Global Policy Forum

Government Denies Charges that Bush Helped Oil Companies in Iraq

By André Verlí¶y

On May 22, the U.N. Security Council gathered in New York to approve a resolution lifting sanctions on Iraq, creating a Development Fund for the country and providing limited immunity to corporations involved in oil and gas deals there for the next four years. The resolution directed that proceeds from future sales of Iraqi oil and gas be placed in the development fund and allowed the U.S.-led Coalition Provisional Authority to disburse the funds in consultation with the interim Iraqi administration.

That same day at the White House, President George W. Bush signed Executive Order 13303, which appears to give immunity from any judicial process to every entity with direct or indirect interests in Iraqi petroleum and related products. "The threat of attachment or judicial process against the Development Fund for Iraq, Iraqi petroleum and petroleum products, and interests therein ... constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States," reads the executive order. It continues, "… any … judicial process is prohibited, and shall be deemed null and void."

Executive Order 13303 went unnoticed outside the government until July, when it was spotted by the Institute for Policy Studies, a liberal think tank. Since then, accusations have been flying over whether or not the Bush administration has given blanket immunity to the oil industry in Iraq. "The Executive Order is a blank check for corporate anarchy," Tom Devine, legal director of the non-profit Government Accountability Project, wrote in a July 2003 assessment of the order for the Institute. "Its sweeping, unqualified language places industry above domestic and international law for anything related to commerce in Iraqi oil." "Translated from the legalese, this is a license for corporations to loot Iraq and its citizens," Devine added.

The U.S. Treasury Department argues that Bush's executive order simply protects the Iraqi people and the oil funds expected to be used to rebuild the country. Taylor Griffin, a Treasury spokesman, told the Center for Public Integrity that because of Iraq's foreign debt —estimates, which do not include compensation to Kuwait for the first Gulf War, vary between $100 billion and $130 billion—the administration did not want any loopholes that would allow people to sue Iraq. Bush's executive order was necessary for the country to avoid long legal struggles, such as those between the Philippine government and former Philippine President Ferdinand Marcos over funds in Swiss banks, he added.

"The executive order only protects revenue from the Development Fund for Iraq. We knew we were going to issue regulations … and we had to be broad," Griffin said. "The Iraqi people need that money," Griffin continued. "We wrote it broad to protect all of the money."

Administration officials said critics' concerns about such issues as blanket immunity for oil spills will be addressed in the Treasury Department's regulations on how to implement Executive Order 13303 through its Office of Foreign Assets Control. Griffin said the regulations were being drafted, but he could give no timetable on when they would be ready.

Where U.N. Resolution 1483 provides immunity only until the first point of sale, Executive Order 13303 appears to give immunity from extraction to payment of taxes, according to some advocacy groups and legal experts. There is no time frame in the order. In the case of an oil spill, Resolution 1483 does not protect from a lawsuit, while Section 1 of the executive order states that any "judicial process is prohibited, and shall be deemed null and void." According to Devine, this removes any enforcement for civil and criminal liability with respect to protected activities covered by the executive order.

"EO 13303 waives the entire system of administrative law under Federal Acquisitions Regulations for government contracts," Devine wrote in his critique of the order. "It cancels liability for civil fraud in government contracts under the False Claims Act … the nation's most effective anti-fraud statute. In short, the EO is a blank check for pork barrel spending."

Advocacy groups say the administration needs to change the language of the executive order if it has other intentions. "This executive order can only be read to cancel the rule of law for the oil industry," Devine said in August. Jamin Raskin, a constitutional law professor at American University, echoed Devine's concerns in comments to the Los Angeles Times, saying the language "seems to destroy the prospect of any enforcement of civil or criminal liability." He suggested the executive order may go the way of the administration's military tribunals, which were sharply refined by regulation after public protest.

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