Republican Presidenial candidate Tommy Thompson Iraq proposal?

Governor Thompson has proposed that Iraq be made into a federal form of government (like the US, Canada and Germany for example). There would be three states within the federation - Kurdish, Sunni and Shia. There would be a federal government to deal with defence and the economic infrastructure. All citizens would recieve royalty payments from oil production (like they do in Alaska). He recognises there would be major issues to still work out. Any comments or other ideas? The other candidates don't seem to have the guts to state their own positions.