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Radical Shiite cleric Muqtada al-Sadr has left Iraq for Iran and no longer has control over all units of his outlawed Mahdi Army, a U.S. commander said Friday. “I personally think it’s fractured somewhat, that they don’t get a whole lot of direct guidelines from [al-Sadr] and that some of these divisions of it are operating on their own,” said Army Col. John Castles, who commands forces in the cleric’s stronghold of Sadr City. Al-Sadr, a Shiite with close ties to Iran’s Islamic government, visits Tehran periodically for what U.S. officials say are consultations on his next tactic to force U.S. troops out of Iraq. He bolted to Iran last winter just as the U.S. launched a reinforcement of nearly 30,000 troops to put down the insurgency in greater Baghdad.

The Mahdi Army, built up by al-Sadr in 2003-04 with the help of Iranian money, is now splintered. Some units formed death squads that invaded Sunni neighborhoods and ambushed American troops.

The Baghdad command has condemned the breakaway units but refrained from antagonizing al-Sadr, who at one time faced a murder warrant from the Baghdad government but now backs candidates for parliament.

Castles’ units also are taking a gingerly approach to the Mahdi fighters who exert control over most parts of Sadr City slums and their 2 million Shiite residents even though the government has outlawed militias.

The 82nd Airborne brigade commander said he has set up only one of his five combat outposts inside Sadr City.

He said he is leaving most security work to the Iraqi police and army as he tries dialogue with Shiite sheiks to bring down violence.

The military terms this an “indirect approach” as opposed to direct military action to achieve objectives.

“I think that many people within Sadr City are threatened by the Mahdi Army, and are doing what they’re doing strictly because they don’t want to suffer the impacts of speaking out against them,” Castles told reporters at the Pentagon in a teleconference.

Sourse: The Washington Examiner

Ultra-hardliners within Iran’s ruling establishment were appointed to a panel monitoring the next legislative elections, raising fears of foul play in a key vote that could determine the shape of the upcoming presidential vote.  Ayatollah Ahmad Jannati and three other arch-conservatives within Iran’s Islamic establishment were appointed as members of the panel monitoring legislative elections due next March, the official IRNA news agency reported Sunday. Their nomination by Iran’s constitutional watchdog, the Guardian Council, sparked fears of mass disqualification of candidates for the race, as was the case in 2004. The four will steer a committee that oversees the elections and approves thousands of other monitors across the country.

The nomination came amid an ongoing power struggle between reformists –who want more overture to the West and less clerical say in running the country– and hardline conservatives who want clerics to maintain complete control over government matters.

The Guardian Council is a powerful oversight body dominated by hard-line clerics that must approve all parliamentary legislation to become law. It also monitors presidential and parliamentary votes.

The council barred thousands of reformist hopefuls from running in the previous parliamentary elections in 2004, leading to a low turnout and giving hardliners control of the legislature. Reformists have denounced that vote as a “historical fiasco.”

A year later, President Mahmoud Ahmadinejad was elected to power. But the hardliner has since lost much of his popularity, and reformists are hoping for a comeback if free and fair parliamentary elections take place.

“The appointments (of ultra-hardliners) increase fears that mass disqualification of reformist candidates will happen again,” said Jafar Kambouzia, a former reformist lawmaker.

Sourse: San Diego Union-Tribune

The United States is on a concerted campaign to discourage foreign energy companies from doing business in Iran. But analysts say Iran’s investment woes are its own fault — it could dodge international pressure and attract more foreign money by simply offering better deals. “They are doing the embargoing for us,” said Mikkal Herberg, a former oil executive now with the National Bureau for Asian Research, a think tank partially funded by the U.S. government. “The terms they offer (to foreign energy companies) for these deals are very poor, with low rates of return against the geopolitical risk,” he said.

Even Chinese firms, eager to invest in troubled countries like Sudan, have been slow to follow through on energy deals in Iran.

The situation shows how domestic politics often hamper Tehran’s ability to withstand Western efforts to curb the country’s controversial nuclear program.

Iran is currently flush with oil revenue, but its economy, reliant on oil and gas, lacks the investment needed to reverse falling oil production. The shortage could seriously weaken the country in future, leaving it more vulnerable to foreign pressure.

U.S. Secretary of State Condoleezza Rice and Defense Secretary Robert Gates continued the push for sanctions against Iran recently, urging allies to support broader financial moves against the country during their Mideast visit.

Iran could do more by sweetening its own foreign deal terms, many oil industry analysts say. But that would run contrary to Iranian President Mahmoud Ahmadinejad’s belief in self-reliance and his goal to channel oil revenues to the country’s poor.

Other conservatives in Iran, like former President Akbar Hashemi Rafsanjani, have pushed for economic reform to attract foreign investment. Leaders like Rafsanjani, who belong to an old guard of conservatives at odds with Ahmadinejad, are thought to hold private control of much of the oil sector.

The basis for Iran’s posture goes back decades. Its constitution prohibits foreign ownership of the country’s energy resources, a reaction to Britain’s near monopoly control of the nation’s oil industry until it was nationalized in the early 1950s.

To attract foreign investment now, Iran offers so-called “buyback” contracts that leave ownership in Iranian hands and pay international energy companies a fixed return to develop oil and gas fields.

But Herberg said the contracts are relatively unattractive because the returns are not equal to the risk of investing in a country with tense international relations.

“What you can earn gives you a rate of return of 6 to 9 percent, maybe 10 percent if you’re lucky,” he said. “In a very low-risk environment, you want to see 10 to 12 percent returns. In a high-risk environment, you need 15 percent plus to make sense.”

Tehran was at odds with China’s Sinopec over the development of the Yadavaran oil field because the company wanted a 15 percent return, and Iran something lower, the managing director of the National Iranian Oil Company, Gholam Hussein Nozari, told the official IRNA news agency in January.

Consistently high oil prices over the past few years have left Iran awash in petroleum revenues, with close to $50 billion in 2006. But the economy lacks the investment it needs to reverse falling oil production, mostly because Iran spends close to $60 billion a year on subsidies for fuel and other goods.

Oil production will decline 5 percent a year unless Iran gets new investment, Akbar Torkan, managing director of Iran’s Pars Oil and Gas Co., was quoted as saying by the semiofficial ISNA news agency in July.

Some experts believe Iran’s oil exports could go to zero within a decade.

All parts of Iran’s energy industry need additional capital, noted Narsi Ghorban, an independent energy consultant based in Tehran — exploration, development, transportation and marketing.

Iran has made some improvements to its buyback contracts over the past few years, extending their duration and allowing a company that discovers a field to develop it.

And last December, NIOC’s director for exploration announced that Tehran would allow production sharing in contracts for the first time, the Economist Intelligence Unit reported.

Although commonly offered by developing countries, such a contract would be a radical departure for Iran, allowing foreign companies a contracted share of production, giving them equity rights without full ownership.

Herberg called it an ingenious way for those in Iran eager for investment to get around the country’s aversion to foreign ownership.

But Alex Forbes, a consultant with U.K.-based Gas Strategies, said he was skeptical that Iran would follow through on the plan.

“I doubt it very much,” he said. “They would have to change their constitution to do that.”

Amy Jaffe, an energy expert at Rice University’s James A. Baker III Institute for Public Policy, noted that Iran lags behind countries like Nigeria that have used production sharing to increase oil output despite their own high risks — in Nigeria’s case, from pipeline attacks and corruption.

“There would be a fairly sizable improvement in investment in Iran’s oil and gas industry if they just offered terms that make sense,” Herberg said.

Sourse: Associated Press