And youve got five trillion dollars of outstanding obligations now that somebody has to deal with. Thats in the current of housing finance. Thats not in the future. So, somebody has got to deal with that. And whether its fannie or freddie or somebody else, i mean, thats, i think, a decision that congress has to make, not fhfa. Let me switch topics here for just a minute. That has to do with the mortgage debt relief act. Director watt, i dont think any state has felt the impact of falling home values more than the state of nevada. Congress passed mortgage debt relief act to ensure those who owe more on their mortgages than they do on their homes are now worth would not be hit with additional income taxes. Im not going to ask your opinion on the irs or thank you. On income taxes. But i think its unfortunate. No one gets hit more than lowincome, middleincome families. I think its unfair and i think most would concur that its unfair, that individuals would have to pay taxes on income that they have never received. So i guess quickly, do you have any picture in your mind of what the consequences would be if we did not extend the mortgage debt relief act and retroactively for this year or extend it into next year . It would certainly have severe consequences for a number of decisions. But, again, thats a decision that congress has to make. I cant make it. And what ive realized is that sometimes expressing my opinion on things that i cant influence have more negative impacts than they have positive impacts. Well, we look to you from time to time, director watt, we do look to you well, i appreciate everybody looking to me, but its just you know, im in a difficult position. And i dont want to have a negative outcome as a result of something that i say. So i think i try to stay in my lane doing the things that fhfa has either perceived or real control over and trying to do those well and effectively. Director, thank you for being here today. Mr. Chairman, thank you. I would like to thank director watt for his testimony and for his on Going Service to our country. This hearing is adjourned. Businessman donald trump will be speaking at the Economic Club of washington, d. C. Tonight. Hes expected to talk about his political aspirations and entrance into the citys business community. The trumps, by the way, are planning to turn the post office into a highend hotel and shopping area. Youll be able to see his comments tonight starting at 7 00 eastern on cspan, and 8 00 eastern on cspan3, a House Veterans Affairs subcommittee examines Military Cemetery operations with a close look at expanding the cemetery system and improving assistance to families. 8 00 eastern on cspan3. Now, officials from the British ForeignOffice Update the committee on the u. K. s Foreign Policy on kurdistan in iraq. They answer about u. K. Business invests in iraq and the role of nato in providing nonlethal weaponry support. Order, order. Can i welcome members of the public to the sitting of the Foreign Affairs select committee, its our third and final evidence session of our committee into kurdistan and on this occasion were taking evidence from the Foreign Office. And are delighted to welcome the parliamentary under secretary of state at the office. So welcome. And can i also welcome Edward Oakden whos the director of the middle east and Foreign Office. I welcome you both. Minister, its now three months since mr. Abadie was installed in baghdad. Have you made any assessment of how hes getting on . What are the prosspeblths for him having a more inclunsive government . Thank you for the opportunity to appear in front of you and thank you for the work you are doing not just in the region, the country but the middle east as well. It helps our work, the governments work, that the British Parliament is engaging in trying to understand these issues in furthering british influence. Im very grateful for what you are doing, i understand you have had a very interesting visit yourself and im pleased to be here. You ask a simple question. It is a short amount of time that hes been in place, but if we look back in june of this year where things stood with isil moving down the tigres and euphrates river, things looked bleak. The mosul dam potentially could have been blown up. Baghdad itself was under threat. And we look at today and we see that maliki is no longer there, abadi is in place, he has a more inclusive government than anybody expected to produce. And think if you look back at when the last time the government was formed, the length of time it took for the cabinet members be announced, i think we should be ploeased wit the progress that actually has been made. C n the coalition itself is now an International Coalition thats been formed of over 60 nations, able to hold back and deter isil, allowing the space for the depleted armed forces of iraq to reinvigorate, train and themselves provide a ground capability to take on isil. Im not complacent and we shouldnt be naive, its going to be a longterm game here, we should not expect results certainly overnight. But considering where we were in june to where we are today, i think we should be pleased with the progress. And this inquirely is about kurdistan, but have you got a view as to how reaching out to the sunni communities in iraq and getting the cohesion from the shia and sunnis . This is the big challenge that the new Prime Minister and president actually face. And the appointment of the defense minister, abadi, a sunni himself, and the speaker in the parliament as well, engaging with senior representatives is so important. We have to remember and you im sure will witness this on your visit of how disenfranchised that the sunnis were in the maliki regime. And this is why its so important, that we engage not just in Anbar Province, but the whole of the northwest of iraq. They have been scarred, i think, by recent events in the sunni community. We also have to remember how diverse that community is. There isnt a single sunni voice that represents everybody in the northwest of iraq and that i think is the challenge of bringing people back to the table, recognizing that the baghdad government represents them all. And looks to the future. Theres a lot of talk about it being their last chance while you were down there. Is that how you see it . That is, i think, a little sensationalist to say, theres no doubt that there is the frustration that we saw under maliki, you had sunni demonstrators coming out, wanting a better life, better representation, and it was the baghdad government that attacked them. So theres massive distrust, no doubt about it. And theres the complications of the relationship that im pleased to see moving forward with the kurdistan region as well. I dont take away from perhaps the implication, the fact that life is very, very tough and its good that the International Community is reengaging with this part of the region in trying to facilitate a solution. Thank you. Side, while we were down there, we were well aware about the nature of the dispute between irbill and baghdad about oil revenues, payments in general. I am very happy you have been able to welcome an interim agreement on this. Could you tell us about the agreement and did the u. K. Play a part in brokering it or did they do it themselves . The grg agreement is very its worth stepping back and saying that iraq has a country is fortunate to be sitting on such enormous mineral wealth, it provides that vision, the direction of travel of where the country should aspire to spend that wealth wisely, on thursday, an interim deal was signed so this i hope will be the beginning of further discussions and agreements that will take place between baghdad and irbil. But essentially the agreement was a lump sum of 500 million which was granted to irbil and this was to pay for a number of outstanding debts, legacy debts. In addition to that, theres also a Licensing Agreement of 150,000 barrels to be sold with essentially the blessing of baghdad and this was perhaps the difficulty that the last couple of months that we have seen in irbil having invested in pipelines, able to secure routes to export the oil, or not being able to do it with the legitimacy perhaps the rest of the world and indeed baghdad wanted to see. And on the i mean this is an interim agreement, theres a lot more to come, is there any role for the u. K. In helping them reach a final conclusion on this . Well, we could be selfish and say we have a british interest in this, its 50 of the Oil Production in iraq is actually thanks to British Companies, bp and shell mostly, involved in that. So we want to see the country prosper. We want to see British Companies do well in the region. But yes, i think there is a role. I stood up in the Foreign Office questions when i was asked this very same question, soosay would britain participate in facilitating discussions, and im pleased to say that our embassy has been very active with talks on both sides to encourage voices to come together. This is a priority for the country, no matter where in the region youre in. The overreliance, perhaps, on hydro carbons is huge. In the region of 1 employment, but 93 of the revenues actually come from hidrocarbons, 63 of the gdp, therefore the country enormously relies on finding oil and producing it and exporting. So im pleased that theres an interim deal, which i hope will be the first consolidated deal in the future. Not least with the disputed areas of kirkuk that still need to be reconciled. But this is the direction i hope we continue down. What remains britishs interest. I think its difficult to say we want to see British Companies flo flourish there, we want a safe environment for are International Companies to operate and we want to see the oil move to parts of the world and not have legal question marksover whether or not it can be indeed purchased, and thats taking place. I think were heading in the right direction. As you know, iraq and kurdistan is sitting on a lot of gas, in fact a huge amount of gas. If we piped up into europe, it would address the overreliance on russias supplies. Is there any role for britain in facilitating that . I think this is something that is worth investigating and worth further discussions and something i think the embassy may have some thoughts on this. But certainly, youre right to say that the potential for in Northern Iraq is actually huge, its a lot of it is untapped and i think it will help the country for many, many years to come. I need to say, mr. Chairman, that shell are doing a major gasification project in the south and it would be logical for they or others to look at the north as well. But thats obviously, will need will be easier once there is a resolution of the share of the energy resources. Getting a final agreement is a little more important . Yes, sir. Perhaps its not going too far to use terminology such as last chance, as it was echoed by the foreign secretary in a question from the floor of the house. There is a question that this is the last chance for the politics of the situation. Just very briefly, before turning to the iraqi arm. You had a new Prime Minister, we had elections, but are you at all concerned that the immediate the politicians, the administrators, the bureaucrats, have essentially remained the same . And doesnt that bode ill when it comes to trying to encourage a more inclusive Foreign Policy . When you have replaced that tier below, and this is very important given the absence of the bureaucracy and the backup that we could associate, arent you at all concerned about that . It depends on what you mean by concern. In one respect, having these voices participate and engage with government, it depends on the authority of the Prime Minister and the president of course and whether theyre able to yield that authority. But were aware, maliki now continues to be involved, but he continues to be inside the tent. Theres also the question mark as i alluded to earlier, as to who are the sunni representatives. I was, i think, forth right in saying there is a diverse mix of tribes in the sunni area, they do not speak with one voice and therefore requesting the sunni leaders to actually come forward, not lead, because were not to that yet, but half the country is at war. Its engaging in an incredible battle, to, im sure we will touch on that, in the west. And therefore you want to attract these people absolutely to the table. They may not be in the position to come to the table. They continue to be but are you satisfied, minister, that there is enough tangible evidence of an inclusive approach of the new administration . At least an attempt. Is there even an attempt to reach out . We have very much encouraged that. I know you have encouraged it, but are you seeing evidence of it. I have seen a number of posts that have been filled by sunnis that we want to see involved are yet unable to do so because of the geographical terrain. Theyre not able to represent or even participate. Theyre out in the country, theyre in exile as well. But we need to be careful by wanting to pict selected, the first 11, if you like, and say these are actually better people to have. We have done that in other countries, actually keeping alive a person who we might make as a future president of a country or a Prime Minister or Something Like that that didnt turn out to always go the way we wanted it to be. What im saying is theres been an absence of an inclusive form of government. Which has alienated the sunnis in the north. That has been part of the problem. Lets part from that for the moment. Lets turn to the iraqi army, trained by the americans, fully equipped, brought up to their numerical strength, very strong, and yet fled at the first signs of trouble. Are we being naive in believing that you can meld different tribes, different cultures, given the 600year history of the region in one force and expect them to take on a position from which a large part of their army is recruited . I dont agree with your inf introduction and description of the iraqi army. You think the iraqis did well. No, theyre not as strong as you are suggesting they were, this was back in june before they sort of dropped their guns and ran. When they did drop their guns, they were full strength, well equipped, had been trained by the americans and equipped for a period of years and at the first sign of trouble, they ran. That is to gloss over the leadership that was actually looking over the iraqi forces, these were shia generals placed in there by maliki himself. He was actually running the show, perhaps he was concerned about their own power, their own authority, therefore the good sunni leaders and others who operated under a structure which you and i are very familiar with having both served, that was removed, not only was it removed, but also the support element from the americans was also removed. Maliki requested that that end, and therefor these generals were answering directly to malikis office, and when the attack actually came in, the orders were not there to coordinate activity, and that is why many of the generals werent sure of actually what to do to provide that mutual support. Not only that, they were serving in a sunni area themselves and through that perhaps a complex environment led to the forces themselves crumbling, much faster than perhaps we would have anticipated. You would put this down to an issue more of an issue of leadership rather than trying to meld a united force at a different ethnic mix, religions, cultures. The lesson has been learned from there and what general allen is now seeking to do is to create a National Guard which actually does work on what youre implying, is that there is a myriad, a complex sort of tapestry of ethnic groupings and each area will be able to develop its own National Guard but answerable to senior authority. Thats the direction of travel, what the americans are now focusing on and that is what i think is best suited for that particular country. Okay, and finally, it appears that the uk is offering little or no assistance to the isf, why is that and is there any plans for that to change . I wouldnt agree with that at all. We are currently involved in air strikes which is assisting the Ground Forces in iraq, as you are aware, there are sortes, over 80 combat missions that have taken place. Were also providing important intelligence gaining thats needed. And also, part of the coalition, so you may want to see the british flag doing x, y, or z, but were doing whats been asked of us. If there is more to be asked, if the Iraqi Government wants us to do more, we will certainly consider it, but were part of a 60strong coalition. And i think we are doing as much as we can and we will certainly consider any request to actually do more. Okay. Thank you. Gentleman welcome, minister, can i just raise to the committees attention my members interest. I have a Family Business in iraq and kurdistan and advise a number of companies as well as i cochair the party group for krg. Thank you very much. For the record. Thank you very much, chairman. Minister, one of the first countries to offer help to both the Kurdistan Regional government and to the baghdad government was iran through the Iranian Revolutionary guards and in the battle against is, i think this is the front lines we were told. Rtn across from kirkuk all the way to do you welcome engagement to the revolutionary guard in the battle against isis in iraq and the gifting of equipment to the kurds, were told they had heavy artillery, and some ammunition from warhouses in baghdad . Im going to invite edward to say in a second a couple of words on the relationship, the longterm relationship, because hes very familiar having served in the region. I woul