IMPEACH BUSH

WASHINGTON, Oct 9 (Reuters) - The opening of the mammoth new U.S. Embassy in Baghdad has been delayed indefinitely while its Kuwaiti contractor fixes a punch list of problems, the State Department said on Tuesday.

The sprawling complex, whose cost is edging toward $750 million, was set to open last month but U.S. lawmakers say shoddy work by the contractor and poor oversight by the State Department have delayed it.

State Department spokesman Sean McCormack rejected claims of inadequate oversight and said there was no indication how long it would be before the new embassy opened.

"I can't tell you when the embassy is going to open," said McCormack. "We don't have an answer."

McCormack said U.S. Secretary of State Condoleezza Rice was prepared to "cut everybody involved some slack" if the delay fell within the norms of opening a large embassy complex but would demand answers if it dragged on too long.

"Anytime you have a large construction project you have punch list items, and we shall see in, I would hope, the not-too-distant future whether or not ... these delays ... fall outside the norms that one might expect for this kind of project," McCormack said.

"We're not going to buy ourself a turkey here. We're going to make sure that we get what we paid for," he said.

Democratic Rep. Henry Waxman of California, who heads an oversight committee in Congress, sent a letter to Rice on Tuesday asking her to explain the delay and accusing her department of incompetence and inadequate oversight.

OVER BUDGET

Congress originally allocated nearly $600 million to build the biggest U.S. Embassy in the world but Waxman said the project was now $144 million over that budget.

In addition, he said new documents showed hundreds of violations of fire codes and other regulations and electrical problems throughout the complex.

"These problems were so severe and widespread that the inspectors concluded that none of the buildings on the new embassy compound could be approved for occupancy," wrote Waxman, a staunch critic of the State Department's oversight of its contractors in Iraq.

McCormack said original specifications of the contract changed after it became clear that more office and living space was needed for civilian and military staff.

"It is not a cost overrun. It is an additional contract requirement," he said.

Waxman, in turn, accused the State Department of misleading his committee over the status of the embassy project at a hearing on July 26 when he said senior officials dismissed issues raised by his committee as minor problems.

"It would appear to be gross negligence if the department's senior management were unaware of the defects at the embassy when they testified before the committee," he said.

"Increasingly, it appears that the State Department's efforts in Iraq are in disarray," added Waxman, referring to an investigation involving U.S. security contractor Blackwater.

Asked about Waxman's comments that the State Department's efforts were in disarray, McCormack replied: "That is just a ridiculous statement."

Waxman has opened an inquiry into accusations that the State Department's inspector general interfered with investigations into waste and fraud involving the construction of the embassy. The inspector general rejected these claims.