WASHINGTON, Janury 11 (IslamOnline & News Agencies) - American officials are seriously considering proposals that the United States tap Iraq’s oil to help pay the cost of a military occupation, a move that would further fan Arab suspicion of U.S. motives in Iraq, reported an American newspaper Friday, January 10.

“Officially, the White House agrees that oil revenue would play an important role during an occupation period, but only for the benefit of Iraqis,” the News Day paper quoted a National Security Council spokesman as saying.

It also quoted a source who has been briefed by participants in the dialogue as saying that there are strong advocates inside the administration, including in the White House, for appropriating the oil funds as “spoils of war.”

“There are people in the White House who take the position that it's all the spoils of war,” said the source, who asked not to be identified.

“We [the United States] take all the oil money until there is a new democratic government [in Iraq].”

“The Justice Department has doubts,” he said, adding that justice experts that “any of it [Iraqi oil funds] can be used or has to all be held in trust for the people of Iraq.”

The News Day quoted a source working with the office of Vice President Dick Cheney as saying that “several officials there too are urging that Iraq's oil funds be used to defray the cost of occupation.”

However, Cheney’s spokeswoman Jennifer Millerwise declined to talk about “internal policy discussions.”

Using Iraqi oil revenues would mean real objective of war is colonialism: Barakat

Seizing Iraqi oil revenues to fund an occupation of the country “would reinforce a prevalent belief in the Mideast that the conflict is all about control of oil, not rooting out weapons of mass destruction,” the paper quoted Halim Barakat, a recently retired professor of Arab studies at Georgetown University, as saying.

“It would mean that the real ... objective of the war is not the democratization of Iraq, not getting rid of Saddam, not to liberate the Iraqi people, but a return to colonialism,” he charged.

“That is how they [Mideast nations] would perceive it.”

The Congressional Budget Office estimates that the cost of an occupation would range from $12 billion to $48 billion a year, and officials believe an occupation could last 1 1/2 years or more, the paper reported.

Laurence Meyer, a former Federal Reserve Board governor who recently presided over a conference organized by the Center for Strategic and International Studies on the economic consequences of a war on Iraq, said discussions deliberately shunned the question of whether Iraq oil revenues should be used to foot the war bill, the paper said.

“It’s a very politically sensitive issue,” he said.

“We’re in a situation where we’re going to be very sensitive to how our actions are perceived in the Arab world.”

“Last month a respected Washington think tank prepared a classified briefing commissioned by Andrew Marshall, the Pentagon’s influential director of Net Assessment, on the future role of U.S. Special Forces in the global war against terrorism,” said the paper.

“Part of the presentation recommended that oil funds be used to defray the costs of a military occupation in Iraq,” it quoted a source who helped prepare the report as saying.

According to the study prepared by the Center for Strategic and Budgetary Assessments, “the cost of the occupation, the cost for the military administration and providing for a provisional [civilian] administration, all of that would come out of Iraqi oil.”

But the source who contributed to the Marshall report said that its conclusions reflect the opinion of many senior administration officials, the paper reported.

“It [the oil] is going to fund the U.S. military presence there,” the source said.

“They’re not just going to take the Iraqi oil and use it for Iraq’s purpose. They will charge the Iraqis for the U.S. cost of operating in Iraq. I don’t think they're planning as far as I know to use Iraqi oil to pay for the invasion, but they are going to use it to pay for the occupation,” he told the paper.