Quite a few events have occurred and new revelations have emerged since I last posted on the Iraqi SOFA/SFA negotiations. First, this explosive article was published...

Revealed: Secret plan to keep Iraq under US control

...Under the terms of the new treaty, the Americans would retain the long-term use of more than 50 bases in Iraq. American negotiators are also demanding immunity from Iraqi law for US troops and contractors, and a free hand to carry out arrests and conduct military activities in Iraq without consulting the Baghdad government.

The precise nature of the American demands has been kept secret until now. The leaks are certain to generate an angry backlash in Iraq. "It is a terrible breach of our sovereignty," said one Iraqi politician, adding that if the security deal was signed it would delegitimise the government in Baghdad which will be seen as an American pawn.

That article was quickly repudiated by Crock O' Shit, in this NYT article...

The United States ambassador to Iraq on Thursday dismissed any suggestion that the Bush administration is maneuvering to set up permanent military bases in Iraq.

“I’m very comfortable saying to you, to the Iraqis, to anyone who asks, that, no indeed, we are not seeking permanent bases, either explicitly or implicitly,” Ambassador Ryan C. Crocker said at a State Department news briefing.

Mr. Crocker commented at length, and sometimes disdainfully, on a London newspaper report of “a secret plan” whereby the United States would keep 50 permanent military bases in Iraq, keep control of Iraqi airspace and insist on legal immunity for American soldiers and contractors.[...]

“That is just flatly untrue,” the envoy said, trying to swat away any implication of “secret provisions, attachments, protocols or whatever” and describing the talks between American and Iraqi officials as “a transparent process.”

Transparent? My arse! Anyways, Patrick Cockburn followed up on his previous article with this bombshell...

US issues threat to Iraq's $50bn foreign reserves in military deal

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

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

Iraq's foreign reserves are currently protected by a presidential order giving them immunity from judicial attachment but the US side in the talks has suggested that if the UN mandate, under which the money is held, lapses and is not replaced by the new agreement, then Iraq's funds would lose this immunity.

Wow, some would consider that blackmail! Fancy that! Then I hear about this 'Face-Saving' measure...

NPR’s Diane Rehm asked NBC News Middle East correspondent Richard Engel about the report. Engel said that as part of “a face saving device,” the bases would technically be Iraqi and “U.S. troops would reside on them as tenants”:

ENGEL: That’s the question, is it permanent bases or is it not, and the details of this have not been published. The U.S. and Iraqi officials I’ve spoken to say they would not be U.S. permanent bases in Iraq, they would be Iraqi bases and that U.S. troops would reside on them as tenants and may even have to pay some sort of nominal rent, so there would be a face saving device. What’s also trying to be worked out is what’s the exact U.S. mission. Would they be able to conduct independent operations without the advice and consultation of the Iraqi government and that has been a point of contention.

The WSJ confirms it...

Both sides also pledged to try to finish the agreement on time, it said. Mr. Abadi, a Shiite legislator close to the prime minister, said talks have hit major stumbling blocks over the future status of U.S. military bases and American use of airspace over Iraq.

"The Americans have some demands that the Iraqi government regards as infringing on its sovereignty," Mr. Abadi said. "This is the main dispute, and if the dispute is not settled, I frankly tell you there will not be an agreement."

Mr. Abadi said Iraq insists that Washington pay fees for each of its military bases in Iraq, as well as promise not to hold the bases permanently or even long-term.

Iraqi government spokesman Ali al-Dabbagh also issued a statement Tuesday saying Mr. Maliki's Cabinet discussed the proposed security agreement and "affirmed not to accept any article that undermines the national sovereignty."

Color me unimpressed with the devices... I agree with Dr. iRack's hypotheses...

Hypothesis 1: This is pure politics. The Sadrists oppose the deal on principle, but also because it represents one of the few nationalist cards they have left in the deck. And, in the face of Sadrist opposition and the "marketing" problem this presents for Iraqi leaders trying to sell the deal to the Iraqi public, members of Maliki's coalition are feigning concerns over sovereignty to bolster their own nationalist credentials (even though they don’t mean it, and, deep down, want a long-term U.S. deal).

Hypothesis 2: Various Iraqi parties are making noise to increase their bargaining leverage and get a better deal.

Hypothesis 3: It's the money, stupid. The real issue is not about infringements on Iraqi sovereignty but a little known aspect of the UNSCRs related to the Development Fund for Iraq (DFI). The DFI (originally established by UNSCR 1483 in May 2003 as a replacement for Oil for Food) is composed of billions of dollars of revenue from oil exports and assets seized from Saddam Hussein. Under this arrangement, the DFI, intended for Iraqi reconstruction needs, is immune from claims made by creditors or others with legal claims (including pending and potential criminal lawsuits) against Saddam's regime. But, if the UNSCR goes away, so does this immunity, and all the money would be put at risk. As this reality has sunk in, the Iraqi leadership is freaked.

So what explains recent events? Dr. iRack suspects the answer is a combination of all three. Some Iraqi leaders are making noise to bolster their nationalist credentials and get a better deal. And, they figure, if this game of brinksmanship fails and ends up thwarting an agreement with the Bush administration, it has the ancillary benefit of not putting the DFI at risk. Instead, they’ll re-up the UNSCR again (which would be tough, but not impossible), buy some time to sort out the DFI mess, and negotiate a deal with the next administration.

Please, let them punt it until the next administrations are elected, both, the Iraqi's and the US! Since, both have elections due in November... Let'em sort out a new deal! I'm sure it'll be a lot more appealing to both populaces...!