Waxman: State Dept. ‘misleading’ on Hunt Oil deal

Rep. Henry Waxman (D-Calif.) accused the State Department Wednesday of issuing “misleading” denials regarding its involvement in Hunt Oil’s controversial contract with the Kurdistan Regional Government (KRG).

Waxman, chairman of the House Committee on Oversight and Government Reform, also alleged that the results of his panel’s investigation raised serious questions as to the role the State Department played in the recently reported no-bid contracts between the Iraqi Ministry of Oil and prominent U.S. and multinational oil corporations. 

{mosads}In a letter to Secretary of State Condoleezza Rice, Waxman demanded that her office hand over all communications on the negotiation of the oil development deals to the Oversight Committee by July 25.

“You and other administration officials have denied playing any role in these contracts,” Waxman wrote to Rice. “In the case of Hunt Oil, however, similar denials appear to have been misleading.”

The Hunt Oil deal was met with an uproar when it was first announced last September, mainly because it was finalized prior to the enactment of a national oil-sharing law. State Department officials proclaimed publicly that insofar as the department knew about the negotiations, it had actively discouraged Hunt officials from making the deal.

President Bush claimed at the time to have been without advance knowledge of the contract, expressing his concern that it would “undermine the ability for the government to come up with an oil revenue-sharing plan that unifies the country.” 

Documents obtained by the Oversight Committee, however, revealed that a significant amount of communication had occurred between the State and Commerce departments and Hunt Oil officials well before the deal was finalized. Waxman reported that none of these documents supported the State Department’s claim that it had warned Hunt against entering into the contract. 

Instead, many documents seemed to indicate that the State Department had no objection to or even approved of the move. Waxman points to an e-mail sent from the head of the U.S. Regional Reconstruction Team in Kurdistan to State Department officials three days before the deal was announced. Waxman reported that a State Department official wrote back, “Many thanks for the heads-up; getting an American company to sign a deal with the KRG will make big news back here.”

The Oversight Committee’s investigation comes on the heels of The New York Times’s June 19 report that a number of Western oil giants — including Exxon Mobil, Shell, BP, and Chevron — were close to landing no-bid contracts with the Iraqi government. 

The State Department has denied any involvement in the negotiation of these latest deals. Nevertheless, in the conclusion to his report Waxman promised further investigation, asserting that the Hunt Oil incident gave reason to doubt the State Department’s word.

“This is a serious matter,” Waxman said, “because of the widespread suspicion in Iraq and other nations that the United States went to war to gain access to Iraqi oil.”