Is US Threatening to Seize Iraqi Assets if They Don’t Sign Pact?

An unverified report quotes Iraqi President Jalal Talibani as claiming that the United States has “threatened to use any means to seize Iraqi assets if we do not support the security pact.” The quote reportedly comes from the Arabic language Marsadiraq, by way of Iran’s state-run media.

The status of forces agreement would define the terms of the US military presence in Iraq beyond the end of this year, when a United Nations mandate is scheduled to expire. The deal has been exceedingly controversial in Iraq, and Iraqi Prime Minister Nouri al-Maliki cites “serious and dangerous obstacles” still remaining before the final terms of the deal could be agreed upon. The primary stumbling blocks are a firm 2011 deadline for US withdrawal from Iraq and US demands for immunity for their forces and perhaps also their contractors from Iraqi law.

Rising fuel prices and a drop in violence in oil producing regions has led Iraq to an enormous budget surplus, much to the consternation of many American officials watching the costs of the war spiral beyond even the most pessimistic estimates. This has led the Senate Armed Services Committee to look into how Iraq is (or rather isn’t) spending this money on reconstruction projects.

The GAO says that Iraq may have an up to $80 billion surplus by the end of the year. This has raised the ire of Armed Services Committee Chairman Senator Carl Levin, who said the United States “should not be paying for Iraqi projects while Iraqi oil revenues continue to pile up in the bank.” He also said the US “should require that US taxpayers be reimbursed for the cost of large projects.”

It is unclear, if this report is true, how the United States could seize Iraq’s surplus or what the reaction to such a move would be from the increasingly independent Prime Minister Maliki. Yet the threat certainly might force the Iraqi government to accept worse terms in the status of forces agreement than they would otherwise be inclined to, and would also be in keeping with Sen. Levin’s call for reimbursement.

Author: Jason Ditz

Jason Ditz is senior editor of