Congressional Committee Questions Iraq Oil Deal

Bush administration officials knew that a Texas oil company with close ties to President Bush was planning to sign an oil deal with the regional Kurdistan government that runs counter to U.S. policy and undercut Iraq's central government, a congressional committee has concluded.

The conclusions were based on e-mail messages and other documents that the committee released Wednesday.

U.S. 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 officer, Ray L. Hunt, a political ally of Bush, briefed an advisory board to 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 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 KRG will make big news back here. Please keep us posted."

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

In the no-bid contracts, the administration ultimately conceded that 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 fuel to critics of the Iraq war who contend that the enormous Iraqi oil reserves were a motivation for the invasion, which the administration denies.

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.

After the deal was signed last year, a State Department official in Baghdad criticized it, saying, "We believe these contracts have needlessly elevated tensions between the KRG 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 Rep. Henry A. Waxman, D-Calif., 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 Iraq passes the law, wrote Jeffrey T. Bergner, an assistant secretary for legislative affairs at the department, in one of the documents made public Wednesday.

But in a letter to Secretary of State Condoleezza Rice, Waxman wrote that the documents his committee collected "tell a different story about the role of administration officials."

In letters obtained by the committee, Hunt, last July and August, informed the President's Foreign Intelligence Advisory Board, of which he was a member, 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," Hunt wrote to the board last July 12.