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House panel eyes Iraq oil contract

Bush administration officials knew that a Texas oil company with close ties to President Bush was planning to sign an oil deal with the regional Kurdistan government that runs counter to U.S. policy and undercut Iraq's central government, a congressional committee has concluded.

The conclusions were based on e-mail messages and other documents that the committee released Wednesday.

U.S. policy is to warn companies that they incur risks in signing contracts until Iraq passes an oil law and to strengthen Iraq's central government. The Kurdistan deal, by ceding responsibility for writing contracts directly to a regional government, infuriated Iraqi officials. But State Department officials did nothing to discourage the deal and in some cases appeared to welcome it, the documents show.

The company, Hunt Oil of Dallas, signed the deal with the Kurdistan's semiautonomous government last September. Its chief executive officer, Ray Hunt, a political ally of Bush, briefed an advisory board to Bush on his contacts with Kurdish officials before the deal was signed.

In an e-mail message released by the congressional committee, a State Department official in Washington, briefed about the impending deal with the Kurdistan Regional Government, wrote: “Many thanks for the heads up; getting an American company to sign a deal with the KRG will make big news back here. Please keep us posted.”

The document release comes as the administration is defending help that U.S. officials provided in drawing up a separate set of no-bid contracts, still pending, between Iraq's Oil Ministry in Baghdad and five Western oil companies to provide services at other Iraqi oil fields.

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