Stunning is the only way to describe what seems to be the precipitous collapse of the Pentagon’s political power in Iraq. Donald Rumsfeld might still have 138,000 troops on the ground, but after the sacking of Ahmad Chalabi last week and the embarrassing tussle over who will head Baghdad’s transitional government, the U.S. military’s assets in Iraq’s fledgling political structure are quickly evaporating.

The old Iraqi Governing Council may have been handpicked by Rumsfeld’s field deputy and occupation overseer Paul Bremer, but now the council is biting back as it takes the lead in shaping the next administration. Pre-empting the desires of both the U.S. and the U.N., the council last week named Iyad Allawi as the prime minister of the regime that will asssume “sovereignty” on June 30. And then, on Tuesday, the same council gave the Bushies another kick in the nuts (and snubbed U.N. envoy Lakhdar Brahimi) when it named its current leader, Ghazi al-Yawer, as president of the new government. To emphasize its cantankerousness, the council then dissolved itself, handing over its functions to the new government it helped to birth.

The announcement of al-Yawer’s selection came after the council angrily and quite publicly rejected the preferred candidate of Rumsfeld and Bremer in spite of U.S. threats not to recognize the council’s choice. Indeed, 81-year-old Adnan Pachachi, who had been pushed as Bremer’s candidate, was forced to withdraw under pressure, if not outright scorn, from the council. Hasn’t someone told these guys that puppets aren’t supposed to act up like this?

But the council members know better than anyone, including their White House patrons, that they currently lack any real popular legitimacy and that the only hope for the incoming government to gain any traction is to publicly bitch-slap its American handlers.

The Americans have plenty of reasons not to be in love with al-Yawer, in spite of the happy face Bush pasted on the whole affair during a Rose Garden press confab. In a recent TV interview, al-Yawer lambasted the U.S. occupation and blamed American bungling for the precarious security situation in Iraq. Bremer and company were also wary about al-Yawer’s commitment to the interim constitution cobbled together earlier this year. And it was al-Yawer who first vocally objected to the American military squeeze on Fallujah back in April, and he took the lead in negotiating the settlement that is now in place.

Al-Yawer has also criticized the resolution that the U.S. and the U.K. put before the United Nations last week as insufficiently recognizing the rights and prerogatives of the incoming Baghdad government. The new president has said he wants Iraq to have more say over foreign troops on the ground. And in the coming days, as he opens negotiations with the U.S. on the status-of-forces agreement that will define that relationship, al-Yawer will have ample opportunity to demonstrate just how much independence from the U.S. he will or will not declare.

Other American objections to al-Yawer beyond his uncontrollability, however, should not be brushed aside lightly. Opponents of the war should not be tempted to read too much into the friction between the now-dissolved Iraqi Governing Council and the Bush administration or to glorify figures like al-Yawer. There are few white hats in this stage play.

University of Michigan scholar Juan Cole, one of the smartest analysts of Iraqi internal politics, points out that part of the American unease around al-Yawer stems from his coziness with the House of Saud. He spent a good spell of his exile living in Saudi Arabia and also enjoys the support of the religious Shiite parties, which, Cole says, might suggest that al-Yawer’s partial to shari’a, or Islamic justice. Those are some legitimately worrisome notions.

Some of U.N. envoy Brahimi’s better intentions have also been thwarted in the anarchic government-building process of the last week. He was determined to stock the interim regime with apolitical “technocrats” so that no particular political faction would have the advantage of incumbency going into next year’s scheduled Iraqi elections. But the government forged by the council is top-heavy with ambitious political hacks representing some of Iraq’s most entrenched parties.

It’s also the State Department and the CIA, as opposed to the Defense Department, that have the closest links with some of the key players in the new government, according to Cole. Iyad Allawi as prime minister and Fallah al-Naqib as interior minister are described by him as “strong wins” for the two agencies, and yet more symptoms of the decline of Pentagon political power.

Colin Powell, meanwhile, has maneuvered so that he, and not Rumsfeld, will manage the $18 billion in Iraqi reconstruction funds recently voted by Congress. I suppose that’s good, given the alternatives. But just what it is that’s being constructed in Iraq seems unclear. The steps taken in the past days to erect a legitimate government for that nation only make that vision ever more elusive.

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