Archive for Thursday, December 11, 2003

U.S. backs away from contract claims

Bush assures angry nations he’ll ‘keep lines of communication open’

December 11, 2003

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— Facing outrage from Europe and Canada, the Bush administration Wednesday appeared to soften its decision to ban countries that did not support the war in Iraq from seeking $18.6 billion in prime contracts to rebuild the country.

President Bush phoned the leaders of France, Germany and Russia and promised to "keep lines of communication open" to discuss which countries would be allowed to bid, a White House official said. Bush had placed the calls to urge them to help restructure Iraq's massive debt, but that seemed less likely given the anger over the policy.

White House officials insisted that their policy of excluding anti-war nations from choice business deals in Iraq was unchanged. But they said they would be flexible in deciding which countries had done enough to qualify.

At a briefing, a senior defense official said the roster of 63 eligible countries "is not a fixed, closed list. ... This is an open list. We're always going to re-evaluate."

The official suggested that a country might qualify for the list simply by declaring itself a member of the Iraq coalition, a step that such war opponents as France and Germany might find politically unpalatable.

Officials made no mention of such flexibility when they disclosed the policy Tuesday.

The U.S. action on contracts reopened the wounds from the run-up to the war that began March 20. Trying to minimize the impact, White House officials noted that the directive applied only to the $18.6 billion in U.S. reconstruction aid and did not apply to an additional $13 billion pledged by countries during a conference in Madrid, or to any other funds that may come through international organizations or to subcontractors.

But anti-war countries complained that the Bush administration, despite recent appeals for international help in healing Iraq's wounds, had punished them by denying access to lucrative prime projects.

Russia warned that the U.S. could endanger any chance that Russia might comply with Washington's requests to restructure Iraq's $8 billion debt. France said it would look into the legality of the U.S. move. Germany called the Pentagon directive "unacceptable" and an example of "extremely selfish economic lobbying."

Canada, which opposed the war but has given about $230 million to Iraq since then, said it would cut off further aid if Canadian firms were barred from bidding for U.S. contracts

The policy limiting 26 prime contracts to companies from the coalition and Iraq became public Tuesday in a memo signed by Deputy Defense Secretary Paul Wolfowitz. Critics overseas regard Wolfowitz as a leader of U.S. neo-conservatives with a perceived hawkish disdain for international institutions and multilateralism.

The Wolfowitz memo said it was necessary to limit eligibility to protect "the essential security interests of the United States."

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