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StateSide:Policy
Archive: November 2007
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RAND's 'Project Air Force' Annual Report Cites Demands of Counterinsurgency
11/19/2007 1:22 PM ET
A US Air Force B-52H long range bomber, part of the US Eight Air Force, 2nd Bomb Wing fleet, waits before sunrise 18 September 2007 from Barksdale Air Force Base in Louisiana.
Paul J. Richards/AFP/Getty
A US Air Force B-52H long range bomber, part of the US Eight Air Force, 2nd Bomb Wing fleet, waits before sunrise 18 September 2007 from Barksdale Air Force Base in Louisiana.

The requirements of counterinsurgency operations brought on by the conflicts in Afghanistan and Iraq have led to a reassessment of priorities throughout the US military. High-tech weapons systems have been all-but-sidelined as Marines, Special Forces, and ground troops trained in counterinsurgency tactics have proven the most effective weapon on the ground in the war on terror.

The requirements of modern warfighting have led to some soul-searching in the Air Force and Navy, as the services seek a re-definition of purpose to fit their capabilities into the full-spectrum of US defense needs.

Without adequate justification for their budgets, Air Force and Navy leaders no doubt fear increasing calls for the dismantling of the current force structure.

It comes as no surprise then that RAND's new annual report on the Air Force puts significant emphasis on how US airpower can be utilized to support COIN operations.

The Air Force "provides mobility, reconnaissance, strike capabilities, and other functions that greatly enhance the effectiveness of counterinsurgency ground forces," according to the annual report by RAND's 'Project Air Force'.

"It also helps constrain the enemy’s options. Therefore, advising, training, and equipping partner air forces to carry out these roles should be a key component of U.S. counterinsurgency efforts."

The annual report released last Friday re-visits related RAND studies, including their definitive Air Power in the CounterInsurgency Era, and an examination of why Iraqi resistance to the invasion was so weak.

The study advises that the greatest institutional challenge facing the Air Force "will not be in acquiring major new weapon, sensor, or aircraft systems but rather in identifying and developing personnel who have the aptitude for this type of warfare and in creating organizations that can effectively advise, train, and equip partner air forces to wage internal wars that are ultimately theirs to win or lose."

Download RAND's Project Air Force annual report here.

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RAND Study Advises Safeguards to Prevent Enemies Using Stolen Weapons
11/15/2007 10:13 AM ET
Al-Muradiyah, IRAQ: US Army Pvt. Brian Kibby uses a metal detector to look for a hidden weapons cache during a mission with Iraqi army soldiers from 1st Battalion, 2nd Brigade, 4th Iraqi Army Division in al-Muradiyah village, north east of Baghdad, 13 March 2007.
Mast. Sgt. Andy Dunaway/AFP/Getty
Al-Muradiyah, IRAQ: US Army Pvt. Brian Kibby uses a metal detector to look for a hidden weapons cache during a mission with Iraqi army soldiers from 1st Battalion, 2nd Brigade, 4th Iraqi Army Division in al-Muradiyah village, north east of Baghdad, 13 March 2007.

International cooperation is needed to keep a new generation of advanced conventional weapons now under development from falling into the hands of terrorists, according to a RAND Corporation report issued yesterday.

Such efforts should focus on making security forces aware of the emerging threats posed by the weapons and developing safeguards that would render the most potent of the weapons inoperable to anyone other than intended operators, according to researchers.

Among the weapons of concern are advanced mortar systems guided by global positioning systems and sniper rifles that can strike a target from up to 2 kilometers away.

“A new generation of advanced conventional weapons could pose serious security risks if they become part of terrorist arsenals,” said James Bonomo, the study's lead author and a senior physical scientist at RAND, a nonprofit research organization. “The good news is there is still time to rein in this threat before it fully develops.”

Researchers say nations that are developing the most-potent advanced weapons need to agree upon anti-terrorist strategies before production begins or they risk enabling terrorists to acquire and use the weapons in attacks, as has happened with shoulder-fired antiaircraft weapons.

Technologies that could discourage terrorists' use of the most-potent weapons include building in a “trusted component” such as a code that would be needed to operate the equipment. These weapons also could be built with expiration dates or geographic boundaries that would make them less appealing to terrorists, according to researchers.

Advanced conventional weapons are traditional tools of warfare that will become more lethal as they incorporate technological advances into future versions. Researchers identified five broad categories of weapons that would pose new and greater risks if they are acquired by terrorists. The weapons are:

* Advanced mortar systems guided by global positioning satellites that could strike targets such as crowds or infrastructure from a long distance. These weapons pose the biggest threat among those studied because there is no effective counter technology for security forces.

* Sniper rifles with improved electronic instrumentation that would allow a relatively unskilled marksman a chance of striking a target up to 2 kilometers away – well beyond the

* Advanced infantry small arms that allow very accurate, short-range fire using grenades as well as some related advanced weaponry.

* Long-range antitank weapons that can destroy a vehicle from beyond 2 kilometers. New models of these weapons are more easily operated by someone with little training.

* Limpet mines (mines that are attached to a vessel) that particularly pose a threat to cruise ships and ferries. Conventional cargo and passenger inspections would not detect this threat.

Researchers say that all five types of weapons could enable attackers to surprise security forces. The attacks could come from far beyond any controllable security perimeter, could allow a high probability of escape for the terrorists, or could require only a single, small attack to be effective.

The first step in making the weapons less useful to terrorists is to raise awareness of the threat among security agencies, according to the report. Private groups such as operators of cruise ships and ferries also need to understand the threat and alter their security plans to account for the issue.

Some of the threats posed by advanced conventional weapons can be addressed with increased security measurers such as improve inspections in harbors. But the riskiest weapons will require international agreements to build in anti-terrorist technology, Bonomo said.

Ultimately, terrorists may be able to overcome technological controls placed on the most-potent advanced conventional weapons, but doing so will require significant effort and altered weapons are likely to be unreliable, Bonomo said. Creating such obstacles should be enough to discourage terrorists from making use of the weapons, Bonomo said.

Read the highlights, or the full RAND report--Stealing the Sword: Limiting Terrorist Use of Advanced Conventional Weapons.

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CSIS Releases Report Examining Dysfunction in Ministry of Interior
11/14/2007 12:36 PM ET
Baghdad, IRAQ: Iraqi National Police security check motorists on Palestine street, close to the Iraqi finance ministry's information section in Baghdad.
Ali Yussef/AFP/Getty
Baghdad, IRAQ: Iraqi National Police security check motorists on Palestine street, close to the Iraqi finance ministry's information section in Baghdad.

Iraq's Ministry of the Interior could be considered to have "dissociative identity disorder," the bureaucratic equivalent of "a heavily-muscled and well-armed individual with extremely poor physical coordination who suffers from multiple personality disorder," according to a new CSIS report on Iraq's internal security forces.

Retired US Marine Corps General Jim Jones led an independent commission's investigation into the same topic, concluding in the 'Jones Report' released in September:

"The Ministry of Interior is a ministry in name only. It is widely regarded as being dysfunctional and sectarian, and suffers from ineffective leadership. Such fundamental flaws present a serious obstacle to achieving the levels of readiness, capability, and effectiveness in police and border security forces that are essential for internal security and stability in Iraq."

CSIS used the Jones Report criticism as the starting point for their investigation into why extensive effort at building the capacity of the Interior Ministry have proven so ineffective.

Author Andrew Rathmell, a British academic who served in the CPA, worked with the MOI, and has done extensive research in public administration reform in Iraq, writes that the central argument of the 20-page report is that:

Iraq’s political dynamics, combined with the unprecedented burdens being placed upon the MOI, will continue to make institutional development and reform terribly difficult. However, assessments such as the Jones report ignore the fact that the ministry is more functional than it may at first appear. Furthermore, there are signs of incipient, MOI-led reforms; these provide hopeful pointers. In order to take advantage of these incipient reforms, the international assistance effort needs to significantly raise its game. If this can be achieved, then, gradually and painfully, the ministry could become a more positive force in Iraqi society. However, even if technical institutional reforms are successful, it will be important to understand that the ministry will reflect Iraq's political make-up; it cannot stand above national politics.

Rathmell notes that the coalition has made significant effort in building up the "brawn" of the Interior Ministry, while devoting less attention to the "head" of the organization.

This has resulted in growing responsibilities for the Ministry as the security forces have expanded, though a lack of capability has left the bureaucracy overwhelmed and unable to cope. Concurrently, the leadership of the MOI has been going through political fragmentation, with disagreements hindering the development of consensus for the benefit of effective policy.

The report notes optimistically that the Ministry currently has a number of capable technocrats who are attempting to make significant improvements, but advises that the US needs to extend support to the reform-minded bureaucrats.

CSIS concludes that, "This will require improvements to the organisation, staffing and coordination of the international effort. It will also require the Coalition to adopt a more realistic view of the possible pace of progress and to curtail our desires to overload a struggling ministry."

Read the full report "Fixing Iraq's Internal Security Forces" here: 071113_fixingiraq.pdf

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Congressional Committee Estimates War Costs Average Family of Four $20,000
11/13/2007 12:08 PM ET
The wars in Iraq and Afghanistan have actually cost nearly twice the $804 billion the White House has spent or requested through 2008, according to a new report by the Democratic staff of Congress's Joint Economic Committee.

In "War at Any Price?," released Tuesday, committee staff put the current pricetag of war spending at roughly $1.5 trillion, which would average out to costing the average American family of four over $20,000 each.

The report advises that enacting tax cuts during a period of high spending for the war has led to increased borrowing from other countries, which has reduced the American government's domestic investment capabilities and left the nation in debt to foreigners.

The war has also led to an increase in oil costs, which has put a burden on the US economy, and the expense of caring for the war wounded is only expected to grow--not only in real costs, but in the lost productivity of those facing debilitating injuries.

Further, the report estimates US businesses have lost $1 billion to $2 billion due to the deployment of their employees who serve as reservists and National Guardsmen.

The Washington Post reports Robert D. Hormats, vice chairman of Goldman Sachs (International) and a member of the National Security Council staff under Presidents Nixon, Ford and Carter, said he agrees that the war is far costlier than the publicly stated price tag but said some of the report's measures are problematic. He said he thinks it would be hard to show that the Iraq war has caused oil prices to skyrocket or oil producers in the Middle East to falter, and he said he does not think there has been a closing-off of U.S. investment because of the war.

Hormats agreed with the report's finding that the United States is dangerously increasing its reliance on foreign debt and that Americans will be paying the price for generations.

"The wars will cost a lot more than the appropriated sums, and it's certainly true our children will be paying for this for a long, long time," he said. "I'm very critical of the way they have financed the war, but I always hesitate to try to quantify any of these things, to make these numerical judgments."

The report outlines three potential scenarios for the future US presence in Iraq and estimates their varied costs. The expense of maintaining 155,000 troops in Iraq through 2017 would run $3.5 trillion, while a drawdown to a "Korea-like" posture, with a gradual reduction in troops to 55,000 would cost $2.8 trillion. The House Dem's plan for a more rapid withdrawal down to 10,000 troops over the next two years, with the remainder to be withdrawn in 2010, carries a $1.7 trillion pricetag.

Read the full report: Iraq_Economic_Costs.pdf

Backgrounder
Armistice Day Became Veteran's Day in 1954 to Honor All Who Served
11/09/2007 12:17 PM ET
A member of the US Honor Guard crosses in front of the Tomb of the Unknown Soldier in Arlington National Cemetery.
Chip Somodevilla/Getty
A member of the US Honor Guard crosses in front of the Tomb of the Unknown Soldier in Arlington National Cemetery.

1918

World War I, then normally referred to simply as The Great War (no one could imagine any war being greater!), ended with the implementation of an armistice between the Allies and Germany at the eleventh hour of the eleventh day of November, 1918.

1919

November 11: President Wilson proclaims the first Armistice Day with the following words: "To us in America, the reflections of armistice Day will be filled with solemn pride in the heroism of those who died in the country’s service and with gratitude for the victory, both because of the thing from which it has freed us and because of the opportunity it has given America to show her sympathy with peace and justice in the councils of the nations..." The original concept for the celebration was for the suspension of business for a two minute period beginning at 11 A.M., with the day also marked by parades and public mettings.

1920

On the second anniversary of the armistice, France and the United Kingdom hold ceremonies honoring their unknown dead from the war. In America, at the suggestion of church groups, President Wilson names the Sunday nearest Armistice Day Sunday, on which should be held services in the interest of international peace.

1921

Congress passes legislation approving the establishment of a Tomb of the Unknown Soldier in Arlington National Cemetery. November 11 is chosen for the date of the ceremony. According on October 20, Congress declares November 11, 1921 a legal Federal holiday to honor all those who participated in the war. The ceremony was conducted with great success.

1926

Congress adopts a resolution directing the President to issue an annual proclamation calling on the observance of Armistice Day. Throughout the 1920s and 1930s, most states establish November 11 as a legal holiday and at the Federal level, an annual proclamation is issued by the President.

1938

Congress passes legislation on May 13 making November 11 a legal Federal holiday, Armistice Day. The United States has no ‘actual’ national holidays because the states retain the right to designate their own holidays. The Federal government can in fact only designate holidays for Federal employees and for the District of Columbia. But in practice the states almost always follow the Federal lead in designation of holidays.

1941- 1945 1950- 1953

World War II and the Korean War create millions of additional war veterans in addition to those of the First World War already honored by Armistice Day.

1954

On June 1, President Eisenhower signs legislation changing the name of the legal holiday from Armistice Day to Veteran’s Day.

1968

Congress passes the Monday Holiday Law which established the fourth Monday in October as the new date for the observance of Veteran’s Day. The law is to take effect in 1971.

1971-1975

The Federal observance of Veterans Day is held on the fourth Monday of October. Initially all states follow suit except Mississippi and South Dakota. Other states changed their observances back to November 11 as follows: 1972- Louisiana and Wisconsin; 1974- Kentucky, Arkansas, Connecticut, Georgia, Maine, South Carolina, West Virginia; 1975- California, Florida, Idaho, Illinois, Iowa, Kansas, Missouri, Montana, Nebraska, New Hampshire, Oklahoma, Oregon, South Carolina, Utah, West Virginia, Wyoming

1975

Legislation passed to return the Federal observance of Veteran’s Day to November 11, based on popular support throughout the nation. Since the change to the fourth Monday in October, 46 states had either continued to commemorate November 11 or had reverted back to the original date based on popular sentiment. The law was to take effect in 1978.

1978

Veteran’s Day observance reverts to November 11.

This backgrounder was produced by the US Army's Center for Military History.

Full Report PDF
Report of CSIS Soft Power Commission Charts Path for US Foreign Policy
11/08/2007 12:15 PM ET
Former Deputy Secretary of State Richard Armitage (L) and Joseph Nye Jr. (R), former Asst. Secretary of Defense for International Security Affairs and former Chair of the National Intelligence Council, served as co-chairmen of CSIS's Smart Power Commission.
Alex Wong/AFP/Getty
Former Deputy Secretary of State Richard Armitage (L) and Joseph Nye Jr. (R), former Asst. Secretary of Defense for International Security Affairs and former Chair of the National Intelligence Council, served as co-chairmen of CSIS's Smart Power Commission.

“Today’s central question is not simply whether we are capturing or killing more terrorists than are being recruited and trained, but whether we are providing more opportunities than our enemies can destroy and whether we are addressing more grievances than they can record,” writes CSIS's Commission on Smart Power, which this week released its far-reaching assessment charting a path for the future of US foreign policy.

CSIS established the Commission on Smart Power last year, appointing Richard Armitage and Joseph Nye as co-chairs and recruiting an array of respected former government officials, diplomats, business leaders, and NGO representatives.

CSIS President John Hamre writes in the report's foreword that the Commission was tasked to address a number of questions: "How does America become the welcomed world leader for a constructive international agenda for the twenty-first century? How do we restore the full spectrum of our national power? How do we become a smart power?"

The report's authors note that America's influence is on the decline worldwide, despite its clear preponderance of hard power. But the US can not project power on the basis of its military strength alone, so the report focuses on the need to develop a greater capacity for the use of soft power as an instrument of national policy.

The tarnish on America's image--making the country no longer widely viewed as a force for positive change in the world--creates obstacles for the development of solid partnerships necessary for collective action on a range of global issues. America finds itself at a critical juncture, and in need of alliances to share the burden of global leadership.

The report advises that in order to maintain its edge in global affairs, the US "must move from eliciting fear and anger to inspiring optimism and hope."

The US must undertake measures to convince the community of nations that it invests in the global good, the report advises, and brings results to all corners of the world that might not otherwise occur in the absence of American leadership.

Specifically, the report concludes, the United States should focus on five critical areas:

* Alliances, partnerships and institutions: The United States must reinvigorate the alliances, partnerships, and institutions that serve our interests and help us to meet twenty-first century challenges.

* Global development: Elevating the role of development in U.S. foreign policy can help the United States align its own interests with the aspirations of people around the world.

* Public diplomacy: Bringing foreign populations to our side depends on building long-term, people-to-people relationships, particularly among youth.

* Economic integration: Continued engagement with the global economy is necessary for growth and prosperity, but the benefits of free trade must be expanded to include those left behind at home and abroad.

* Technology and innovation: Energy security and climate change require American leadership to help establish global consensus and develop innovative solutions.

Report of the CSIS Commission on Smart Power: 071106_csissmartpowerreport.pdf

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GAO Report Advises DoD to Stop Using Contingency Requests for Long-Term Needs
11/07/2007 6:25 PM ET
WASHINGTON - SEPTEMBER 26: Chairman of the Joint Chiefs of Staff Peter Pace (L), Defense Secretary Robert Gates (C) and Deputy Secretary of State John Negroponte (R) listen to questions during a Senate Appropriations Committee hearing on on the supplement
Mark Wilson/Getty
WASHINGTON - SEPTEMBER 26: Chairman of the Joint Chiefs of Staff Peter Pace (L), Defense Secretary Robert Gates (C) and Deputy Secretary of State John Negroponte (R) listen to questions during a Senate Appropriations Committee hearing on on the supplement

By June of this year, the Pentagon budget allocations for "Global War on Terror" responsibilities had surpassed the amount expended for the duration of the 2006 fiscal year appropriations, according to a new report by the Government Accountability Office (GAO).

The GAO expresses concern that "changes in DOD’s GWOT funding guidance have resulted in billions of dollars being added to GWOT funding requests for what DOD calls the 'longer war against terror,' making it difficult to distinguish between incremental costs to support specific contingency operations and base costs."

In late 2006, the DoD altered its own guidelines for the allocation of budget requests. Whereas previously only unexpected costs of contingency operations were permitted to be used for emergency funding requests, the Pentagon has revised those requirements to include longer term items deemed necessary for the ongoing 'war on terror.'

The DoD change of regulations means that items previously considered a part of the Pentagon's base budget--such as future weapon systems, transformation, and increases to military end strength--have become a line item on request for GWOT funding.

GAO reports, in its collective opinion, that "similarities, in some cases, between DOD’s GWOT and base funding requests, along with the duration of GWOT operations, indicate DOD has reached the point where it should build more funding into its base budget."

Further, according to GAO, the practice of paying for ongoing military operations through emergency funding requests "reduces transparency and avoids the necessary reexamination of commitments, investment priorities, and trade-offs."

The agency recommends that, "If the administration believes the nation is engaged in a long-term conflict, the implications should be considered during annual budget deliberations."

The report makes eleven points of action in total for the Pentagon. The full range of recommendations ca be found on page 34 of the report attached below, though the three overriding recommendations for DoD are as follows:

(1) issue guidance defining what constitutes the “longer war against terror,” identify what costs are related to that longer war, and build these costs into the base defense budget;

(2) identify incremental costs of the ongoing GWOT operations that can be moved into the base budget;

(3) in consultation with the Office of Management and Budget consider limiting emergency funding requests to truly unforeseen or sudden events.

Read the full report here: d0868.pdf

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Review Cites Understaffing, Lack of Training for Serious Contracting Problems
11/02/2007 10:07 AM ET
"Notwithstanding there being almost as many contractor personnel in the Kuwait/Iraq/Afghanistan theater as there are U.S. military, the Operational Army does not yet recognize the impact of contracting and contractors in expeditionary operations and on mission success," according to the Gansler Commission's report on the Army expeditionary contracting process.

Contracting should be considered an important priority and not as an "institutional side issue," according to the report, which described Army contract personnel as "understaffed, overworked, undertrained, undersupported, and, most important, undervalued."

Dr. Gansler said the first steps are to hire more contracting officers and to train them properly. While the workload in contracting actions has increased more than 350 percent in the last 12 years, he said the Army's contracting-oversight workforce has been almost cut in half.

"First and most important is the people," Dr. Gansler said this afternoon at a Department of Defense press conference. He recommended adding 400 Soldiers and 1,000 Civilians to the Army contracting force, and another 583 Army personnel to fill positions in the Defense Contract Management Agency.

He also recommended establishing an Army Contracting Agency and adding five generals to the Army contracting force, to give it stature and importance. In the 1990s, he said the Army had five generals on the contracting force.

The commission outlined four areas as critical to future success:

(1) Increased stature, quantity and career development for contracting personnel -- both military and civilian, particularly for expeditionary operations;

(2) Restructure of the organization and responsibility to facilitate contracting and contract management;

(3) Provide training and tools for overall contracting activities in expeditionary operations; and

(4) Obtain legislative, regulatory, and policy assistance to enable contracting effectiveness, important in expeditionary operations.

The commission also followed investigations and audits that identified contractors and government contracting officials for corrupt activity related to contingency contracting.

As of Oct. 23, 83 Army criminal investigations relating to contract fraud in Iraq, Kuwait, and Afghanistan were ongoing. While the cases vary in severity and complexity, most involve bribery. There are confirmed bribes in excess of $15 million, according to the Army Criminal Investigation Command.

So far 23 U.S. government employees, both military and civilian, have been charged or indicted in federal court. Contracts valued at more than $6 billion have been affected.

Dr. Gansler said that many of those who committed fraudulent acts were not actually contracting officers, but personnel who were asked to oversee contracts as a secondary responsibility.

Smackdown
Senior Foreign Service Officer in Heated Response to State Decision
11/01/2007 5:09 PM ET
PETROL POLITICS
State Department Suggests National Hydrocarbons Laws Preferable, Not Necessary
By BEN LANDO 11/01/2007 11:05 AM ET
WASHINGTON, Oct. 31 (UPI) -- The U.S. State Department says an oil law implemented under Saddam Hussein is good enough for Iraq’s national government to sign oil deals, though it would prefer a new national law -- mired in controversy and far from approved -- to be used instead.

The new position is a shift for the U.S. government, or at least a nuance in its stance, which has pressed hard for a new hydrocarbons legal regime and condemned deals signed between a regional government and private firms -- especially when it’s an American company.

“We would prefer these laws to be passed before any deals are signed,” Deputy Assistant Secretary for Near Eastern Affairs Lawrence Butler told United Press International. “However, in the absence of passage of the hydrocarbon law, Iraq as a sovereign state can continue to use the Saddam-era laws to manage the sector in the meantime.”

It’s not clear what effect the U.S. stance will have on the international oil industry, salivating at the prospect of entering the third-largest oil reserves in the world, as Iraq’s Oil Ministry says it will not wait forever for a new law before signing deals.

Iraq is underexplored and experts predict the country's reserve totals could be twice as much as the 115 billion barrels that have already been found.

Iraq’s Kurds, who control territory covering less than 1 percent of Iraq’s proven reserves, are signing oil deals to explore and develop an oil sector of their own, which Washington sees as exacerbating the already weighty wedge in Iraqi national politics.

“We have many opportunities to excite you,” KRG Natural Resources Minister Ashti Hawrami told UPI recently when asked what the "sales pitch" is to international oil firms. “And if you don’t come forward now, you will lose.”

India’s Reliance Industries will apparently be the latest to sign a production-sharing contract with the Kurdistan Regional Government. A company official confirmed the two are in end-stage talks for two exploration blocks, the global energy information firm Platts reports.

The KRG has signed nine deals since the fall of Saddam, most of which have been called “illegal” by Baghdad, which considers the Kurds’ unilateral moves unconstitutional.

Security is a major factor, but top officials from international oil companies told UPI on condition of anonymity they’re waiting for a law detailing their rights as investors before entering the Iraqi oil scene.

The sector is nationalized now and many Iraqis -- including the stronger workers’ unions -- fear opening it up to international investors will squander their resources.

The most recent draft of the hydrocarbons framework law, which is stuck in Parliament’s Energy Committee, would ease some restrictions. The production-sharing contracts, however, are controversial. The darling deals of the international oil industry, PSCs allow companies to recover their total cost for exploration and development, and then split oil proceeds after that; the percentage of that split is what drives Iraqi concerns. The company can include the reserves on its books, bolstering its value.

The law is also held up by disagreements between the KRG and Baghdad over how decentralized control over the oil fields and exploration blocks will be.

Separate laws governing revenue sharing, the Ministry of Oil and the Iraqi National Oil Co. round out the hydrocarbons package but are further behind than the oil law.

Iraqi Oil Minister Hussain al-Shahristani told potential investors at an Iraq oil conference held in Dubai nearly two months ago there is no “legislative vacuum” in Iraq. He said if there is no national oil law, the ministry would begin implementing its strategic plan for Iraq’s oil and gas reserves using the Saddam law.

The KRG passed its own oil law in August, which the region says the 2005 Constitution allows for, another dig at the slow pace of the national oil law.

Since passing the regional oil law it signed three production-sharing contracts: Heritage Energy Middle East Ltd., a subsidiary of the Canadian company Heritage Oil and Gas, and Perenco Kurdistan Ltd., a subsidiary of Perenco S.A. of France, earlier this month; Dallas-based Hunt Oil Corp. on Sept. 8.

The Hunt deal row spread to Washington, as the State Department became vocal and members of Congress raised red flags.

Prominent congressional committee chairmen have sent letters of query to the State Department, White House and Hunt Oil, asking what the government knew about the deal and what it told Hunt before it signed.

President Bush said he “knew nothing” but is concerned if it “undermines” national law efforts.

The State Department said it tells companies that approach it that such deals widen the gap between the federal government and the KRG, delaying resolution on a national package of laws governing the hydrocarbons sector.

Hunt Chief Executive Officer Ray Hunt told The Wall Street Journal there were no conversations with the U.S. government prior to signing the deal. The company admitted to the meeting after being confronted with internal State Department documents obtained by UPI that revealed a meeting in Irbil, the KRG capital. According to the document, the department gave Hunt its “do not sign” talking points.

Aside from monkey-wrenching U.S. plans to prop up a strong and stable central government, the department says companies signing deals with the region without a national law will be on shaky legal grounds.

“We continue to advise companies from outside of Iraq that they incur significant political and legal risk in signing any contracts with any party inside of Iraq before a national law package is passed by the Iraq Parliament,” the State Department’s Butler, who oversees Iraq policy, told a U.S.-Arab policymakers conference last week.

It appears most of the international oil community is listening to the State Department, especially the majors, fearing a deal with the KRG will blacklist them from the rest of Iraq’s black-gold bounty.

“We continue to encourage Iraq’s political leaders to agree on the passage of a national hydrocarbon law and companion legislation,” Butler told UPI. Washington says such a law will ease tensions and lead to reconciliation, and has been pushing the law and Iraqi legislators behind the scenes for years.

But if Baghdad joins the KRG in signing oil deals without a nationally approved strategy for the oil sector -- regardless of each government’s claim the Constitution allows it -- and international oil companies rush in, it could cause chaos in the Iraqi oil sector, exacerbating an already tense political standoff.

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