Left hand -- meet right hand! Bush style!

Bush Seeks Help of Allies Barred From Iraq Deals
By DAVID E. SANGER and DOUGLAS JEHL

Published: December 11, 2003


ASHINGTON, 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 excluded 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."