Posted on 14-7-2003

Iraq Invasion Part II - Oil Ownership

Letter to General Flowers from US Senator Henry A. Waxman

Dear General Flowers:

  I am writing to inquire about U.S. plans to mortgage Iraq's oil to pay for contracts with private companies like Halliburton and Bechtel.

  For many months, opponents of the war in Iraq have been arguing that the real purpose of the war was to obtain control for the United States over the vast oil fields in Iraq. In response, the Administration has consistently said that Iraqi oil belongs to the Iraqi people. Recently, for example you wrote me:

  Iraqis will make all decisions about how much oil and refined products to produce, when and where to produce for the domestic market and how to distribute the product...Iraqis will decide for themselves all matters relating to development, production, sale and distribution of Iraqi petroleum products.

  The Wall Street Journal has reported, however, that the United States is considering a plan to mortgage Iraq's oil to pay for the costs of reconstruction. Such an arrangement would commit future oil revenue from Iraqi wells to paying the expenses of major U.S. contractors operating in Iraq. This policy would appear to conflict fundamentally with the claim that Iraq's oil belongs to the Iraqi people. In effect, the country's oil revenues would belong to Halliburton, Bechtel and the other large U.S. corporations operating in Iraq.

  Not suprisingly, the Wall Street Journal reports that this proposal "has the enthusiastic backing" of Halliburton and Bechtel. According to the Wall Street Journal, this plan has been advocated by the Coalition for Employment Through Exports, a U.S. business group whose members include Halliburton, Bechtel and other large contractors in Iraq. This group has been "knocking on doors throughout the Bush Administration" to promote the mortgage proposal.

  I am writing to request information about this plan to mortgage Iraq's oil. In particular, I am interested in the role, if any, that Halliburton and other companies working in Iraq may have played in shaping this plan. Specifically, I request that you:

  1. Describe the plan being considered to securitize Iraq's oil, including details such as the duration of the plan and the amount of Iraqi oil involved;

  2. Identify all contacts concerning this plan between the Corps and any nongovernmental party or its representative(s);

  3. Provide copies of all records (including telephone records, notes and any other form of written or electronic communication) related to item 2 above.