June 6, 2008: US Using Iraq’s Money to Pressure Iraq into Signing Permanent Presence Agreement

The US is pressuring the Iraqi government to accept a military agreement for permanent US bases in Iraq (see March 7, 2008 and June 5, 2008) by using some $50 billion of Iraqi money being kept in the US Federal Reserve Bank as a negotiating tool. About $20 billion in outstanding court judgments exist against Iraq in the US. A presidential order currently gives that money protection from judicial attachment. But, US officials have told Iraqi lawmakers, if they do not sign the accord with the US, President Bush will lift that immunity and the $20 billion will be confiscated by the US court system. [Independent, 6/6/2008; Xinhua News Agency (Beijing), 6/6/2008] Reporter Patrick Cockburn writes: “The US is able to threaten Iraq with the loss of 40 percent of its foreign exchange reserves because Iraq’s independence is still limited by the legacy of UN sanctions and restrictions imposed on Iraq since Saddam Hussein invaded Kuwait in the 1990s. This means that Iraq is still considered a threat to international security and stability under Chapter Seven of the UN charter. The US negotiators say the price of Iraq escaping Chapter Seven is to sign up to a new ‘strategic alliance’ with the United States.” Cockburn writes that regardless of the financial “blackmail,” Iraqis are resistant to the agreement because they fear it will make their nation a perpetual “client state” of the US. [Independent, 6/6/2008]