[Senate Prints 112-3]
[From the U.S. Government Publishing Office]






112th Congress 
 1st Session                COMMITTEE PRINT                     S. Prt.
                                                                  112-3
_______________________________________________________________________

                                     

 
                       IRAQ: THE TRANSITION FROM
                         A MILITARY MISSION TO
                         A CIVILIAN-LED EFFORT

                               __________

                                A REPORT


                             TO THE MEMBERS


                                 OF THE


                     COMMITTEE ON FOREIGN RELATIONS

                          UNITED STATES SENATE

                      One Hundred Twelfth Congress

                             First Session

                            January 31, 2011

                                     



                  U.S. GOVERNMENT PRINTING OFFICE
63-954                    WASHINGTON : 2011
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                   COMMITTEE ON FOREIGN RELATIONS \1\

                 JOHN F. KERRY, Massachusetts, Chairman
BARBARA BOXER, California            RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, Jr., Pennsylvania   JAMES E. RISCH, Idaho
JIM WEBB, Virginia                   JIM DeMINT, South Carolina
JEANNE SHAHEEN, New Hampshire        JOHN BARRASSO, Wyoming
CHRISTOPHER A. COONS, Delaware       ROGER F. WICKER, Mississippi
VACANT                               JAMES M. INHOFE, Oklahoma
VACANT
                  Frank G. Lowenstein, Staff Director
            Kenneth A. Myers, Jr., Republican Staff Director





    \1\ Committee membership for the 112th Congress had not 
been set when this report was sent to press.




                                  (ii)

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                            C O N T E N T S

                              ----------                              
                                                                   Page

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



  Part One: Executive Summary and Recommendations................     1



  Part Two: Current Conditions in Iraq...........................     4



  Part Three: An Ambitious Transition............................     7

    Regional Engagement..........................................     9

    U.S. Military Presence.......................................    13

    Budgeting and Authorities....................................    16



  Conclusion.....................................................    19


                               Appendixes

  Appendix I: Iraqi Security Forces ``Minimum Essential 
  Capabilities''.................................................    21



  Appendix II: Congressional Funding of the War in Iraq..........    22



  Appendix III: Security Incident Trends: January 2004 to May 
  2010...........................................................    23

                                 (iii)
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                         LETTER OF TRANSMITTAL

                              ----------                              

                              United States Senate,
                            Committee on Foreign Relations,
                                  Washington, DC, January 31, 2011.

    Dear Colleagues: This will be a year of unprecedented 
transition for the United States in Iraq as we move from a 
military-led mission to a civilian-led effort. The diplomatic 
mission that results will be of extraordinary size and 
complexity and it will assume security responsibilities in a 
still-dangerous environment. The stakes are high, not just for 
our civilian personnel, but for American foreign policy in the 
Middle East. While Iraq has made dramatic progress in recent 
years, the situation remains fragile and potentially 
reversible. The success of our diplomatic mission there will be 
an important factor in whether Iraq emerges from years of 
turmoil as a strategic partner or turns toward Iran. This 
report by the majority staff of the Senate Foreign Relations 
Committee sheds new light on this important topic and offers a 
number of policy recommendations. The report's central 
message--that our government needs to make sure our objectives 
in Iraq are aligned with both our civilian capacities and a 
financial commitment to succeed--will be vital as we face a 
similar transition in Afghanistan in the years to come.
            Sincerely,
                                             John F. Kerry,
                                                          Chairman.

                                  (v)


                       IRAQ: THE TRANSITION FROM
                         A MILITARY MISSION TO
                         A CIVILIAN-LED EFFORT

                              ----------                              


            Part One: Executive Summary and Recommendations

    As the U.S. military presence is withdrawn from Iraq, 
civilians, rather than soldiers, are likely to write the last 
chapter of the American war effort there. There is much 
encouraging news: There has been a remarkable transformation 
since sectarian war threatened state collapse in 2006 and 2007. 
A permanent government is finally in place. While the 
negotiations to form this government spanned most of 2010, the 
Iraqi leaders' commitment to the political process over 
violence has helped sustain hard fought security gains.

    But these advances remain fragile, uneven, and potentially 
reversible. Al-Qaeda in Iraq and other terrorist groups 
continue their efforts to foment violence and sectarian strife. 
The nine months it took to form the new government is evidence 
that Iraq's political processes are not yet self-sustaining. 
Fundamental political issues remain unresolved, from the 
hydrocarbon laws, to Kirkuk and other disputed internal 
boundaries, to the nature of Iraqi federalism. While Iraq has 
the potential to become a wealthy country, it faces a difficult 
fiscal environment until at least 2014 when increased oil 
production is projected to begin coming online.

    The transition in the coming year from a military to a 
civilian mission will be critical to the United States' broader 
interests in the Middle East. It will test the sustainability 
of the progress made in recent years. It will be an indicator 
of United States' commitment to the bilateral partnership. And 
it will have a significant bearing on Iraq's place in the 
regional security architecture.

    By December 2011, in accordance with the 2008 U.S.-Iraq 
security agreement, the American military is scheduled to 
withdraw its remaining 50,000 troops.\1\ The diplomatic mission 
that remains will be an initiative of unprecedented size and 
complexity, currently projected to consist of some 17,000 
individuals on 15 different sites, including 3 air hubs, 3 
police training centers, 2 consulates, 2 embassy branch 
offices, and 5 Office of Security Cooperation sites.
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    \1\ The U.S. military effort peaked in November 2007 with some 
170,000 troops. Today, there are about 50,000 troops present, in 
addition to 75,000 contractors, most of them third country nationals.

    But even though the new mission must attain full 
operational capability by October 2011 to facilitate a smooth 
transition, fundamental questions remain unanswered. The State 
Department is scheduled to assume full security 
responsibilities in a still dangerous and unpredictable 
environment and must strike a difficult balance between 
maintaining a robust presence and providing a sufficient level 
of security. In almost any scenario, the United States will 
continue to have military personnel stationed at the American 
embassy in a non-combat role under the Office of Security 
Cooperation. As in many countries around the world, these 
troops will be responsible for enhancing the bilateral defense 
relationship by facilitating security assistance. But the size, 
scope, and structure of this presence remain undetermined, even 
at this late date. Perhaps most significantly, it is unclear 
what kind of security relationship the incoming Iraqi 
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Government would like with the United States.

    In the wake of such uncertainties, a complicated diplomatic 
plan has emerged that highlights a dilemma that will likely 
confront the nation for as long as counterinsurgency warfare 
and state-building are central components of American foreign 
policy: How can the State Department effectively operate in 
difficult security environments without the support of the 
American military?

    The U.S. Government should ensure that the scope of the 
mission in Iraq is compatible with the resources available, 
including State Department capacity, the financial commitment 
from Congress, a degree of U.S. military support and the 
backing of the Iraqi Government. If these elements are not 
fully in place, the administration may be forced to choose 
between scaling back the diplomatic mission or accepting a 
degree of physical risk familiar to military personnel, but 
normally unacceptable for diplomats. Because this is a 
difficult and unappealing choice, this report will examine how 
elements of the transition can be aligned with U.S. diplomatic 
goals to increase the likelihood of success. Two Senate Foreign 
Relations Committee staff members visited Iraq to examine the 
military-to-civilian transition in detail. These are their 
principle findings:



    First, it is unclear whether the State Department has the 
capacity to maintain and protect the currently planned 
diplomatic presence without U.S. military support. Among the 
planned satellite offices are consulates in Basra and Irbil and 
smaller branch offices in Kirkuk and Mosul. There is no doubt 
about these cities' strategic importance. But given the ongoing 
security challenges in Iraq and the immense manpower the 
military brings to bear, maintaining an American diplomatic 
presence without military support will cost hundreds of 
millions of dollars to set up, cost even more to operate, and 
have large ``tooth-to-tail'' ratios. The consulates will 
require a combined security and life support staff of roughly 
1,400 to sustain about 120 functional personnel, whereas the 
branch offices will require more than 600 staff to support 30 
functional personnel--a ratio of 20 to 1.\2\
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    \2\ According to State Department officials, the branch offices are 
projected to cost about $350 million apiece to set up. The embassy 
branch office in Kirkuk is also scheduled to house an Office of 
Security Cooperation site which will include about 100 functional 
staff, as well as about 300 additional security and life support 
personnel.

    If a vigorous regional presence is necessary to support 
Iraq's stability, a mechanism for a continued but restricted 
follow-on military presence should be considered to help secure 
American diplomats. But it is not yet clear that the Iraqi 
Government desires such an arrangement on terms compatible with 
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American interests.

    Second, uncertainty about the nature of the U.S. military 
presence in Iraq after 2012 is complicating all other aspects 
of transition planning. The transition's most important element 
also remains its biggest unknown. Although the new Iraqi 
Government is publicly signaling that it will not seek to 
renegotiate the terms of the security agreement, the door is 
still open for a limited follow-on U.S. military presence. 
Clarity is needed on what this presence will look like and how 
it will integrate into the larger diplomatic mission. The 
authors have identified three distinct possibilities for the 
U.S.-Iraq security relationship beyond 2011. Each involves 
significant tradeoffs, but only the first two may be 
politically palatable to the new Iraqi Government.


   Total drawdown of U.S. troops: A full military withdrawal 
        in 2011, except for a limited Office of Security 
        Cooperation housed within the embassy, would confirm 
        the United States as true to its word (an essential 
        message to deliver throughout the region) and it would 
        force Iraq to take full responsibility for its own 
        affairs. However, security and political gains could be 
        jeopardized with the full exit of American forces. In 
        this scenario, given the prohibitive costs of security 
        and the capacity limitations of the State Department, 
        the United States should consider a less ambitious 
        diplomatic presence in Iraq.

   Expanded Office of Security Cooperation: The United States 
        maintains, on a temporary basis, an expanded Office of 
        Security Cooperation that includes a limited number of 
        non-combat military forces functioning in a reduced 
        capacity under the State Department's purview. They 
        provide logistical support for the Iraqi army, shore up 
        administrative gaps within the Ministry of Defense, and 
        provide ``behind the wire'' capabilities to better 
        enable the State Department to sustain its proposed 
        mission. Although new funding authorities would need to 
        be negotiated between the State and Defense Departments 
        and approved by Congress, the limited military presence 
        would augment the State Department's ability to execute 
        its current plan in Iraq.

   New security agreement: The United States negotiates a new 
        security agreement to allow a limited and temporary 
        U.S. troop presence to include the support described 
        above as well as a continuing partnership with the 
        Iraqi military to conduct select counterterrorism 
        operations, and to sustain the nascent security 
        cooperation between the Iraqi army and the Kurdish 
        peshmerga throughout the disputed internal boundaries. 
        This approach should only be considered if it comes at 
        Iraq's request within parameters consistent with 
        American interests, which may be unlikely given the 
        current posture of the newly formed government. It 
        risks reinforcing the notion of the United States as an 
        occupying power and would elicit political and popular 
        opposition in both the United States and Iraq. In this 
        scenario, the State Department, although still 
        responsible for significant facets of diplomatic 
        security, would be substantially aided by the continued 
        but limited presence of the U.S. military.



    Third, bureaucratic integration between the Departments of 
Defense and State remains incomplete, and the unity of effort 
in Baghdad has not yet been matched in Washington. Under the 
direction of Ambassador Jim Jeffrey and General Lloyd Austin, 
an effective partnership has been fostered between the embassy 
leadership team and the senior officers on the ground. But the 
supporting bureaucracy has not matched that cohesiveness. For 
example, according to military and civilian personnel in Iraq, 
it is easier to transfer critical ``non-excess'' equipment from 
the military to a third country than it is to the State 
Department. While the U.S. military has a pressing need for 
helicopters, including in Afghanistan, it is not in the 
taxpayers' interest for the State Department to purchase new 
helicopters and ship them to Iraq if more suitable ones are 
already in country. There appear to be tensions within the 
State Department between those bureaus responsible for 
conducting the ambitious diplomatic strategy and those 
responsible for securing and supporting them. Embassy security 
personnel need to be empowered to face risks rationally and 
creatively, and protected from second-guessing from Washington 
that produces risk-aversion.

    Fourth, a creative and sustainable funding mechanism is 
needed to pay for the diplomatic mission in Iraq.  
Congressional support has been undermined by a constrained 
fiscal environment and war fatigue. Yes, there are significant 
unanswered questions about what kind of presence the United 
States will have in Iraq post-2011. But regardless of whether 
the U.S. military withdraws as scheduled or a smaller successor 
force is agreed upon, the State Department will take on the 
bulk of responsibility for their own security. Therefore, 
Congress must provide the financial resources necessary to 
complete the diplomatic mission. Consideration should be given 
to a multiple-year funding authorization for Iraq programs, 
including operational costs (differentiated from the State 
Department's broader operational budget), security assistance, 
and economic assistance programs. The price tag will not be 
cheap--perhaps $25-30 billion over 5 years--but would 
constitute a small fraction of the $750 billion the war has 
cost to this point.

                  Part Two: Current Conditions in Iraq

    The situation in Iraq is at a critical juncture. Terrorist 
and insurgent groups are less active but still adept; the Iraqi 
army continues to develop but is not yet capable of deterring 
regional actors; and strong ethnic tensions remain along Iraq's 
disputed internal boundaries. Although a government has finally 
been formed, it remains to be seen how cohesive and stable it 
will be.

    Threat assessment: Violence has been reduced by more than 
90% since peaking in early 2007.\3\ After an upward spike in 
the third quarter of 2010--and notwithstanding horrific 
episodes such as the October 31st Al-Qaeda in Iraq attack 
against a Catholic church in Baghdad in which dozens of 
hostages were killed--the number of Iraqi civilians killed in 
violent attacks declined every month between the formal end of 
the U.S. combat mission on August 31 and December. \4\ American 
combat fatalities are down from an average of 75 a month 
between 2004 and 2007 to an average of five a month in 2010. A 
number of insurgent and terrorist groups in Iraq are still 
capable of violent attacks, but they are generally diminished 
in strength and many have begun the process of political 
assimilation.\5\
---------------------------------------------------------------------------
    \3\ See Appendix III.
    \4\ According to the Iraqi Health, Defense and Interior Ministries, 
the violent death totals for the last five months are: December: 89 
civilians + 62 Iraqi security forces (ISF); November: 105 civilians + 
66 ISF; October: 120 civilians + 65 ISF; September: 185 civilians + 88 
ISF; August: 295 civilians + 131 ISF. Source: multiple Reuters and 
Associated Press stories. By way of comparison, during the worst spasms 
of sectarian violence in late 2006 and early 2007, Iraqi civilians died 
at a rate of more than 100 per day.
    \5\ In addition to Al-Qaeda in Iraq, notable Sunni insurgent groups 
include Jaysh al-Islami, the 1920 Revolutionary Brigade, Ansar al-
Sunna, Jaysh Rijal al-Tariqa al Naqshabandia, Hamas al-Iraq, and the 
Mujahidin Army. Active Shi'a groups include the Promised Day Brigade, 
Muqtada al-Sadr's movement, and Kata'ib Hizbollah. Department of 
Defense, ``Measuring Stability and Security in Iraq,'' June 2010, p 28.

    Despite the encouraging trend, the U.S. embassy and certain 
satellite sites, such as the forward operating base outside 
Mosul, are under daily threat from mortar and rocket fire. 
January 2011 was a relatively bad month, with as many as 159 
Iraqis killed in a single week, but it remains to be seen 
whether this level of violence will be sustained. Al-Qaeda in 
Iraq remains the country's most dangerous terrorist 
organization, although the pace of its high-profile attacks has 
slowed considerably. Joint engagements by Iraqi and U.S. 
Special Operations Forces killed at least 34 of its 42 top 
leaders in 2010. But its remaining fighters, estimated to be 
95% Iraqi, are well-trained and dedicated insurgents. Al-Qaeda 
in Iraq and other extremist groups do not currently constitute 
an existential threat to Iraq's political order. But continued 
political instability could provide them the opportunity to 
rejuvenate, especially in the absence of constant pressure and 
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an integrated intelligence effort.


    Iraqi security capacity: The withdrawal of the U.S. 
military from population centers in June 2009 left the Iraqi 
forces in control of all eighteen provinces. To their credit, 
they have withstood significant security tests, from the 
drawdown of over 100,000 U.S. forces to the March 2010 
parliamentary elections and the ongoing government formation 
process that followed.

    As a result of an earlier American focus on force 
generation, the Iraqi army has been the fastest growing 
professional military in the world over the past several 
years.\6\ More recently, efforts have shifted towards 
developing specialization, professionalism, and the 
administrative capability throughout the military and police. 
Despite great strides, the ability of the Iraqi forces to 
operate without the support of a robust U.S. presence remains 
unknown.
---------------------------------------------------------------------------
    \6\ As of October 2010, the Iraqi security forces stood at 
approximately 645,000, of which 247,000 are Ministry of Defense forces 
and 398,000 Ministry of Interior forces.

    Complicating matters, Iraq's political leadership may not 
fully appreciate how integral U.S. military support is to 
buttressing the Iraqi army's basic capabilities. In large part 
operating behind the scenes, American troops still provide 
critical administrative and logistical functions, skills the 
---------------------------------------------------------------------------
Iraqi forces have yet to master.

    The U.S. military has developed metrics known as ``minimal 
essential capabilities'' to measure the Iraqi security forces' 
foundational effectiveness at independently providing internal 
security and defending against external threats. Alarming 
deficiencies are projected beyond 2011, which will have a 
serious impact on the State Department's ability to provide its 
own force-protection: \7\
---------------------------------------------------------------------------
    \7\ Based on discussions in Baghdad with U.S. military and embassy 
officials and Iraqi military officials. See also Appendix II.


   The Ministry of Defense is deficient in its ability to 
        maintain and support the armed forces. Although the 
        Iraqi military has developed into a competent 
        counterinsurgency force, the logistics, training, and 
        maintenance requirements that contribute to its 
        sustainment will potentially go unfulfilled without 
---------------------------------------------------------------------------
        U.S. military assistance.

   The army and air force lack the full conventional ability 
        to defend Iraq's borders against external threats. 
        Although Iraq does not currently face a conventional 
        threat, it cannot yet deter its neighbors from 
        interfering in domestic politics.

   Iraq's skillful counterterrorism force is likely to become 
        less capable because it still relies on the United 
        States to integrate intelligence.

   The U.S. military presence is the glue that holds together 
        nascent cooperation between the Iraqi army and Kurdish 
        peshmerga. Without U.S. troops to resolve disputes and 
        foster relations, the situation could deteriorate, 
        leaving the country with two separate heavily armed 
        security forces at odds over contentious political 
        issues.



    Arab/Kurdish security:  Unresolved political tensions 
between Baghdad and the Kurdish regional government remain a 
threat to Iraq's long-term stability. In an effort to manage 
these tensions, the U.S. military established Combined Security 
Mechanisms beginning in 2009, in which Arabs, Kurds, and 
Americans operate checkpoints and conduct joint patrols in four 
provinces along the Arab-Kurd trigger line (Ninewa, Salah ad-
Din, Kirkuk, and Diyala). The effort has reduced tensions and 
put in place lines of communication in case of a breakdown. 
However, it remains to be seen if this architecture can be 
sustained after the U.S. military withdrawal, absent progress 
towards resolving the underlying political disputes between 
Irbil and Baghdad.

    The United States has also pushed for the integration of 
the Kurdish peshmerga into the Iraqi security forces. Prime 
Minister Maliki announced in April 2010 the formation of four 
unified peshmerga regional guard brigades which theoretically 
will report to Baghdad, and laid out plans to train and equip 
eight additional units in hopes of forming two Iraqi army 
divisions within Kurdish provinces.

    Politics: All of Iraq's major constituencies participate, 
at least grudgingly, in the Iraqi political order. But 
fundamental questions remain about the make-up of the Iraqi 
state, including the nature of Iraqi federalism, the final 
disposition of the disputed internal boundaries, the 
organization of Iraq's energy sector, and the political 
reintegration of the Sunni Arabs. The contentious nine-month 
period of government formation indicates that Iraq's political 
processes are not yet self-sustaining.

    Mistrust between political factions remains high, sectarian 
wounds have not fully healed, and decisions to forgo violence 
in favor of the political process may still be reversible. The 
integration of the Sons of Iraq--comprised mostly of former 
Sunni insurgents--into the army and local governments remains 
uneven. Should the new government break down along sectarian 
lines, Sunni extremist groups may have an opening to lure back 
former fighters into the insurgency.

    Bilateral agreements: The U.S.-Iraqi bilateral relationship 
is delineated in two accords that were negotiated in tandem and 
signed by the Bush administration in November 2008: the 
strategic framework agreement and the security agreement.

    The strategic framework agreement is an aspirational 
document intended to broaden the U.S. partnership with Iraq 
beyond security. Although short on detail and non-binding, the 
agreement provides a template for normalizing the bilateral 
relationship in areas such as economic, cultural, diplomatic, 
and security cooperation. The security agreement is the legal 
framework that dictates the terms of the U.S. military presence 
in Iraq. It contains two significant milestones. First, it 
required U.S. combat troops to withdraw from Iraqi population 
centers by June 30, 2009. Second, it obligates all U.S. forces 
to leave Iraq by December 31, 2011. Any changes to the 
agreement would require the consent of the Iraqi Government and 
parliamentary ratification.

    On August 31, the U.S. military formally ended Operation 
Iraqi Freedom and began Operation New Dawn, dedicated to three 
distinct functions: train, equip, and advise the Iraqi 
military; continue counterterrorism operations; and protect 
U.S. diplomatic initiatives.\8\
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    \8\ The August 31 transition is not included in the security 
agreement, but was outlined by President Obama in his February 27, 2009 
speech on Iraq at Camp Lejeune, North Carolina.
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                  Part Three: An Ambitious Transition

    Already the largest in the world, the American diplomatic 
mission in Iraq will expand further as the State Department 
takes on full responsibility for its own security. But time for 
planning is short, as the new mission must attain full 
operational capability by October 2011.

    The embassy compound will continue to be the center of 
American diplomatic gravity. But it will be supported by a 
planned 15 satellite sites across the country: three air hubs, 
three police training centers, two consulates, two embassy 
branch offices, and five Office of Security Cooperation sites. 
Roughly 17,000 individuals are expected to be under ``chief of 
mission authority,'' mostly third-country nationals working as 
life-support and security contractors. The number of American 
diplomats in Iraq is projected to remain at roughly 650, with 
an additional several hundred functional staff posted at the 
embassy from a variety of other government agencies, including 
USAID and the Departments of Treasury, Justice, and 
Agriculture.

    As of December, land use agreements had not been signed and 
construction had not begun at the satellite sites. The size and 
character of the Office of Security Cooperation has not been 
determined. The transfer from the military to the embassy of 
sensitive materiel has not been completed. Thousands of 
critical life-support and security personnel contractors need 
to be vetted and hired.

    In an April 7, 2010 letter sent to his counterpart at the 
Department of Defense, Undersecretary of State for Management 
Patrick Kennedy highlighted the magnitude of the challenge:


          Secure ground and air movements within Iraq, 
        essential to DOS' current and proposed provincial 
        presence, are now possible only because of U.S. 
        military capabilities and availability of support. 
        Without such support in the future, DOS will be forced 
        to redirect its resources towards obtaining and 
        supporting less-appropriate vehicles and airframes to 
        allow the [branch offices and consulates] to function 
        in an insecure environment. We will continue to have a 
        critical need for logistical and life support of a 
        magnitude and scale of complexity that is unprecedented 
        in the history of the Department of State. [State] does 
        not have within its Foreign Service cadre sufficient 
        experience and expertise to perform necessary contract 
        oversight.



    Connecting the satellite sites will be a contractor-
operated air wing, operated by the State Department's Bureau of 
International Narcotics and Law Enforcement Affairs.\9\ A 
fixed-wing component of four turboprop aircraft, which seat 
roughly fifty passengers, will transport officials across 
international borders and between Baghdad, Basrah, and Irbil. 
Unlike diplomats from some other nations, U.S. Government 
personnel are generally prohibited from arriving via commercial 
aircraft at Baghdad International Airport, significantly 
increasing transportation costs. Instead, they are flown in on 
military aircraft, landing within the commercial terminal's 
sight line. Beginning this year, they will enter the country on 
the embassy's air-wing.
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    \9\ Although both run by Bureau of International Narcotics and Law 
Enforcement Affairs (INL), the police training program and air wing 
will be operationally separate. INL developed its air transportation 
capacity during its Latin America training and drug interdiction 
programs in the 1990s, and now has a worldwide fleet of about 230 fixed 
and rotary wing aircraft. But this will be its most complex operation.

    The State Department's Bureau of International Narcotics 
and Law Enforcement Affairs plans to augment its current 
rotary-wing fleet of 14 UH-1N Twin Huey helicopters, with 20 
Sikorsky S-61 helicopters and four more UH-1Ns, operating out 
of the three air hubs.\10\ State Department requested in 
writing 24 UH-60 Blackhawk helicopters from the Defense 
Department, which are faster, carry more passengers and were 
already in theater. The Defense Department never formally 
responded. The rotary-wing fleet is theoretically capable of 
moving several hundred passengers a day, though this tempo may 
be hard to sustain in practice.
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    \10\ INL also operates a small number of MD-530 helicopters in 
Baghdad for surveillance and ground movement air support.

    As reported by the Commission on Wartime Contracting, an 
independent legislative commission created by Congress, the 
State Department has identified fourteen military functions 
that will be lost once the U.S. military is gone from Iraq.\11\ 
The State Department is looking to reproduce limited versions 
of many of these functions through security contractors. But 
there are roles that a diplomatic mission is not capable of 
replacing. The U.S. military's strategic over-watch function in 
Iraq provides a deterrent to armed militia groups, demonstrates 
American resolve, and bolsters the political order.
---------------------------------------------------------------------------
    \11\ Commission on Wartime Contracting in Iraq and Afghanistan, 
Special Report 3, July 12, 2010: ``Better planning for Defense-to-State 
transition in Iraq needed to avoid mistakes and waste.'' http://
www.wartimecontracting.gov/index.php/reports. The fourteen lost 
military functions are:

       Recovering killed and wounded personnel
       Recovering damaged vehicles
       Recovering downed aircraft
       Clearing travel routes
       Operations center monitoring of private security contractors
       Private security contractor inspection and accountability 
services
       Convoy security
       Explosive-ordnance disposal
       Counter rocket, artillery and mortar notification
       Counter-battery neutralization response
       Communications support
       Tactical-operations center dispatch of armed response teams
       Policing Baghdad's international zone
       Maintaining electronic counter-measures, threat intelligence, 
and technology capabilities.

    The capacity of the diplomatic effort depends in large part 
on the short-term U.S. military footprint and the budget and 
bureaucratic support the embassy receives from Washington. The 
administration must be willing to make tough choices to ensure 
strategic goals are in line with realities on the ground and 
available resources.


                          REGIONAL ENGAGEMENT

    By October, the Embassy will transition from 16 provincial 
reconstructions teams down to four regional posts--permanent 
consulates in Basrah and Irbil and shorter-term embassy branch 
offices in Kirkuk and Mosul.

    The provincial reconstruction teams have been a cost-
effective enterprise, with the military providing security, 
logistics and transportation support. Peaking at 31 teams in 
2008, the teams have interacted with provincial and sub-
provincial political leaders, and been a focal point of such 
diplomatic initiatives as outreach to the Sons of Iraq, efforts 
to manage Arab-Kurdish tensions, and interactions with the 
Shiite religious establishment. While the State Department 
originally contemplated five to seven provincial sites, the 
rapidly rising cost estimates have reduced the number to four, 
leaving engagement outposts in Najaf, Ramadi, and Baquba 
unfilled.

    In comparison to the provincial reconstruction teams, the 
successor sites will have reduced functional staffs, smaller 
operational radii, and no funding for discretionary projects. 
Three of the four--Basrah, Kirkuk and Mosul--will be located in 
dangerous locales. As the U.S. military withdraws from these 
locations, it will take much of its local situational awareness 
with it, the product of relationships cultivated over seven 
years.\12\ Similarly, the branch offices in Kirkuk and Mosul 
will have little capacity for sustaining the Combined Security 
Mechanisms, a key element of the current strategy to manage 
Arab-Kurdish tensions in disputed areas, which are currently 
supported by several thousand American troops.
---------------------------------------------------------------------------
    \12\ The observations in this section are based upon discussions 
with civilian and military officials in Baghdad, Kirkuk and Washington. 
The authors visited Kirkuk in November 2010, and visited Kirkuk and 
Mosul in November 2009.

    The Bureau of International Narcotics and Law Enforcement 
Affairs will take over the police-training program from the 
U.S. military, based on a hub-and-spoke system. Approximately 
190 police trainers will be based at Baghdad, Basrah and Irbil, 
from which they can deploy to approximately 25 field 
locations.\13\ Iraq now runs its own police training academies. 
So rather than classroom training, the program will focus on 
advising and mentoring the local and national police 
leadership, as well as supporting the Ministry of Interior and 
focusing on specialized disciplines such as forensics and 
prosecution.
---------------------------------------------------------------------------
    \13\ The Baghdad hub will hold roughly 110 trainers at Forward 
Operating Base Shield east of the Tigris River, near a large Iraqi 
Government complex which houses the Ministry of Interior and several 
other important government ministries. The Basrah and Irbil hubs will 
be contained on the same compounds that house the consulates and will 
be home to roughly 45 and 25 trainers, respectively.

    While the U.S. military has begun reconfiguring existing 
sites as part of the military withdrawal, real estate 
agreements could not be formally negotiated until the new 
government was in place. With the consulates and branch offices 
becoming fully operational by October 2011, the Bureau of 
Overseas Building Operations has been left with precious little 
---------------------------------------------------------------------------
margin for error.

    There is cause for concern that the Defense Department has 
not yet finalized planning on the structure of the Office of 
Security Cooperation and how its activities will integrate into 
the larger diplomatic mission, including decisions on its size, 
locations, lines of funding, and force protection. Current 
plans call for a central hub in Baghdad; four fully staffed 
auxiliary posts; and an undetermined number of ``spokes'' 
throughout the country. Each site will serve as a base for 
distinct training, maintenance, and logistical missions to 
improve Iraqi defense capabilities.\14\ More than 200 permanent 
military and civilian staff will be augmented by a still 
undetermined, but steadily increasing number of skilled 
contractors (currently estimated somewhere in the range of 
800), supplemented by perhaps 3,000 or more life-support and 
security contractors. But it is unclear whether the Office will 
use the embassy's air wing or contract its own helicopters, 
which could have significant consequences for the larger 
diplomatic mission.
---------------------------------------------------------------------------
    \14\ As of November 2010, USF-I planned posts in Balad, Taji, 
Besmaya, and Umm Qasr with additional ``spokes'' in Tikrit, Taji, Ali 
Air Base, and Kirkuk. At these locations, training, maintenance, and 
operations will occur on equipment including F-16 Aircraft, M1A1 Tanks, 
T-6A Training Aircraft, UH-1H Huey Helicopters, Armored Vehicles, M113 
Armored Personnel Carriers, and OH-58 Helicopters.

    The period immediately after the military withdrawal may be 
especially sensitive, as extremist groups test the new defenses 
and attempt to demonstrate their own relevance. Current 
planning calls for 5,500 security contractors to be employed by 
the State Department in Iraq, roughly double the current number 
and not including the Office of Security Cooperation.\15\ 
Roughly four thousand of these will be third-country nationals 
serving as static perimeter security for the various 
installations, a continuation of current practice at both 
civilian and military sites.
---------------------------------------------------------------------------
    \15\ Though the numbers remain in flux, current plans call for 
about 600 guards in Irbil, 575 in Baghdad, 335 each in Kirkuk and 
Mosul, and about 3,650 in Baghdad. Most of State's security 
contractors, both perimeter and movement, will be hired through the 
Worldwide Protective Services (WPS) contract, the successor to the 
current Worldwide Personal Protective Security (WPPS II) contract. 
However, some of the specialized security functions described in this 
section will be contracted separately. For more information, see http:/
/www.state.gov/m/ds/rls/rm/143420.htm.

    Despite the continuing threat of indirect fire,\16\ the 
Bureau of Diplomatic Security's ability to provide security on 
American compounds after 2011 is encouraging. The State 
Department already coordinates perimeter security and external 
movements through an impressive high-tech tactical operations 
center inside the embassy. More limited operations centers will 
be set up in satellite facilities located on Iraqi Government 
compounds or military bases, thus providing for an additional 
layer of local security. However, security contractors will 
have to take over highly specialized functions, such as 
explosive-ordnance disposal; counter rocket, artillery and 
mortar notification; and aerial surveillance, raising important 
questions about both the desirability and capacity of military 
functions in the hands of private security contractors.
---------------------------------------------------------------------------
    \16\ While mortar and rocket attacks against the embassy and other 
American facilities usually do little damage, three Triple Canopy 
perimeter guards were killed in July by indirect fire.

    The more difficult challenge will be maintaining the 
ability to make frequent secure ground movements. That the 
State Department will have considerably less firepower at its 
disposal ``outside the wire'' is obvious, but arguably 
desirable for a diplomatic mission. The State Department has 
been coordinating movements in Baghdad and other locations for 
some time. What the civilian mission will lose, though, is the 
military's over-watch capabilities. Functions like 
surveillance, intelligence, liaising with the Iraqi military, 
rapid response, and the like are less visible, but they cannot 
easily be replaced. The embassy's central location in the 
``Green Zone'' provides relatively good security and easy 
access to key Iraqi leaders in Baghdad. But the satellite sites 
will only be as effective as their inhabitants' ability to get 
---------------------------------------------------------------------------
off their compounds.

    The branch offices are designed to support the movements of 
personnel to two different local destinations simultaneously. 
(For the sake of comparison, the current provincial 
reconstruction team in Kirkuk averages three movements per 
day.) However, given current conditions and security standards, 
we believe this projection may be overly optimistic and that 
functional personnel will be greatly restricted in comparison 
with the existing construct.\17\
---------------------------------------------------------------------------
    \17\ Two other factors could reduce the branch offices' engagement 
tempo. First, the U.S. military moves more personnel per movement than 
Diplomatic Security is able to support. Second, provincial 
reconstruction team Kirkuk personnel currently maintain virtual offices 
in the main Kirkuk Government building, allowing them to coordinate 
multiple meetings per movement. It is not clear that the branch offices 
will be able to maintain this virtual presence.

    There is a built-in tension between a diplomat's desire to 
energetically engage local actors and the Regional Security 
Officers' prerogative to keep those diplomats safe.\18\ This is 
nowhere truer than in Iraq and Afghanistan, where strategically 
critical diplomatic objectives are paired with formidable 
security threats. Unlike their military counterparts, diplomats 
are unarmed, and every protection must be taken to ensure their 
safety. On the other hand, there is also a risk of compromising 
the mission with excessive or inflexible security requirements. 
The question is whether the benefits at these diplomatic 
missions will justify their enormous costs if the functional 
staff's ability to move off compound is constrained. Effective 
risk management and clear strategic guidance from Washington 
will be essential.
---------------------------------------------------------------------------
    \18\ Regional Security Officers, special agents with the Bureau of 
Diplomatic Security, coordinate all aspects of a diplomatic mission's 
security. The Embassy has used private security contractors to conduct 
``red zone'' movements in Baghdad for some time, though it will soon 
lose the military's quick response capacity. Since the tragic shooting 
incident in Nisour Square in 2007, at least one Diplomatic Security 
agent now participates in every movement outside the Green Zone.
---------------------------------------------------------------------------
Recommendations
  1. The State Department should reconsider whether the embassy 
        branch offices will have sufficient freedom of movement 
        to justify their considerable expense.  If a vigorous 
        regional presence is necessary to support Iraq's 
        stability, a mechanism for a continued but restricted 
        follow-on military presence should be considered to 
        help secure American diplomats. But it is not yet clear 
        that the Iraqi Government desires such an arrangement 
        on terms compatible with American interests.

  2. The size and scope of the Office of Security Cooperation 
        must be determined as soon as possible and integrated 
        into the diplomatic mission. In Afghanistan, it will be 
        important to stand up a similar office sooner. Within 
        the organization, the administration should develop an 
        integrated team consisting of State, Defense, and 
        specialized contracting personnel adept at dealing with 
        the intricacies of U.S. security assistance. Compared 
        to the current ad hoc arrangements in Iraq and 
        Afghanistan, these offices will be capable of carefully 
        assessing the needs of the host nation, aligning those 
        desires with national interests, gauging the 
        requirements to sustain continued support (both in 
        terms of potential training sites and required 
        contractors), and assessing the regional impact of arms 
        sales.

  3. Regional security officers need to be empowered to face 
        risks rationally and creatively. They have an 
        incredibly difficult balancing act to perform and must 
        be protected from second-guessing from Washington that 
        produces risk-aversion. While all prudent security 
        measures should be taken, allowances need to be made 
        for the nature of the diplomatic mission in Iraq. In 
        the authors' experience, American diplomats in are 
        courageous, committed and cognizant of the dangers, but 
        often chafe at what they see as excessive security 
        requirements. Examples of possible security measures 
        include:

     Reconsider security in the Kurdish Regional Government.  
            Not a single American has died in Iraqi Kurdistan 
            since 2003, and until recently, American diplomats 
            in Irbil received a higher level of movement 
            security than in Sanaa, Yemen. Excessive security 
            requirements in the north drain resources that 
            could be better used elsewhere and constrain our 
            diplomats' ability to function.

     Consider the use of Baghdad International Airport. If 
            there are systemic security gaps at the airport, 
            the United States should forcefully engage the 
            Iraqi Government to address these gaps. It is 
            enormously expensive, inefficient for smaller 
            groups and undiplomatic not to use a country's 
            international airport.

     Explore the feasibility of ``Iraqizing'' security.  Local 
            security guards are more affordable, understand the 
            local language and culture, and have a superior 
            situational awareness. As Ambassador Ryan Crocker 
            has pointed out, highly trained and vetted Lebanese 
            guards were used during the worst years of the 
            Lebanese civil war without a single ``friendly 
            fire'' instance.
  4. A joint State and Defense Department task force should be 
        set up to explore options for sustaining the Combined 
        Security Mechanisms. The Iraqi Government should be 
        consulted on the feasibility and desirability of 
        maintaining a smaller presence of U.S. military liaison 
        or training teams that would not require the 
        renegotiation of a new security agreement.


                         U.S. MILITARY PRESENCE

    Even after the expiration of the 2008 security agreement, 
the United States will have military personnel stationed at the 
American embassy in a non-combat role, as it has in most 
countries in the world, as affirmed by the strategic framework 
agreement. But the size, scope, structure and role of this 
presence remain undetermined, even at this late date. Perhaps 
most significantly, it is unclear what kind of security 
relationship the incoming Iraqi Government would like with the 
United States. The outcome will shape the nature of the 
bilateral relationship, and have a profound effect on the State 
Department's diplomatic posture.

    Assuming no renegotiation of the security agreement, the 
U.S. military will transfer the vestiges of its mission to the 
Office of Security Cooperation--Iraq under embassy authority by 
October 2011. Similar offices throughout the region assist host 
nations with sustainment, training, acquisition, and the 
conduct of joint exercises, but the office in Iraq--the largest 
U.S.-funded organization of its kind--will face unique 
challenges based on the security environment.\19\ The Office's 
responsibilities will include the provision of training and 
logistical support for current and future arms sale to Iraq. 
This is not an insignificant task given that some $13 billion 
in U.S. arms sales are currently pending.
---------------------------------------------------------------------------
    \19\ Based on discussions in Baghdad with U.S. military and embassy 
officials and Iraqi military officials.

    The authors suspect that many U.S. and Iraqi senior 
military commanders, along with some senior diplomats, would 
like an augmented residual U.S. military presence in Iraq after 
2011 not only to bolster the Iraqi army, but also to support 
the Combined Security Mechanisms, protect hard fought gains in 
security, and provide a counter to Iran. But the new Iraqi 
Government has not yet signaled a public desire to renegotiate 
---------------------------------------------------------------------------
the 2008 security agreement.

    And a continued military presence poses significant risks, 
as well: that it validates our status as occupiers in the eyes 
of the local population and the larger Muslim community, that 
it exacerbates Iraqi dependencies and thereby retards rather 
than accelerates Iraqi political accommodation, and that an 
opportunity is missed to finalize the American military exit 
from Iraq. It remains to be seen whether the Iraqi Government 
will request a continued U.S. military presence or how the 
Obama administration would respond.

    Although several variations exist, the authors see three 
broad options for the U.S. military posture going forward. A 
long-term U.S. military presence in Iraq is both unsustainable 
and undesirable. Thus, each option is a temporary solution to 
help manage the evolving security situation while Iraq's 
political class evolves and its armed forces continue to 
develop. Each involves significant tradeoffs, but only the 
first two may be politically palatable to the new Iraqi 
Government.


          Total drawdown of U.S. troops: In this scenario, the 
        U.S. military departs as scheduled by the end of 2011, 
        though presumably still leaving behind the Office of 
        Security Cooperation described above. The United States 
        will be viewed as upholding its end of the security 
        agreement, delivering a critical message throughout the 
        region: it is not in the business of occupying foreign 
        countries.

          But this option is not without significant risks. The 
        Iraqi military will be forced to sustain itself with 
        only limited American support. This could lead to 
        outside political interference and a deteriorated 
        security environment allowing Al-Qaeda in Iraq and 
        other insurgent groups to reenergize and potentially 
        destabilize Iraq, with significant negative 
        consequences for the region. In this scenario, the 
        diplomatic mission will not have the capacity to 
        support the Combined Security Mechanisms set up to 
        foster communication and coordination between the Iraqi 
        army and Kurdish peshmerga along Iraq's disputed 
        internal boundaries, potentially leaving two heavily 
        armed forces at odds over unresolved politically 
        contentious issues.
          Forced to operate without the security blanket of the 
        military, American diplomats would be exposed to 
        additional danger without adequate protection from the 
        host nation. Unless the Iraqi security forces can 
        demonstrate the capability to provide a more permissive 
        security environment, the State Department should 
        reconsider whether it has the capacity to undertake the 
        ambitious regional posture described in this paper.


          Expanded Office of Security Cooperation: In this 
        scenario, U.S. combat forces depart in accordance with 
        the security agreement, but the Office of Security 
        Cooperation would be expanded, to include additional 
        military personnel under the ambassador's chief of 
        mission authority. Though these personnel would serve 
        in a strictly advisory capacity, they could continue to 
        perform critical functions such as sustaining 
        logistics, administrative duties, and training--roles 
        that many in the Iraqi military and political classes 
        seem keen for the United States to maintain. While not 
        directly participating in force protection or combat 
        operations, these troops could provide critical 
        intelligence, surveillance, and reconnaissance support, 
        as well as a coordination function with the Iraqi 
        security forces, to better enable the State Department 
        to carry out its engagement.
          This arrangement would require the consent of the 
        Iraqi Government, though perhaps not parliamentary 
        approval. This creates its own problems: the presence 
        of troops, even in a limited fashion, could come to be 
        politicized and seen as allied with ruling parties 
        against the opposition. Such a footprint might not be 
        capable of supporting the Combined Security Mechanisms 
        in the north. And it would lack a quick reaction 
        capacity or any kind of force projection except in 
        self-defense. Though such a force would have little 
        interaction with the Iraqi public, it might also be 
        cited as evidence that the United States has no 
        intention of leaving Iraq.


          New security agreement: Under this scenario, the 
        Obama administration would renegotiate, at Iraq's 
        public request, a new security agreement to allow a 
        continued U.S. military presence--a lean force capable 
        of partnering in support of counterterrorism operations 
        and maintaining the Combined Security Mechanisms in the 
        north. This residual presence would address the 
        projected shortfalls in the Iraqi security forces by 
        providing sustained logistics, intelligence, and 
        maintenance support and be positioned to help the Iraqi 
        counterterrorism forces exert maximum pressure against 
        Al-Qaeda in Iraq and other extremist groups. A larger 
        troop presence could reinforce Iraqi border security 
        and air sovereignty, and would probably retain a 
        robust, if little used, rapid reaction capability.
          But this scenario does not seem compatible with the 
        public statements of the new Iraqi Government. 
        Furthermore, the Obama administration has committed to 
        abide by the terms of the current security agreement, 
        negotiated by the Bush administration, and withdraw all 
        troops by December 2011. The presence of American 
        troops is a contentious issue in Iraqi politics. Even 
        if the Iraqi Government signaled a desire to 
        renegotiate the security agreement, there is likely to 
        be significant parliamentary opposition, especially 
        among the large Sadrist bloc. Rather than building 
        Iraqi capacity, a continued U.S. military presence 
        could instead foster Iraqi dependency.
          If Iraq were to request a new security agreement, the 
        United States should carefully consider the appeal, but 
        only agree if the terms are favorable to American 
        interests. The U.S. military presence would be 
        purposefully limited and only present to facilitate 
        highly selective missions.
Recommendations
  1. The administration should ensure that its resources, 
        capacities and policy objectives are in balance.  Each 
        of the security options described above leads to 
        separate conclusions about how best to structure the 
        diplomatic presence in Iraq. But there is a clear 
        relationship between the U.S. military support in place 
        and the capacity of the State Department, which the 
        authors are concerned, is not adequately incorporated 
        into the current transition planning.

  2. The administration should clarify to lawmakers in 
        Washington what the military presence in Iraq, if any, 
        will look like beyond 2012.


                       BUDGETING AND AUTHORITIES

    The total request for Congressional appropriations in Iraq 
in FY12, after the transition is completed, could reach $6 
billion. Of that, diplomatic operations will cost at least $3 
billion, roughly double the FY11 request and encompassing more 
than a quarter of the State Department's global operational 
budget.\20\ This does not include other State Department 
programs in Iraq such as economic and security assistance, or 
the Office of Security Cooperation. While these are 
indisputably expensive programs, their cost constitute a mere 
fraction of what was spent on earlier military operations. And 
if Iraq emerges from the chaos of the last years as an 
important regional partner it will have been money well 
spent.\21\
---------------------------------------------------------------------------
    \20\ Deputy Secretary of State Thomas Nides wrote in response to 
questions for the record from the Senate Foreign Relations Committee, 
received November 17: ``The current average monthly obligation rate for 
ongoing Diplomatic and Consular Programs (D&CP)-funded operations of 
the embassy and provincial reconstruction teams (PRTs) is approximately 
$120 million per month. As the transition of DOD-supported activities 
to State accelerates over the coming year, average monthly obligations 
will grow by $275 million, peaking at approximately $395 million per 
month around the end of the third quarter before dropping to lower 
obligation rates by year end. This includes significant security and 
construction contracts related to the two Embassy Branch Offices, two 
consulates, and Sather Air Base-funded by the FY 2010 supplemental--to 
be awarded during January-March. The Department foresees total FY 2011 
obligations for D&CP of nearly $3.2 billion.''
    \21\  Appropriations for the war in Iraq peaked in FY08 at $142 
billion and declined in FY10 to $51 billion. See Appendix II.

    Given this enormous cost disparity between military and 
diplomatic operations, it is notable that Congress cut the 
State Department's requests for Iraq operations twice in 
2010.\22\ With the nation deeply involved in a second war in 
Afghanistan and recovering from a severe recession, Iraq 
receives less attention in a difficult fiscal environment. 
Security costs in Iraq are enormous compared to most diplomatic 
postings, and thus disruptive to the budgeting cycle. 
Nonetheless, the cuts have raised serious concerns that the 
current funding baselines might limit the scope of future 
operations. A more stable funding mechanism must be found that 
contains both clarity for operational planners at the State 
Department and mechanisms for effective Congressional 
oversight.
---------------------------------------------------------------------------
    \22\ The FY2010 supplemental appropriations act, passed in July 
2010, included a $540 million cut from the administration's D&CP 
(Diplomatic and Consular Programs account) request. FY11 appropriations 
have not yet been resolved with the Government operating on a 
continuing resolution until March 2011, but the Senate and House 
appropriations committee markups included cuts to administration's 
$1.78 billion FY11 Iraq D&CP request, to $1.65 billion and $1.34 
billion respectively.

    Meanwhile, the unity of mission in Baghdad does not appear 
to have been matched in Washington. Communication between 
military personnel and civilian counterparts is much better in 
the field than in Washington. This is hardly an unusual 
phenomenon, but the ``stove-piping'' of information and 
resources can have a particularly deleterious effect in such a 
complex operation. Within the State Department there appear to 
be tensions between the embassy and the Bureau of Near-East 
Affairs, which are looking to maintain a vigorous provincial 
profile, and operational bureaus such as the Bureaus of 
Diplomatic Security and Overseas Building Operations 
responsible for securing them. While an element of bureaucratic 
tension can help refine strategic objectives, there is also a 
danger that differing bureaucratic prerogatives lead to muddled 
policy. Creative thinking is especially important to security. 
Because this is a transition of such extraordinary importance 
and complexity--and because time is so limited--the State 
Department must articulate sharper strategic and operational 
---------------------------------------------------------------------------
guidelines.

    Furthermore, it is not clear that the State and Defense 
Departments have all of the legal authorities they need. For 
example, according to military and diplomatic personnel in 
Baghdad, it is easier to transfer ``non-excess'' military 
equipment in Iraq to a third country than it is to the State 
Department.\23\ New authorities could conceivably be needed in 
a number of different areas: flexibility between spending 
accounts, operations and staffing of the Office for Security 
Cooperation, the definition of ``chief of mission'' authority, 
on the security standards employed, etc. Such legal questions 
urgently need to be resolved.
---------------------------------------------------------------------------
    \23\ Deputy Secretary of State Thomas Nides, November 17: ``The 
Department of Defense (DoD) does not currently have the authority to 
transfer `non-excess' property. Therefore, for items identified as 
`Non-excess' the Department of State (DOS) will either have to fund 
those items or DoD may require exceptional, temporary authorities to 
transfer them to the Department of State at no cost. Giving DoD such 
authority would greatly facilitate such transfers.''

    Adding to the uncertainty, Foreign Military Sales to Iraq 
have sharply increased in recent months. In August 2010, the 
U.S. military was tracking 170 Iraqi cases valued at almost $6 
billion. But by November, the number had skyrocketed to 
approximately 400 cases valued at nearly $13 billion, raising 
serious questions about the Iraqi military's capacity to deal 
with such an influx of highly technical equipment. This 
dramatic increase--and the accompanying contractors necessary 
to fulfill the orders--could result in an even larger footprint 
likely to overwhelm the State Department's already lean 
resources. Arms sales professionals, who typically broker such 
deals, were not present in Iraq soon enough and political-
military specialists from the State Department were 
insufficiently involved in the early stages of arms 
---------------------------------------------------------------------------
negotiations with Iraqis.

    The startup costs associated with the Office of Security 
Cooperation, responsible for managing Foreign Military Sales, 
are typically funded by the State Department. However, in Iraq 
this is problematic for two reasons. First, the security 
environment is such that the State Department may not be able 
to afford the associated security costs. The Defense Department 
however, has less restrictive requirements--which could reduce 
site-protection costs by as much as $750 million--and a larger, 
more flexible budget. Second, the State Department, if forced 
to outfit the Office of Security Cooperation to its security 
standards, will not achieve full operational capability by 
October. Due to the expanding footprint, there would be too 
much to do with not enough time.

    Funding streams to support the Iraqi military are changing. 
The Iraqi army must be properly resourced and adequately 
equipped to deter future challenges from outside its borders. 
From 2005-2012 this was accomplished through the Iraq Security 
Forces Fund within the Defense budget.\24\ The fund has been a 
discretionary spending vehicle for procurement, operations, and 
maintenance. But in FY 2012, that funding line will be replaced 
with a more restrictive and traditional form of security 
assistance, Foreign Military Financing, granted through the 
Department of State's budget to finance the purchase of U.S. 
equipment, training, and services. The administration will 
likely request approximately $1 billion annually through FY 
2014 after which Iraq is forecast to be capable of financing 
its own military.
---------------------------------------------------------------------------
    \24\ The administration request for FY 2011, through the defense 
budget, was $2 billion dollars of which Congress is likely to 
appropriate closer to $1.5 billion.

    With the departure of combat troops, the security 
assistance is the principal point of leverage the United States 
has in promoting Kurdish integration and developing a 
professional generation of soldiers and police. The sale of 
military equipment gives us an edge in diplomacy, builds 
relationships, and fosters interoperability. But perhaps most 
importantly, it fills a void that other countries, including 
---------------------------------------------------------------------------
Iran, are more than willing to step into if left empty.

    Although there are many unknowns still associated with the 
transition to a diplomatic mission in Iraq, it will not serve 
the United States to sit back and take a ``wait and see'' 
approach to funding our efforts there. A future presence of the 
U.S. military, in any form, will not alleviate the 
responsibilities of the State Department, but will only help 
facilitate its effectiveness.
Recommendations
  1. Congress must provide the financial resources necessary to 
        complete the diplomatic mission in Iraq.  To this end, 
        senior administration officials in Washington should be 
        more vocal on the importance of full Congressional 
        funding for its budget requests for Iraq programs.

  2. Consideration should be given to a multiple-year funding 
        authorization for Iraq programs, including operational 
        costs (differentiated from the State Department's 
        global operational budget account), security 
        assistance, and economic assistance programs. The State 
        Department would have to articulate a more 
        comprehensive three-to-five year strategy for Iraq, but 
        would receive assurances that critical programs would 
        not fall victim to the vagaries of the budgeting 
        process. Congress would demonstrate its commitment to 
        the bilateral relationship, but also be able to create 
        benchmarks for progress and establish sunsets to ensure 
        the transition period to normal diplomatic operations 
        is not open-ended.

  3. State Department should appoint a senior coordinator for 
        Iraq, housed within the Bureau of Near East Affairs, 
        empowered to engage across bureaus. This office would 
        be responsible for ensuring a unity of effort within 
        the State Department, including on difficult security 
        matters and serve as the principle interlocutor with 
        the Defense Department on transition issues. It will 
        also serve as the model for transition in Afghanistan.

  4. If the administration needs new authorities to execute the 
        new diplomatic mission in Iraq, these need to be 
        urgently communicated to the appropriate Congressional 
        committees.

  5. Congress should approve an authority whereby the 
        Department of Defense funds the stand-up costs of the 
        Office of Security Cooperation inside Iraq.  This would 
        alleviate a financial burden that the State Department 
        would not be able to bear. Consideration should also be 
        given to authorizing the Defense Department to 
        subsidize security costs associated with arms sales. In 
        the Iraqi security environment these costs are highly 
        inflated and if incorporated could have the dual 
        effects of pricing U.S. defense contractors out of a 
        competitive Iraqi market and offending our Iraqi 
        partners by calling their security measures into 
        question.

  6. Congress should fully fund the current request for the 
        Iraqi Security Forces Fund and future requests for 
        Foreign Military Financing.  This will ensure future 
        defense cooperation between the U.S. and Iraq. The 
        ``total package'' approach associated with American 
        arms sales will establish an ongoing relationship where 
        the Iraqis will depend on specialized U.S. skills for 
        training and maintenance. An extensive security aid 
        package will also prohibit other regional actors from 
        inserting their undue influence on Iraq's fledgling 
        democracy.

                               Conclusion

    The U.S. Government should ensure that the scope of the 
mission in Iraq is compatible with the resources available, 
including civilian capacity, the financial commitment from 
Congress, a degree of U.S. military support and the backing of 
the Iraqi Government. If these elements are not fully in place, 
the administration may be forced to choose between scaling back 
the diplomatic mission or accepting a degree of physical risk 
familiar to military personnel, but normally unacceptable for 
diplomats.

    Debate over the balance between conventional and 
unconventional military capacity is often heard through the 
halls of the Pentagon. A similar discussion must take place 
within the State Department regarding the role and capabilities 
of our diplomatic corps. Although the State Department's budget 
is a fraction of the Pentagon's, the distinctions between the 
diplomatic and military missions in places like Iraq and 
Afghanistan are quickly blurring. To adapt to the 
counterinsurgency doctrine, U.S. troops are asked to put down 
their weapons and converse over cups of tea. Conversely, in 
Iraq the State Department is being asked to augment its 
traditional diplomatic functions with a forceful, though 
defensive, security capacity.

    Reevaluating the role of diplomats is not about giving up 
on Iraq. Quite the opposite, it is an acknowledgment of the 
importance of getting the transition right. Some will argue 
that the war's faulty pretext--that Iraq's supposed weapons of 
mass destruction stocks constituted ``a grave and gathering 
danger''--justify a quick American disengagement from Iraq once 
our troops are withdrawn next year. While such an approach may 
be ideologically fulfilling, it constitutes snatching ``defeat 
from the jaws of victory.''

    For all the challenges the diplomatic mission faces, its 
success or failure has profound implications on the nature of 
the American sacrifice in Iraq. It will be an important factor 
in whether a more stable Iraq emerges from decades of turmoil 
as a strategic partner of the United States, or, instead, 
potentially turns towards Iran.

    More than 4,400 American lives have been lost and $750 
billion spent. But no figure can encapsulate the horrific loss 
of life, treasure, and the associated sweat that was poured 
into waging war, crafting a peace, and charting the transition. 
Now is not the time to politically disengage. The transition 
must be fostered through this critical stage, for the template 
being created in Iraq now will serve as the model in 
Afghanistan in years to come.
                   Appendix I: Iraqi Security Forces 
                   ``Minimum Essential Capabilities''







         Appendix II: Congressional Funding of the War in Iraq


                                                   Congressional Funding of the War in Iraq, 2003-2011
                                                      (In billions of U.S. dollars by fiscal year)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                       Total      2011
                         Department                            2003     2004     2005     2006     2007     2008     2009     2010   2003-2010   Request
--------------------------------------------------------------------------------------------------------------------------------------------------------
Defense....................................................      50       56       83       98      127      139       92       61       707         46
State (incl. USAID)........................................       3       20        2        3        3        3        2        3        39          4
Veterans Affairs...........................................       0        0        0        0        1        1        1        2         5          1
  Total: Iraq..............................................      53       76       86      102      131      142       96       66       751         51
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Research Service

                Appendix III: Security Incident Trends: 
                        January 2004 to May 2010




   Source: Department of Defense, ``Measuring Stability and Security 
                         in Iraq,'' June 2010.