At a hearing by a congressional watchdog committee, Democratic lawmakers said the State Department under Rice had been too lax with armed security contractors, ignored corruption at the highest levels of the Iraqi government and was sloppy in overseeing construction of the costly new U.S. Embassy in Baghdad.
"I think there was a huge gap between what she said and reality," said Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee.
Waxman, D-Calif., and other Democrats said they would not call on Rice to resign, noting that their frustration is with the Bush administration's policies rather than Rice alone.
"If you just change the deck chairs, it's not going to change the policy," said Rep. Peter Welch, D-Vt., a committee member.
The hearing gave Democrats the venue to hammer the administration on the war. Thus far, they have been unable to pass veto-proof legislation ordering troops home from Iraq.
Recent events have given them ample fodder: shootings involving the private guards hired to protect State Department diplomats; allegations that Iraq's prime minister, Nouri al-Maliki, has blocked corruption investigations, and delays in the embassy's construction.
The Democrats' strategy did not go unnoticed by Republicans.
Democrats seemed to be trying "to drill enough small holes in the bottom of the boat to sink the entire Iraqi enterprise, while still claiming undying support for the crew about to drown," said Rep. Tom Davis of Virginia, the committee's top Republican.
The usually unflappable Rice became frustrated at several points, including a tense exchange with Welch on whether al-Maliki was corrupt. Since April, the prime minister has required that Cabinet-level corruption investigations first receive his approval. Such a policy, Welch and other Democrats say, is tantamount to blanket immunity for al-Maliki and his ministers.
When repeatedly pressed to say whether she thought al-Maliki was covering up fraud and abuse, Rice said she would not respond to rumors.
"To assault the prime minister of Iraq or anyone else in Iraq with here-to-date unsubstantiated allegations or lack of corroboration, in a setting that would simply fuel those allegations, I think, would be deeply damaging," she said.
After the hearing, Waxman said there was a gap between "her very smooth presentation" and the facts. Rice said the State Department was invested in stopping corruption, but Waxman said she was unfamiliar with al-Maliki's corruption policy and that department insiders tell lawmakers its efforts are dysfunctional.
The hearing comes after several weeks of wrangling between Waxman and the department, particularly on the public disclosure of U.S. corruption investigations in Iraq.
The department says such information should be classified because it could expose sources and hurt U.S.-Iraqi relations. Democrats counter that if Iraqi officials are stealing from their government and funding anti-U.S. militias, the State Department should make it public.
On the issue of armed contractors such as Blackwater USA, Rice this month ordered new rules for the private guards that cover the use of deadly force.
Rice said Thursday that she and Defense Secretary Robert Gates might make further recommendations. She said legislation is needed to ensure contractors involved in overseas killings can be prosecuted legally.
A day earlier, Rice ousted the State Department's security chief, Richard Griffin, after a review panel she convened found serious deficiencies in his office's oversight of contractors.
Griffin, the assistant secretary of state for the Bureau of Diplomatic Security, resigned under pressure, becoming the first political casualty of the fallout from the Blackwater incident. He will be replaced on Nov. 1 on an acting basis by one of his deputies.
Meanwhile, State Department officials denied any double standard or impropriety in the firing of Griffin and this week's promotion of two of his subordinates who directly oversaw the hiring of contractors, including those in Iraq.
One official, who spoke on condition of anonymity to describe an internal personnel matter, said the promotions were based on performance reviews completed months earlier and took into account their work over the past seven years.
Rice's answers on the Blackwater scandal did not satisfy many Democrats during the hearing, including Rep. Paul Hodes of New Hampshire.
Before giving Blackwater hundreds of millions of dollars, "didn't you or your subordinates ever stop to ask whether or not the legal framework was a place to hold these contractors accountable for its actions?" he asked.
Congress is moving to put all armed contractors operating in combat zones under military control and make them subject to U.S. criminal jurisdiction.
The Senate this month included a requirement in its 2008 defense authorization bill that would give combatant commanders authority over contractors.
Sen. Carl Levin, D-Mich., chairman of the Senate Armed Services Committee, told reporters Wednesday he is confident the House will go along with the idea and include it in a final bill sent to President Bush.
A separate bill to give U.S. courts jurisdiction to prosecute State Department contractors has passed the House and is being reviewed by the Senate Judiciary Committee.