November 3, 2003

Operation Iraqi Lawsuit

By George C. Wilson, National Journal

The United States and Britain, as well as their private contractors engaged in rebuilding Iraq, could face an onslaught of lawsuits—perhaps claiming hundreds of millions of dollars in damages and taking up years of court time. The grounds? That the coalition broke international law in the way it invaded and occupied Iraq, and in the way it is using Iraq's wealth and resources. This warning comes from an international lawyer who has just finished a detailed study of the possible legal consequences of America's first pre-emptive war.

David J. Scheffer, a visiting professor at Georgetown University Law Center who was President Clinton's ambassador-at-large for war-crimes issues, argues that the United States and Britain have ignored the "short leash" granted by the internationally accepted rules governing the behavior of occupying powers. He contends that they have gone far beyond just patching up Iraq, which he said is allowed under international law, and are now moving onto the forbidden ground of exploiting the oil wealth of the country.

Sooner or later, Scheffer predicts, the U.S. and British governments, as well as their contractors (including Vice President Dick Cheney's former employer, the Halliburton conglomerate of Houston), could well be sued by Iraqis arguing that their property, particularly oil, was misused by the Coalition Provisional Authority. Moreover, he says, the future sovereign Iraqi government, as well as the nations that were owed millions of dollars by the former government of Saddam Hussein, could also find grounds for lawsuits.

Scheffer and his legal allies assert that the rebuilding of Iraq is different from the United States' rebuilding of Germany under the Marshall Plan after World War II. Germany in 1945 was in ruins and had no immediate riches to tap. Iraq in 2003, however, has vast oil resources. And although President Bush has declared that Iraq's oil belongs to the Iraqi people, the Coalition Provisional Authority is making decisions on how to exploit that resource and what to do with the income from it. Scheffer questions the legal rights of the occupying powers to make decisions about oil income before a sovereign Iraqi government is formed. Moreover, given the rules of occupation, Scheffer contends that the American and British governments increased their legal liability when they decided to invade Iraq without the approval of the U.N. Security Council. "We have walked into a liability trap" by going it alone, he said of the U.S. government.

Other international lawyers dispute Scheffer's brief, which he is putting into a future article for the American Journal of International Law.

National Journal sent a summary of Scheffer's contentions to the State Department and invited legal experts there to comment. The department declined. But lawyers on the more conservative side of the political spectrum were happy to weigh in against Scheffer's analysis.

David Rivkin, who was a highly placed lawyer in the Reagan and George H.W. Bush administrations, said that Ambassador Paul Bremer and his Coalition Provisional Authority in Iraq are doing just what the international rules of occupation intended: helping the occupied country. "Is Bremer building a villa for himself and his children?" Rivkin asked rhetorically.

Rivkin also argued that it would be a stretch to hold the United States to the rules of strict liability for its actions in Iraq. "Absolutely nothing" in the international rules of occupation, he said, "imposes strict liability, even where one's actions do not bear the right fruit." Rivkin said, for example, that if the CPA builds a school in Iraq that turns out to be shoddy, the United States would still not be liable for claims. Rivkin did acknowledge, however, that Scheffer was right on one point: The United States would have been less vulnerable to lawsuits if it had invaded and occupied Iraq with the blessing of the United Nations. But, he contended, the lawyerly, if not insulting, wording needed to provide such immunity would never have passed in the Security Council.

Both John Yoo, a visiting professor at the University of Chicago and a visiting scholar at the American Enterprise Institute, and Paul Rosenzweig, a senior legal research fellow at the Heritage Foundation, said that the United States is for now the sovereign government of Iraq and, as such, could not be sued in U.S. federal court. And, as a sovereign power, they added, the United States would have to consent to being sued in the International Court of Justice in The Hague. Rosenzweig called Scheffer's argument "an interesting theoretical exercise" with little chance "of coming to fruition."

Scheffer obviously disagrees. He largely bases his case on the 1949 Geneva Convention IV, and on U.N. Security Council Resolution 1483, passed on May 22 of this year, which lifted the economic sanctions against Iraq and recognized the authority of the coalition forces as an "occupying power."

He argues that Geneva Convention IV limits what the Coalition Provisional Authority and its contractors can legally do in Iraq. "Occupation law was not designed to transform society," Scheffer said. "The fundamental premise of occupation law has been to confine the occupying power to humanitarian objectives that essentially preserve the status quo, not entitle the occupying power to transform the territory it holds. Otherwise, the door would be wide open for abuse by aggressive and benevolent armies alike."

Article 147 of the convention forbids occupying powers from engaging in the "extensive destruction and appropriation of property not justified by military necessity and carried out unlawfully and wantonly." Scheffer says that the article raises several questions: Does the coalition have the right to dig into Iraq's ground for oil and sell it as it sees fit? Did the U.S. military have the right to confiscate and spend the stashes of Iraqi cash it found?

Scheffer disagrees with conservatives who are skeptical that Iraqis would have standing to sue the United States for damages. He says that Iraqis and the future Iraqi government would be armed with the U.N. resolution if they sought redress in a U.S. federal court or through the International Court of Justice in The Hague.

Scheffer and other lawyers on the more liberal side of the spectrum also raise questions about President Bush's Executive Order 13303 issued on May 22. It seeks to protect Iraq's oil, and the Iraq Development Fund that spends money earned from sales of Iraqi oil, from legal attack by creditors or anyone else. In the executive order, Bush declared a national emergency and stated that any "threat of attachment or other judicial process against the

Development Fund for Iraq, Iraqi petroleum, and petroleum products" would obstruct "the orderly reconstruction of Iraq," and hence was "prohibited and shall be deemed null and void."

U.N. Security Council Resolution 1483 does indeed give the Coalition Provisional Authority wide latitude in spending the money in the Development Fund. But critics see the sweeping executive order as an attempt by Bush not just to safeguard Iraqi oil money from attachments and lawsuits but also to immunize corporations against liability lawsuits, no matter how they go about extracting and selling Iraqi oil.

The nonprofit human-rights and environment litigation group EarthRights International calls Bush's order "outrageous." And Tom Devine, the legal director for the Government Accountability Project, a watchdog group, said the order "appears to cancel the rule of law for the oil industry or anyone else who gets possession or control of Iraqi oil or anything of value related to Iraqi oil."

But Taylor Griffin, a Treasury Department spokesman who said he participated in many of the drafting sessions for the executive order, dismissed those interpretations as "bad lawyering." The whole idea, he said, was to make sure that proceeds from Iraqi oil go into the Development Fund to help Iraq and to avoid the risk that the money could be legally attached or claimed before reaching the Iraqi people. There is no attempt to pre-empt federal court suits, he said. Treasury promised last summer to issue rules to clarify Executive Order 13303 but so far has not done so.

Scheffer said that oil companies may "find comfort" in the order because "they are assured of some level of protection in federal court." He cautioned, however, that "it should not be assumed by anyone in the oil industry that orders of this character can immunize either the federal government or oil companies from the full force of occupation law. Would the federal court completely set aside occupation law in deference to this executive order, which has no statutory force whatsoever?" Scheffer doubts it.

Scheffer said he decided to raise these issues about the legal consequences of invading and occupying Iraq to increase awareness that going it alone in pre-emptive warfare "can actually come back and bite you—two, three, four, or five years from now when claims metastasize and become very real for any particular group of people who decide they have been victimized by the occupation." He foresees "a mega-claim, under which an entire class of Iraqi citizens" sues the U.S. and British governments for misusing their oil money. "Even if the Iraqi citizens were defeated in U.S. federal courts," Scheffer argued, "they might be able to persuade the future Iraqi government to pick up the case for them and file it as a reparations claim in the International Court of Justice in The Hague."

If Scheffer is right, stand by for a long war on the legal front in Iraq. Claims against Iran that were generated by the 1979 imprisonment of American hostages in the U.S. Embassy in Tehran are still being argued today in The Hague.