Posted on 26-2-2004

White House rebuffs UK contracts bid

Terry Macalister

Top-level lobbying by British ministers on a trip to Washington on behalf of UK companies trying to win work in Iraq has been rebuffed by White House officials.
The trade minister, Mike O'Brien, insisted at a reconstruction conference on Tuesday that his visit had been successful, but well-placed sources argue differently.

Confidential papers seen by the Guardian show the US national security adviser, Condoleezza Rice, phoned Tony Blair's office to discuss the issue after she read a leak about the concerted lobbying in this newspaper on February 13.

But Mr O'Brien and Tony Blair's trade envoy, Brian Wilson, were told clearly there could be no special efforts to help win deals for UK firms.

"The White House is sympathetic but officials there say they cannot intervene in a procurement process handled by the Pentagon," said a well-placed source.

Briefing documents dated February 20 - before the trip to Washington - suggest Mr Blair might raise the issue directly with President George Bush if there is no progress. "Depending on the outcome of the minister's visit, he [Mr O'Brien] may want to recommend to the prime minister that he raise this directly with President Bush," according to documents marked "restricted". The British government has become embarrassed about domestic firms' failure to win a big slice of the Iraq reconstruction contracts. Billions of dollars worth has gone to American companies such as Halliburton, which used to be headed by US vice-president Dick Cheney.

A new round of contracts come up early next month and the UK looks better placed, with stakes in 15 of the 17 bids being considered. But there is still acute nervousness.

Mr O'Brien told a London gathering on rebuilding Iraq that 20 UK firms had already won deals, although he denied he had made the visit to Washington last week to plead Britain's case. The trip had been "to discuss transparency and a level playing field".

But the documents prepared ahead of that meeting make clear the true reason for the mission by Mr O'Brien and Mr Wilson.

Special guidance on how to handle media interest in the Washington trip argues: "The purpose of the visit is to lobby for UK contracts and if there [are] none offered, then the media would report on this negatively."

Despite Mr O'Brien's comments that "we have secured quite a lot of contracts already", the briefing documents from the UK trade and investment unit of the Department of Trade and Industry admit the question of how successful UK firms are in Iraq is "impossible to answer" because details are not available.

The Guardian revealed two weeks ago that Mr O'Brien and Mr Wilson were planning a trip to the US to lobby for more UK contracts, and the article triggered a flurry of action in Washington.

The latest set of confidential documents reveal that "Condoleezza Rice telephoned Nigel Sheinwald [Mr Blair's special foreign affairs envoy] on February 13 to ask about the Guardian article that day".

Last night Mr Wilson insisted the US trip was not aimed at avoiding political embarrassment but an attempt to ensure Britain benefited commercially from the "biggest construction programme in history".