July 3, 2008 – IR Summary/NYT - Bush administration found trying to violate the American policy and undercut Iraq’s central government as per Congressional Committee’s finding. A Texas oil company with close ties to President Bush was planning to sign an oil deal with the regional Kurdistan government that ran counter to American. Is it corruption or oversight?  The conclusions were based on e-mail messages and other documents that the committee released  yesterday.

United States policy is to warn companies that they incur risks in signing contracts until Iraq passes an oil law and to strengthen Iraq’s central government.

The Kurdistan deal, by ceding responsibility for writing contracts directly to a regional government, infuriated Iraqi officials. But State Department officials did nothing to discourage the deal and in some cases appeared to welcome it, the documents show.
The Company Hunt Oil of Dallas, signed the deal with Kurdistan’s semiautonomous government last September. Its chief executive, Ray L. Hunt, a close political ally of President Bush, briefed an advisory board to Mr. Bush on his contacts with Kurdish officials before the deal was signed.

In an e-mail message released by the Congressional committee, a State Department official in Washington, briefed by a colleague about the impending deal with the Kurdistan Regional Government, wrote: “Many thanks for the heads up; getting an American company to sign a deal with the K.R.G. will make big news back here. Please keep us posted.”

The release of the documents comes as the administration is defending help that United States officials provided in drawing up a separate set of no-bid contracts, still pending, between Iraq’s Oil Ministry in Baghdad and five major Western oil companies to provide services at other Iraqi oil fields.

In the no-bid contracts, the administration said it had provided what it called purely technical help writing the contracts. The United States played no role in choosing the companies, the administration has said.

Disclosure of those contracts has provided substantial fuel to critics of the Iraq war, both in the United States and abroad, who contend that the enormous Iraqi oil reserves were a motivation for the American-led invasion — an assertion the administration has repeatedly denied.

Iraq’s oil minister, Hussain al-Shahristani, has condemned the Kurdistan deal as illegal because it was not approved by Iraq’s central government and was struck without an oil law, which has still not been passed.

After the deal was signed last year, a senior State Department official in Baghdad criticized it, saying, “We believe these contracts have needlessly elevated tensions between the K.R.G. and the national government of Iraq.”

The State Department said Wednesday that it had discouraged the deal. Hunt officials declined to comment, and Kurdish government officials said there was no impropriety.
In a letter to the House Committee on Oversight and Government Reform, whose chairman is Representative Henry A. Waxman, Democrat of California, a State Department official wrote that the department had strongly discouraged Hunt from signing the deal until an oil law had been passed.

The State Department told Hunt that “we continue to advise all companies that they incur significant political and legal risk by signing contracts” before then, wrote Jeffrey T. Bergner, an assistant secretary for legislative affairs at the department, in one of the documents made public on Wednesday.

But in a letter to Secretary of State Condoleezza Rice, Mr. Waxman wrote that the documents his committee had collected “tell a different story about the role of administration officials.” In letters obtained by the committee, Mr. Hunt informed the President’s Foreign Intelligence Advisory Board, of which he was a member, last July and August that he was pursuing serious business interests in Kurdistan.

“We were approached a month ago by representatives of a private group in Kurdistan as to the possibility of our becoming interested in that region,” Mr. Hunt wrote to the board last July 12. “We had one team of geoscientists travel to Kurdistan several weeks ago and we were encouraged by what we saw.” Full