Bush defiant at allies' fury over access to Iraq contracts

By Robin Wright and Dana Milbank
The Washington Post

	CHIP SOMODEVILLA / DETROIT FREE PRESS Day laborers use brushes, shovels and brooms to sweep the looted and gutted Iraqi Ministry of Education building yesterday in Baghdad, as rebuilding continues.
	E-mail this article Print this article Search archive Other links U.N. Secretary-General Kofi Annan criticizes the contract policy President Bush defends the decision

"It's very simple," Bush said after a Cabinet meeting. "Our people risked their lives. Friendly coalition folks risked their lives, and therefore the contracting is going to reflect that and that's what the U.S. taxpayers expect."

U.N. Secretary-General Kofi Annan branded the U.S. policy "unfortunate," echoing protests from allies such as Germany and France and claims that the Bush administration move may violate international law. At home, Senate Majority Leader Bill Frist registered his concerns, and other Republicans on Capitol Hill expressed puzzlement that the White House decided to support a policy it flatly rejected only months ago.

Diplomats and foreign-policy analysts, meanwhile, warned that the policy, which bars countries that did not support the Iraq invasion from getting prime contracts there, could crimp or cripple two major diplomatic missions: winning international forgiveness for Iraq's $120 billion in debt, and rallying U.N. support for the Bush administration's plan for the political transition in Iraq. The timing is particularly awkward because former Secretary of State James Baker is about to begin a diplomatic mission to recruit more international help in Iraq.

"It was a train wreck," a top State Department official, speaking on condition of anonymity, told Knight Ridder Newspapers of the decision-making process.

The European Commission, the executive body of the European Union, issued a statement yesterday calling on Bush to revoke the policy and warning that it may be a violation of World Trade Organization rules.

Bush said even a decision by countries such as France and Germany to forgive Iraqi debt would not allow them to compete for the contracts in Iraq. And he was derisive when asked about German Chancellor Gerhard Schroeder's claim that "international law must apply here," saying: "International law? I better call my lawyer; he didn't bring that up to me."

However, White House press secretary Scott McClellan suggested countries that forgive Iraqi debts could be added to the list of those eligible to bid. "If countries want to join in our efforts in Iraq," he said, "circumstances can change, and we'll make that very clear."

The list of eligible countries provided by the Pentagon includes nations that did not send troops to help in the war effort, including Turkey, Saudi Arabia and tiny island nations Tonga and Palau.

State Department spokesman Richard Boucher said that although not all sent troops, "they stood by the United States at a time of danger and peril."

Though the policy was intended to reward allies, officials from some key coalition countries say they are unhappy because the business they thought they were promised in return for support has failed to materialize and they do not expect the decision to change that.

Elena Poptodorova, Bulgaria's ambassador to the United States, said that her country has received no subcontracts for work in Iraq. Romania, the Baltic nations, Slovakia and others in Eastern Europe share the disappointment, she said.

Even as Bush took a hard line in public, there were signs that he was working privately to calm the furor. He called Jean Chrétien on the Canadian prime minister's last day in office and, according to Chrétien, said he would seek to exempt Canada from the new policy.

"He told me he wasn't happy we were on the list," Chrétien said. "He said we would take steps so that we weren't on the list anymore."

Baker will travel to France, Russia, Germany and other countries next week to ask those governments to forgive part of Iraq's crushing national debt. France and Russia, which are both permanent members of the Security Council and carry major Iraq debt, are particularly critical.

Russia is signaling it may not help restructure or forgive some $8 billion in Iraqi debt, while France will tell Baker next week that it will discuss debt only after there is a recognized Iraqi government that can assume economic and other commitments, French envoys said.

"We're asking others to forgive billions (in debt) and yet have no role in reconstruction. We're telling them, 'You make the sacrifices and we get all the goodies,' " said James Steinberg, director of foreign policy studies at the Brookings Institution and deputy national-security adviser in the Clinton administration.

U.N. diplomats are cautioning that the ban will make it harder to get a concrete statement of support from the Security Council for the U.S. exit strategy when an Iraqi delegation presents the transition timetable and plan at the United Nations next week. Annan, speaking in Berlin, called the U.S. decision "not unifying."

"Domestically this works, but diplomatically it makes it very tough," added a U.N. diplomat in New York. "The United States has been saying for the last couple of weeks that we have to look forward and, whatever you thought of the war, now is not the time to fight past battles but to look to the future to help the Iraqis. But the (policy) does exactly the opposite — it rehashes the past and penalizes people."

Republicans were keeping a distance from the contract policy. Frist said on CNBC's "Capital Report" that he spoke to the administration to express reservations. "We have to remember that many of these countries that are being denied these contracts are supporting us elsewhere in the world, maybe fighting HIV-AIDS in Africa, maybe in Afghanistan, and that's why I hope that there'll be some moderation of the policy as we go forward," he said.

Bush, however, stood firmly behind Deputy Defense Secretary Paul Wolfowitz, who wrote the memo announcing the contracting policy. "He's doing an outstanding job to help make the world a safer and better place," Bush said.

Washington Post staff writers Thomas E. Ricks and DeNeen Brown contributed to this report. Background on European participation was from the Los Angeles Times and the Chicago Tribune.

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