Baker sought to cover-up illegal trade with Saddam’s Iraq, Israeli charges

Baker sought to cover-up illegal trade with Saddam’s Iraq, Israeli charges
Iraq Study Group co-chair James A. Baker made two points as he testifies before the Senate Armed Services Committee on the release of the ISG report on Dec. 7 (Mike Theiler/AFP)
 

Former Secretary of State James Baker was involved in a cover-up of illegal trading by his law firm with the regime of Iraqi dictator Saddam Hussein, according to a former contractor who did work for Mr. Baker’s firm.

 

Mr. Baker used non-Americans to help acquire funds from Iraq in violation of the United Nations embargo and U.S. law, the former contractor said.

 

Nir Gouaz, an Israeli security veteran, said that in 1999 Mr. Baker’s leading deputy at the law firm of Baker Botts ordered him to destroy all documents that detailed how he obtained from Iraq more than $250 million for a client.

 

Mr. Baker’s firm has denied Mr. Gouaz’s account.

 

But the Israeli said he has documents that could destroy Mr. Baker’s reputation. He said he has been angered by Mr. Baker’s attempt to press the Bush administration to impose an anti-Israeli policy in an attempt to win Arab cooperation to help stabilize Iraq. Mr. Baker, appointed by President Bush in 2003 as his envoy to recover debts from Iraq, has also co-chaired the Iraq Study Group, which on Dec. 6 issued 79 recommendations on U.S. policy in Iraq.

 

“When I heard the Baker recommendations, I couldn’t stand the hypocrisy,” said Mr. Gouaz, president of Caesar Global Securities, who worked for Mr. Baker’s law firm in Washington for two years. “In his eyes, the diplomatic vision for the Middle East is actually an economic vision. A person like that wouldn’t stop at anything to reap profits and dictate to Israel how to behave.”

 

Mr. Gouaz said he began working for Baker Botts, a leading Washington firm with more than 700 attorneys, in the late 1990s. He was assigned a case by Mr. Baker’s aide, Jeffrey Stonerock, to help recover an $880 million Iraqi debt to South Korea’s Hyundai Engineering, which completed infrastructure projects in Iraq.

 

Iraq cited the United Nations’ Oil for Food program, which permitted Baghdad to buy only food and vital requirements, for its failure to pay the debt. The United States also froze Iraqi bank accounts abroad.

 

Mr. Gouaz said he personally maintained what he termed a “superficial relationship” with Mr. Baker. But he said Mr. Baker was informed on everything that took place regarding international transactions at Baker Botts.

 

Mr. Gouaz said he was hired because he was discreet and not a U.S. national. He said a U.S. national could have been prosecuted for dealing with the regime of Iraqi dictator Saddam Hussein.

 

“At that point, I thought I was doing work for Hyundai,” Mr. Gouaz recalled. “I didn’t think deeply about this. I didn’t think that James Baker was doing something abnormal. It is very acceptable to sell debts at a very low price. They took me because I was discreet and not American. He [Baker] knew this very well.”

 

In the end, Mr. Gouaz said, he acquired $273 million for Hyundai and helped save the company from bankruptcy. He said Mr. Baker’s law firm arranged a meeting with Shaiker Tawfik Fakoury, the president of the Bank of Jordan. In July 2000, Mr. Fakoury purchased the Iraqi government bonds from Hyundai at a discount and resold them to Saddam’s government in exchange for $450 million worth of oil.

 

Mr. Gouaz said he estimated that Mr. Baker’s firm received between 10 and 15 percent. Mr. Gouaz said he received much less, but would not specify. The Israeli said he dealt with everybody from a Chinese liaison to Jordan’s royal family to help recover the debt.

 

The Israeli investigator did not hear from Mr. Baker’s office until late 2001, after the al Qaeda suicide strikes on New York and Washington. Mr. Gouaz said Mr. Stonerock asked him to destroy the documents relating to the Hyundai-Iraq deal.

 

“A month or two after 9/11, I got a phone call from the office of James Baker and they told me ‘Remember the deal we did?’ I said ‘Of course,'” Mr. Gouaz recalled. “He asked ‘Do you have any documents from this deal?’ I said I don’t remember. He said ‘If you do, destroy them.'”

 

“It is in a safe,” he added. “At that moment, I knew that I would have to preserve the documents and even photographs [of meetings]. I gave it to somebody from the Israel Security Agency.”

 

Mr. Gouaz said since then he has felt pressure from Mr. Baker’s office. He indicated that since 2002 he began experiencing difficulties with acquiring permits from the U.S. government.

 

“There were no threats,” said Mr. Gouaz, who returned to Israel in 2003. “But I was under lots of pressure after 9/11 to get rid of the documents. They asked me to again sign a secrecy document, which I didn’t do. I felt under a lot of pressure regarding anything I did that required approval from the administration.”

 

Mr. Gouaz has allowed outsiders to see some of the documents. They included a copy of a July 11, 2000 letter from Hyundai that thanked Mr. Gouaz for his efforts in collecting money from Iraq, an Iraqi government bond for $11 million and photographs of what Mr. Gouaz said was a signing ceremony in 2000 in which Hyundai’s Iraqi government bonds were sold to the Bank of Jordan.

 

Mr. Stonerock, a retired U.S. Army lieutenant colonel, heads the Korea practice group at Baker Botts and advises non-U.S. clients on U.S. corporate matters. The firm cited Mr. Stonerock’s services for Hyundai Motor Co., but did not refer to the Iraqi file.

 

“Mr. Stonerock’s practice concentrates on applying both law and public policy to create value for clients,” Baker Botts said on its Web site. “He has brought this dual focus to supporting the Hyundai Motor Company in the site selection for its first U.S. manufacturing facility, representing Korean companies in major international arbitrations as well as patent-infringement litigations, working for major Korean energy companies in projects in several countries, and advising on the impact of U.S. trade policy, nuclear nonproliferation issues, and other U.S. governmental processes and matters.”

 

Mr. Gouaz is certain that Mr. Baker knew of every aspect of the Hyundai-Iraq case. In 2005, Mr. Baker, who counseled the firm’s clients for more than 20 years, became a partner in charge of the Washington, D.C. office of Baker Botts.

 

Over the last year, Mr. Gouaz said, he has been approached by some in the U.S. media to discuss his allegations against Mr. Baker. Mr. Gouaz, who has begun meeting reporters, said he is prepared to present evidence against Mr. Baker in any official U.S. inquiry.

 

“It could be that I will land in the United States and talk to an investigatory committee,” Mr. Gouaz said.

Baker Expose

Baker Expose

Baker case documents saved from shred order
Businessman says they outline sanction-avoiding transactions

By Aaron Klein, © 2006 WorldNetDaily.com

JERUSALEM – An Israeli businessman who says he served as a broker in a multimillion-dollar Iraqi collection deal by the law firm of former Secretary of State James Baker now charges in a WND interview Baker’s firm tried to cover up the alleged transactions, concerned about exposure after the Sept. 11, 2001, attacks.

The deal was structured to bypass U.S. sanctions on Iraq, according to the middleman, Nir Gouaz, president of Caesar Global Securities in Israel.

Gouaz claimed Houston-based Baker Botts made about $30 million collecting funds owed to a South Korean company by the Iraqi government at the peak of American sanctions imposed against Baghdad.

He claimed Baker was directly involved in the deal. CONTINUE

Baker-Hamilton Lunacy

Baker-Hamilton Lunacy
By Kenneth R. Timmerman
FrontPageMagazine.com | December 15, 2006

Much ink has already been spilled on the Baker-Hamilton Iraq Study Group report. Welcomed by liberals and condemned by conservatives, more importantly it has been rejected by just every public figure in Iraq. Without a doubt, the report’s most controversial recommendation was the call for direct talks with the governments of Syria and Iran. What has gone unrecognized, however, are the stunning misconceptions underlying that recommendation. (Note: the page references below all refer to the PDF version of the report, which can be downloaded here. All emphasis is my own). Misconception #1: “Given the ability of Iran and Syria to influence events within Iraq and their interest in avoiding chaos in Iraq, the United States should try to engage them constructively.” (p7) Neither Iran nor Syria has any interest in avoiding chaos in Iraq. On the contrary, their behavior shows that chaos and the collapse of the Iraqi government are in fact their goal. If they had been concerned with avoiding chaos in Iraq, they had many good opportunities to support the Iraqi government, to support the building of a national Iraqi army, and to strengthen border controls. Instead, they promoted insurgents whose goals were to ignite sectarian conflict.  Misconception #2: “In seeking to influence the behavior of both countries, the United States has disincentives and incentives available.” (p7) Since the 1979 revolution, the United States has repeatedly attempted to “influence the behavior” of the regime, without success.  The Baker-Hamilton proposal is a warmed rehash of the same failed policy we’ve been trying since 1979. Following the seizure of US hostages in Tehran in 1979, the U.S. and its allies imposed sweeping diplomatic, economic, and political sanctions. Tens of billions of dollars of Iranian assets were frozen around the world. The new Iranian regime became an instant outcast. Oil output plummeted to one third the pre-revolutionary levels. Unemployment soared. Per capita income collapsed – and has still not regained pre-revolutionary levels. Despite these “disincentives,” the regime persisted in the behavior we found objectionable. One could draw similar examples from the 1980s, the 1990s, or the past few years. Again and again, the world community has sought to “influence the behavior” of the Tehran regime, and the regime has brushed off threats and incentives alike. On the contrary, this is a regime that has been willing to pay a tremendously high price in blood and treasure to pursue its murderous policies. Recall that the only reason the regime ultimately released the U.S. hostages in January 1981 was out of fear that the incoming Reagan administration would join forces with Saddam Hussein’s Iraq and bring about the collapse of the regime. Short of an all-out U.S. military assault on Iran, U.S. support for regime-change is the only approach that can avoid a future Persian Gulf region dominated by a radical Iranian regime armed with nuclear weapons. Saying pretty-please, as the Baker-Hamilton group proposed, just isn’t going to work. Misconception #3: “Several Iraqi, U.S., and international officials commented to us that Iraqi opposition to the United States— and support for Sadr—spiked in the aftermath of Israel’s bombing campaign in Lebanon. “ (p24) This is pure mendacity, and is transparently false. It was the Feb. 2006 bombing of a Shiite shrine in Samarra (possibly carried out on orders from Iran) that ignited all-out sectarian conflict, not an Iranian proxy war hundreds of miles from Iraq’s borders. Misconception #4: Iraq cannot be addressed effectively in isolation from other major regional issues, interests, and unresolved conflicts. To put it simply, all key issues in the Middle East—the Arab-Israeli  conflict, Iraq, Iran, the need for political and economic reforms, and extremism and terrorism—are inextricably linked.” This is the type of nonsense the Saudis, their Washington lobbyists and others have been promoting for some time. Bombs are going off in Najaf? Hariri gets assassinated in Lebanon? It’s all the fault of the Jews. If there is logic here, it is not of the sort to make Americans proud. Misconception #5: “…the Support Group should actively engage Iran and Syria in its diplomatic dialogue, without preconditions. This is a prescription for transforming Iran into the superpower of the Persian Gulf. It’s no coincidence that following these encouragements in the Baker-Hamilton report, Iran announced it was installing 3,000 centrifuges in Natanz. Pay no price, pay no heed (or as my 13-year son would say, “No pain, no brain.”)   Note that the Saudis and their GCC partners are not the fools that Baker and Hamilton appear to be. The day after the Iranian nuclear announcement, the GCC announced that it would be studying a joint “peaceful” nuclear program, as I reported earlier this week. Misconception #6: “…[T]he United States and Iran cooperated in Afghanistan, and both sides should explore whether this model can be replicated in the case of Iraq. (Recommendation 9 – p37) Recommendation #9 is the core of the Baker-Hamilton argument for engaging Iran. Here they repeat Misconception #1 (that Iran actually wants to avoid chaos in Iraq) and Misconception #2 (that the U.S. can influence Iran’s behavior by offering incentives), to arrive at Misconception #6, a historic misreading of what actually happened in Afghanistan following the September 11 attacks on America. It should be noted that nowhere in the report does the ISG ever describe how Iran cooperated with the United States in Afghanistan. In television interviews, Baker has referred to multi-lateral talks on Afghanistan’s future that included an Iranian government representative. But for the Iranians, the Afghan talks were a no-brainer. Once the United States had smashed the Taliban regime and demonstrated its dominance in Afghanistan, of course the Iranians wanted to have a stake in crafting Afghanistan’s future. No one else was going to protect the Hazara community (Afghanistan’s Shiite population). Iran felt a historic responsibility to step up to the plate. It’s a safe bet that the Islamic regime in Tehran will take part in international groupings that include U.S. representatives if they believe that is the only way of meeting their interests. But this is simply not the case in Iraq. Beyond that, however, is an omission of tremendous significance. Far from opposing al Qaeda in Afghanistan, as the Baker-Hamilton report suggests, the Iranian regime provided material and logistical support to al Qaeda before 9/11, and opened a rat line to evacuate top al Qaeda operatives to Iran in the weeks after the U.S. assault on Afghanistan began, as the 9/11 commission report reported. Even today, Iran harbors several hundred top al Qaeda terrorists, including Osama Bin Laden’s eldest son Saad and al Qaeda military leader Saef al-Adel, whom they claim to be holding under “house arrest.” Misconception #7: …Worst-case scenarios in Iraq could inflame sectarian tensions within Iran, with serious consequences for Iranian national security interests.” (p37) Iran’s leaders don’t fear “sectarian tensions,” they have been stoking them. And should Saudi Arabia or others start to provide support for Azeri, Baluchi, or other separatists groups inside Iran, don’t worry: the Rev. Guards will crack down in a hurry, and Amnesty International won’t be invited to the party. Like several other “incentives” listed by the Baker-Hamilton group, this is a straw man. (Other “incentives” they cite include things the Iranians know we will do anyway, such “preventing the Taliban from destabilizing Afghanistan.”) The Iranians certainly aren’t going to change their behavior to get what’s being given to them for free. Misconception #8: Further, Iran’s refusal to cooperate [with the Support Group] would diminish its prospects of engaging with the United States in the broader dialogue it seeks (p38) This statement combines two separate misconceptions: first, that Iran actually seeks a broader dialogue with the United States (it does not: it merely seeks an end to perceived U.S. support for regime change), and second, that the United States might actually hold Iran accountable if it refuses to adhere to U.S. conditions for our cooperation.  The record of U.S. negotiations with Iran has been crystal clear:  the minute the United States begins making concessions to Iran, we are already have way down the slippery slope to capitulation. For proof, re-read my cautious welcome in these pages to Condoleeza Rice’s offer of a straight-up, black-and-white offer to Iran in May to give up its nuclear program. Anyone who thinks for an instant the Iranians aren’t aware of our dismal negotiation record has never tried to buy a Persian carpet. Glimmers of truth occasionally make it through the smokescreen of this absolutely abysmal report. Proposed talks between Iran and the United States about the situation in Iraq have not taken place. One Iraqi official told us: ‘Iran is negotiating with the United States in the streets of Baghdad.’” (p25) Given that no one is making the Iranians pay a price for “negotiating” with the United States by setting off shaped-charge IEDs that murder Iraqis and U.S. troops, why should they sit with us and agree to make concessions? If the Baker-Hamilton report had been written by high school freshmen who had never left the American suburbs, one would give them a pat on the back and suggest that they will change their tune once they encounter the real world, where America’s enemies are numerous, determined, and deadly. But Baker and Hamilton don’t have that excuse. Their report, which offers little more than U.S. capitulation, is based on lies and misconceptions these veteran practitioners of U.S. foreign policy are smart enough to understand.The President should respond to it just as Baker demanded when he told Congress not to consider it “like a fruit salad and say, ‘I like this, but I don’t like that. I like this, but I don’t like that.’” He should send the report back to its authors with a Donald Trump cover note: “You’re fired!”

James Baker’s Terrible Iraq Report

James Baker’s Terrible Iraq Report
By Daniel Pipes
FrontPageMagazine.com | December 13, 2006

The Iraq Study Group Report, cobbled together by ten individuals lacking specialized knowledge of Iraq, dredges up past failed U.S. policies in the Middle East and would enshrine them as current policy.

Most profoundly, regarding the American role in Iraq, the report moronically splits the difference of troops staying or leaving, without ever examining the basic premise of the U.S. government taking responsibility for the country’s minutiae, such as its setting up public works projects. Instead, the report unthinkingly accepts that strategic assumption and only tweaks tactics at the margins.

A preposterously lengthy list of 79 recommendations lies at the heart of the report. These include such gems as bringing in the (Saudi-sponsored) Organization of the Islamic Conference or the Arab League (no. 3) to decide Iraq’s future. Another creates an “Iraq International Support Group” that includes Iran, Syria (no. 5), and the United Nations secretary-general (no. 7).

Other brilliant recommendations call for the UN Security Council to handle the Iranian nuclear problem (no. 10) and for the support group to persuade Tehran to “take specific steps to improve the situation in Iraq” (no. 11). Right. The Iranian regime, whose president envisions a “world without America,” will save Washington’s bacon. Such counsel smacks at best of what the Jerusalem Post calls “staggering naïveté” and at worst of ghastly foolishness.

Of course, small minds assert that problems in Iraq are “inextricably linked” to the Arab-Israeli conflict – thereby repeating the precise mistake that lead co-chairman James A. Baker, III, made in 1991. He then led the effort to abandon the Persian Gulf and turn to the Palestinians, leaving Saddam Hussein in power for another dozen years and contributing directly to the present mess. In the new report, Mr. Baker and his colleagues call for a Palestinian state (no. 12) and even demand that a final settlement address the Palestinian “right of return” (no. 17) – code for dismantling the Jewish state. They peremptorily declare that “the Israelis should return the Golan Heights,” in return for a U.S. security guarantee (no. 16).

Besides the astonishing conceit of these Olympian declarations, one wonders how exactly the Iraqi civil war would be ended by pleasing the Palestinian Arabs. Or why the unresolved Arab-Israeli conflict is any more relevant to Iraq than the unresolved Azeri-Armenian conflict, which is closer to Iraq.

To make matters worse, Mr. Baker had the nerve to admonish the Bush administration not to treat the report’s 79 recommendations “like a fruit salad,” choosing one idea while rejecting another, but to accept it as a whole. Even in Washington, a town famous for arrogance, this statement made heads turn. That Mr. Baker and his co-chairman, Lee Hamilton, sat for a picture spread with famed photographer Annie Liebovitz for Men’s Vogue, a fashion magazine, only confirms the vacuity of their effort, as does their hiring the giant public relations firm, Edelman.

In all, the Iraq Study Group Report offers a unique combination of bureaucratic caution, false bi-partisanship, trite analysis, and conventional bromides.

Although the press reacted to this drivel, in the words of Daniel Henninger writing in the Wall Street Journal, with “neurotic glee,” Robert Kagan and William Kristol deemed it “dead on arrival,” and Iraq’s president, Jalal Talabani, called it “dead in the water.” One hopes they are right, that President George W. Bush ignores its recommendations, and that this “new lipstick on a very old pig” (Spencer Ackerman) quickly disappears from sight.

That’s not to say that Mr. Bush should “stay the course,” for that course has not worked. A host of creative ideas have been floated by individuals knowledgeable about Iraq, sympathetic to the administration’s goal of building a free, democratic, and prosperous Iraq, and not tempted to see their role as an exercise in preening. The White House should call on these talented individuals to brainstorm, argue, and emerge with some useful ideas about the future American role in Iraq.

Doing so means breaking with a presidential tradition, going back at least to 1919, of what I call a “know-nothing” Middle East diplomacy. Woodrow Wilson appointed two completely unqualified Americans to head a commission of inquiry to the Levant on the grounds, an aide explained, that Wilson “felt these two men were particularly qualified to go to Syria because they knew nothing about it.” This know-nothing approach failed America 87 years ago and it failed again now.

The Baker Scam..How Jewish people must answer

The Baker Scam..How Jewish people must answer

By Felix Quigley

A recent article on the Baker Report makes me jot down some concrete issues which the Jewish people and their supporters must now address…It includes an old debt which the Irish owe to the Jewish nation.

Let us take the IMRA statement put forward by a contributor to Israpundit (Baker wants to sacrifice Israel by Arlene Kushner)

IMRA
“The White House has been examining a proposal by James Baker to launch a Middle East peace effort without Israel.

“The peace effort would begin with a U.S.-organized conference, dubbed Madrid-2, and contain such U.S. adversaries as Iran and Syria. Officials said Madrid-2 would be promoted as a forum to discuss Iraq’s future, but actually focus on Arab demands for Israel to withdraw from territories captured in the 1967 war. They said Israel would not be invited to the conference.

“‘As Baker sees this, the conference would provide a unique opportunity for the United States to strike a deal without Jewish pressure,’ an official said. ‘This has become the most hottest proposal examined by the foreign policy people over the last month.’

“Officials said Mr. Baker’s proposal, reflected in the recommendations of the Iraq Study Group, has been supported by Secretary of State Condoleezza Rice, Undersecretary of State Nicholas Burns and National Intelligence Director John Negroponte…

“Officials said the Baker proposal to exclude Israel from a Middle East peace conference garnered support in the wake of Vice President Dick Cheney’s visit to Saudi Arabia on Nov. 25. They said Mr. Cheney spent most of his meetings listening to Saudi warnings that Israel, rather than Iran, is the leading cause of instability in the Middle East…

“Under the Baker proposal, the Bush administration would arrange a Middle East conference that would discuss the future of Iraq and other Middle East issues. Officials said the conference would seek to win Arab support on Iraq in exchange for a U.S. pledge to renew efforts to press Israel to withdraw from the West Bank and Golan Heights.

“‘Baker sees his plan as containing something for everybody, except perhaps the Israelis,’ the official said. ‘The Syrians would get back the Golan, the Iranians would get U.S. recognition and the Saudis would regain their influence, particularly with the Palestinians.’”

We can certainly say with absolute certainty that the above represents the end of the road for the “special” relationship between the US and Israel. I personally rejoice at that because it was always based on a total fraud.

A Madrid 2, what exactly is this which is proposed by the US elite in the form of Baker and Hamilton? It is a place at which the worst Fascists on the planet, including the Mullahs of Iran and the Baathists of Syria, and the Palestinian Arab descendents of Hajj Amin el Husseini, come together along with the US and the EU led by Britain, in order to undo the agreements and promises made in 1922 and in 1947 to establish a Jewish state in historic Palestine.

All pundits may not agree . Some may still hang on to their hopeless and damning illusions. But it is, it is the end of the line. From now on Israel has got to adopt a policy of absolute independence and even if the fiercest attacks are launched it must stand with its head held high as a proud and an independent nation.

As one contributor on Israpundit (the wonderful Keelie) pointed out everything is out in the open, Jews can now see what the US and the Brits are really all about. And they can now begin to see the truth about what happened to that other tiny land of the Serbs just 15 years ago.

So we are going to have a unity between the two peoples who are the most oppressed and the most lied about in history. That is right and fitting because Hajj Amin el Husseini and Himmler did not distinguish in the slightest detail between Jews and Serbs in the Holocaust of the Balkans.

What do I mean “did not distinguish”. I mean that the Croatian and Bosnian Islamist Fascists killed hundreds of thousands of Serbs, and a lesser number of Jews, in the Balkans in ways that surpassed the barbarity of the Nazis of Germany. In fact it set the stage for the Nazi slaughter.

That is really what the proposals for Madrid 2 mean.

The wonderful article by Arlene has something of this in it. We live now at an absolutely historical conjuncture of events. When Herzl founded the movement back in the 1890s he became more and more aware that the motive and driving force for the struggle for the Jewish Homeland (Zionism) was coming from the most oppressed, and the poorest of dirt poor Jews, living in the Ghettoes of Eastern Europe.

Herzl was a middle class professional. But he was not afraid of this plebeian movement because he was a true Jewish patriot. More and more he embraced this. It was a tragedy that Herzl died young just after the crucial Sixth Congress of 1903. When he died the movement was taken forward by a new layer of leaders under Weizmann and though they were good honest people they tended more and more to turn away from that mass movement and to rely on international governmental support. This was both positive and negative, but the negative has tended to predominate as the years have passed by, and is expressed most of all in the reactionary unity of American Jews with the American elites.

This Baker proposal has slammed the steel doors on all of that. From now on the Jewish people must treat the US and EU elites as their total enemy and must take their case ONLY to the American ordinary people. At the same time in Israel far more attention has to be paid to all aspects of the mass movement, including their fears of the Arab Fifth Column in their midst and their social and increasingly poverty-ridden conditions of living.

However Arlene despite her wonderful article still has got illusions in Bush.

The real truth is that Bush is the No 1 enemy of the Jewish people. Bush immediately after the 9-11 barbarity referred to Islam as the Religion of Peace. Blair travels around with a copy of the Koran in his suitcase and he reads it! Both are lethal enemies of Israel. The man who Bush chose specially for Iraq, the most important American in Iraq, is a real enemy of Jews and a real friend to the Islamists. That is Kalmay Khalizad and his (and Bush’s) hands are all over this Baker report.

Of course as Arlene points out there are individuals in Congress etc who may be friends of Israel. But this is so because they were elected by the mass movement of Americans who have remained loyal to the principles of the American Revolution in their support of this tiny race of people – the Jews.

Arlene misses the main point which she would have already learned if she had not ignored the Yugoslavian experience. Contrary to Arlene, the US and EU elites are not fools. They have looked closely at the world situation and have reached definite conclusions, which are intelligent conclusions from where they stand as a ruling elite.

    • First of all their position towards Islam and Islamofascism is contradictory and that is to put it at its kindest. These Fascists have been prepared to strike against US and EU interests as was seen in the many attacks in the US and in Europe. This is part of the global campaign to push Sharia which threatens all democratic rights. But the other side to this is that the US and EU are prepared to use this very same Islamofascism in a number of ways. One of these is that this form of religious Fascism is a perfect weapon for disciplining the 1.4 BILLION of poor Muslims in the world and to turn them, or at least sections of them, into a lethal force to attack progressive causes. (We saw this in Yugoslavia and we see it in the so-called Palestinians) And another is to break down democratic rights not just in Muslim lands but also at home.• A by-product of this is the complete destruction of the “Left” where in England as a prime example the so-called Left and “Trotskyist” SWP is lining up in Respect with George Galloway and the Islamofascists. Hence the Left is effectively, at the most important conjuncture in history, destroyed.

    • Then there is the position of the Left on the twin issues of 1. Bosnia and 2. the Palestinians. Both the Bosnian Islamofascists of Izetbegovic and the Arab Palestinians under whatever leaders, whether it be Fatah or Hamas, are part of the Arab Islamist movement. In both these cases, Yugoslavia and the Palestinians the NeoLeft argued that these Islamist movements were not part of Jihad. That they were special. That the Islamists of Bosnia and the KLA of Kosovo were part of a national liberation movement. And that the Palestinian Arab movement is based on issues like “Refugees” etc (a hoax from which those people have suffered as well as Jews). All of this has led to the complete emasculation of the Left. I do not have to tell you that following the Russian revolution of 1917 this is something that the US and EU elites have sought and now still seek.

    • Where this is going is seen most clearly in Britain where the English ordinary people are so turned off by this politically correct “Left” in the Town Halls and in Government, a la Livingstone, that they even seek some answer in the National Front, a complete reversal of what they fought for in the Hitler war.

And so the most extreme form of this betrayal is carried out by a so-called “Trotskyist” movement called the SWP in England, who are supporting Islamofascism, and who are mirrored in America by The Nation and by the accomodation between the notorious opportunist Ramsay Clark and the ANSWER grouping.

The situation in Israel is now most critical.

For many years we in the west have seen the only voices coming from Israel in the form of reactionary “Peace” messengers, such as Ilan Pappe. These are out and out Jew haters, complete enemies of Israel and they are paraded around the highways and byways of countries like Ireland spouting their form of Jew hatred, which always sounds authentic because it comes from a “Jew”.

But the Lebanon War effectively put an end to all of that. Why is that? For the simple reason the the mass movement of the Israelis had had enough of these cowardly Palestinian and Hezbullah Arabs and moved totally (I mean 100 per cent) behind the wonderful and revolutionary men and women of the IDF. I repeat that movement of the Israeli masses spelled the death knell of the Israeli “Peace” traitors. Yes indeed they are traitors, and always have been, because that is what a traitor does when your country comes under attack. A traitor talks about peace and so emasculates your fighting power and decisive defensive edge.

Yes it is about Judaism today and it has always been about Israel as a Jewish state.

The best fighting forces, the most daring, those who are prepared to take the most risks for their country have shown to be from the settlements which are based on Judaism. Why is this!

Read carefully the stirrings in the Israeli body politic over the past few days. The movement to challenge Olmert on his planned selling out of Judea and Samaria and the Golan Heights is all coming from within the body of Judaism. Why is this! Because for the very simple reason that Jews did not create anti-Semitism and a big part of Israel is a refuge against anti-Semitism.

So I say that the spark for the new Israeli Revolution will emerge out of the young men and women who are in the tradition of Judaism.

But here we must be very, very careful. The Judaic tradition in Israel has now got to take its movement forward in the most progressive way.

We need essentially a revolutionary party which will base all of its work on the wonderful Israeli mass movement. The central aims of this movement must be to force Olmert and his government to give a commitment not to sell out Judea and Samaria, not to betray by giving the Golan Heights to the reactionary Baathists of Syria, to take back Gaza without delay, to expel from Israel whatever their religion or race who are campaigning against the existence of Israel, and above all to strike against Iran with everything and without any delay in order to put a stopper on the Mullah Nuclear Bomb.

But even all of that is not enough! Such is the gigantic nature of the task which Jews face! The mass movement of ordinary American people and the ordinary people of Europe and elsewhere must also be reached with the truth and an uncompromising statement of Israeli and Jewish independence and their regard for the true religious rights of ordinary people.

In this regard every Jewish person and every Jewish supporter in the Diaspora is now being asked to step up to the mark. A strategy of theory and practice must be immediately hammered out. This has got implications for every Jewish organization and for every Jewish (or just Jewish sympathetic) blog that exists.

To sum up some of these thoughts:

    • There needs to be a turn to the mass movement in Israel and especially to those religious youth we saw mobilizing at the time of the Gaza betrayal• We need to organize urgently a discussion of all the forces who oppose Baker

    • We need to pool all resources and somehow mount a major campaign to reach the American mass movement.

Our demands and areas of interest will centre around:

    • Destroy the Iranian Mullah Nuclear Bomb• No Jihadist Palestinian state

    • Respect Israeli and Jewish independence

    • Consequently force Baker and Hamilton to appear before Congress to answer their betrayal of Israel to Islamofascists and Baathists

    • A special appeal to the American trade unions to raise the issue of the repression of trade unionists in Iran

    • A special appeal to all true socialists to insist that their movements break from their collaboration with Islamofascism. They cannot remain socialists and be linked to Fascism.

    • Finally I would appeal to Americans of Irish descent. It is now time to repay a debt to the Jewish people. The most prominent Jewish family in Irish history were the Briscoes and they fought for Irish national liberation against the British. Irish people in America and Ireland must oppose this present Jihadist Palestinian state and support the survival of the Jewish cause.

James Baker’s Double Life

James Baker’s Double Life

by NAOMI KLEIN

[from the November 1, 2004 issue]

When President Bush appointed former Secretary of State James Baker III as his envoy on Iraq’s debt on December 5, 2003, he called Baker’s job “a noble mission.” At the time, there was widespread concern about whether Baker’s extensive business dealings in the Middle East would compromise that mission, which is to meet with heads of state and persuade them to forgive the debts owed to them by Iraq. Of particular concern was his relationship with merchant bank and defense contractor the Carlyle Group, where Baker is senior counselor and an equity partner with an estimated $180 million stake.

Until now, there has been no concrete evidence that Baker’s loyalties are split, or that his power as Special Presidential Envoy–an unpaid position–has been used to benefit any of his corporate clients or employers. But according to documents obtained by The Nation, that is precisely what has happened. Carlyle has sought to secure an extraordinary $1 billion investment from the Kuwaiti government, with Baker’s influence as debt envoy being used as a crucial lever.

The secret deal involves a complex transaction to transfer ownership of as much as $57 billion in unpaid Iraqi debts. The debts, now owed to the government of Kuwait, would be assigned to a foundation created and controlled by a consortium in which the key players are the Carlyle Group, the Albright Group (headed by another former Secretary of State, Madeleine Albright) and several other well-connected firms. Under the deal, the government of Kuwait would also give the consortium $2 billion up front to invest in a private equity fund devised by the consortium, with half of it going to Carlyle.

The Nation has obtained a copy of the confidential sixty-five-page “Proposal to Assist the Government of Kuwait in Protecting and Realizing Claims Against Iraq,” sent in January from the consortium to Kuwait’s foreign ministry, as well as letters back and forth between the two parties. In a letter dated August 6, 2004, the consortium informed Kuwait’s foreign ministry that the country’s unpaid debts from Iraq “are in imminent jeopardy.” World opinion is turning in favor of debt forgiveness, another letter warned, as evidenced by “President Bush’s appointment…of former Secretary of State James Baker as his envoy to negotiate Iraqi debt relief.” The consortium’s proposal spells out the threat: Not only is Kuwait unlikely to see any of its $30 billion from Iraq in sovereign debt, but the $27 billion in war reparations that Iraq owes to Kuwait from Saddam Hussein’s 1990 invasion “may well be a casualty of this U.S. [debt relief] effort.”

In the face of this threat, the consortium offers its services. Its roster of former high-level US and European politicians have “personal rapport with the stakeholders in the anticipated negotiations” and are able to “reach key decision-makers in the United Nations and in key capitals,” the proposal states. If Kuwait agrees to transfer the debts to the consortium’s foundation, the consortium will use these personal connections to persuade world leaders that Iraq must “maximize” its debt payments to Kuwait, which would be able to collect the money after ten to fifteen years. And the more the consortium gets Iraq to pay during that period, the more Kuwait collects, with the consortium taking a 5 percent commission or more.

The goal of maximizing Iraq’s debt payments directly contradicts the US foreign policy aim of drastically reducing Iraq’s debt burden. According to Kathleen Clark, a law professor at Washington University and a leading expert on government ethics and regulations, this means that Baker is in a “classic conflict of interest. Baker is on two sides of this transaction: He is supposed to be representing the interests of the United States, but he is also a senior counselor at Carlyle, and Carlyle wants to get paid to help Kuwait recover its debts from Iraq.” After examining the documents, Clark called them “extraordinary.” She said, “Carlyle and the other companies are exploiting Baker’s current position to try to land a deal with Kuwait that would undermine the interests of the US government.”

The Nation also showed the documents to Jerome Levinson, an international lawyer and expert on political and corporate corruption at American University. He called it “one of the greatest cons of all time. The consortium is saying to the Kuwaiti government, ‘Through us, you have the only chance to realize a substantial part of the debt. Why? Because of who we are and who we know.’ It’s influence peddling of the crassest kind.”

In the confidential documents, the consortium appears acutely aware of the sensitivity of Baker’s position as Carlyle partner and debt envoy. Immediately after listing the powerful players associated with Carlyle–including former President George H.W. Bush, former British prime minister John Major and Baker himself–the document states: “The extent to which these individuals can play an instrumental role in fashioning strategies is now more limited…due to the recent appointment of Secretary Baker as the President’s envoy on international debt, and the need to avoid an apparent conflict of interest.” [Emphasis in original.] Yet it goes on to state that this will soon change: “We believe that with Secretary Baker’s retirement from his temporary position [as debt envoy], that Carlyle and those leading individuals associated with Carlyle will then once again be free to play a more decisive role…”

Chris Ullman, vice president and spokesperson for Carlyle, said that “neither the Carlyle Group nor James Baker wrote, edited or authorized this proposal to the Kuwait government.” But he acknowledged that Carlyle knew a proposal was being made to the government of Kuwait and that Carlyle stood to land a $1 billion investment. “We were aware of that. But we played no role in procuring that investment.”

Asked if Carlyle was “willing to take the billion but not to try to get it,” Ullman answered, “Correct.”

Iraq is the most heavily indebted country in the world, owing roughly $200 billion in sovereign debts and in reparations from Saddam’s wars. If Iraq were forced to pay even a quarter of these claims, its debt would still be more than double its annual GDP, severely undermining its capacity to pay for reconstruction or to address the humanitarian needs of its war-ravaged citizens. “This debt endangers Iraq’s long-term prospects for political health and economic prosperity,” President Bush said when he appointed Baker last December.

But critics expressed grave concern about whether Baker was an appropriate choice for such a crucial job. For instance, one of Iraq’s largest creditors is the government of Saudi Arabia. The Carlyle Group does extensive business with the Saudi royal family, as does Baker’s law firm, Baker Botts (which is currently defending them in a $1 trillion lawsuit filed by the families of September 11 victims). The New York Times determined that the potential conflicts of interest were so great that on December 12 it published an editorial calling on Baker to resign his posts at the Carlyle Group and Baker Botts to preserve the integrity of the envoy position.

“Mr. Baker is far too tangled in a matrix of lucrative private business relationships that leave him looking like a potentially interested party in any debt-restructuring formula,” stated the editorial. It concluded that it wasn’t enough for Baker to “forgo earnings from clients with obvious connections to Iraqi debts…. To perform honorably in his new public job, Mr. Baker must give up these two private ones.”

The White House brushed off calls for Baker to choose between representing the President and representing Carlyle investors. “I don’t read those editorials,” President Bush said when asked by a reporter about the Times piece. Bush assured reporters that “Jim Baker is a man of high integrity…. We’re fortunate he decided to take time out of what is an active life…to step forward and serve America.” Carlyle was equally adamant: Chris Ullman assured a Knight-Ridder reporter that Baker’s post “will have no impact on Carlyle whatsoever.”

In fact, several months earlier, on July 16, 2003, Carlyle had attended a high-level London meeting with Kuwaiti officials about the deal. According to the document, the Kuwaitis asked Carlyle and the other consortium members to “prepare a detailed financial proposal for the protection and monetization” of reparation debts from Iraq. But at the time Baker was appointed envoy, the consortium had not yet submitted its proposed plans to Kuwait. That means that the Carlyle Group could have pulled out of the consortium, citing the potential conflicts of interest. Instead, Carlyle stayed on, and the consortium proceeded to use Baker’s powerful new position to aggressively pitch a deal that positioned the consortium as the Kuwaiti government’s chief lobbyist on Iraq’s debts and that gave Carlyle a clear stake in the fate of Iraq’s debts.

However, several changes were made in the way the consortium presented itself. The documents state, “Prior to [Baker’s] appointment [former US Secretary of Defense Frank] Carlucci had played a convening and guiding role on behalf of Carlyle.” But after the appointment, according to Carlyle’s Chris Ullman, the firm’s role was scaled back. “When James Baker was named special envoy…Carlyle explicitly restricted its role to only investing assets on behalf of Kuwait.” Shahameen Sheikh, chairman and CEO of International Strategy Group, a company created by the consortium to manage this deal, said that Carlyle told her that “they are not a lobbying firm.” Days before Baker’s appointment, the consortium reached out to another high-profile Washington firm, the Albright Group, which eventually signed on as the leading political strategists and lobbyists for the consortium.

Moreover, Ullman said that Carlyle put “controls in place” that would insure that Baker “would play no role in nor benefit from” the proposed $1 billion investment–an amount that would constitute nearly 10 percent of Carlyle’s total equity investments.

But it’s not clear that Carlyle has been straightforward about its dealings so far. The day before Baker’s appointment was announced, John Harris, managing director and chief financial officer of Carlyle, submitted a signed statement to White House Counsel Alberto Gonzales. “Carlyle does not have any investment in Iraqi public or private debt,” he wrote. He didn’t mention that Carlyle had for months been in negotiations with Kuwait to help secure its unpaid war debts from Iraq. Asked if the White House had been informed of the Carlyle Group’s dealings with Kuwait at any point, Ullman replied, “I’ll get back to you on that.” He did not.

According to Kathleen Clark, it is unclear whether Baker is complying with the criminal statute and administrative regulations that prohibit government officials from participating in government business in which they have a financial interest-including matters that affect an outside company that employs the official. Clark notes, “even if Baker is somehow being screened from profiting from this deal, Carlyle is using Baker’s government position to benefit themselves.” She says it’s time for Carlyle and the White House to come clean. “There’s a tremendous need for transparency here.” The White House and James Baker’s office did not respond to repeated requests for comment.

Baker occupies a complicated place in the consortium’s January proposal–he is both problem and solution, stick and carrot. In the documents, Baker’s name comes up repeatedly, usually in tones of high alarm. “Mr. Baker’s new role and the likely emergence of what will be understood as a new round of global negotiations over Iraqi debt–casts all of these issues in a new light and gives them a new, perhaps even intense, sense of urgency,” states a letter signed by Madeleine Albright; David Huebner, chairman of the Coudert Brothers law firm (another consortium member); and Shahameen Sheikh.

But after establishing Baker’s envoy job as the embodiment of the threat that Kuwait will lose its reparations payments, the proposal goes on at length about the powerful individuals connected to the consortium who will “have the ability to gain access to the highest levels of the United States Government and other Security Council governments for a hearing of Kuwait’s views.” According to Levinson, “What they are proposing is to completely undercut Baker’s mission–and they are using their connection with Baker to do it.”

On January 21, 2004, James Baker’s dual lives converged. That morning Baker flew to Kuwait as George Bush’s debt envoy. He met with Kuwait’s prime minister, its foreign minister and several other top officials with the stated goal of asking them to forgive Iraq’s debts in the name of regional peace and prosperity.

Baker’s colleagues in the consortium chose that very same day to hand-deliver their proposal to Foreign Minister Mohammad Sabah Al-Salem Al-Sabah–the same man Baker was meeting. The proposal “takes into account the new dynamics that have developed in the region,” states the cover letter, signed by Albright, Huebner and Sheikh–dynamics that include “Secretary Baker’s negotiations” on debt relief. If Kuwait accepts the consortium’s offer, they explain, “we will distinguish Kuwait’s claims–legally and morally–from the sovereign debt for which the United States is now seeking forgiveness.”

Was it a coincidence that the consortium submitted its proposal on the same day Baker was in Kuwait? And which James Baker were Kuwait’s leaders supposed to take more seriously–the presidential envoy calling for debt forgiveness or the businessman named in the proposal as a potential ally in their quest for debt payment?

Ahamed al-Fahad, under secretary to the prime minister of Kuwait, told The Nation, “I have seen it [the proposal] and I am fully aware of the situation.” But when asked about Baker’s dual role in Kuwait, he said, “It’s hard to comment on that issue, especially now. I hope you fully understand.”

Shahameen Sheikh, the consortium head who made the delivery, says the timing was a coincidence. “It had nothing to do with Mr. Baker’s visit…. I was in the region so I thought I would stop over on the way to Europe and deliver the proposal.”

We do know this: After meeting with Baker on January 21, Kuwait’s foreign minister told reporters that Baker had shown “understanding of Kuwait’s position on war reparations,” confirming that the subject did come up. He also said that while sovereign debt might be forgiven, reparations would not, because “there is an international decision from the UN.”

Three days later, when Baker was back in Washington giving a speech, he made this distinction for the first time. “My job is to deal with Iraqi debt to sovereign creditors, not with war reparations,” he said. He also echoed the exact line of the Kuwaiti government: that reparations are outside his purview because they are “under the jurisdiction of the United Nations Security Council and subject to resolutions it has passed.”

This was a curious statement: Why would such a large portion of Iraq’s debts be off the table? It also seemed to contradict other things Baker said in the same speech. He said that “any reduction [in Iraq’s debt] must be substantial, or a vast majority of the total debt.” That is impossible without addressing reparations, which by some measures account for more than half of Iraq’s foreign debts. The Center for Strategic and International Studies, the center-right think tank hosting Baker’s speech, has said it is “unwise” to make any debt relief plan “that does not include reparations.”

Baker’s statement on reparations also placed him at odds with several other members of the Bush Administration, including former chief envoy to Iraq Paul Bremer. “I think there needs to be a very serious look at this whole reparations issue,” Bremer said in September 2003. He compared the Iraq situation to that of Germany after World War I, when the 1921 Reparations Commission forced the Weimar Republic to pay $33 billion. The massive reparations “contributed directly to the morass of unrest, instability and despair which led to Adolf Hitler’s election,” Bremer warned.

Yet Iraq continues to make regular reparations payments for Saddam’s 1990 invasion of Kuwait. In the eighteen months since the US invasion, Iraq has paid out a staggering $1.8 billion in reparations–substantially more than the battered country’s 2004 health and education budgets combined, and more than the United States has so far managed to spend in Iraq on reconstruction.

Most of the payments have gone to Kuwait, a country that is about to post its sixth consecutive budget surplus, where citizens have an average purchasing power of $19,000 a year. Iraqis, by contrast, are living on an average of just over $2 a day, with most of the population dependent on food rations for basic nutrition. Yet reparations payments continue, with Iraq scheduled to make another $200 million payout in late October.

This arrangement dates back to the end of the first Gulf War. As a condition of the cease-fire, Saddam Hussein agreed to pay for all losses incurred as a result of his invasion and seven-month occupation of Kuwait. Payments started flowing in 1994 and sped up in 1996, with the start of the UN’s oil-for-food program. According to UN Security Council Resolution 986, which created the program, Iraq could begin to export oil as long as the revenue was spent on food and medicine imports, and as long as 30 percent of Iraq’s oil revenues went to the United Nations Compensation Commission (UNCC), the Geneva-based quasi-tribunal in charge of Gulf War reparations.

Some of the claims that have been awarded by the UNCC are huge: the cost of cleaning up Kuwait’s and Saudi Arabia’s coastlines from oil spills and fires, or the Kuwait Petroleum Corporation’s controversial award for $15.9 billion in lost oil revenues. So far, the UNCC has paid out $18.6 billion in war reparations and has awarded an additional $30 billion that has not been paid because of Iraq’s shortage of funds. There are still $98 billion worth of claims before the UNCC that have yet to be assessed, so these numbers could rise steeply. That’s why there are no accurate estimates of how much Iraq owes in war reparations–the figure ranges from $50 billion to $130 billion.

But the fate of these debts is now highly uncertain. On May 22, 2003–two months after the United States invaded Iraq–the Security Council decided to cut the percentage of Iraqi oil revenues going to war reparations to 5 percent. This past May, an Iraqi delegation went to the UN to ask for the percentage to be reduced even further, to accommodate Iraq’s own reconstruction needs. There is growing sympathy for this position. Justin Alexander of the debt relief group Jubilee Iraq says that many of the claims before the UNCC are inflated and that “even for genuine claims, this is Saddam’s responsibility, not the Iraqi people’s, who themselves suffered far more than anyone.”

This is where the Carlyle/Albright consortium comes in. The premise of its proposal is that Iraq’s unpaid debts to Kuwait are not just a financial problem but a political and public relations problem as well. Global public opinion is no longer what it was when Kuwait was promised full reparations. Now the world is focused on reconstructing Iraq and forgiving its debts. If Kuwait is going to get its reparations awards, the cover letter argues, it will need to recast them not as a burden on Iraq but “as a key element in working toward regional stability and reconciliation.”

Several parties involved in the consortium emphasized that the proposal concerned only reparations debts. Albright Group spokesperson Jamie Smith said, “We were asked to join a proposal to secure justice for victims of Saddam’s invasion of Kuwait and ensure that compensation to Kuwaiti victims–which was endorsed by the US government and the United Nations–be used to promote reconciliation, environmental improvements and investment in Kuwait, Iraq and the region.”

In fact, the proposal does not restrict itself to reparations debt. The consortium also asks the government of Kuwait to give the consortium control over $30 billion in defaulted sovereign debts to be used as political leverage to secure reparations claims. Furthermore, most experts on debt restructuring agree that Iraq’s debts must be looked at as a whole: There is little point forgiving Iraq’s sovereign debts if the country is still going to be saddled with an unmanageable reparations burden. This understanding is reflected in the documents, which repeatedly state that Kuwait’s reparations payments are endangered by the moves to forgive Iraq’s debts.

To avert this threat to Kuwait, the consortium proposes a three-pronged strategy of aggressive backroom lobbying, clever public relations and creative investing and financing. “Any solution for payment of the Unpaid Awards…must be politically sellable as reinforcing stability and growth in the Gulf and in Iraq. This Proposal provides the strategy, the architecture, and the talent to achieve this goal,” the document states.

Lobbying: Since the UNCC exists entirely at the discretion of the Security Council, which can vote to reduce, suspend or eliminate reparations at any time, the part of the proposal dealing with power-brokering is straightforward: It suggests a full-on lobbying offensive directed at Security Council members, using Albright’s connections, but also other “eminent” people associated with the consortium like former US Senator Gary Hart and former US ambassador to the UN Jeane Kirkpatrick. “We will first seek to preserve the five percent of the revenues from Iraqi oil allocated as funding for payment of the UNCC awards,” the proposal says. To achieve this, the consortium will make “discreet contacts at top levels in key capitals of Security Council member states and with influential representatives,” and “interventions with United Nations senior staff to shape presentations to the Security Council.” The proposal further notes that “Germany and Romania may be pivotal, and The Albright Group has very close ties to each.”

Public Relations: The consortium also has a detailed plan to address the perception that reparations are “diverting resources from rebuilding Iraq to a more wealthy neighbor.” First, Kuwait must assign its unpaid debts from Iraq to a private foundation controlled by the consortium. The foundation will manage an investment fund that will invest a portion of reparations payments from Iraq to Kuwait back into Iraq. As examples of the types of investments the foundation would make, Albright, Huebner and Sheikh suggest in their letter that the reparations funds could be used to buy Iraq’s state-owned companies. “In the near future, 40 state-owned Iraqi enterprises in a range of sectors will be available for leasing and management contracts,” they write. By demonstrating that Kuwait is investing part of its reparations proceeds back into Iraq’s economy, the consortium-run foundation “establishes a humanitarian rationale for the United States and other countries to continue their support” for the reparations. The consortium appears to see privatization–a highly controversial proposal in Iraq–as part of a humanitarian mission.

The proposal also suggests more direct public relations strategies. It calls for Kuwait to dedicate $1 billion of the reparations awards it has already been paid by the UNCC to a Kuwait Environmental Restoration Fund, which the consortium would create. The purpose of this fund would be to remind the world of “the gravity of the environmental legacy facing Kuwait” and to “position Kuwait as the region’s environmental leader.” The fund would be headed by Carol Browner, former head of the US Environmental Protection Agency and a principal in the Albright Group.

Investment/Financing: The proposal predicts that on their own, lobbying and PR will not be sufficient to secure the amounts that the Kuwaiti government hopes to receive in reparations. For the consortium to “maximize the value of Kuwait’s compensation,” Kuwait will have to part with even more of the reparations payments it has received. In addition to the $1 billion for the environmental fund, the proposal calls for another $2 billion of Kuwaiti money to be invested in a Middle East Private Equity Fund. Of that $2 billion, “$1 billion would be invested, by way of special agreement, in The Carlyle Group equity funds” for a period of at least twelve to fifteen years. At the end of that period Kuwait will get the return on these investments, as well as whatever the consortium has been able to negotiate in reparations payments.

For the consortium, it is an excellent deal: Its members get to manage a $2 billion investment portfolio, collecting healthy management fees as well as a percentage of interest. They also will be paid a “retainer” and 5 percent of any debts the consortium gets repaid, and “a negotiated percentage of the value returned to Kuwait exceeding” the pre-arranged amount.

Other consortium members sharing in these benefits include Fidelity Investments; BNP Paribas, a European bank embroiled in the oil-for-food scandal; Gaffney, Cline & Associates, an energy company specializing in oil and gas privatization; Nexgen Financial Solutions, a financial engineering firm partly owned by the government of France; and Emerging Markets Partnership, an AIG affiliate headed by a former senior vice president of the World Bank, Moeen Qureshi.

In addition to the financial windfall, the arrangement would give this group of private companies tremendous power. Whoever holds Iraq’s debt has the ability to influence policy in Iraq at a moment of extreme political uncertainty. Yet for the government of Kuwait the proposed deal is fraught with risk. It’s true that the fate of its Iraqi reparations looks grim. The consortium estimated that if Kuwait tried to sell those debts on the market, its $27 billion would be worth only $1.5 billion. But the consortium is asking Kuwait to risk $3 billion of reparations money it has already received in the hope that it can be used to leverage some of the rest. However, as Jerome Levinson points out, “There are absolutely no guarantees of even that.”

It is clear that the consortium is extremely eager to seal a deal with Kuwait. Consortium CEO Shahameen Sheikh writes of making five trips to Kuwait in four months; Albright met with Kuwait’s foreign minister about the issue on April 2, 2004; and the Albright Group’s Carol Browner is reported to have “personally delivered a copy” of the proposal to his hotel when he was in Washington. Yet Kuwait appears reluctant: It took four months to reply to the proposal and then it would only say, in a letter dated August 10, that the proposal “will be taken into deep consideration and is currently being studied by the appropriate authorities.” According to Ahamed al-Fahad, “The issue is now in the hands of the under secretary of foreign affairs,” who was unavailable for comment. But Salem Abdullah al Jaber al-Sabah, Kuwait’s ambassador to the United States, said, “As far as my information is concerned, my government is not considering such proposals.”

Even if the deal falls through, the fact that the Carlyle Group and the Albright Group have been engaged in these negotiations may already have damaged debt relief efforts, hurting both Iraqi and US interests. Levinson points out that the Bush Administration has made commitments that Iraq’s oil revenues will be spent on reconstruction. Yet the failure to deal with the reparations issue means that “part of those resources instead are being diverted to Kuwait. Who pays for this? It’s the people of Iraq who continue to make reparations payments, and it’s US taxpayers, who are asked to foot the bill for reconstruction, because Iraq’s money is going to debt payments.”

Levinson says this is all the more remarkable because of who is involved. “Here you have two former Secretaries of State seemingly proposing to use their contacts and inside information to undercut the official US government policy.” Washington University’s Kathleen Clark says the proposal “lays bare how former high-level government employees use their access in order to reap financial benefits that appear to be enormous.”

A case can certainly be made that James Baker and Madeleine Albright have had more direct influence over Iraq’s debts and reparations payments than any politicians outside Iraq, with the possible exception of the forty-first and forty-third Presidents of the United States.

As Secretary of State, Baker played a role in running up Iraq’s foreign debts in the first place, personally intervening in 1989 to secure a $1 billion US loan to Saddam Hussein in export credits. He was also a key architect of the first Gulf War, as well as of the cease-fire that required Saddam to pay such sweeping reparations. In his 1995 memoirs, The Politics of Diplomacy, Baker wrote that after seeing the oil-well fires in Kuwait he cabled President George H.W. Bush and said, “Iraq should pay for it.” Now, through the consortium, Carlyle could end up controlling $1 billion of those payments.

The role of the Albright Group raises similar questions. As Secretary of State and Ambassador to the UN, Madeleine Albright participated personally in drafting UN Resolution 986, which created the oil-for-food program, diverting 30 percent of Iraq’s revenue from oil sales to war reparations. “It’s a great day for the United States because we were the authors of Resolution 986,” she said on The NewsHour With Jim Lehrer on May 20, 1996. Now, as a private citizen, Albright is a leading member of a consortium that is exploiting her connections to try to profit from the very reparations she helped secure. Albright also enforced the brutal sanctions campaign against Iraq, one of the effects of which was the hobbling of Iraq’s state companies. Now, she is part of a plan to use Iraq’s reparations payments to buy the very firms that her sanctions program helped to debilitate.

But it is Baker’s envoy post that raises the most serious questions for the White House, especially because a Special Presidential Envoy is the President’s personal representative, meeting with heads of state in the President’s stead and reporting back directly to the President. If a President’s envoy has a conflict of interest, it reflects directly on the highest office. Clark says, “There is absolutely a conflict of interest. Baker is aligned with two parties–the US government and Carlyle–that are not aligned with each other.”

As envoy, Baker’s job is to do his best to clear away Iraq’s debts, lessening the burden on Iraqis and on US taxpayers. Yet as a businessman, he is an equity partner in a company that is part of a deal that would achieve the opposite result. If Baker the envoy succeeds, Baker’s business partners stand to fail–and vice versa.

Have these conflicts influenced Baker’s performance as envoy? Has he pushed as hard as he could have for debt forgiveness? We know that Iraq’s steep war reparations to Kuwait have largely escaped public scrutiny–if Baker has steered the Bush Administration away from the reparations issue, for whom was he working at the time? The White House? Or Carlyle? Clark says questions like these are precisely why conflict-of-interest regulations exist. “We have reason to doubt that Baker is doing everything he could be doing on behalf of the United States because he has an interest in another side of the transaction.”

This issue is all the more pressing because the file that President Bush handed to Baker is in disarray–ten months on, there is significantly less goodwill toward forgiving Iraq’s debt than when Baker arrived. When President Bush appointed him, he praised Baker’s “vast economic, political and diplomatic experience.” And at first, Baker seemed to be making fast progress: After top-level meetings, France, Russia and Germany appeared open to canceling a large proportion of debt owed to them by Iraq, and Saudi Arabia and Kuwait seemed ready to follow.

But now, the negotiations are not only stalled, they seem to be going backward. Kuwait, for its part, has hardened its position. “Debts remain debts,” Foreign Minister Mohammad Sabah Al-Salem Al-Sabah said recently. And it has intensified its demands for Gulf War reparations, joining with Saudi Arabia, Iran, Jordan and Syria to claim an additional $82 billion from Iraq in environmental damages.

And the Europeans? At a Senate Foreign Relations Committee hearing on September 15, Senator Joseph Biden Jr. asked Ronald Schlicher, Deputy Assistant Secretary of State for Iraq, about the status of the international negotiations.

“Has a single nation in the G8…formally said or requested of their parliaments to forgive Iraqi debt?” Biden asked.

“Not yet. No sir,” Schlicher replied.

Not only has Baker failed to deliver any firm commitments for debt forgiveness; at the annual meeting of the International Monetary Fund on October 2, it emerged that France had done an end run around Washington and was pushing a debt-relief deal of its own. French Finance Minister Nicolas Sarkozy announced that he had lined up Russia, Germany and Italy behind a plan to cancel only 50 percent of Iraq’s debts–a far cry from the 90-95 percent cancellation Washington had been demanding. Yet Baker was nowhere to be found.

Busy negotiating the rules of the presidential debates, Baker has been MIA on the debt issue. Since he returned from his trip to the Middle East in January, the President’s envoy has issued only two public statements on Iraq’s debt, and he has been completely silent on the topic for the past six months–despite having publicly committed to getting the debt issue sewn up by the end of the year.

While this is bad news for Iraqis and for US taxpayers, it could be good news for Carlyle. A swift resolution to Iraq’s debt crisis works against its financial interest: The longer the negotiations drag on, the more time the consortium has to convince the reluctant Kuwaiti government to sign on the dotted line. But if Iraq’s debt is successfully wiped out, any proposed deal is off the table.

Baker’s position as envoy has certainly been useful to his colleagues in the consortium. Whether Baker has helped solve Iraq’s debt crisis is far less clear.

More on James Baker’s Split Loyalties…

I found an interesting and damning tidbit about James Baker (the murderer of 2918 heroic Americans in Iraq) in the November 1, 2004 issue of The Nation:

Until now, there has been no concrete evidence that Baker’s loyalties are split, or that his power as Special Presidential Envoy–an unpaid position–has been used to benefit any of his corporate clients or employers. But according to documents obtained by The Nation, that is precisely what has happened. Carlyle has sought to secure an extraordinary $1 billion investment from the Kuwaiti government, with Baker’s influence as debt envoy being used as a crucial lever.

The secret deal involves a complex transaction to transfer ownership of as much as $57 billion in unpaid Iraqi debts. The debts, now owed to the government of Kuwait, would be assigned to a foundation created and controlled by a consortium in which the key players are the Carlyle Group, the Albright Group (headed by another former Secretary of State, Madeleine Albright) and several other well-connected firms. Under the deal, the government of Kuwait would also give the consortium $2 billion up front to invest in a private equity fund devised by the consortium, with half of it going to Carlyle.

At a time when James Baker was supposed to help reduce Iraq’s debt to various countries around the world, not only did he ignore his mandate in favor of a client (obviously, for Mr. Baker, a corporate client must rate far above the country’s interests!) but as the above article further says:

The Nation has obtained a copy of the confidential sixty-five-page “Proposal to Assist the Government of Kuwait in Protecting and Realizing Claims Against Iraq,” sent in January from the consortium to Kuwait’s foreign ministry, as well as letters back and forth between the two parties. In a letter dated August 6, 2004, the consortium informed Kuwait’s foreign ministry that the country’s unpaid debts from Iraq “are in imminent jeopardy.” World opinion is turning in favor of debt forgiveness, another letter warned, as evidenced by “President Bush’s appointment…of former Secretary of State James Baker as his envoy to negotiate Iraqi debt relief.” The consortium’s proposal spells out the threat: Not only is Kuwait unlikely to see any of its $30 billion from Iraq in sovereign debt, but the $27 billion in war reparations that Iraq owes to Kuwait from Saddam Hussein’s 1990 invasion “may well be a casualty of this U.S. [debt relief] effort.”

In the face of this threat, the consortium offers its services. Its roster of former high-level US and European politicians have “personal rapport with the stakeholders in the anticipated negotiations” and are able to “reach key decision-makers in the United Nations and in key capitals,” the proposal states. If Kuwait agrees to transfer the debts to the consortium’s foundation, the consortium will use these personal connections to persuade world leaders that Iraq must “maximize” its debt payments to Kuwait, which would be able to collect the money after ten to fifteen years. And the more the consortium gets Iraq to pay during that period, the more Kuwait collects, with the consortium taking a 5 percent commission or more.

The goal of maximizing Iraq’s debt payments directly contradicts the US foreign policy aim of drastically reducing Iraq’s debt burden. According to Kathleen Clark, a law professor at Washington University and a leading expert on government ethics and regulations, this means that Baker is in a “classic conflict of interest. Baker is on two sides of this transaction: He is supposed to be representing the interests of the United States, but he is also a senior counselor at Carlyle, and Carlyle wants to get paid to help Kuwait recover its debts from Iraq.” After examining the documents, Clark called them “extraordinary.” She said, “Carlyle and the other companies are exploiting Baker’s current position to try to land a deal with Kuwait that would undermine the interests of the US government.” 

Baker’s Realpolitik policies as Secretary of State brought about a whole slew of disasters on America. The current war in Iraq is the direct result of his saving Sadddam Hussein’s neck, twice, but the man has the gall to use his position as an American envoy for personal profit and to the detriment of the mission he was entrusted. Folks, as Professor Kathleen Clark said in the partagraph above said, Baker is in a “classic conflict of interest. Baker is on two sides of this transaction: He is supposed to be representing the interests of the United States, but he is also a senior counselor at Carlyle, and Carlyle wants to get paid to help Kuwait recover its debts from Iraq.” After examining the documents, Clark called them “extraordinary.” She said, “Carlyle and the other companies are exploiting Baker’s current position to try to land a deal with Kuwait that would undermine the interests of the US government.

Were such actions taken by an officer of any other corporation, he or she would have been prosecuted, found guilty and locked up for a long term… and rightfully so! Mr. Baker, however, not only was not prosecuted he actually rose to higher positions of influence and now produced a report which not only reflects morally and politically bankrupt ideas which can benefit only his clientele. To have such an individual in a position to influence American policy (actually, if one reads the report, the ISG members arrogantly think they are dictating policy) around the world, is a dangerous farce! It speaks volumes of Baker’s corrupt reach tentacles and their into the deepest levels of government.

Who actually is gaining from this report and who is rejoicing at its release? Dr. Walid Phares, writing in the Counterterrorism Blog makes some very interesting and sobering observations:

Without any doubt, the Iraq Study Group report will become the center of a major debate on US foreign policy and the War on Terror. It contains significant components of possible successes but also recipe for disasters. It is important that the counter Terrorism community begins its review of the report and share its views with the public. Following is a summary published by Mideast Newswire summarizing some of my comments on US and Arab radios and media today.

IRAQIZATION IS RIGHT BUT SURRENDERING TO FASCIST REGIMES IS WRONG

Washington DC, December 6, 2006. Mideast Newswire

In his first analysis of the the Iraq Study Group recommendations, Mideast expert Walid Phares told three media outlets in the US, Europe, and the Middle East, that “the Iraq Study Group’s recommendations resemble a salad bowl. The document contains some rational suggestions that should have been adopted by the Bush Administration years ago, and also some suicidal ideas that were tested decades ago and failed miserably.” Phares, a senior fellow with the Foundation for the Defense of Democracies in Washington, DC and author of Foreign Affairs best seller Future Jihad, was interviewed by Al Muharer al Arabi, Radio Free Iraq, and the Jack Ricardi radio show in the US. “These are only the first reactions to a comprehensive document; there will be a thorough analysis of the report from both American and Middle Eastern perspectives.”

Phares told Al Muharer al Arabi that the global recommendation “to engage Iran and Syria’s regimes positively and constructively means that they were mistreated before. My first question to the authors of the report is this: how was the United States mistreating these regimes in the past? Was asking Ahmedinejad to stop making a nuclear bomb and asking Assad of Syria to withdraw from Lebanon following a UN resolution signs of bad treatment? Were these demands wrong in their essence? Do they give Iran and Syria the right to feel victimized? If one perceives US action in this way, then all what Washington has to do is to release pressure on the Mullah to build their weapons and ask Assad to send his Army back to Lebanon.” Phares added, “the public in America and the people in the region are not as naive as they were before 9/11. They will ask the hard questions when the time comes. The so-called engagement recommendation is a relic from the past and sounds like a suicidal idea. For surrendering to fascist regimes – regimes that are rejected by their own people – is utterly wrong.” However on the Iraq restructuring suggestions, Phares told Radio Iraq and other radio shows that “the idea of the Iraqization process is a right one and has always received a consensus among Iraqis and Americans. General Abizaid and many others have voiced these suggestions in the past in the US and in Iraq.” But Phares concluded by asking “how can we press for empowering the Iraqis on the ground on the one hand while surrendering their fate to Iran and Syria through diplomatic means on the other? That sounds like a recipe for chaos to me.”

In a previous interview with Radio Free Iraq few days before the release of the report, Dr Phares said: “many ideas and suggestions are on the table, but one matter should be clear: there shouldn’t be a return of dictatorship to Iraq and a return of Syrian occupation in Lebanon. On the other hand, inserting US forces within Iraqi forces should have been the initial plan.

Do you think we can get Baker, the murderer of American soldiers in Iraq, the de facto accomplice of terrorists and fascists regime, to explain to us how he dares engage Iran and Syria’s regimes positively and constructively. As Dr. Phares says, it means that they were mistreated before. My first question to the authors of the report is this: how was the United States mistreating these regimes in the past? Was asking Ahmedinejad to stop making a nuclear bomb and asking Assad of Syria to withdraw from Lebanon following a UN resolution signs of bad treatment? Were these demands wrong in their essence? Do they give Iran and Syria the right to feel victimized? If one perceives US action in this way, then all what Washington has to do is to release pressure on the Mullah to build their weapons and ask Assad to send his Army back to Lebanon. Phares added, “the public in America and the people in the region are not as naive as they were before 9/11. They will ask the hard questions when the time comes. The so-called engagement recommendation is a relic from the past and sounds like a suicidal idea. For surrendering to fascist regimes – regimes that are rejected by their own people – is utterly wrong.

There is however a much bigger catalog of questions… The first set of questions has been asked repeatedly by various bloggers and columnists in the MSM and it is this: How does Israel, hundreds of miles away from Iraq, bear any responsibility for the conflict there and why? How will Baker’s proposed de facto dismantling of Israel and the raising of Hamas to a legitimate entity, bring peace to Iraq and what benefits will another terrorist led government in the Middle East produce for US interests?

The next set of questions, one that nobody asked yet is more serious, its possible answers more dangerous to America. Here they come… The UN has approved and the legitimate democratically elected Lebanese government under PM Saniora has ratified an international Tribunal to try Syria’s Baby Assad and his accompliices. To make a deal with Syria, Assad must be spared the Tribunal, could it be that Baker is so intent on hiding his own guilt or a client’s that he must, at any cost, squelch Assad’s trial? Could Lebanon’s former PM Rafik Hariri have stood on the way of some of James Baker’s business deals? Could Mr. Baker be trying to spare himself a devastating revelation?

You think that is farfetched, that I must be hallucinating? You think, gentle reader, that my questions are out of line? Then look at Mr. Baker’s career, the lawyer for Saudi Arabia, the US envoy more intent in lining his own pockets than in carrrying out his duties, the Secretary of State that saved Saddam Hussein and as as result of his actions is directly responsible for the current Iraq war. He is the one who through his Realpolitik is directly to blame for the death of Cindy Sheehan’ son and thousands of others. Ms. Sheehan should ask Mr. Baker to explain why her son had to die in Iraq, but she won’t (of course!) since it won’t produce as many photo ops as going after the President. Awaken America! James Baker, the man with hands full of blood, the unscrupulous profiteer with pockets full of silver, must be exposed and prosecuted as a war criminal, as a murderer and as a traitor!!!

Chaim