Thursday, August 2, 2012. Chaos and violence continue, Nouri fumes as Turkey visits Kirkuk, Allawi makes a high profile stop in the region, is the Dept of Veterans Affairs violating US law, what is controlling ownership, and more.
With the non-stop wars of the last years, there are a large number of veterans in the US population. Some of them would like to start their own businesses. Gordon Block (Watertown Daily Times) reports on "soldiers and veterans" who turned out for a seminar on that topic that New York Governor Andrew Cuomo was behind. Those attending were able to ineract with "Empire State Development; the Departments of State, Labor, and Taxation and Finance; the state Liquor Authority and the Workers' Compensation Board." Governor Cuomo's Deputy Secretary for Civil Rights, Alphonso B. David, explains, "We want them to understand there are these resources." This week the Deputy Administrator of the US Small Business Administration Marie C. Johns explored the topic at The Huffington Post and noted, "In fact, over nine percent of veterans start or purchase a business once they return home. And the ripple effect of their entrepreneurial spirit is evident in the rate of small business ownership across the nation. Currently, there are over two million veteran entrepreneurs employing close to six million people across the nation."
Veteran businesses, Congress was told today, that apply for to be recognized as such by the VA suffer from a 60% initial rejection rate and there is a 40% rejection rate for those who apply a second time. The VA's Leney stated that the VA believed, this year alone, 59 businesses had fraudulently applied for veteran status and that they had referred those 59 to the Office of Inspector General. This is more than double the 2011 numbers (25 referred) and 2012 is not yet over.
Chair Marlin Stutzman: Everyone here knows about the problems VA has had implementing the small business provisions of a series of public laws beginning Public Law 109-461 and we'll hear more about it today, I'm sure. While addressing those continuing issues is important, especially those that may include criminal activity, the past is not my focus today. I want to know how and -- equally important -- when VA will put in place the systems and the policies that will shorten the time, decrease the level of effort needed to pass muster to lower the costs and finally create a community of veteran owned businesses that is reasonably free from unqualified companies. This is not just a VA task. There are issues we in Congress need to deal with as well.
"We have patiently waited for signs of progress following the installation of a new Executive Director of Smll and Veteran Business Programs at the VA," declared Chair Bill Johnson this morning. "And while some improvements have been made, unfortunately the goals established nearly a year ago have yet to be achieved. This Committee has an oversight responsibility to the American people to ensure that tax dollars administered by the VA are going to legitimate, qualified, veteran owned businesses. I am hopeful that today's hearing will encourage and assist the VA in reaching their goals of improving the CVE [Center for Veterans Enterprise] once and for all."
Stutzman and Johnson were co-chairing a joint hearing of two House Veterans Affairs subcommittees -- the Subcommittee on Economic Opportunity (Johnson) and the Subcommittee on Oversight and Investigation (Stutzman).
The first panel was the Executive Director of VA's Office of Small and Disadvantaged Business Utilization, Thomas Leney. That's what we're emphasizing today because I want it on the record here that the Congress believes the VA is not in compliance with the law. In addition, we're going to note the most puzzling and troubling moment of the hearing. This also took place on the first panel. If you're a veteran wanting to start a small business, you may need money. One way to get money for your business is to bring in investors. But while, in the real world, doing that will not penalize you, in the faux world of VA classifications, it turns out many veteran owned businesses are not getting recognized as such -- which can mean that they are not allowed to bid for VA contracts. VA is operating under a defintion of ownership and control that is unique to the world of VA and clearly puzzled the members of Subcommittees -- Democrats and Republicans.
First up, the issue of the law. Excerpt:
Chair Bill Johnson: Mr. Leney, you heard the quote I read just a little bit before from the Federal District Judge for the District of Columbia. He said "several of the groups cited by the CVE as a basis for denying the application for inclusion in the VetBiz VIP database are described in such generalized and ambiguous terms that the Court is essentially left to guess as to the precise basis for the agency's decision." So what steps has the CVE taken to ensure that decisions for appeals are sufficiently reasoned so that, if the issue does go to court, a judge can properly exercise judicial review.
Thomas Leney: Uh -- sir, I find that, uh, judicial concern, uh, troubling --
Chair Bill Johnson: Okay, I know you find it troubling. And we've got a lot of witnesses to hear from today. I don't want to -- I don't want to spin our wheels. Have you made any improvements as a result of that District Judge's findings and the input that we've given you from this Committee -- Subcommittee -- to make sure that appeals are sufficiently reasoned to make sure that they can be understood? Has any action been taken?
Thomas Leney: Yes, sir. As I mentioned in my oral statement every request for reconsideration receives a legal review from our Office of General Counsel on the basis of are we prepared to defend it in court?
Chair Bill Johnson: Have you made any changes to your process to make sure that they are --
Thomas Leney: That is the change to the process. Every one of our requests for reconsideration receives a legal review.
Chair Bill Johnson: Okay. And that wasn't being done prior to --
Thomas Leney: That was not being done prior.
Chair Bill Johnson: Does -- does VA possess the necessary expertice in making determinations of ownership under their current process?
Thomas Leney: Yes, sir.
Chair Bill Johnson: Okay. Does -- VA does not allow for affiliatons whereas because you testified a few minutes ago that because your processes are consistent, your regulations are consistent with SBA regulations if I heard you correct.
Thomas Leney: Yes, sir.
Chair BIll Johnson: The VA does not allow for affiliatons whereas government-wide rules do allow for affiliatons. Why is there a difference between SBA and VA's interpretation?
Thomas Leney: Sir, in response to engagement with this Committee, we undertook a review of our regulation with respect to 13 CFR 125 and 13 CFR 124 which are the SBA regulations. We found that not only are our regulations similar, our interpretations are similar as well. In fact, based on our review to date the SBA regulations routinely reaches similar if not identical decisions as the VA. We have -- We have undertaken a review of the regulation. We're doing that in collaboration with the SBA and, in fact, one of the elements, if you compare the two regulations, our regulation is much more detailed than 13 CFR 125.
Chair Bill Johnson: What about 13 CFR 121, Mr. Leney, that's also a part of this disccusion that describes the intent of the Congress? How do you -- how do you involve 13 CFR 121 in your process?
Thomas Leney: Sir, the 13 CFR 121 is one of the regulations we are now looking at as part of our review of our regulations.
Chair Bill Johnson: But it's been for a long time and we've suggested that you include it for a long time. And you're just now looking at it?
Thomas Leney: Sir, our focus -- my focus has been to implement the regulations that the VA utilizes for the verification program.
Chair Bill Johnson: But shouldn't the regulation be based on the law, Mr. Leney?
Thomas Leney: The regulation, we believe, is based on the law, sir.
Chair Bill Johnson: But not if you exclude, uhm, 121.
Thomas Leney: Sir, like I say, the Secretary [of the VA Eric Shinseki] has directed us to review the regulation. We are doing so in conjunction with the SBA and stakeholders. I cannot -- I cannot speak to why it was not being done previously. But it is being done now.
Chair Bill Johnson: How long have you been here, Mr. Leney?
Thomas Leney: Sir, I've been here a year.
Chair Bill Johnson: And this is not the first time that you've testified before this Subcommittee.
Thomas Leney: This is not the first time.
Chair Bill Johnson: We've talked about 121 before.
Thomas Leney: Yes, sir.
Chair Bill Johnson: Okay. So why are you waiting for the Secretary to tell you to do something that the law clearly requires?
Thomas Leney: Sir, as I stated, my focus has been to implement the regulation that is in place with the VA. That regulation has been long standing and it has been tested. We are now reviewing that regulation based on an extensive series of stakeholder engagements. And I'll be happy to come back and report --
Chair Bill Johnson: You'll get a chance to come back, Mr. Leney, because it's a violation of the law. 121 is part of the process and that's what this Subcommittee demands, it's what the American people demand. That's why we're losing patience with the process -- because we keep making these suggestions and we keep spinning our wheels and chasing this same rabbit around the corner over and over again. So I'm sure I'll have more questions but I'm going to go now to Mr. Stutzman for his questions.
Chair Marlin Stutzman: Thank you, Mr. Chairman. I believe the VA has a fairly robust statistical analysis section. Is that correct?
Thomas Leney: Sir, I can't speak to that. I don't know.
Chair Marlin Stutzman: You don't know that --
Thomas Leney: I don't know the extent of the statistical analysis.
Chair Marlin Stutzman: You do have -- You do have one?
Thomas Leney: I can't speak to that. I do not know.
Now let's move over to issues of ownership and control and, again, we're just on the first panel and the one witness, Thomas Leney.
US House Reps Jerry McNerney and Phil Roe asked about veterans who are turned down despite owning 51% of their company. They can't get a veterans small business contract if they own 51% because that's not "control." Roe explained that if you owned 51% of GM stock, you control General Motors. However, that's not the VA definition. The VA definition is that the owner must have 100% control. There can be partners, but they can't have control or even voting rights because, as the VA is interpreting it, even voting rights waters down control. No, that doesn't make any sense at all.
Chair Bill Johnson: You said you're going towards lines of clear delineation. Give us the definition of control. You ought to be able to do that. You're the Director of this department. Tell this Subcommittee right now, tell the people that are listening today what is the defintion of control if 51% ownership doesn't qualify. What is it?
Thomas Leney: The definition of 100% control is that you can do anything you want with that business, make any decision concerning that business to include selling that business for a dollar and no one else in that business to include other owners -- other minority owners -- can do anything to prevent you from doing so.
Chair Bill Johnson: Mr. Leney, do you know of any business in the world that has more than one owner where that defintion would qualify? Can you name me one business? One?
Thomas Leney: I can name you thousands of businesses
Chair Bill Johnson: Where that definition qualifies?
Thomas Leney: Yes, sir.
Chair Bill Johnson: Under a court of law?
Thomas Leney: Yes, sir.
Chair Bill Johnson: I'd like to see them. Would you write them down and submit them to this Committee?
Thomas Leney: Yes, sir.
Chair Bill Johnson: I'd like you to do that. I'd like to see that.
Those were among the big moments in the hearing today. Time and space permitting, we'll note some other moments from the hearing tomorrow.
Lara Jakes (AP) reports that attempts by the US government to have Ali Mussa Daqduq extradited to the US to stand trial for his part in "the 20007 killings of five American soldiers" has been rebuffed by an Iraqi legal panel composed of three judges whose ruling notes, "It is not possible to hand him over because the charges were dropped in the same case. Therefore, the court decided to reject the request to hand over the Lebanese defendant Ali Mussa Daqduq to the U.S. judicial authorities, and to release him immediately." Back in December, law professor Robert Chesney noted where blame could fall. The list included:
Blame the Maliki administration for intransigence in refusing to let us remove Daqduq during the waning days of our presence, and for now apparently going forward with comically minor charges. Blame the Obama administration for not somehow overcoming that intransigence. Blame critics of the administration who fiercely objected (for reasons that still make little sense to me) to the prospect that Daqduq might be brought into the United States for a military commission trial, making a fetish out of GTMO as the only permitted geographic location for such proceedings. Blame the Obama administration for refusing to use GTMO in the face of such intransigence.
Back in June of 2009, the US began releasing those responsible for the deaths of the five American soldiers. They did so, see the June 9, 2009 snapshot, so that Barack could get a terrorist group to turn over some British corpses. As noted in that snapshot:
CNN reminds the five US soldiers killed "were: Capt. Brian S. Freeman, 31, of Temecula, California; 1st Lt. Jacob N. Fritz, 25, of Verdon, Nebraska; Spc. Johnathan B. Chism, 22, of Gonzales, Louisiana; Pfc. Shawn P. Falter, 25, of Cortland, New York; and Pfc. Johnathon M. Millican, 20, of Trafford, Alabama." Those are the five from January 2007 that al-Khazali and his brother Qais al-Khazali are supposed to be responsible for the deaths of. Qassim Abdul-Zahra and Robert H. Reid (AP) states that Jonathan B. Chism's father Danny Chism is outraged over the release and has declared, "They freed them? The American military did? Somebody needs to answer for it."
December 17, 2011, Charlie Savage (New York Times) reported on what was termed "a move likely to unleash a political backlash inside the United States." What was he reporting on? The White House's decision to release Ali Musa Daqduq to the Iraqi government, the man "accused of helping to orchestrate a January 2007 raid by Shiite militants who wore U.S.-style uniforms and carried forged identity cards. They killed five U.S. soldiers -- one immediately and four others who were kidnapped and later shot and dumped beside a road." Reporting on it the same day, Matt Apuzzo (AP) noted the reactions of two US senators.
Senator Mark Kirk (in a letter before the release): "Daqduq's Iranian paymasters would like nothing more than to see him transferred to Iraqi custody, where they could effectively pressure for his escape or release. We truly hope you will not let that happen."
Senator Saxby Chambliss (after news broke of the release): "Rather than ensure justice for five American soldiers killed by Hezbollah terrorist Ali Musa Daqduq, the administration turned him over to Iraq, once again completely abdicating its responsibility to hold on to deadly terrorists. Given Iraq's history of releasing detainees, I expect it is only a matter of time before this terrorist will be back on the battlefield."
Liz Sly and Peter Finn (Washington Post) reported that US National Security Council spokesperson Tommy Vietor insisted that the White House "sought and received assurances that he will be tried for his crimes." Some assurances. May 7th, Daqduq was cleared of all charges. Senator Kelly Ayotte released a statement that day noting that she and 19 other US Senators lodged their objection to transferring Daqduq July 21, 2011 in a formal letter which "expressed the Senators' concerns that transferring Daqduq to Iraqi custody might result in his release and a return to terrorist activities." Those concerns were dismissed. When the May 7th verdict came down the White House demanded a "do-over" in Iraqi courts. No surprise (except maybe to the White House) the same Iraqi courts cleared Daqduq of the charges which led the July 12th fuming from the White House that appeared to be just for show:
AFP reports that there was an attack on a police patrol in Taji yesterday which led to the deaths of four police officers and that there was an attack on a Taji prison in which four other police officers were killed. Alsumaria reports that the attack started with a bombing at the gate and then assailants stormed the prison where they clashed with prison guards -- they state officials have not released the death tolls -- and they remind something similar happened in Baghdad Tuesday when a car bombing outside the counter-terrorism center was followed by assailants attempting to storm the center leading to five deaths and twenty-seven people being injured. The supposed goal behind the Tuesday attack was to break out forty terrorists including leadership. Of the Tuesday attack, Al Mada notes that there were six suicide bombers outside the center who detonated before assilants attempted to storm the counter-terrorism center. Meanwhile Alsumaria reports that this morning a Baghdad attack using three bombs have left 4 police officers dead and four more injured. All Iraq News reports there has been an armed attack on the Diyala headquarters of Sahwa ("Awakening," "Sons of Iraq") which has claimed the life of 1 and left four more injured. AFP notes a Baghdad car bombing has left 9 people dead and another thirty-two injured, a Kirkuk home invasion left four family members dead (the victims were Turkmen -- parents and two daughters -- and their throats were all slit), three more Kirkuk attacks resulted in the deaths of 7 Iraqi soldiers with eleven more left injured, a Tirkit attack resulted in 4 police officers being shot dead, a Tikrit bombing left 3 Sahwa dead, 1 soldier was shot dead in Dujail with four more kidnapped and a Samarra attack resulted in the death of 1 Sahwa and 1 police officer at the hands of unknown assailants.
Iraq Body Count, an independent tracking database, reports no drop in civilian casualties, with an average of about 4,000 killed per year since 2009. The US troop pullout six months ago has taken the wind out of the sails of many armed groups, especially Shia groups, whose raison d'etre was opposing the occupation. But it has also led to a rebalancing of power in which politicians, militias, "terrorists" and countries in the region are vying for influence. "The main event in Iraq, which was postponed for many years due to the US presence, is the struggle among Iraqis to control the country," argues Michael Knights, a fellow at the Washington Institute for Near East Policy, and author of several books on Iraq. Analysts expect the struggle to continue bubbling along for some time to come. Here are a few of the drivers of conflict in Iraq: Dysfunctional parliament: Iraqi politics are young - only truly born after the US withdrawal - and its players are still learning how to make democracy work. "The main driver of violence in Iraq is the dysfunctionality of the political process and the polarization between [Prime Minister Nouri] al-Maliki and his opponents," says Joost Hiltermann, Iraq analyst with the International Crisis Group. The Shiite rulers do not know how to absorb minorities into the fold, and many questions around the constitution, federalism and power/resource-sharing remain unanswered. The inability to reach agreement has left the government unable to do much of anything: unable to provide basic services (leading to mounting frustration with the government) and unable to properly run its security forces (who cannot contain the insurgents). Without some kind of political consensus on how to run the country, insurgent groups will keep finding fuel to light the fire. Or as one UN analyst put it: "Iraq will be stuck like this until Iraqi politics become mature enough."
With July now seen as the deadliest month in two years, Nouri's government is eager to change the topic and are instead trying to steer the focus to oil. Kadhim Ajrash and Nayla Razzouk (Bloomberg News) report, "Iraq's crude exports in July rose for the third consecutive month to an average of 2.52 million barrels a day, generating sales of $7.5 billion, the head of the country's State Oil Marketing Organization said." AFP adds, "Iraq's revenues from oil, which account for the lion's share of the country's income, were up by about $1 billion in July compared to the month before, an oil ministry spokesman said on Wednesday." The announcement will most likely lead Moqtada al-Sadr's bloc to further question the Ministry of Finance's assertion earlier this week that there was no oil surplus revenues to distribute among the Iraqi people. UPI notes that "independence-minded Kurds seeking their own oil industry and a new bombing offensive by al-Qaida, could cripple Baghdad's ambitions to become the world's top oil producer."
It started late last year with ExxonMobil, then a month ago Chevron joined in, followed this week by Total and nowGazprom. That's four of the world's biggest international oil and gas giants that have defied Baghdad to sign up for concessions to drill for oil in the Kurdistan region of northern Iraq.
Baghdad has blacklisted the oil giants from future bidding rounds for southern fields, and has condemned the sweet deals that the Kurds have been offering as in violation of the Iraqi constitution.
All Iraq News notes Ahmet Davutoglu, Turkey's Foreign Minister, arrived in Erbil yesterday on a regional visit and today he is visting Kirkuk. The outlet states he may visit Baghdad. Al Mada notes that Davutoglu was received yesterday by Kurdish Regional Government, the Minister of the Interior, the Governor of Erbil and other dignataries. Click here for a photo of KRG President Massoud Barzani receving Davutoglu and the KRG press release notes that the two addressed the relationship between their two gvoernments (which has seen increased friendship, the release notes) and discussed economic and energy partnerships as well as the situation in Syria. The Journal of Turkish Weekly adds:
According to the written statement released by the Turkish Foreign Ministry, Davutoglu and Barzani held productive meetings in Irbil about bilateral relations, regional problems and discussed the Syria crisis. According to the statement, Davutoglu and Barzani clarified their satisfaction over the relations and agreed to expand them in all fields, particularly in the fields of economic development and energy. According to statement Davutoglu and Barzani discussed the situation in Syria. "They emphasized that the situation in Syria is grave. Syrian people continue to suffer. Loss of life and destruction are at unprecedented levels. They underlined that the actions of the Syrian regime and its policy to provoke sectarian and ethnic conflict within the country will further deteriorate the situation. The developments in Syria also pose a threat to regional security and stability. This situation is unacceptable by all standards," the statement said.
UPI reports that upon seeing Kirkuk, Davutoglu declared, "This is the most important day of my life. I am visiting Kirkuk, which was always in my dreams. I am happy to be the first Turkish foreign minister to visit Kirkuk in 75 years. Kirkuk will be an eternal city of peace in Iraq where our Turkmen, Kurdish and Arab brothers live together." All that peace talk was apparently too much for Baghdad. UPI notes that the visit resulted in "outrage from the Iraqi government." Basil el-Dabh (Egypt Daily News) also notes, "Iraq's federal government condemned Davuutogulu's visit on Thursday."
Kirkuk is disputed with both Baghdad and the KRG claiming it. We're dropping back to the July 26, 2011 snapshot for more on this issue:
Of greater interest to us (and something's no one's reported on) is the RAND Corporation's report entitled "Managing Arab-Kurd Tensions in Northern Iraq After the Withdrawal of U.S. Troops." The 22-page report, authored by Larry Hanauer, Jeffrey Martini and Omar al-Shahery, markets "CBMs" -- "confidence-building measures" -- while arguing this is the answer. If it strikes you as dangerously simplistic and requiring the the Kurdish region exist in a vacuum where nothing else happens, you may have read the already read the report. CBMs may strike some as what the US military was engaged in after the Iraqi forces from the central government and the Kurdish peshmerga were constantly at one another's throats and the US military entered into a patrol program with the two where they acted as buffer or marriage counselor. (And the report admits CBMs are based on that.) Sunday Prashant Rao (AFP) reported US Col Michael Bowers has announced that, on August 1st, the US military will no longer be patrolling in northern Iraq with the Kurdish forces and forces controlled by Baghdad. That took years. And had outside actors. The authors acknowledge:
Continuing to contain Arab-Kurd tensions will require a neutral third-party arbitrator that can facilitate local CMBs, push for national-level negotiations, and prevent armed conflict between Iraqi and Kurdish troops. While U.S. civilian entities could help implement CMBs and mediate political talks, the continued presence of U.S. military forces within the disputed internal boundaries would be the most effective way to prevent violent conflict between Arabs and Kurds.
As you read over the report, you may be struck by its failure to state the obvious: If the US government really wanted the issue solved, it would have been solved in the early years of the illegal war. They don't want it solved. The Kurds have been the most loyal ally the US has had in the country and, due to that, they don't want to upset them. However, they're not going to pay back the loyalty with actual support, not when there's so much oil at stake. So the Kurds were and will continue to be told their interests matter but the US will continue to blow the Kurdish issues off over and over. Greed trumps loyalty is the message. (If you doubt it, the Constitution guaranteed a census and referendum on Kirkuk by December 31, 2007. Not only did the US government install Nouri al-Maliki as prime minister in 2006, they continued to back him for a second term in 2010 despite his failure to follow the Constitution.)
Along with avoiding that reality, the report seems rather small-minded or, at least, "niche driven." Again, the authors acknowledge that as well noting that they're not presenting a solution to the problems or ways to reach a solution, just ways to kick the can further down the road and, hopefully, there won't be an explosion that forces the issue any time soon. ("Regional and local CBMs have the potential to keep a lid on inter-communal tensions that will, without question, boil beneath the surface for a long time. They cannot, however, resolve what is, at its heart, a strategic political dispute that must be resolved at the national level.") Hopefully? Page nine of the report notes that the consensus of US military, officials, analysts, etc. who have worked on the issue is that -- "given enough time -- Arab and Kurdish participants will eventually have a dispute that leads to violence, which will cause the mechanism to degrade or collapse."
The report notes that, in late 2009, Gen Ray Odierno (top US commander in Iraq at that point) had declared the tensions between Arabs and Kurds to be "the greatest single driver of instability in Iraq." It doesn't note how the US Ambassador to Iraq when Odierno made those remarks was Chris Hill who dismissed talk of tensions as well as the issue of the oil rich and disputed Kirkuk.
These issues are all at play. Further irritating Nouri may be Ayad Allawi's visit. KUNA reports that he is in Anakara meeting with Turkey's Prime Minister Recep Tayyip Erdogan.
In other news, President Barzani has a response to Nouri's whisper campaign. Earlier this week, State of Law was whispering to the press that Barzani would be called before Parliament for questioning. Then the Speaker of Parliament's office weighed in noting that no such request had been made. Al Mada reports today that Barzani states he's more than ready to appear before Parliament and answer questions if called. This not only allows Barzani to appear open to the Iraqi people, it also underscores that Nouri's ongoing refusal to appear before Parliament for questioning is in violation of the Constitution.