World

W.H. Backs Iraq Constraints

December 11, 2003 / 7:05 AM EST / CBS/AP

The White House defends as "appropriate and reasonable" the policy barring countries that did not back the war from bidding on U.S.-funded reconstruction projects in Iraq, reports CBS News Correspondent Peter Maer.

"Prime contracts for reconstruction funded by U.S. taxpayer dollars should go to the Iraqi people and those countries who are working with the United States on the difficult task of helping to build a free, democratic and prosperous Iraq," Spokesman Scott McClellan said.

A directive from Deputy Defense Secretary Paul Wolfowitz limits bidders on those 26 contracts, worth $18.6 billion, to firms from the United States, Iraq, their coalition partners and other countries which have sent troops to Iraq.

The ruling bars companies from U.S. allies such as France, Germany and Canada from bidding on the contracts because their governments opposed the American-led war that ousted Saddam Hussein's regime.

In other recent developments:

Two U.S. soldiers were killed and four were wounded in separate attacks Wednesday in the northern city of Mosul, the U.S. military said. One was guarding a gasoline station, the other part of a convoy when guerrillas detonated a roadside bomb and opened fire.

U.S. forces in Kirkuk arrested 29 people, including five Iraqi policemen, suspected of cooperating with the insurgents, reports CBS News Correspondent Lisa Barron.

In Baghdad, Iraq's interim government voted to establish a war crimes tribunal to prosecute top members of Saddam's regime. U.S. authorities are holding several dozen of Saddam's top aides who could be tried under the new measure.

In Baghdad on Wednesday, 3,000 funeral marchers mourned four men killed in a bombing of a Sunni mosque a day earlier. Then they took revenge against those they believe to be responsible, rival Shiite Muslims, reports Barron. The men went to a nearby Shiite mosque and destroyed much of the interior. Many in Iraq fear it could mark the start of a civil war.

Several U.S. allies sharply criticized the decision.

"If these comments are accurate ... it would be difficult for us to give further money for the reconstruction of Iraq," said Canada's deputy prime minister, John Manley. "To exclude Canadians just because they are Canadians would be unacceptable if they accept funds from Canadian taxpayers for the reconstruction of Iraq."

Steven Hogue, a spokesman for Prime Minister Jean Chretien, said Canada has contributed more than $190 million to the rebuilding effort.

CBS News Correspondent Elaine Cobbe reports France is studying the directive to see whether or not it breaks international laws on competition. It is conferring with the European Union and the European Commission.

Germany and Russia also are angry, reports CBS Correspondent Charlie D'Agata.

German Foreign Minister Joschka Fischer said Germany is "astonished."

Russia, which is owed $8 billion by Iraq, issued a veil threat to take a harder line for repayment.

"As far as Russia is concerned," Defense Minister Sergei Ivanov said, "it is not planning any kind of write off of that debt.

The Wolfowitz memo, dated Friday and posted on a Pentagon web site Tuesday, says restricting contract bids "is necessary for the protection of the essential security interests of the United States."

Bush administration officials have suggested publicly and privately since before the war started that countries which opposed the United States on Iraq would be cut out of at least some of the lucrative rebuilding contracts administered by Washington. The order from Wolfowitz covers contracts to manage the entire rebuilding effort, train and equip the Iraqi National Army and rebuild infrastructure including roads, sewers, power plants and oil fields.

Wolfowitz wrote that the restrictions would encourage other countries to join the coalition in Iraq. A Pentagon spokesman, Maj. Joe Yoswa, said the order does not prohibit companies from the excluded countries from getting subcontracts in Iraq.