- The Washington Times - Tuesday, September 30, 2003

Leaders of the Iraqi Governing Council warned Congress yesterday that transforming a $20 billion reconstruction aid package into a loan would fuel suspicions across the Middle East that the real reason the United States went to war was to get control of Iraq’s vast oil reserves.

Ahmed Chalabi, whose monthlong term as president of the council ends today, emerged from a meeting with top Senate leaders saying that the symbolism of the loan would be very harmful to the U.S. reconstruction effort.

“A loan would be an added burden on the Iraqi people, and it would also show that the United States was less than sincere on the issue of freedom,” Mr. Chalabi said.

Changing the aid package from a grant to a loan “will have very adverse effects, both in Iraq and in the region,” added Adnan Pachachi, one of the most senior members of the Governing Council.

President Bush included the $20 billion as part of an $87 billion supplemental spending package for Iraq and Afghanistan. Bush administration officials are strongly opposed to efforts, endorsed by leading congressional Democrats, to convert the money to a long-term loan, with Iraq’s immense oil reserves as the collateral.

Iraq faces $100 billion in foreign debts and an additional $120 billion in reparations from the 1991 Persian Gulf war run up by the ousted regime of Saddam Hussein. U.S. officials also fear that efforts to get other nations to contribute aid and troops to the Iraq stabilization mission will be jeopardized if Congress insists that the U.S. contribution come in the form of a loan.

The Senate Appropriations Committee beat back on a party-line, 15-14 vote yesterday an amendment offered by Sen. Byron L. Dorgan, North Dakota Democrat, to transform the aid package to a loan.

But Senate Minority Leader Tom Daschle, who attended the meeting with the Iraqi leaders, said he still favored the loan idea in light of the U.S. government’s budgetary woes.

“Somebody’s got to borrow the money. Either it’s going to be the United States or Iraq,” the South Dakota Democrat said. “We’re borrowing the money today to give to Iraq so they don’t have to borrow the money. Now you find me an American who thinks that makes sense.”

Even some Republicans seem open to the loan idea.

Senate Appropriations Committee Chairman Ted Stevens, Alaska Republican, left open the possibility that Iraq may pay back some of the money “when oil starts coming out of the ground.”

But a bipartisan delegation of House members back yesterday from a four-day trip to Iraq came out strongly against the idea of a loan.

“I fully intend to vote for the whole package, although that may not be a popular vote in my district,” said Rep. Rick Larsen, Washington Democrat.

Rep. Jerry Lewis, the California Republican who leads the House Appropriations defense subcommittee, said he “personally favored” the grant idea.

Mr. Chalabi and State Department spokesman Richard Boucher yesterday played down reports of a growing rift between the U.S.-appointed Iraqi council and the U.S.-dominated administration over the timing of a return to full Iraqi sovereignty. Mr. Chalabi and others have pressed for a quicker turnover of power, but have also raised doubts they can meet Secretary of State Colin L. Powell’s suggested six-month deadline to write a new constitution.

“Don’t believe what you read in the newspapers,” said Mr. Chalabi, who many tout as a future leader of Iraq.

“We are allies and friends. The United States has done an enormous, historic move in Iraq. The relationship between us and the United States government is very close.”

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