VZCZCXRO8615
PP RUEHBC RUEHDE RUEHDH RUEHDIR RUEHIHL RUEHKUK
DE RUEHGB #1104/01 1141621
ZNY SSSSS ZZH
P 241621Z APR 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 2832
INFO RUCNIRA/IRAN COLLECTIVE PRIORITY
RUCNRAQ/IRAQ COLLECTIVE PRIORITY

S E C R E T SECTION 01 OF 03 BAGHDAD 001104 

NOFORN 
SIPDIS 

DEPARTMENT FOR NEA/I AND NEA/IR 
NSC STAFF FOR OLLIVANT AND MAGSAMEN 

E.O. 12958: DECL: 04/23/2019 
TAGS: PREL PTER PINR PGOV MOPS ECON IR IZ
SUBJECT: IRANIAN PLANS FOR IRAQ AS U.S. FORCES DRAW DOWN 

REF: A. WHITE HOUSE 853 
¶B. BAGHDAD 342 
¶C. BAGHDAD 762 
¶D. BAGHDAD 383 
¶E. BASRA 17 
¶F. BAGHDAD 1103 
¶G. BAGHDAD 289 

Classified By: Classified By: Charge d'Affaires Patricia A. Butenis for 
reasons 1.4 (b) and (d). 

¶1. (S) SUMMARY: The Iranian response to the drawdown of U.S. 
military forces in Iraq, and Iraq's evolving relationship 
with Iran, will influence the climate for U.S. engagement 
with Iran on our range of interests. The Iranians may see 
the drawdown as an opportunity to strengthen their hand in 
Iraq, akin to the opportunities they perceived after the fall 
of Saddam in 2003. But they appear to have learned that 
their proxy violence and efforts to strong-arm Iraqi 
politicians generated more ill-will than influence. Iraqis 
are now pushing back against malign Iranian influence. The 
GOI cracked down on Iranian-backed militias and signed 
long-term partnership agreements with the United States last 
year, while this year Iraqi voters rewarded nationalist Iraqi 
politicians in the provincial elections. At the same time, 
Iraqis are buying Iranian products, accepting Iranian 
investments, and welcoming Iranian visitors. The political 
relationship between the countries is maturing, although 
still scratchy. 

¶2. (S)(Summary continued) Iran in 2009 faces more 
constraints in Iraq than it did in 2003. We expect the 
Iranians will respond to the U.S. military drawdown under 
these new constraints with violence targeted more closely at 
the United States, more diplomatic outreach to Iraqi 
politicians, and continued focus on trade and investment. 
Consistent with ref A, our response must be targeted as well: 
a vigorous response to security challenges, regional 
diplomacy to help Iraq integrate with its neighbors and 
internationally, and increased assistance to Iraq to build 
its political and economic capacity to resist malign 
influence from Iran. END SUMMARY. 

--------------- 
New environment 
--------------- 

¶3. (S) The Quds Force (QF) -- the external operations arm of 
the Islamic Revolutionary Guard Corps (IRGC) -- has directed 
Iranian policy in Iraq since the fall of Saddam in 2003. The 
IRGC-QF used its leverage with Shi'a political parties such 
as the Supreme Council for the Islamic Revolution in Iraq 
(SCIRI) to influence evolving Iraqi domestic politics, while 
providing extensive logistical support and training to the 
Jaysh al-Mahdi (JAM) militia and other extremist groups. 
Tripartite discussions between the USG, GOI, and Iranian 
government in Baghdad in 2007 made no immediate breakthroughs 
toward reducing Iranian sponsorship of violence. 

¶4. (S) The heavy-handed Iranian intervention backfired, 
however, when the violent and undisciplined JAM alienated 
many Iraqis, who also came to resent Iranian political 
interference. In 2007, SCIRI changed its name to the Islamic 
Supreme Council of Iraq (ISCI) to distance itself from its 
Iranian and revolutionary origins, while PM Maliki's Da'wa 
party has staked out a nationalist political position. With 
ISCI's backing, Maliki directed Iraqi security forces to 
challenge JAM control of Basra and Sadr City in 2008, 
succeeding with the extensive but quiet assistance of MNF-I. 
This success, along with growing popular distrust of Iran and 
Iranian influence, contributed to Da'wa's strong showing over 
ISCI in January 2009 provincial elections (ref B). Among 
other recent Iranian setbacks in Iraq, the GOI signed the 
Qother recent Iranian setbacks in Iraq, the GOI signed the 
Security Agreement and Strategic Framework Agreement with the 
USG despite Iranian objections. 

¶5. (S) Dynamics other than the U.S. military drawdown will 
affect Iranian influence in Iraq in coming years. Iraqis 
will continue to accept legitimate Iranian investment and buy 
Iranian electricity and manufactured goods as Iraqi domestic 
production struggles to rebuild. Iranian agricultural produce 
will continue to fill Iraqi markets as Iraqi farmers recover 
from conflict, neglect, and a drought that has limited 
production. The number of Iranian pilgrims and tourists, 
already in the hundreds of thousands annually, will increase 
with improvements in Iraqi security and tourism 
infrastructure. As the Iraqi-Iranian bilateral relationship 
matures with its positive advances and disputes, the 

BAGHDAD 00001104 002 OF 003 


governments will seek to deepen their cooperation on issues 
such as de-mining, petroleum development and border security, 
although disagreements over border demarcation and water 
rights will continue to cause friction (ref G). 

¶6. (S) Just as Iraq will try to strengthen relations with 
its Arab neighbors and Turkey to balance Iranian influence, 
Iran will maintain regional influence through relations with 
Syria and domestic influence in Iraq through its TV 
broadcasts into Iraq and relations with Shia political 
parties, the Kurds, and in fact any Iraqis who will have 
them. Ultimately, Iraqi nationalism and self-reliance are 
the most effective long-term defenses against Iranian 
domination, and the degree and nature of Iranian influence in 
Iraq will be determined less by the level of U.S. military 
forces in Iraq than by the Iraqi political and economic 
capacity to balance Iranian influence and channel it into 
mutually beneficial areas. 

-------- 
Drawdown 
-------- 

¶7. (S/NF) While it initially criticized the Security 
Agreement, intelligence reporting indicates that Iran is 
beginning to take advantage of the new constraints on U.S. 
military forces. Iranian officials have pressured the GOI to 
close the Mujahedin-e Khalq's Camp Ashraf since the GOI 
assumed security responsibility for it on January 1, as well 
as release IRGC-QF officers detained by MNF-I in January 2007 
as MNF-I turns detainees over to the GOI. (Note: MNF-I and 
Embassy intend to hold the officers as long as legally 
possible. End note.) Even as Iran publicly emphasizes 
diplomatic and economic engagement in Iraq (ref C), the 
IRGC-QF continues to support violent extremist groups such as 
Kata'ib Hizbollah (KH), and Iran may have played a role in 
the recent movement of the extremist group Asa'ib Ahl al-Haqq 
(AAH) away from the political reconciliation process. MNF-I 
analysts expect extremists to continue to use increasingly 
deadly weapons supplied by Iran against U.S. forces this year 
as U.S. forces move outside the cities and present targets 
with little risk of collateral damage. MNF-I also expects 
extremists to respond to the drawdown with attacks on U.S. 
forces in an attempt to take credit for the U.S. departure. 

¶8. (S) Likewise, the Iranian government will continue to 
publicly portray the drawdown as a victory for the Iraqi 
people and defeat for the United States, perhaps placing it 
in the context of other U.S. military disengagements such as 
Lebanon in 1984 and Somalia in 1993. After the Security 
Agreement was approved, Iranian officials portrayed it 
positively, emphasizing the stipulation that Iraq's territory 
will not be used to attack a neighbor and that U.S. forces 
would leave by the end of 2011. 

¶9. (S) This public posturing may play on fears we've heard 
from Basra to Anbar to Kurdistan that the U.S. drawdown will 
create a vacuum that Iran will attempt to fill. But if Iran 
adopts too high a public profile, it risks further backlash 
because of nationalistic Iraqi pride as well as economic, 
political and cultural grievances. For example, a Shia 
member of the Council of Representatives warned us recently 
of the pernicious effects of Iran on Shia religious doctrine, 
seeking USG support for a media outlet for Iraqi Shi'a 
clerics who will resist Iranian theology (ref D). Contacts of 
REO Basra blame the rising price of housing on Iranian real 
estate; likewise, Iranian agriculture is blamed for 
undercutting local competition (ref E). The GOI is rejecting 
Qundercutting local competition (ref E). The GOI is rejecting 
Iranian claims to reinstate the 1975 Algiers Accord about the 
Shatt al-Arab, and it is blaming Iranian dams for sharply 
cutting water supplies reaching northeast. Maliki and his 
team do not trust the Iranians and their militia games -- 
Basra being a prime example, but also Sadr City and AAH. 


¶10. (S) While some Iraqi fears of Iranian influence are 
exaggerated, IRGC-QF operatives do expect a more permissive 
operating environment as U.S. forces draw down (ref F). At 
the same time, the drawdown will remove some threats the 
Iranians perceive near the Iran-Iraq border. An Iranian 
Unmanned Arial Vehicle (UAV) shot down by U.S. forces in 
February was sent to scout two such targets: Camp Ashraf and 
a U.S. military base. In the absence of such perceived 
threats, and distracted by economic woes and internal 
discord, it is possible that Iran will become less 
preoccupied with security threats from Iraq. However, 
considering Iran's long history of confrontation with Iraq, 
its unease about enduring Iraqi-American cooperation, and its 

BAGHDAD 00001104 003 OF 003 


delegation of Iraq policy to the belligerent anti-American 
IRGC-QF, Iran will likely continue to support extremists in 
Iraq, perhaps building extremist groups into a Lebanese 
Hezbollah-style political-military organization as a hedge 
against a resurgent Iraqi central government. 

---------------------------- 
New challenges, USG response 
---------------------------- 

¶11. (S) We will continue to assist the Iraqi government in 
developing that capacity through political, diplomatic, 
economic, rule of law, and security cooperation as outlined 
in Embassy and MNF-I's Joint Campaign Plan and the Mission 
Strategic Plan. Among current initiatives: the Local 
Governance Program to strengthen local government 
administrative capacity and civic engagement; assistance for 
Iraqi farmers to develop the agricultural sector; training 
for the Central Bank's Money Laundering Unit to combat 
financial crime; engagement with Iraq's neighbors to 
strengthen its regional integration; and advice for Iraqi 
officials on an information strategy to respond to malign 
Iranian interference in Iraqi affairs. Success in these 
efforts requires a whole-of-government approach, and 
sufficient funding for non-military initiatives is vital. 
(Note: Ref F outlines a USG strategy for maintaining pressure 
on the IRGC-QF in Iraq as U.S. military forces draw down.) 

------- 
Comment 
------- 

¶12. (S) The view of Iran from Iraq is shaped by complaints 
from Iraqi businessmen about Iranian competition, warnings 
from Iraqis on the street about Iranian expansionism, 
whispers from Iraqi politicians about Iranian influence, and 
the occasional sound of Iranian munitions whistling overhead. 
While none of these need necessarily affect the USG approach 
on engagement with Iran, Iran's response to the drawdown of 
U.S. military forces in Iraq will not improve the climate for 
talks. In fact, elements of the Iranian government opposed to 
engagement with America may use the instigation of violence 
in Iraq as a spoiler. However, the Iraqi government and 
Iraqi people are not as vulnerable as they were in 2003; they 
are increasingly willing and able to defend their own 
interests. Continued strengthening of the Iraqi-American 
partnership will improve their capacity to counter and 
balance Iranian influence, and keeping Iraq informed of our 
progress on engagement with Iran will allay concerns that 
Iraq's national interests are on the table. 
BUTENIS