Order Code RS21867
Updated July 13, 2007
U.S. Embassy in Iraq
Susan B. Epstein
Specialist in Foreign Policy and Trade
Foreign Affairs, Defense, and Trade Division
Summary
Concerns about the U.S. Embassy in Iraq have surfaced regarding the quality of
construction and reported assertions of trafficking-like labor practices by First Kuwaiti
General Trade and Contracting Company, the primary builder of the U.S. embassy in
Baghdad.
The Bush Administration’s FY2008 budget request includes $65 million for base
funding for operations in Iraq. In addition, the Administration requested $823.9 million
for mission operations in an FY2007 supplemental request and another $1.9 million for
mission operations in an FY2008 emergency request. On May 24, 2007, Congress
passed a compromise supplemental appropriation (H.R. 2206), which the President
signed into law (P.L. 110-28) on May 25. The enacted law included $750 million for
State Department operations in Iraq.
A previous emergency supplemental appropriation (H.R. 1268/P.L. 109-13), signed
into law on May 11, 2005, included $592 million for embassy construction — all that
is needed for construction of the U.S. Embassy in Baghdad, according to the Department
of State. Completion of the embassy is expected by the end of the 2007 summer. This
report will be updated as information becomes available.
Background
From July 17, 1979, when Saddam Hussein first came to power in Iraq, until just
prior to the beginning of Operation Desert Storm in January 1991, the United States had
full diplomatic relations with Saddam Hussein’s government. On January 12, 1991, four
days before Operation Desert Storm, the United States closed its embassy doors in
Baghdad. At the time of its closing, the U.S. Embassy in Baghdad maintained a staff of
approximately 50 and an annual budget of $3.5 million. From 1991 until 2004, the
United States did not have diplomatic relations with Iraq.
With Saddam Hussein removed from power and the United States and its partners
militarily occupying the country, the Bush Administration handed over government self-
rule to the Iraqis on June 28, 2004. Part of the transition toward self-rule for Iraq is also

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a transition for the United States from being a military occupier to reestablishing normal
diplomatic ties with an independent Iraq.
Organizational Structure
The U.S. Ambassador to Iraq (Ambassador Ryan Crocker) has full authority for the
American presence in Iraq with two exceptions: 1 — military and security matters which
are under the authority of General Patraeus, the U.S. Commander of the Multinational
Force-Iraq (MNF-I), and 2 — staff working for international organizations. In areas
where diplomacy, military, and/or security activities overlap, the Ambassador and the
U.S. commander continue cooperating to provide co-equal authority regarding what’s best
for America and its interests in Iraq.
The U.S. Embassy in Baghdad is among the largest American embassies in both staff
size and budget. According to the State Department, the U.S. Mission in Baghdad is
staffed with about 1,000 Americans representing various U.S. government agencies and
between 200 and 300 direct hires and locally engaged staff (LES, formerly referred to as
foreign service nationals, or FSN).
Americans representing about 12 government agencies are providing the face of
America in the embassy and regional offices in Iraq. The agencies include the
Departments of State (DOS), Defense (DOD), Agriculture (USDA), Commerce (DoC),
Homeland Security (DHS), Health and Human Services (HHS), Justice (DoJ), Labor
(DoL), Transportation (DoT), Treasury, and the Agency for International Development
(USAID). Agencies that did not recommend staff for an Iraq presence include
Departments of Energy, the Interior, and Veterans Affairs, as well as NASA, Peace Corps,
Secret Service, and Social Security.
The United States has a number of experts from the various agencies on the ground
in Iraq working as teams (Provincial Reconstruction Teams — PRTs) to determine such
needs as security, skills, expenditures, contracting and logistics, communications/
information technology, and real estate. The State Department is in the process of adding
10 Embedded PRTs (EPRTs). Additionally, the United States has consultants from the
agencies working in an ongoing basis with the various Iraqi ministries such as the Iraqi
Health Ministry, Education Ministry, Foreign Ministry, Ministry of Oil, etc. to help Iraq
gain a strong foothold on democracy and administrative skills.
In addition to the current level of U.S. personnel in Iraq, the Bush Administration
announced its intention of establishing a Civilian Reserve Corps of skilled civilians to
send overseas. According to Secretary Rice’s testimony before the House Foreign Affairs
Committee on February 7, 2007, the President’s plan includes sending a “surge” of
another 350 civilians to Iraq. Secretary Rice went on to say that DOD has agreed to fill
many of those positions with Reservists until the State Department can recruit civilians
for the long-term Civilian Response [Reserve] Corps.
Location, Security, and the Role of U.S. Diplomatic Posts in Iraq
The State Department has been using three sites for embassy-related needs. The sites
are the Chancery, formerly a Baathist residence which was later occupied by the U.S.

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Army; the Annex (the Republican Palace) previously used by the CPA; and the
Ambassador’s residence, once occupied by Ambassadors Bremer, Negoponte, and
Khalilzad. The U.S. government is not paying Iraq for the use of property and buildings,
according to the State Department. The Iraqi government has reportedly requested that
these facilities be returned to it, with improvements, which State Department officials say
will happen when the New Embassy Compound (NEC) is completed in 2007. On
October 31, 2004, the United States and Iraqi Ministry of Foreign Affairs signed an
agreement on diplomatic and consular property. Among other things, this agreement
transferred to the United States title to a site for the new American Embassy compound
and future consulate sites in Basra and Mosul. State’s Overseas Buildings Operations
(OBO) identified a 104-acre site for a NEC on a site adjacent to the Tigris River in the
Green Zone. OBO claims that the NEC is on schedule to open in late summer, 2007.
First Kuwaiti General Trading and Contracting Company (a Kuwaiti company with
ties to Kellogg, Brown, and Root [KBR] in some Defense Department activities) was
selected through a competitive bidding process to build the U.S. embassy in Baghdad,
according to State Department officials. Current controversy with the embassy
construction involves news accounts of First Kuwaiti using improper labor practices and
possibly trafficking in people to build the embassy. According to a State Department
official, a recent Inspector General report determined that reports of improper labor
practices by First Kuwaiti are unfounded.1
Regional teams are located in Mosul, Kirkuk, Basrah, and Hillah; each consists of
limited staff representing DOS, as well as other agencies and contractors in designated
locations. Altogether, about 46 people are spread among the regional offices. Each
regional team’s mission is primarily advising and coordinating with local officials and
interacting with citizens to better understand the attitudes of the Iraqi people toward
America. Both in Baghdad and in the regional offices, American Foreign Service Officers
will be conducting public diplomacy — promoting American values and policies in Iraq.
Beyond the official consulate posts in Iraq, the Department of State has Foreign
Service Officers embedded in major U.S. military commands located outside of Baghdad.
DOS and DOD civilian employees also are at these locations. The State Department
reportedly plans on having a total of 50 personnel in the Iraq provinces, including
diplomatic security personnel.
Security is key to establishing diplomatic relations. The current facilities used by
DOS in Baghdad have been subject to attacks, some of which have injured and killed
Americans. According to the Department of State, Diplomatic Security (DS) has
responsibility for embassy security. Overall security in the country, however, will
continue to be the responsibility of the commander of the multinational forces. DOD and
contractors will continue to be major contributors to a secure atmosphere. Regarding
funding of security activities, the Administration has determined that security for the
embassy will come from a combination of DOD’s budget, as well as State’s Diplomatic
Security funds.
1 Telephone conversation with a State Department official in the Office of Acquisition
Management, July 12, 2007.

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Funding
For embassy construction: Congress authorized $20 million (P.L. 108-287) for
housing and other expenses incurred prior to construction of the new compound in
Baghdad and $592 million (P.L. 109-13) for construction of the NEC on the 104-acre site.
Department of State officials say that the funding is sufficient and the NEC is on track to
being completed on time — by the end of summer, 2007.
For U.S. operations in Iraq: The FY2008 budget request includes $65 million for
regular funding for operations in Iraq. In addition, the Bush Administration requested
$823.9 million in its FY2007 supplemental request for operations in Iraq and in the
FY2008 emergency request the Administration is seeking an additional $1.9 billion for
operations in Iraq. If Congress were to approve all three requests, it would provide a total
of about $2.8 billion for U.S. State Department operations in Iraq within a year.
Congress passed its FY2007 supplemental appropriation (H.R. 2206) with $750
million for State Department operations in Iraq, $73.9 million less than requested. The
funding is for mission security, logistics support, overhead security (reinforcing roofs and
ceilings to protect against bombs), and information technology. Congress has not yet
considered the FY2008 supplemental request. Some funding for State Department
operations in Iraq also is included in the State, Foreign Operations Appropriation for
FY2008 (H.R. 2764, H. Rept.110-197, S. Rept 110-128).
Congressional Responsibilities
While conducting foreign policy is the prerogative of the President, Congress
maintains three important responsibilities with respect to U.S. foreign policy: 1)
confirmation of political appointees (held by the Senate), 2) appropriations, and 3)
oversight. Congressional opportunities to have input on U.S. diplomatic relations with
Iraq and the embassy can occur within the nomination confirmation process, the annual
State Department appropriation legislation, and biennial foreign relations authorization.

The position of Ambassador to Iraq was initially filled by John Negroponte, who
served from May 2004 to March 2005. Zalmay Khalilzad (formerly the Ambassador to
Afghanistan) is the current U.S. Ambassador to Iraq. Ryan Crocker has been nominated
to replace Ambassador Khalilzad. The Senate Foreign Relations Committee held a
nomination hearing for him on February 15, 2007. He has not yet been confirmed.
Appropriations for the new U.S. Mission in Iraq have come from a variety of
sources. To date, no funds for either the interim buildings or new embassy construction
have come from the regular appropriations process, according to the Department of State.
The initial phase of establishing the U.S. post in Baghdad involved the Administration
finding funds without specific appropriations for the embassy. Subsequently, much of the
total required funding appeared in emergency supplemental requests, CPA funds, and
DOD appropriations rather than in the regular budget. Many have had difficulty in
discerning exactly what the Administration has already received and what is still needed;
what has been spent and what is in the pipeline; what is available for operational activities
of the Mission versus activities related to construction of the new compound.

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Oversight includes congressional monitoring of how the embassy represents
American foreign policy, cultural and commercial interests. While the 108th Congress
was criticized in the media for doing too little oversight in general, and specifically with
transferring of supplemental funds from Afghanistan to Iraq, construction of the new
embassy in Iraq has been a high priority for some Members. Congress can provide the
State Department with authority and direction to implement new programs or new
emphasis on existing programs, and can set reporting requirements on spending or
conducting such activities.

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