VZCZCXRO2858
PP RUEHBC RUEHDE RUEHDIR RUEHIHL RUEHKUK
DE RUEHGB #2812/01 2460644
ZNY SSSSS ZZH
P 020644Z SEP 08
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 9177
INFO RUCNIRA/IRAN COLLECTIVE PRIORITY
RUCNRAQ/IRAQ COLLECTIVE PRIORITY

S E C R E T SECTION 01 OF 02 BAGHDAD 002812

SIPDIS

E.O. 12958: DECL: 08/29/2018
TAGS: PGOV PREL PINR IR IZ
SUBJECT: KARBALA: IRAN EXERTS HEAVY INFLUENCE THROUGH
TOURISM INDUSTRY

REF: BAGHDAD 2316

Classified By: Deputy Political Counselor Greg D'Elia for reasons 1.4 (
b) and (d).

This is a PRT Karbala Reporting Cable

¶1. (S) Summary: Since Iraq's liberation, Tehran has sought to
increase its sway within Karbala and other key Shi'a holy
cities. Iranian agents make use of direct payments and
business favors to ensure that provincial government figures
remain compliant and favorably inclined to Iranian interests.
Shamsah Travel and Tourism, the dominant organization
handling Iranian pilgrims, is reportedly a front for Iranian
authorities and intelligence activities. While local
politicians and businessmen at times contest Shamsah's reach,
its influence is pervasive. End Summary.

Iran's Karbala Campaign
-----------------------

¶2. (S) As the site of Imam Husayn's martyrdom, and the
birthplace of the twelfth imam, Karbala holds tremendous
religious significance for Shi'a Muslims in general and
Iranian "twelvers" in particular. Iraq's liberation in 2003
has led to a dramatic increase in travel from Iran, providing
Tehran with the opportunity to increase its control here.
Iran's Karbala campaign can be divided into two phases,
according to knowledgeable contacts. The first, beginning
with the liberation and lasting until 2006, featured the
ham-fisted backing of militias such as the Jaysh al-Mahdi
(JAM) and the Badr Corps. As it became clear that Karbala
residents were fed up with violence and blamed Iran, Tehran
shifted to the more subtle tack of using its funds to build
relationships with local government officials in order to
solidify the central role of Iranian businesses in the
province -- especially businesses servicing the estimated one
million religious visitors per year traveling to Karbala from
Iran.

¶3. (S) By stressing its religious duty to help maintain the
shrines of Imam Husayn and Imam Abbas, and its obligation to
look after Iranian citizens here, Tehran is able to dress its
Karbala operations in the cloak of legitimacy. According to
government and private-sector contacts, the mechanism through
which it exerts its influence is Shamsah Travel and Tourism.
They describe Shamsah as an umbrella organization comprising
some 2,500 Iranian companies, closely linked to the Iranian
Government. Because of Shamsah's reported size and reach,
and because our contacts in local government and the tourism
industry are adamant that it faces no competition from other
Iranian entities, we believe Shamsah is identifiable with the
Kosar Organization. Described by the National Council of
Resistance of Iran as the soft arm of the Qods Force, Kosar
is designed to set up logistics support for Iranian agents
through business and charitable activities.

Shamsah's Agents
----------------

¶4. (S) Out of 170 hospitality enterprises (hotels,
restaurants, travel and tourism businesses) that applied to
Shamsah in 2007 for the opportunity to provide services to
Iranian visitors in Karbala, only six were selected
initially. Contacts report that Shamsah's primary agent is a
50-something former resident of Kut named Kareem al-Musawi.
He operates two tourism companies selected: Al-Diyar and
Al-Janoub. Described as motivated by money, he also owns
several hotels, a mineral water company, and a dairy. Some
of these businesses allegedly were financed by Tehran, along
with homes in the Islamic Republic that he visits regularly.
Al-Musawi is widely perceived here as having access to
"unlimited" Iranian funding. He distributes 10,000-dinar
(800 USD) "grants" to the poor and is believed to financially
support Provincial Council (PC) Acting Chairman Abd al-Al
al-Yasiri (ISCI), according to multiple contacts in local
government.

¶5. (S) Another important Shamsah agent is Mohammad al-Yakubi,
a Fadilah-affiliated PC member. He controls the Al-Rafideen
and Qasr al-Mustafa tourism companies here and is the uncle
of Hamoud Mohsen al-Yakubi, chairman of the National Tourism
Committee. A third Shamsah agent identified by our contacts
is Abd al-Kareem al-Unayzi, a Da'wa-affiliated member of the
Iraqi Council of Representatives (CoR). He owns the Al-Taf
Travel Agency in Karbala. The sixth hospitality business
Shamsah selected is the Jarash Company; our contacts do not
know who owns it.

¶6. (S) Within the last six months, Shamsah reportedly
selected two more local affiliates: The Sadr

BAGHDAD 00002812 002 OF 002


organization-controlled Al-Sununu Travel Agency and the
Al-Manar Company for Tourism, which is owned by Hadi
al-Amari, chairman of the CoR's Security and Defense
Committee. The eight companies selected by Shamsah agreed to
arrange to house, feed, and transport Iranian pilgrims for
136 USD each for seven days (four nights in Karbala and three
nights in Najaf), according to our contacts. As the primary
agent, al-Musawi receives 25 USD out of every 136 USD payment
and, in exchange, coerces local hotels into servicing the
Iranians for 111 USD each, even though this amount barely
covers costs. Our contacts report that al-Musawi threatens
to withdraw the Iranian business if the hotel owners balk;
with the majority of visitors to Karbala coming from the
Islamic Republic, hoteliers face a Hobson's choice between
empty rooms and rooms full of underpaying guests.

The Central Kitchen
-------------------

¶7. (S) In early 2007, Shamsah opened the Central Kitchen (aka
the Iranian Kitchen) in Karbala. Publicly, at least, the
idea was to provide Iranians with food to which they were
accustomed; Persian pilgrims supposedly had complained that
they could not stomach the local Iraqi fare. In the run-up
to last year's Shabaniyah observances, local hoteliers,
butchers, and green grocers -- seeing the Central Kitchen,
with its imported foods and workers, as an intensification of
Shamsah's threat to their livelihoods -- complained to Abd
al-Mahdi al-Karbala'i, Grand Ayatollah al-Sistani's deputy.
Al-Karbala'i contacted the PC, which then voted to close the
Central Kitchen. Al-Musawi countered by lobbying individual
PC members -- particularly al-Yasiri -- and prevailing upon
the eight local companies with which Shamsah does business to
write to Governor Aqeel Hamoud al-Khazali asking for the PC's
decision to be overruled. Our PC and tourism industry
contacts claim that Iranian Ambassador Hasan Kadhum Qomi
personally lobbied PC Tourism Committee Chairman Hasan
al-Furati, and that al-Musawi threatened to "crush and kill"
some of the hotel owners (Note: One hotel owner told us
that he was informed by a friend at the Interior Ministry
that a "file" had been opened on him at al-Musawi's behest
and that his case was being examined by Karbala intelligence
chief Gen. Razaq, aka "Abu Amal," who belongs to ISCI/Badr.
End Note.)

¶8. (S) In response to the lobbying and letters, Aqeel asked
Karbala's Hotel and Restaurant League for its opinion on the
Central Kitchen. The League responded that its members had
no objection to the Central Kitchen per se, but insisted that
it use Iraqi workers and purchase food and supplies from
Iraqi vendors. The PC, meanwhile, formed a special
committee, led by member Hamid al-Turfi (ISCI), to study the
issue. In January, 2008, al-Turfi's committee upheld the
decision to close the Central Kitchen. It defiantly remained
open until March, 2008, when it forcibly was closed by the
Iraqi Police.

Comment
-------

¶9. (S) As many Karbala pilgrims inevitably hail from Iran,
the dominance of an Iranian-connected company should not
surprise, though Shamsah,s coercive methods and reputed
proxy intelligence role send a disturbing signal. Acting PC
Chairman Al-Yasiri's incompetence (see reftel) and the
Central Kitchen brouhaha show that Iranian actors in the
region, economic or otherwise, are not infallible. PRT has
concerns that Shamsah Director al-Musawi and his confreres
are hard at work lining the pockets of likely candidates in
the provincial elections. Al-Yasiri's survival to date,
attributable to the PC's failure in several attempts to
assemble a quorum for a vote to oust him, wryly has been
described by some here as a "miracle;" official contacts
suggest Iranian money convinced some members not to appear.
The longer that provincial elections are delayed, the more
time Tehran and its local allies have to cook up similar,
unpleasant, surprises. End comment.
BUTENIS