Analysis: Iraq funding bill too oily

WASHINGTON, May 11 (UPI) -- A new measure to fund the Iraq war has run into opposition from congressional Democrats who say it does not offer enough provisions to keep the United States away from Iraq's oil.

"We have to be concerned that the oil in Iraq belongs to the Iraqi people," said Rep. Lynn Woolsey, D-Calif. "It's absolutely that simple."

Woolsey is co-chair of the 72-member Congressional Progressive Caucus and 76-member Out of Iraq Caucus, a coalition from both chambers attempting to champion an exit strategy from Iraq. A bill to do so received 171 votes, including two Republicans, but was defeated Thursday prior to the supplemental passage.

Woolsey and seven caucus colleagues voted against the supplemental. Unlike the supplemental bill vetoed earlier this month, the new bill does not have a timetable for U.S. troops to end combat operations, and it still includes provisions concerning Iraq's oil.

"All I can say is I'm not satisfied that what we're doing will actually benefit the Iraqi people and not billions of dollars for oil companies," Woolsey said. The Washington Post reports at least 138 of Iraq's 275 parliamentarians signed onto a draft bill proposing a timetable, enough to carry the measure.

The U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007 was approved 221 to 205. The Chicago Tribune reports it will likely not make it through the Senate and will be vetoed again. It authorizes $42.8 billion now but forces Congress to assess President Bush's success in Iraq in July before giving him another $52.8 billion.

Congress would look at, among other things, "whether the Government of Iraq ... enacted a broadly accepted hydrocarbon law that equitably shares oil revenues among all Iraqis," according to the bill's language. This is one of four benchmarks for Iraq Bush outlined in speeches back in January.

United Press International made numerous requests to ask House Appropriations Committee Chairman Dave Obey, D-Wis., about the oil benchmark but received no response. His committee drafted the language. When House Democrats asked him about the issue in a private meeting this week, The Politico reports, he cussed them out.

Negotiators in Iraq are trying to find common ground on three key issues governing Iraq's oil: which fields the central or regional governments will control; the percentage of and mechanism for distributing Iraq's oil revenue; and the scope and method for foreign investment. Much of the dispute boils down to interpretation of the Iraqi Constitution, passed in 2005.

"Were what was being presented simply and exclusively a piece of legislation to clarify the constitution's position on the sharing of Iraq's oil revenues, that might make some sense," said Antonia Juhasz of Oil Change International and visiting scholar at the Institute for Policy Studies. "There's absolutely no reason why the United States should be involved in those discussions."

"The Democrats adopted the benchmarks to sound reasonable, to say to the president, to say to the public: 'We'll give the Iraqis the opportunity to show some political movement and if they don't show the movement then we will end the occupation,'" said Juhasz, author of "The Bush Agenda: Invading the World, One Economy at a Time."

Juhasz, Woolsey and others fear it could play out poorly for Iraqis. Iraqi political leaders are being pressed by oil technocrats who want to ensure federal control over oil development and are urging a delay in the law. The Kurds are pushing for action by the end of this month -- a deadline adopted by the central government also, but likely to be missed -- and want regional autonomy, as well as the free market to replace oil nationalism.

Iraq has more oil than every country except Saudi Arabia and Iran, but its sector has been hurt by the U.S.-led war and subsequent civil war, U.N. sanctions and mismanagement by Saddam Hussein. There are concerns, especially from Iraq's oil unions, that foreign companies will be given too much access to, possibly control over, the oil. The Iraq Federation of Oil Unions is threatening to strike Monday in opposition, which could take Iraq's 1.6 million barrels per day of oil exports out of the global market.

Michael Eisenscher, national coordinator for U.S. Labor Against the War, said the supplemental passage means Congress is "complicit in what amounts to a backdoor privatization of most of Iraq's oil reserves." USLAW, an umbrella group representing affiliates here with more than 5 million members, is in regular contact with Iraq's unions.

The bill does state appropriated money can't be used to "exercise United States control over any oil resource in Iraq." Eisenscher and others, however, point to other language that gives U.S. military authority to protect "American diplomatic facilities and American citizens," even if combat operations are ended, thus potentially using U.S. troops to protect American oil workers or companies pumping Iraq's oil, be it from foreign insurgents or angry Iraqis.

"It's a concern," Woolsey said. "It should be debated, it should be out in the sunshine, what does it mean and how many of our troops would have to stay for just that reason?"

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