. A significant part of this, about 1.5 billion, is managed by a combined UNDP, UN Development Program, World Bank organization called the IRFFI, which is the Iraq Reconstruction Fund Facility for -- no, International Reconstruction Fund Facility for Iraq. And they do a variety of projects and they're becoming more active. The IMF has done an initial program of almost half a billion dollars and they have just gone as part of their standby arrangement that they negotiated in December with another $600 million. In addition, the World Bank is also engaged with their first $450 million direct program with Iraq out of, between the IMF and the World Bank, about 5.5 billion.

So we are -- and it's all integrated with the Iraqis, with the Planning Minister Barham Salih in Iraq, and in coordination with the major donors such as the Japanese and the British.

QUESTION: To put the spending, this abundant spending, in context for American readers and viewers -- you made some reference to milestones earlier. I say milestones, but you know what I mean. Could you, as somebody who is the Coordinator for Iraq, can you venture some opinion or some judgment as to when these various things will happen, like a permanent government? The President today is talking about Iraqis have a choice between chaos and I forgot what the positive thing --

QUESTION: Unity.

QUESTION: Unity. What is your feeling, what is your analysis, what is your expectation for these various benchmarks being reached?

AMBASSADOR JEFFREY: Well, having been out there last year, and you'll all remember that it took us a fair amount of time to assist the Iraqis in standing up a permanent government, the first thing I know is not to put a deadline on it. They're all aware that they need a new government. We have a government, of course, while we have a transitional government under Prime Minister Jafari, but for all kinds of reasons there is a need to have a new government as quickly as possible.

But what's important to us, our focus is what kind of a government. Is this a government that will incorporate the national compact that Zal Khalilzad talks about? Is it a government that will be able to effectively mobilize the tremendous resources of that country to deal with the security situation, much of which is political, deal with issues like de-Baathification, sensitivities between the Kurds and the Arabs in the north and all of the issues you know about.

MR. ERELI: We've got time for just a couple more.

AMBASSADOR JEFFREY: Okay.

QUESTION: Today there are more than 200 people killed in Iraq and some of them found shot in their head in several cases. Do you think that Iraq still veers toward a civil war?

AMBASSADOR JEFFREY: We do not see Iraq veering towards a civil war. We saw a outburst, as you know, following the attack on the Gold Mosque in Samarra of a significant upsurge in sectarian killings. We also saw at the same time immediate action by not only the government but by all the political parties, most of them very sincerely trying to rein in their supporters and control these, in some cases, spontaneous acts of violence. After several days, helped by a curfew, and by the coalition forces in the streets, but particularly by the Iraqi security forces, the situation was brought under control, and right now by Iraq standards it's calm and back to normal.

QUESTION: Prime Minister Jafari is presently visiting Turkey. And Iraqi President Talabani blasted his Prime Minister for making that visit in an uncoordinated way. Do you have any comment on the Jafari visit and the lack of coordination within the Iraqi government?

AMBASSADOR JEFFREY: You should ask the Iraqi Government that.

MR. ERELI: Okay, last question over here.

AMBASSADOR JEFFREY: Okay.

QUESTION: Talking about the training of Iraq security forces, I think in a briefing on Friday with Lieutenant General Gene Renuart with the Joint Chiefs says that the one battalion that in October had been classified as being able to operate independently is no longer classified, has been downgraded, and there is no single Iraqi battalion capable of acting independently of U.S. forces. Is that a bit of a disappointment at this point?

AMBASSADOR JEFFREY: We have a program to stand up Iraqi forces, but I think as I'm sure, although I didn't hear it, I know that General Renuart stressed that the metric that they're using is control of battlespace. There's already a large number of Iraqi forces that control battlespace.

QUESTION: Thirty-seven battalions.

AMBASSADOR JEFFREY: Right. There is about 55 Iraqi battalions that are in Category Two, seeing as we now know that none are in Category One, and those units are basically what we call in the lead. These are units whose basic capability, which is light infantry in a counterinsurgency fight, is considered absolutely, in terms of training, equipment, leadership and such, totally adequate. What they lack, as I'm sure he described, but I will go through it again very quickly because it's an important issue, is things like redundant communications, the ability to call in air support, to have air support, the ability to call in indirect fires, mortar and artillery, the ability to support themselves logistically out there on, say, the Syrian border or the Iranian border. Those capabilities are only slowly going to be built in. Why? Because very correctly, with the effort of having the Iraqis in the lead in fighting their own insurgency and the terrorists that are there, is to have Iraqi infantry troops, Iraqi light-armed troops, taking the lead. So that's what we focused on first. The rest of the stuff we will develop over time and we will be for some time providing that kind of quasi-noncombat support. That's the logic of this thing and we think it makes sense.

QUESTION: I have a clarification really, if I heard you correctly talking recently about the violence and now where we are today, because the question was about 200 killed today. And if I heard you correctly, you went back a few days to the mosque bombing and the curfew and then said now we've returned to normal, or Iraq has returned to normal. And my question is: Is 200 a day dead normal?

AMBASSADOR JEFFREY: As you know, we don't do numbers, partially because obtaining accurate Iraqi numbers is not easy. The reports I saw today even in U.S. newspapers, one account in one leading newspaper said 256 in the morgues; another one said a much larger number. But all of this was based upon hearsay information by local people working on the morgues rather than the Ministry of Health. We have even had problems back in the Fallujah campaign with the Ministry of Health figures that had to be corrected.

So we're careful about casualty figures. What we do see is they're returning to about the level of attacks, the level of casualties, to the extent we can monitor these casualties, that we've experienced in the past a few weeks ago. That's where we are right now.

Thank you very much, everybody.

Released on February 28, 2006

ENDS


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