An attempt by a group of Democratic senators to pressure the State Department to intervene in the Iraqi government’s awarding of oil contracts appeared stalled at the starting gate Tuesday.

Charles E. Schumer, D-N.Y., John Kerry, D-Mass., and Claire McCaskill, D-Mo., want the administration to step in and object to contracts soon to be awarded by the Iraqi government to foreign oil companies, because Iraq has failed to complete action on an oil-sharing revenue law.

These Democrats also argue that giving more money to the Iraqi government would feed its corruption and inflame sectarian violence.

But the senators do not have any plans to follow through legislatively, and the administration has flatly rejected the notion that it should be in the business of telling the Iraqis how or to whom they can award the contracts.

Schumer claimed that American national security would be harmed if Iraq is allowed to earn more money from oil revenue.

“The last thing Iraq needs is further impetus for the three factions to fight over billions of dollars of oil revenues as American troops are caught in the cross-fire,” he said, referring to Iraq’s Shiite, Sunni and Kurdish populations.

Republican leaders attacked the logic of that argument Tuesday, noting that Iraq is a sovereign country entitled to award contracts to whomever it sees fit. Moreover, the United States should be encouraging economic development in Iraq, not thwarting it, they said.

“I’m perplexed to understand what the complaint might be,” said Senate Minority Leader Mitch McConnell, R-Ky. “Clearly we want the Iraqi government to be a sovereign entity that makes its own decisions.”

Concerns Over Wider U.S. Role

According to news reports last week, the Iraqi Oil Ministry is in the final stages of negotiating contracts with a group of foreign oil companies, including Chevron, Exxon Mobil, Shell, Total and BP, all of which had stakes in Iraqi oil prior to the Saddam Hussein regime.

Although these are reported to be modest technical support contracts, the Democratic senators said the contracts would give those companies a leg up in future negotiations over greater shares of Iraq’s oil resources.

In a June 23 letter to Secretary of State Condoleezza Rice, Schumer and Kerry demanded the Bush administration somehow stop the Iraqi government from awarding the contracts until the oil-sharing law is complete.

“We fear that any such agreement signed by Iraq’s Hydrocarbon Ministry without an equitable revenue sharing agreement in place would simply add more fuel to Iraq’s civil war,” the letter stated.

But White House and State Department officials pointed out that the Democrats’ call for intervention ran counter to their demand that Iraq take on more responsibility, especially for its own reconstruction.

“I’m curious as to why the Democrats seem to, on the one hand, want Iraq to take over more control of their own country, but on the other hand, want to continue to meddle in their business,” White House spokeswoman Dana Perino said Tuesday.

Push For More Iraqi Spending

Democrats have been pushing for Iraq to spend more of its estimated $100 billion in annual oil revenue on reconstruction, even adding language to the defense authorization bill (HR 5658, S 3001) and supplemental war funding measure (HR2642) to that effect.

Kerry said the contracts would inflame anti-U.S. sentiment in Iraq by giving Iraqis the perception that American companies were abusing Iraqi oil resources.

“What bigger, more bold message could you emblazon on our involvement in Iraq than to have American oil companies walking away with big oil deals without transparency and accountability?” Kerry said.

But only two of the companies mentioned in the Schumer-Kerry letter are incorporated in the United States.

Stephen Biddle, senior fellow at the Council on Foreign Relations, said that while U.S. officials in Iraq actively advise and educate the Iraqi government on contracting and reconstruction, they are in no position to force the Iraqis to award or cancel contracts based on U.S. interests.

Also, despite the lack of an oil-sharing law, Iraq’s Shiite-led government is not using oil revenue to support their sectarian objectives, Biddle said.

“They do a pretty equitable job of distributing oil revenue, not because they are legally obligated to but for political reasons,” he said.

A new report by the Government Accountability Office stated that Iraqi oil production was around 2.5 million barrels per day (bpd) in May and the U.S. goal for Iraqi oil production was 3 million bpd.

Iraqi government representatives have said the new contracts could boost Iraqi oil production by 500,000 bpd, according to reports.