Iraq: The Way Forward -- U.S. Ambassador's Assessment

MODERATOR: Good evening and welcome to the Council on Foreign Relations.

Council members from around the nation and world are participating via teleconference. So I'll remind you and our speaker that this session is on the record.

And I ask you, as we always do, to please turn off -- not just put on vibrate -- your cell phones and your BlackBerrys and any other communications devices that you have, because it interferes with the sound system.

We're very pleased tonight to have Ambassador Chris Hill.

Welcome.

AMBASSADOR CHRISTOPHER HILL: Thank you.

MODERATOR: The U.S. ambassador to Iraq as our guest.

I don't know what global climate change has done to the snowfall in Baghdad this year, but Chris spent some of his growing up years in Rhode Island and went to Bowdoin College in Maine, so he's clearly more intrepid than some of the rest of us are in facing the elements here.

HILL: You're a bunch of wimps. (Laughter.)

MODERATOR: I know you've all -- I know you all have a copy of his biography, but let me just hit a few of the high points.

Ambassador Hill began his career in public service in the Peace Corps in Cameroon in 1974 and he clearly liked being in difficult places, because in 1977 he joined the Foreign Service and he began serving in some of the most complicated places for U.S. diplomacy during those years -- Belgrade, Warsaw, Seoul and -- (inaudible) -- and on the State Department's Policy Planning Staff -- a particularly complicated place.

And his great skill as a negotiator on both sides first became apparent when he served as deputy of the U.S. negotiating team in the Bosnia peace talks in 1996. As Ambassador to Macedonia in the late 1990s, he also served as the administration's special envoy to Kosovo. He was ambassador to Poland from 2000 to 2004 and followed up with a two-year tour as ambassador to South Korea.

Then came the role in which most of us have followed him in recent years as assistant secretary of State for East Asia and Pacific Affairs. Ambassador Hill also served as the lead negotiator at the six-party talks on the North Korea nuclear issue.

His role in Bosnia and North Korea negotiations twice have earned him the State Department's highest award: the secretary's Distinguished Service Award.

It was a little less than a year ago that the Obama administration decided to put his great skills to the ultimate test as ambassador to Iraq at a time of great change in the U.S. presence there.

I've listened to Ambassador Hill talk in the past about his approach to diplomacy and also during a number of appearances here in Washington this week. And I think we can draw a pretty straight line, that might not be immediately apparently, between his days in the Peace Corps in Cameroon and working with Iraq's young democracy during a time of important new elections for a new national government a little more than two weeks away.

I just want to read you a paragraph from a profile of him that appeared in The Washington Post several years ago: "As a volunteer in Cameroon, Hill worked with credit unions. And when he discovered that one board of directors had stolen 60 percent of the members' money, he reported the malfeasance to their members who promptly reelected them, because the board reflected carefully tribal interests and it really did not matter to the members that the board directors ran a good credit union or not. Hill said the lesson was, quote, 'When something's happened, it's happened for a reason and you do your best to understand that reason, but don't necessarily think you can change it.'"

Ambassador Hill, I want you to give us an update on the electoral process in Iraq -- it's importance and some of the problems that we all know have surrounded it. It's obviously been a contentious period and there's a lot riding on it in terms of U.S. policy in Iraq and in the region.

But first I want you, if you would, to put that quote in context. You do your best to understand the reasons why something's happening and don't necessarily think you can change it. How would you put that in context in Iraq in terms of what's been going on over the past year -- and especially in the last month or so?

HILL: Okay. I was afraid you were going to ask me about the future of that credit union and I don't know really what happened.

But I will tell you that, you know, you have to respect history. And you have to respect people's collective experience; you have to respect, basically, the sociology and, you know, what's gone on there before. And you should not expect, necessarily, that your brilliant thoughts to trump, you know, a thousand years of sociology and of culture.

So all I'm trying to say with that was, first of all, it was wrong for people to abscond with 60 percent of the money, but I realized that people didn't really -- it wasn't what was important to them. What was important to them was something that I hadn't understood. So I was very conscious at that age that you shouldn't sort of come in and expect everyone to think like you.

So I think with respect to Iraq, there are certain standards that they're going to have to achieve. And they're going to have to, you know, sort of rise to the occasion -- not unlike in the life of an individual. I think a nation can also rise to the occasion. But you know, you should expect things to be easy or things to look exactly as they would in the U.S.

This election -- it's a very important election. It's an important election, not because if we have a successful election we can pull our troops out. It's an important election, because it will really help define what Iraq is in the future. And in so doing, define a relationship that we're going to be able to have in the future. This is, you know, I do think all problems should start by, you know, look at the map. And when you see what Iraq is, it's where the Shi'a world meets the Sunni world; it's where the Kurdish world meets the Arab world. It's in a very important position in the world. And so we want it to be successful and we want to have a long-term relationship.

This election has -- this election process has been a tough one. And you know, when you sit down with parliamentarians and you try to crank out an election law, which should be a bunch of technical aspects of how you're going to run an election, and then you find that sometimes people will -- you know, everything gets held up over some issue that you don't really think is that important. But again, you've got respect the fact that they think it's important, even if you don't think it's important.

So you know, we spent days talking about the distribution of seats. You know, their desire, essentially, to gerrymander seats so that everyone would know in advance who would get the seats in one area -- that is Kirkuk.

So I thought, boy, this whole election's going to hang on Kirkuk. So finally, we came up with a solution to it, but then it was important only until people decided it wasn't important. And then even the solution we had that everyone agreed to -- you know, people kind of moved on. They didn't really care. Emotions receded and then on we were to the next issue.

So I'd like to -- you know, as Americans, you want to sort of impose not only how we think elections ought to happen -- although, frankly, we've had some of our problems and we're not the only ones aware of our problems. Other people know we've had problems. But you want to sort of impose that process, but you've got to be very respectful of what they're dealing with.

MODERATOR: Well, talk about what I think has been the most publicized problem here leading up to the election, which is the disqualification of about 500 people, which is now reduced, I guess, to about 120 or so?

HILL: Well, actually, it's reduced even less than that.

What happened was you have a situation in Iraq -- not unlike in post-war Germany -- and by the way, that's the only World War II analogy you'll hear from me -- but you know, de-Ba'athification and de-Nazification.

All right, so this is -- de-Ba'athification is a very emotional issue in Iraq. I mean, people really worry about this stuff. It's not something that, you know, is something that only a few people are concerned about.

So the issue was that there was a so-called de-Ba'athification commission that was set up by the U.S., you know, when were there as sort of viceroy back in '03. And it is worth recalling that back in '03, we named the head of the de-Ba'athification committee: a gentleman named Ahmed Chalabi. I mean, he was named by the United States. And you know, I'm not a history junky, but I think it is worth recalled, you know, sometimes where problems begin.

And so lo and behold, two years ago they disband that committee; everyone scatters, except Mr. Chalabi thinks that he should the head of the new committee whose membership they were never able to constitute. So it's been a tough issue when several -- a couple of the major coalitions -- Shi'a coalitions -- were running on a de-Ba'athification platform -- the need to get rid of Ba'athists.

Now, some people were doing this, to be frank, because it was a way to get at people. You know, a way to say: I think you're a Ba'athist and I'm going to make sure you're on the de-Ba'athification list. So a sort of targeting of political opponents -- no question that went on.

There are also people who saw, because Ba'athism was statistically -- if you look at senior leadership of the Ba'athist Party -- more Sunni than say, Shi'a, there was some perception that some of it was an attack on the Sunnis. And certainly the Sunnis felt that, even though when you looked at this list of 511, it somewhere around 60 percent Shi'a. But nonetheless, the impression was that it was a -- it was an attack on Sunni politicians.

But you know, the situation gets even more complicated when you had time and time again people in Iraq suggesting that somehow the U.S was in favor of the Ba'athists. Now, for most Americans this is astounding, because after all, we invaded the country; we, you know, we've lost many thousands of U.S. troops --

MODERATOR: To get rid of the Ba'athists.

HILL: -- to get rid of the Ba'athists. So how in the world could anyone think that our interest in Iraq was somehow was to have a restitution of Ba'athist authority?

And so then, I think it is worth spending a little time on history. It is worth going back and looking at the 1960s when the perception in Iraq, when we were very much concerned about making sure that Iraq did not become a Soviet-sponsored, communist-client state. And so lo and behold, in '68 when the Ba'athists emerged, many people said, Aha! This is what the U.S. did. They wanted to get rid of the communists and so they supported Ba'athism as the alternative.

So fast forward now and we have this situation where people -- people in Iraq, they look at the strength of our concerns about Iran -- and by the way, they are well considered concerns about Iran; we can talk about that later -- and they say, Aha! The U.S. is so concerned about Iran and somehow, that means they would -- really would like to support the Ba'athists.

So incredibly enough, as I went around town convincing people that this process you've got with Ahmed Chalabi coming back from the crypt and somehow being in the middle of this de-Ba'athification, this process, you know, lacks transparency; it lacks buy-in from major parts of the electorate and therefore, you've got to be very careful about how you're doing this. This is perceived as somehow the U.S. somehow wants to see Ba'athists back.

So you've got to respect that and try to deal with that and say 100 times a day that no, we don't want the Ba'athists back.

MODERATOR: Well, you know, Ahmed Chalabi -- it's not really that he has come back from the crypt. He never actually got in the crypt, did he?

HILL: Well, I'm not suggesting that he -- (laughter).

MODERATOR: But let me ask -- I mean, what is it -- both you and General Odierno said this week that -- said pretty clearly that he was an agent working for Iran. What's his constituency besides Iran? Why is he allowed -- you know, the Iraqis, as you pointed out, have not hesitated to criticize the United States for interfering in the election. We believe that Iran is directly interfering in the election. How come they haven't been criticized in the same way there?

And from whence -- I know I've asked you this before -- but from whence derives Chalabi's power? Why is he still there? Whose interest does he serve?

HILL: Well, thanks for asking that again, since the first time you asked me I said, "It beats the heck out of me." (Laughter). But I think -- I think Chalabi -- you're right. He's never quite departed the scene. He's been a player there. He obviously has some key relationships within the Shi'a community. He's not to be -- he's got key relationships among emigre Iraqis, many of whom are indeed back in Iraq.

But we also know he spent a lot of time visiting people in Tehran. He's spent a lot of time in Iran dealing with various people who are interested in Iraq. And when you look at Iran's interest in Iraq, it goes way back. And I mean, and you go into these sort of cosmic questions of where -- where is Shi'a -- where's the center of Shi'ism? Is it Najaf; is it Qom? I mean, what is it?

I mean, it goes into the Iran-Iraq relationship should not be just defined in terms of our presence. I mean, that's sort of an American notion that somehow it's all about us and it's not all about us. It's something much deeper. So there are sort of legitimate historical connections there, but the problem we find today is that Iran is very much evident in Iraq in terms of training various insurgency groups -- Shi'a groups; providing equipment. I mean, when -- in some of the, you know, ordinance that falls on the embassy -- for example, the 107mm rockets -- are made in Iran.

And so we see Chalabi making frequent visits there. We know he's met with -- as General Odierno pointed out -- we know he's met with Quds Force. It seems to me he ought to come clean, tell us what he's doing there -- what he's been up to. He's a guy who has not really used the institutions of the democracy there. He's not an active member, for example, of the council of representatives -- the parliament. But he's very busy. He has these informal relationships. We know that he reaches out to various clerics, but he's also got his hand in other areas. I mean, he's a very active guy and he's not been afraid to use overseas contacts as well.

MODERATOR: Well, then, I guess my question is: Whose interest is he serving within the Iraqi body politic among the principal parties who could stand up and say, enough of this?

HILL: I think Iraqis should be asking the question: Where is some of the funding coming from for some of these political groups and whether some of the funding comes from Iran? And I think they should be asking Ahmed Chalabi that question.

MODERATOR: And why are they not?

HILL: You know, it's funny. They are going to have -- they have had Iran as a neighbor for a millennium or so or more. They're going to have Iran as a neighbor for another millennium.

You know, it's a neighbor and countries are a little funny about neighbors, because they realize that they can't choose their neighbors. So often when you're talking to Iraqis -- even privately -- they'll say "the country to our east." And the I go, you know, I'm a little dyslexic. Okay, you mean Iran -- the country to our east. They don't even want to mention what the country is. It's the neighbor and I think people are respectful of the fact that they'll wake up the next day and the neighbor's still going to be there.

MODERATOR: I feel a little bit like I'm on "Meet the Press" presenting you with words from your own past, but this is one just from yesterday --

HILL: Oh, my gosh! All right, go ahead.

MODERATOR: -- where you said that "This is an election that in many respects will determine the future of Iraq, the future of the United States and also the future of the U.S. relationship with Iraq."

HILL: I didn't say the Iraq elections would determine the future of the United States.

MODERATOR: Well, that's their transcript.

HILL: That's a misprint. I'm sorry. I didn't say that.

MODERATOR: We'll just stick to the future of the U.S. relationship with Iraq. (Laughter.)

HILL: I mean, maybe the American League pennant race this year will determine the future of the United States, but not that one.

MODERATOR: Oh -- (laughter).

I thought the future of the U.S. relationship with Iraq was set out in the Strategic Framework Agreement.

HILL: I think it's very true.

MODERATOR: How would various electoral outcomes here determine differences in how the agreement is implemented?

HILL: Well, I think, first of all, our interest in a long-term relationship with Iraq rests on our interests with a long-term relationship with a democratic Iraq. Our interests -- our understanding of how the Kurds, for example, play a role in Iraq is an understanding that Kurds will only be in Iraq insofar as there's an Iraq that lives up to its democratic constitution. So democracy is a key element of our relationship with Iraq and our long-term relationship with Iraq.

So when you look at the importance of this election, this is very much an Iraqi election where this is a -- you know, they are organizing this; they are doing this. We are there to be helpful; we're there to point out concerns we have. But people often say to me, what's your leverage?

I'll tell you what our leverage is. Our leverage is not somehow threatening to withdraw troops or threatening to invade some boardroom with troops. Our leverage is to say: Iraqis, if you want a good relationship with us -- a long-term relationship with us -- we need to make sure these elections are democratic.

So it is of fundamental importance these elections are handled well. And what I'd like to say is that going through -- going through these past weeks where, you know, it's like some whack-a-mole game. You know, everyday it's something else that pops up and you have to go after that. But I do believe they are going to get to these elections and I do believe that they are elections that the Iraqis are going to be proud of --

MODERATOR: And what's going to happen --

HILL: -- because they are -- they are the Iraqi elections.

Now, what's going to happen? Well, there are five major coalitions. And you know, there are -- it is hard to say who's going to win the election, but I can assure you: No coalition can put together an entire government. They are going to be at best a plurality in the new parliament, the new council of representatives.

So immediately -- a winning coalition, whether it's one of the two Shi'a coalitions or whether it's this secular coalition under Mr. Allawi -- they are immediately going to have to reach out to other partners. So I would predict fairly safely that you're going to have one of the two major Shi'a coalitions. And you have one under Prime Minister Maliki and then you have another coalition -- (inaudible) -- which involves the ISCI Party, but also the Sadarists -- and one of those two coalitions will reach out to get a Sunni partner and there are a couple of major Sunni entities out there. And by the way, some of these coalitions are expected to break up the day after the election. And so pieces of coalitions will join with pieces of other coalitions.

So I think you'll end up with a Shi'a, a Sunni partner. And then the Kurds will kind of have a look at tall this and the Kurds -- because the Kurds will be the decisive force. I mean, the Kurds are a very powerful force in Iraq, because they can be the ones to determine what the new government's going to be.

You know, when I first looked at the Kurdish issue in Iraq -- you know, Foreign Service officers are often looking at, you know, what our -- at our past experiences. So I was thinking, "Oh, it's sort of like Albanians in Serbia. They have this province down there." No. The Kurds have three provinces, it's true, in the KRG, but they also have major players who live and work and have always been in Baghdad.

So the Kurds are going to look at this and they're going to decide, and they probably will be more or less united, although the Kurdish situation is a little more complicated now, because it's not just the two parties. There's a third entity there. And so they will probably join a coalition that they think will meet their interests, and so I think they'll go forward. How long this is going to take, this government formation, that is really the rub.

Now, people -- there's a great deal of concern in Washington, where, when people are not worried about the snowstorm, they're worried about the question of how long this government formation is going to take place. And there's a good reason why people are worried, because when you go back to '05, this government formation took so long that problems were brewing out there in the provinces, especially these provinces where there's Sunni and Shi'a living together. And so, before you knew it, you had an insurgency which grew up during the vacuum created during this government formation period.

So one of the concerns we've had is to make sure that there is the caretaker government, which would be the Maliki government. Whether he succeeds himself or whether someone else does, he has responsibility for running the security services right now. So that government's got to be alert, because there are players out there who do not enjoy broad support; that is, players such as al Qaeda, who basically operate in small cells and operate clandestinely. But they would love to cause major problems here.

So the sooner they can get a government, the better. I'm not willing to say it's going to be a few days, and it might actually take a few months. But what will be important is to have the caretaker government managing things while they put together a new government.

MODERATOR: General Odierno has said, and I believe you've said too, that 60 days -- sort of shooting for within 60 days.

HILL: Yeah, which is two months. So when I said months the other day, I meant sort of two months. I don't want it to be five months.

MODERATOR: And I think he said this week that he was going to, at the end of 60 days, do an evaluation of the security situation based on what was happening politically, and that, as part of that evaluation, he would make some recommendations about deployment of U.S. troops.

Obviously we're supposed to -- combat troops are supposed to pull out about 50,000 troops by the end of August.

HILL: Down to 50,000.

QUESTIONER: Well, there's 100,000 now, and down to 50,000.

HILL: I'm not very good at math, but you're absolutely right. But most people need -- it comes from the Camp Lejeune speech last February. And the point is to get down to 50,000. And we were at about 120,000 last month. And you're right; we've just gone past the 100,000. We'll get to 50,000 by the end of August.

QUESTIONER: And he said that he has the authority to at least make recommendations for contingencies based on his evaluation after those 60 days. Can you see any situation in which that timetable would change, down to 50,000 by the end of August, and basically all troops except whatever training functions remain after --

HILL: You're asking me a hypothetical question. We hate hypothetical questions. I mean, in the junior officer class we're told, "Never entertain a hypothetical question." (Laughter.)

QUESTIONER: That's why you're not in the military. (Laughs.)

HILL: So, look, we believe, as we look at the situation and we look at the likely outcomes, we look at the likely way forward, that we believe we will see a situation that is such that we will get to 50,000. I don't predict earthquakes. You know, obviously there are surprises in Iraq. We obviously have to deal with them. Believe me, there have been incidents in the last few weeks that were of great surprise. We thought something was going to be easy; it became difficult, such as the election law.

We saw something that should have been impossible become easy, such as the code of conduct. Do you realize all the Iraqi parties yesterday signed a code of conduct not to say bad things of each other and agreed to abide by the results of the election, things like that? I'd like to see them try that around here as well. (Laughter.)

So it's really hard to predict, but I can assure you we have the flexibility for, you know, assessing the situation going from there. But right now we do believe that the 60 days following the election are the most critical. We are in strength and in force there, and we do believe we can get to the 50,000 troops, which will involve the U.S. getting out of combat operations.

Now, these are troops. They're combat troops. But they are not involved with combat operations. So we would expect them to be, you know, present in all parts of the country, so we will have coverage throughout the country.

We believe this is a workable system. You know, we didn't arrive at it capriciously. It's all -- it was -- going to 50,000 was an initiative of President Obama, but it's also in the overall framework of a security agreement that was reached with the Iraqi government in November and December '08.

So, you know, inshallah. I mean, we will see. But we do believe that we can get there.

MODERATOR: We'd like to invite the audience to join in now. As we usually do, if you'd just raise your hand, I'll call on you. Wait for the microphone. Stand up. Identify yourself and your affiliation. And I know you will all keep your questions concise so that we have time for lots of them.

David.

QUESTIONER: David Ignatius from The Washington Post.

Say a bit more, Ambassador Hill, about the Iranians in Iraq. If you put yourself in the mind of the head of the Qods Force, Qasem Sulemani, what does he see from Tehran when he looks across the border? And what do you think is the likelihood that, after the elections, there will be a government that really is prepared to resist Iranian pressure in Iraq?

HILL: First of all, we think the Iraqi government has been resisting Iranian pressure. That's been ongoing.

As for what the Iranian desiderata in Iraq, what are they trying to do, it's often opaque to us. But it seems to be a real concern that somehow Iraq can become a Sunni-minority country again, though they seem to want very much that the Shi'a somehow join together and that it should be not only Shi'a-led, but maybe Shi'a-only government. So we see signs of that.

I mean, mind you, you know, the Iranians don't have sort of "Meet the Press" Sunday-morning shows and, you know, discuss what their objectives are. But it seems to want to be Shi'a. They seem to not welcome the fact that Iraq has begun to reach out to other Arab states. For example, there's an improving relationship with Egypt. There are some feelers between Iraq and Saudi Arabia.

The Iranians certainly don't welcome an objective that we have for Iraq, which is to be attached to the neighborhood and to have -- even though most of the neighbors, almost all the neighbors, are Sunni-led states, for them to understand that a Shi'a-led Iraq is also in their interest.

The Iranians seem to want to detach them from that. And I think it's fair to say Iran has a desire to see a weak neighbor that would be susceptible to their pressure and to be very much under their indirect control. Some of the provinces in Iraq are very much organically linked to Iran in the sense of water supply and electricity.

When you look at the sort of religious tourism, which is an enormous issue in southern Iraq, you see that the majority of people are from Iran. So there are a lot of sort of cultural ties that bind the countries. But I think Iran wants to see a closer relationship -- a special relationship with Iraq and a relationship that Iraq does not enjoy anywhere else. And they certainly don't want to see us there.

QUESTIONER: Ambassador Hill, my name is Irvin Hicks. I'm with the State Department's Office of Rightsizing, M/PRI. We recently visited posts, actually last -- two weeks ago.

HILL: How'd we do? Are we okay?

QUESTIONER: Well, we're going to see.

HILL: You going to cut my position there? (Laughter.) That's fine with me. (Laughs.)

QUESTIONER: The question I have for you, sir, is that, on the one hand, the Office of Inspector General said that the embassy was too large, and Ambassador Ford was quoted as saying that you need to plus up to 3,000. And so as we move forward and want to be an enabler to the post, can you give a sense as to your perspective and which direction the mission should go?

HILL: You know, I think, in the long term, in the fullness of time, you know, we have an embassy that is right now the largest in the world. You know, Iraq is not the largest country in the world. I would expect to have an embassy that's appropriately sized for a country of some 30 million people with some substantial economic activities, because I think one of the very important developments in Iraq recently is the fact that they have worked -- they have signed lease agreements with the major oil companies. And, you know, within 10 years, if all goes well and if the infrastructure gets built, you know, you can look at Iraq in the neighborhood of a 10-million-barrels-per-day oil producer, which is sort of Saudi-like, four times the size of the Iranians.

So it's going to be an important player, and I think it should have an embassy that's sized appropriately for being an important regional player. That's the long term.

In fact, though, as we get to that longer term where, I think, the embassy will get smaller, we need to get bigger before we get smaller. And that has to do with the fact that we have worked very assiduously with our military colleagues on an overall plan, a joint plan, where we will, in fact, take over.

The embassy will take over a lot of responsibilities now being held by the military. So among these will be police training, which has been a military responsibility and converts over to the State Department. So we will be adding just a couple of hundred positions there. So, you know, I can see it going from an embassy that's currently housing some, you know, 1,100 or so to an embassy that could be housing 1,300 people in the short run before it comes down in the longer run.

Now, if you look at our embassy housing -- and this is a subject very dear to my heart because, you know, we have embassy housing; we're configured for about 700 people, and yet we've got about 1,100 people on the compound. Now, how do we do that? And the answer is you take one-bedroom apartments, living room and bedroom, and you take sheetrock and essentially divide the living room and put a doorway into it such that you have this tiny area that, when you enter the apartment, you have this area off of what is essentially a kitchenette where you might be able to put a couple of chairs and a table. And then you have two bedrooms and they share a bathroom. You know, this is not ideal.

Now, a lot of people point out it's better than containerized housing units, which is where we were a few years ago. And, you know, I meet a lot of people who were in Iraq a few years ago and they say, "Oh, you know, people shouldn't complain. You should see the way it was when we were there. I know about your log cabins," et cetera, et cetera.

But, you know, in the long run, you know, we're not going to be able to attract people when they're, you know, two to a one-bedroom apartment. I mean, we have a situation where, you know, when people come to Iraq, they fill out a questionnaire; you know, "Do you play music in your room? What time do you like to go to bed at night?" you know, this sort of thing. I mean, it's like college. And, you know, I didn't have that great a time in college -- (inaudible).

So we are going to get bigger. This problem is going to get more severe before, we hope -- inshallah -- that, you know, the police training will work; we'll begin to withdraw police trainers. The security situation, that is one of the major drivers of cost; you know, when you look at the costs of some of these provincial reconstruction teams, these sort of satellite embassies that we have out there. And we're looking at enduring-presence posts, possibly two consulates, possibly three other posts.

You know, the cost of these things is enormous, because, you know, to get to them, to provide life support, you need helicopters, et cetera. So we would like to see a situation where this gets normal, but it's going to take a while. And what is most important right now is we need to be able to tell the military we've got this under control.

And we spend a lot of time on transition. We sit in meeting after meeting going through every element of it. This Joint Campaign Plan, the JCP, in the embassy under a guy named Ambassador Cameron Munter on our side, and then on the military side they have a lot of planners, and we're taking 1,300 tasks that the military is doing. We're either putting them to the Iraqis, discontinuing them, or putting them over to the embassy, and a lot of them are going over to the embassy.

So we have to be able to take that up. And we will do it, because, I tell you, we've got to get this done, and we're going to play to win. So, you know, no one is going to be able to say that the civilians somehow didn't get it. We got it.

QUESTIONER: Thank you. Mr. Ambassador, I'm David Short with FedEx.

I'd like to pick up on the insight you shared with us a few minutes ago about the upcoming elections and ask if it would be fair to conclude that the likelihood is that the cabinet we face after the March elections will be substantially different from the players that we're dealing with today and that we've been dealing with under Prime Minister Maliki, and also if policies and agreements entered into by the Maliki regime today or tomorrow or next week will likely be honored by the new government that emerges or if American business should be prepared that it may not be. Thank you.

HILL: Yeah, on that second point, so far, so good. I mean, the idea they're going to relitigate contracts or something, we have gone over that with all of the various coalitions to emphasize the very strong view that they should not do this. We've emphasized the importance of national reputation of Iraq and the fact that they cannot spend time relitigating contracts.

There was some effort -- you know, in Iraq, it's never over till it's over. And, you know, we've found in some cases there was an effort to relitigate, for example, some of the oil deals that were signed after the June round. And when they saw there were some differences emerging in November, there was some effort to look at these things again.

Ultimately the government went ahead, understanding that relitigating contracts is not a good idea for Iraq's international reputation. So we have been all over that like a rug, because, you know, if this is all going to work, if Iraq is going to be this partner that we talk about for the long run, they've got to get the economy really cranked up. And that involves honoring the contracts.

I have not gotten any push back from any politician on this. They get it. That doesn't mean it's not going to come up, but I can assure you we've got a very strong commercial section. They're very aggressive on these sorts of things. We will continue to be all over that.

Now, on the issue of, you know, who might re-emerge in a future cabinet, I don't know. I will say that a lot of the people that, you know, our businesses have worked with in the ministries, I would be very surprised if these people somehow disappeared. I think you will see a lot of familiar faces. I'm sure there will be a lot of changes in ministries, obviously, but you'll see a lot of familiar faces. And so -- and if you have to meet new friends, we'll introduce you to new friends. And, you know, we'll work that.

But, you know, in a real sense, Iraq has got to pick up the pace on these economic issues. And one way you pick up the pace is not doing everything two or three times. I mean, you've really got to sort of say, "That's been raised, resolved. Let's move on to the next problem."

It is gratifying -- you know, we have a very strong economic team, very strong commercial team in the embassy, and it's kind of gratifying that we're on to those issues and we're able to talk about those things and it's not just talking about the security situation, which, you know, in the past took up 95 percent of the time.

I mean, we had what we believed to be a very successful conference in Washington last October. We had actually Dan Christman there from the Chamber. We believe that really was an eye opener for the Iraqis. They saw that we have a great interest, but they also saw that, you know, American business has some choices out there. It doesn't have to all be -- you know, if things aren't going to work in Iraq, they'll take their business elsewhere.

So I think the more we can get Iraqis out of Iraq to, you know, see what's going on -- the British did a very good conference in London, I think, last June. The Koreans are bringing 50 business CEOs to Baghdad in about -- I think it's in about a week's time, at the end of February. So more and more, they're getting accustomed to international business and accustomed to what international business practices are.

QUESTIONER: Henri Barkey from the Carnegie Endowment.

I wanted to ask you about the Saudi relationship, which I don't understand very well. On the one hand, we see the Saudis being very worried about Iran and the nuclear program. On the other hand, they seem to have given up on Baghdad and they think that Baghdad is nothing but a surrogate of Tehran. Why is it that the Saudis are not trying to do something to stop -- prevent Baghdad from becoming more of an Iranian client state? What can be done?

HILL: Yeah. I think countries that are concerned about the growing relationships with Iran should be more active in Iraq, as your question suggests. We see Turkey being very active in Iraq. Now, I think Turkey wants a good relationship with Iraq. But I think the effect of it is to be some kind of counterbalance to the Iranian relationships which, as I said, are cultural, are religious in some cases, are commercial, but also are very malevolent in other cases.

So I think one of the issues is Iraq has elections coming up. A number of countries, when they make the decision to be present in Iraq, are looking at the question of, you know, who's going to win. I'm not in a position to tell you why the Saudis might move more quickly or less quickly, but I suspect we'll be able to judge their intentions better by the -- after the election and to see whether they're prepared to move quickly with the new government, as many countries have suggested that they will.

You know, Iraq is -- the concept of a democratic Iraq, an Iraq that is Shi'a-led but, obviously, a state where the Sunnis and the Kurds play key roles -- it's a new concept in the Middle East. And I think some of the countries have moved very cautiously. And we'd, obviously, like everyone to move a little faster in this.

QUESTIONER: Ude Abudi. Mr. Ambassador, you talked about history. In 1925, when the British helped create Iraq, they drafted a very democratic constitution that has elections. Iraq was more cohesive than today. But the flow in Iraqi society was the army, every two or three years, would have a coup de tat that would be enterprising.

If you go back to that time when the Turks were in Iraq, the first secret Arab political societies were by Iraqis in the Turkish army.

So what assurances do we have that, after we leave, that the Iraqi forces don't have militias and groups that are -- (inaudible) -- from Iran or Syria or --

HILL: Yeah. Well, again, I think what's important for Iraqis to understand is the U.S. desire of a long-term relationship. What we don't want is a situation where there's some perception that the U.S. is leaving and then the neighbors begin a sort of great game and, you know, vie for influence out of a perception that there's a vacuum that's being created.

We have no interest in a vacuum there. We have a very large embassy. We're going to have a large economic presence. I mean, some of our largest companies are already there. Exxon-Mobil is there. Occidental Oil is there. We've got, you know, a number of oil service companies there. I mean, I think we're going to have a big presence there.

What are the guarantees that the history in 1925 won't repeat itself? You know, I think, you know, it's a very different -- it's a very different external environment for Iraq. I do believe that the more international firms that are there, I think, the better for Iraq. I think it's encouraging that all permanent members of the U.N. Security Council have major oil deals in Iraq and, therefore, investments in Iraq's success.

You know, I think to see -- you know, to be able to talk to the Russian ambassador there, and they have very similar views, I think is a very gratifying thing and -- when we have that kind of relationship there.

You know, because of the improvement in the security situation, I've been able to get out to almost all the provinces in Iraq, which was -- you know, could not be done by my predecessors due to security. And it was just -- it's been striking, you know, to go to some of these campuses -- I was at the University of Baghdad a couple of weeks ago and, you know, talking to these students. And, you know, they didn't talk to me about the Sunnis and the Shi'a and, you know, Article 140 of the constitution as the solution for Kirkuk.

They want to know, you know, are the oil companies coming in? Are they going to recognize these engineering degrees from Baghdad? You know, what do they need to do to assure that their degrees are going to be acceptable to international firms? You know, know can we improve our English in how can we improve, you know, relationships with American universities? Can we do more on distance learning? You know, this sort of thing.

It's what these kids are all asking. I mean, they're all very much wanting to be part of sort of global climate -- I mean, a global, you know, interaction and education. I was up in Erbil talking to Saladdin students there -- the same reaction. I mean, it's kind of gratifying that they kind of got it. And I must say one of these kids came up to me and said I just want to talk to some native speaker to really work on my English. And I said, well, I think we've got some various programs. And this kid said, well, you know, can't something be done more quickly?

So I took the kid's e-mail address, gave it to my daughter in college. She contacted the kid, and they spent two hours on Skype on Sunday. I mean, this is the kind of -- for those of you who don't know, Skype is a sort of video thing that -- (laughter) -- most parents are very well aware of.

But I mean, this is kind of encouraging that that's what these kids want. And, you know, maybe there was an equivalent of that in 1925, but I kind of doubt it.

QUESTIONER: (Off mike.)

HILL: I know about the security services. I know we've got problems. I know we've got, you know, issues where security services have multiplied, there are too many of them and, you know, they've got look very carefully at how these things are run and what the civilian control -- and believe me, this is one of the issues in the campaign; the question of how the current prime minister is handling security services.

But, you know, there's also been some very tough security problems out there. So I think, you know, we have to, in some ways, give the Iraqis some credit for identifying their own problems and for finding their own solutions to those problems. We can be helpful. We can kind of lay it out for them, but they are going to have to make that a priority to make sure the security services are properly -- the people in them are properly vetted, and they also need to make sure that you don't have militias.

But if you compare the militia problem today versus the militia problem, I don't know, three years ago, it's an enormous improvement. And that's what we've got to continue to build on.

I mean, I was out in Anbar about two weeks ago and, you know, talking to tribal sheiks there. I mean, it's just night and day what they're dealing with in terms of militia problems. But the security is not what we'd like it to be, but we have to stay on it. That's the only answer I can give you at this point.

QUESTIONER: Ambassador, Doug Ollivant.

Can you talk to us a little bit about what you think your Office of Military Cooperation looks like on January 1, 2012?

HILL: You know, we're obviously studying that issue because, you know, every normal embassy in the world has an office -- has a defense attache and an office of security cooperation. We're obviously, you know, going to look carefully at it, but I think what's also important is to know what the cooperation is going to look like and, in particular, we want to hear from the new Iraqi government on this issue and how they perceive it.

I think these need to be programs where there is a meeting of minds between the Iraqis and the U.S. And while we've done some internal planning of what this might look like, we need to sit down and hear from the Iraqis what they would like to see.

I suspect they would like to see some kind of relationships, but we need to see that and, therefore, we need to wait for the elections.

QUESTIONER: Hani Findakly, Potomac Capital. You mentioned correctly the importance of the reset (ph) of the economy. And to my mind, there are a couple of very important issues about the economy beyond security. One is the rampant corruption that seems to be prevalent right now from the president down to the little clerks in government.

What do you think can be done to deal with this issue of corruption and get it going?

The second issue is just on the economy. Iraq seems to be still in the Chapter 11 U.N. Security Council --

HILL: Chapter 7.

QUESTIONER: Chapter 7.

HILL: Chapter 11 is something else. (Laughter.)

QUESTIONER: It has put them in Chapter 11. (Laughs.)

They have been under that sanction since 1991, and they have not been taken out. And I understood from talking to Iraqi officials that the U.S. has promised, as part of the protocol, to do something about this. Why is it still under sanctions? Why do they still continue to owe billions of dollars to -- (inaudible)?

HILL: Yeah. First of all, on corruption, I mean, we have Ambassador Joe Stafford at the embassy who deals with anti-corruption initiatives. I mean, the first thing you want to sort of publicize your efforts. You want people to at least be ashamed of corruption.

The second thing is you want to kind of strengthen internal controls as you would in a corporation, let alone in a country. So, you know, we have a lot of anti-corruption programs, I think, like in any country -- and I don't think Iraq has a corner on corruption. I think a lot of countries have that problem, and it's got to be -- you've got to have more transparency. You've got to have, you know, a rule of law that, you know, we have judges that are prepared to mete out sentences for when people are caught. And, you know, you have to have an electorate that's kind of, you know, ready to, you know, throw politicians out of office who are perceived as corrupt.

So, again, I don't think there's any magic formula. I think corruption is usually part and parcel of overall sort of stage of development. And, again, I don't think Iraqis are any more corrupt than anyone else. I kind of wonder about some of these analyses that would suggest they're like kind of the most corrupt country in the world. First of all, I'm not sure how you really get at that.

And I think it reflects weak institutions and, you know, opaque systems that lack transparency. And I think you've just got to keep working on getting those things together. We're doing that.

You know, frankly, there's actually been some -- you know, the way they handle the oil bids, I mean, you know, those -- the way those two bid rounds were done, I mean, that was not someone going into a tent and coming out with an oil concession. I mean, that was a national TV, live, hotel, big Plexiglas box where the government floor price was put into the, you know, box in an envelope where the oil firms interested in bidding on it would go up, put their envelopes into this four-sided, Plexiglas, you know, see-through box. People would open the thing, read the thing out loud on live TV to show precisely what the bid was from the various international oil companies.

You know, the fact that they've got that -- and it's pretty unusual, and I think they learned some of it from the Norwegians. They've had various, you know, technical assistance. We were involved with that as well. I think it's a good sign because they're very sensitive to the fact they don't want people to perceive that there was corruption in the allocation of the oil.

So I think, you know, that's a good sign that they're sensitive, and we'll see how they do in the future. But, I mean, you know, it's obviously a major effort for us to try to help them on that.

On the Chapter 7 issue, you know, 20 years after this -- after the really brutal invasion of Kuwait -- and it was brutal. I mean, the Iraqis went in there and destroyed things and sold things. And so it's not surprising that there were kind of some tough measures taken against Iraq in the wake of their Kuwait adventure, not at all surprising.

The issue is how do we handle it now. You know, we're looking at some of the key aspects of the Chapter 7. One is the issue of Iraq complying with the border as delineated by the U.N. It's very -- these are politically sensitive issues, but we are obliged under Article 25 of the security agreement to assist Iraq in getting out of from under Chapter 7.

And so the U.N. is also engaged in trying to be helpful. I've had meetings with UNAMI colleagues, U.N. office colleagues. And I think we look forward, in dealing with the new government, to try to sit down and work through some of these things. We've had a lot of discussions in the foreign ministry, but these are going to require political solutions.

Just a brief note on, you know, we have a very strong U.N. office there. They're under extremely capable guidance in Ad Melkert. And I tell you, when the U.S. and the U.N. work together, we move mountains. I think we can really do a lot there together.

And, you know, when he brought, you know, me to his office, the British ambassador, the French ambassador, and we tried to sort of begin to sort through these Chapter 7 issues, I think we'll get there, but we need an Iraqi interlocutor. And that will come with the new elections.

Not to put too much weight on these new elections, but they are important. (Laughter.)

MODERATOR: We have time for one more really quick question.

QUESTIONER: Thanks. Sam Steedy (ph).

Ambassador, going back to our question about -- or your point about education capacity building, a few years ago, Dubai was able to lure several western universities to establish satellite campuses. I'm just wondering how far you think Iraq is in terms of being able to provide these -- the security, safety, and economic incentive to accomplish similar things.

HILL: Yeah. They're probably not there yet, but they're getting there. And there is a real thirst for education. I mean, this is a country that is very proud of its educational traditions. You know, sadly, many of these things were under-invested in during the Saddam period. So there's a lot of work that needs to be done.

But I found it rather extraordinary that, as we put together the Fulbright Program which depended on matching funds from the Iraqis, we got the matching funds very quickly. And so Iraq now has the largest Fulbright Program in the entire Middle East.

The Iraqi -- Prime Minister Malaki has had a program to send Iraqi students abroad. There is a real -- you know, education is a major issue there. What I want to make sure is, when we get U.S. universities that come there and sign memorandum of understandings with these Iraqi universities, they need to understand that this is a big deal for Iraqi universities. I mean, this is a very big deal.

And so, you know, I'm often, you know, getting quizzed about, well, what happened to, you know, University X because they signed this thing and we haven't heard from them; we want to get going on it.

They really want to see these things happen. I think -- you know, I keep coming back to oil and we did not fight this war for oil. You know, I don't want to suggest that oil was the issue here, but, you know, they will have the money to do some important things in these human-investment questions like education.

But I tell you, if you could have been there with me out at Baghdad University, these kids just wanting to have these contacts and, you know, get on with their education. I mean, it was really quite moving, and I would really like to see us pick up the pace in the -- over there.

I would just like to say that, first of all, I know there's so many distinguished people here, but I'm just so honored that Senator John Warner is here in the front row. And Senator Warner and I worked a lot together on places like Kosovo and, you know, Macedonia.

Senator Warner came there and, during the whole, you know, North Korea stuff. And I'd like to point out to people that they have never restarted the reactor that they blew -- (laughter). Everyone should know that. Is doesn't mean they're good guys, but they never restarted the reactor. And tell your editorial page that, too. (Laughter.)

I worked so hard with Senator Warner. He gave me so much support, and I just want to acknowledge him here.

Thank you very much, Senator, for coming.

MODERATOR: Ambassador Hill, thank you so much, as always, for -- (audio break.)

HILL: Thank you. (Applause.)

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