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Bush Seeks Help of Allies Barred From Iraq Deals


Published: December 11, 2003

WASHINGTON, Dec. 10 — President Bush found himself in the awkward position on Wednesday of calling the leaders of France, Germany and Russia to ask them to forgive Iraq's debts, just a day after the Pentagon said it was excluding those countries and others from $18 billion in American-financed Iraqi reconstruction projects.

White House officials were fuming about the timing and the tone of the Pentagon's directive, even while conceding that they had approved the Pentagon policy of limiting contracts to 63 countries that have given the United States political or military aid in Iraq.

Many countries excluded from the list, including close allies like Canada, reacted angrily on Wednesday to the Pentagon action. They were incensed, in part, by the Pentagon's explanation in a memorandum that the restrictions were required "for the protection of the essential security interests of the United States."

The Russian defense minister, Sergei Ivanov, when asked about the Pentagon decision, responded by ruling out any debt write-off for Iraq.

The Canadian deputy prime minister, John Manley, suggested crisply that "it would be difficult" to add to the $190 million already given for reconstruction in Iraq.

White House officials said Mr. Bush and his aides had been surprised by both the timing and the blunt wording of the Pentagon's declaration. But they said the White House had signed off on the policy, after a committee of deputies from a number of departments and the National Security Council agreed that the most lucrative contracts must be reserved for political or military supporters.

Those officials apparently did not realize that the memorandum, signed by Paul D. Wolfowitz, deputy secretary of defense, would appear on a Defense Department Web site hours before Mr. Bush was scheduled to ask world leaders to receive James A. Baker III, the former treasury secretary and secretary of state, who is heading up the effort to wipe out Iraq's debt. Mr. Baker met with the president on Wednesday.

Several of Mr. Bush's aides said they feared that the memorandum would undercut White House efforts to repair relations with allies who had opposed the invasion of Iraq.

White House officials declined to say how Mr. Bush explained the Pentagon policy to President Vladimir V. Putin of Russia, President Jacques Chirac of France and Chancellor Gerhard Schröder of Germany. France and Russia were two of the largest creditors of Saddam Hussein's government. But officials hinted, by the end of the day, that Mr. Baker might be able to show flexibility to countries that write down Iraqi debt.

"I can't imagine that if you are asking to do stuff for Iraq that this is going to help," a senior State Department official said late Wednesday.

A senior administration official described Mr. Bush as "distinctly unhappy" about dealing with foreign leaders who had just learned of their exclusion from the contracts.

Under the Pentagon rules, only companies whose countries are on the American list of "coalition nations" are eligible to compete for the prime contracts, though they could act as subcontractors. The result is that the Solomon Islands, Uganda and Samoa may compete for the contracts, but China, whose premier just left the White House with promises of an expanded trade relationship, is excluded, along with Israel.

Several of Mr. Bush's aides wondered why the administration had not simply adopted a policy of giving preference to prime contracts to members of the coalition, without barring any countries outright.

"What we did was toss away our leverage," one senior American diplomat said. "We could have put together a policy that said, `The more you help, the more contracts you may be able to gain.' " Instead, the official said, "we found a new way to alienate them."

A senior official at the State Department was asked during an internal meeting on Wednesday how he expected the move to affect the responses of Russia, France and Germany to the American request. He responded, "Go ask Jim Baker," according another senior official, who said of Mr. Baker, "He's the one who's going to be carrying the water, and he's going to be the one who finds out."

In public, however, the White House defended the approach. Scott McClellan, the White House spokesman, said "the United States and coalition countries, as well as others that are contributing forces to the efforts there, and the Iraqi people themselves are the ones that have been helping and sacrificing to build a free and prosperous nation for the Iraqi people."

He said contracts stemming from aid to Iraq pledged by donor nations in Madrid last month would be open to broad international competition.

Richard A. Boucher, the State Department spokesman, said Wednesday that while the bidding restriction applied to prime contracts, "there are very few restrictions on subcontractors."

He also said the World Bank and International Monetary Fund "may have different, or their own, rules for how they contract."

When the committee was drafting the policy, officials said, there was some discussion about whether it would be wise to declare that excluding noncoalition members was in the security interests of the United States. As a matter of trade law, countries are often allowed to limit trade with other nations on national security grounds.

"The intent was to give us the legal cover to make the decision," one official said.

But the phrase angered officials of other nations because it seemed to suggest they were a security risk.

Moreover, the United States Trade Representative's office said on Wednesday that contracts with the occupation authority "are not covered by international trade procurement obligations because the C.P.A. is not an entity subject to these obligations."

"Accordingly, there is no need to invoke the `essential security' exception to our trade obligations," the office added.

That raised the question of why Mr. Wolfowitz included the phrase.

The Pentagon was already recasting the policy on Wednesday.

"Nobody had the intent of being punitive when this was being developed," said Larry Di Rita, spokesman for Defense Secretary Donald H. Rumsfeld.

"This is not a fixed, closed list," he said. "This is meant to be forward looking and potentially expansive."

Bush Seeks Help of Allies Barred From Iraq Deals

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815-604.jpg France, Germany, and Russia. They are not nor should they be considered our allies. They were told this would happen prior to the start of the war, now they are crying. They made their bed now let them sleep in it.
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This simply doesn't matter. Those debts are either going to be forgiven or are not going to be paid.

France, Germany and Russia (Canada for that matter) have all rendered themselves totally irrelevant.

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I was watching the news earlier and it looked like Chirac was about to start crying. Good!! Screw him. Screw Chirac, Schroeder, Putin, and Anan.

These weasels got exactly what was coming to them, I can't wait to see them try and collect on Saddam's debt's. That's when the entertainment will really begin.

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I agree...screw anyone who doesn't want to cooperate with us! It's time that the rest of these guys realized just who needs who in this world. This is a great lesson to learn for all of the countries that want to cross us when we want them to do something. You'll be cut off!!! And, the next time, if more want to follow the French, Germans or Russians then so be it. We won't need them, either. After enough of that, I think they'll start to realize just how much they really did screw up!!!

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