Anxious to keep lid on Iraq, Obama woos Kurds
* White House quietly grants concessions to Kurds
* Worries about Iraq's stability with U.S. troops gone
* Critics say Obama hopes to keep Iraq below voters' radar
By Alister Bull
WASHINGTON, April 17 (Reuters) - President Barack Obama, facing a damaging election-year problem if Iraq's political crisis worsens, has launched an urgent behind-the-scenes push to ease tensions between the Baghdad central government and the Kurds.
Masoud Barzani, president of the Kurds' semi-autonomous regional government, paid a quiet visit to the White House on April 4 and left with backing for two long-standing requests that could help build the worried Kurds' confidence in U.S. support.
Barzani's heated criticism last month of Iraqi Prime Minister Nuri al-Maliki has fanned concern the country could splinter, potentially setting off a fresh civil war.
Reuters has learned that to demonstrate U.S. support, the White House and Congress agreed to lift a designation that treats Kurdistan's two main political parties as if they were terrorist groups, complicating members' travel to the United States. In addition, the U.S. consulate in Arbil will begin issuing U.S. visas before the end of 2012.
Since withdrawing the last U.S. troops in December, Obama has, at least publicly, put little focus on Iraq, and critics view the latest gestures as not much more than damage control.
But Obama still has a lot at stake in Iraq. If violence explodes, it could tarnish Obama's bragging rights with U.S. voters for concluding the unpopular war.
And worsening relations between the Shi'ite-led central government and semi-autonomous Kurdistan could thwart White House efforts to lower gasoline prices. The Kurds halted oil exports to Baghdad on April 1, citing a payment dispute.
Barzani last month delivered a sharp denunciation of Maliki's government and suggested he could seek a referendum of some kind on the Kurdish region's relations with Baghdad - although he stopped far short of breaking a taboo by making explicit reference to independence.
Analysts say the probability of the Kurds declaring independence is low, although not zero.
"If Kurds were to declare independence in the near term there is a very high likelihood that that would provoke a war with Baghdad," said Kenneth Pollack, a former CIA analyst.
The White House promises to the Kurdish president "constitute useful takeaways for Barzani but they are probably about the absolute minimum that he would have found acceptable," said Pollack, now a senior fellow at the Brookings Institution's Saban Center for Middle East Policy.
The goal of the Washington meetings in early April, both the White House and the Kurds said, was to re-commit to a relationship that both value. Obama dropped in on one of the meetings Vice President Joe Biden hosted for Barzani that day.
Biden assured Barzani of U.S. backing for the Kurds, but he also cautioned that Washington could not pick sides between Kurdistan and Baghdad, a senior administration official said.
"Neither relationship can come at the expense of the other relationship," the official said. "A red line for us is that all this must be done in a way that is consistent with the (Iraqi) constitution."
Iraq boasts some of the world's largest oil reserves and could provide essential extra production capacity to help stabilize world oil markets, at a moment when gasoline prices are one of the most pressing issues for U.S. voters.
And while foreign policy hasn't yet been a major factor in the U.S. presidential campaign, both parties are likely to sharpen their focus on it ahead of the one-year anniversary of Osama bin Laden's killing by U.S. commandos on May 2.
Qubad Talabani, son of Iraqi President Jalal Talabani and the representative for the Kurdistan Regional Government in Washington, said the Kurdish delegation was happy with Biden's words of support to Barzani.
"The reaffirmation of the commitment to Kurdistan and the Kurdish people went down very well," he said.
"For us, we're naturally an insecure people, and given the history that we've had, we're expecting at some point or another to be let down again," he said.
The Kurds, severely persecuted under late Iraqi dictator Saddam Hussein, have become increasingly nervous since U.S. troops left.
Indeed, the troop departure was followed almost immediately by a political crisis sparked by Maliki's demand for the arrest of a Sunni Muslim vice president, who fled to Kurdistan, where Barzani defied the prime minister by granting him shelter.
SEE NO EVIL
Critics of Obama's Iraq policy complain that the White House is primarily concerned on keeping a lid on events until after the Nov. 6 U.S. election.
"I think the administration is of the mind-set of 'see no evil, hear no evil' and it wants Iraq to be invisible for the political debate in the United States," said Ned Parker, a visiting fellow at the Council on Foreign Relations.
To encourage the Kurds to remain within Iraq's political process, the administration is bowing to their long-standing plea to amend the status of the main political parties, the Patriotic Union of Kurdistan (PUK) and Kurdistan Democratic Party (KDP). Under the U.S. Immigration and Nationality Act, members of the groups are deemed to be engaged in terrorist activity.
This is not as severe as being designated as a terrorist organization by the U.S. State Department. But it means that members of these organizations must get a government exemption to visit or stay in the United States.
An aide to Senator Joe Lieberman, chairman of the Senate Homeland Security Committee, said Lieberman was working on legislation to remove the designation.
In addition, the U.S. decision to begin issuing visas from its consulate in Arbil from the end of 2012 will save Kurds who want to visit the United States the expense and hazard of journeying to Baghdad to get a visa or traveling to a U.S. consulate outside of Iraq.
State Department spokesman Michael Lavallee confirmed this move, which had been long sought by the Kurds, but stressed in a statement that it was part of a broader effort to "work with the government of Iraq to continue to normalize our consular services throughout the country."
OIL SAFETY VALVE
U.S. officials also offered to help the Kurds in talks with Baghdad to resolve the oil payments dispute and get the exports flowing once again, the Kurds said.
The amounts involved are modest - around 50,000 barrels per day from Kurdistan compared with Iraq's national output of some 2.6 million barrels, according to published 2011 estimates by the U.S. Central Intelligence Agency.
But the dispute highlights the country's ongoing failure to agree to a national oil law, potentially dampening the willingness of big foreign oil firms to make the investments necessary to exploit these resources.
The Kurds currently have no independent export route for their oil outside of the central government.
"They have a lot of potential," said Ben Lando of the Iraq Oil Report. "There are substantial oil and gas reserves but there has not been a qualified number put on that and in many places exploration is still ongoing." (Editing By Warren Strobel and Eric Beech)
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