Slicing up Iraq for friends & family

[Anonymous]

Well, ho ho ho!  It's an early Christmas for James Baker III.

All year the elves at his law firm, Baker Botts of Texas, have been working day and night to prevent the families of the victims of the September 11 attack from  seeking information from Saudi Arabia on the Kingdom's funding of Al Qaeda fronts.

It's tough work, but this week came the payoff when President Bush appointed Baker, the firm's senior partner, to "restructure" the debts of the nation of Iraq.

And who will net the big bucks under Jim Baker's plan?  Answer:  his client, Saudi Arabia, which claims $30.7 billion due from Iraq plus $12 billion in reparations from the First Gulf war.


PUPPET STRINGS

Let's ponder what's going on here.

We are talking about something called "sovereign debt."  And unless George Bush has finally 'fessed up and named himself Pasha of Iraq, he is not their sovereign.  Mr. Bush has no authority to seize control of that nation's assets nor its debts.

But our President is not going to let something as trivial as international law stand in the way of a quick buck for Mr. Baker.  To get around the wee issue that Bush has no legal authority to mess with Iraq's debt, the White House has crafted a neat little subterfuge.  The official press release says the President has not appointed Mr. Baker.   Rather Mr. Bush is "responding to a request from the Iraqi Governing Council."   That is, Bush is acting on the authority of the puppet government he imposed on Iraqis at gunpoint.

I will grant the Iraqi 'government' has some knowledge of international finance; its key member, Ahmed Chalabi, is a convicted bank swindler.

The Bush team must see the other advantage in having the rump rulers of Iraq pretend to choose Mr. Baker; the US Senate will not have to review or confirm the appointment. If you remember, Henry Kissinger ran away from the September 11 commission with his consulting firm tucked between his legs after the Senate demanded he reveal his client list.   In the case of Jim Baker, who will be acting as a de facto US Treasury secretary for international affairs, our elected Congress will have no chance to ask him who is paying his firm.? nor even require him to get off conflicting payrolls.

This takes the Bush administration' Conflicts-R-Us appointments process to a new low.

Or maybe there's no conflict at all.   If you see Jim Baker's new job as working not to protect a new Iraqi democracy but to protect the loot of the old theocracy of Saudi Arabia, the conflict disappears.

Iraq's debt totals something on the order of $120 billion to $150 billion, depending on who's counting.  And who's counting is VERY important.

Much of the so-called debt to Saudi Arabia was given to Saddam Hussein to fight a proxy war for the Saudis against their hated foe, the Shi'ia of Iran.  And as disclosed by a former Saudi diplomat, the kingdom's sheiks handed about $7 billion to Saddam under the table in the 1980's to build an "Islamic bomb."

Should Iraqis today and those not yet born have to be put in a debtor's prison to pay off the secret payouts to Saddam?

James Wolfensohn, president of the World Bank, says 'No!'  Wolfensohn has never been on my Christmas card list, but in this case he's got it right:  Iraq should simply cancel $120 billion in debt.

Normally, the World Bank is in charge of post-war debt restructuring.   That's why the official name of the World Bank is "International Bank for Reconstruction and Development."   This is the Bank's expertise.  Bush has rushed Baker in to pre-empt the debt write-off the World Bank would certainly promote.


"I FIXED FLORIDA"

Why is our President so concerned with the wishes of Mr. Baker's clientele?  What does Bush owe Baker?  Let me count the ways, beginning with the 2000 election.  

Just last week Baker said, "I fixed the election in Florida for George Bush."  That was the substance of his remarks last week to an audience of Russian big wigs as reported to me by my somewhat astonished colleagues at BBC television.

It was Baker, as consiglieri to the Bush family, who came up with the strategy of maneuvering the 2000 Florida vote count into a Supreme Court packed with politicos.
 
Baker's claim to have fixed the election was not a confession; it was a boast.  He meant to dazzle current and potential clients about his Big In with the Big Boy in the White House.   Baker's firm is already a top player in the Great Game of seizing Caspian Sea oil. (An executive of Exxon-Mobil, one of Baker Botts's clients, has been charged with evading taxes on bribes paid in Kazakhstan.)  


ALL IN THE FAMILY

Over the years, Jim Baker has taken responsibility for putting bread on the Bush family table.  As Senior Counsel to Carlyle, the arms-dealing investment group, Baker arranged for the firm to hire both President Bush 41 after he was booted from the White House and President Bush 43 while his daddy was still in office.

Come to think of it, maybe I'm being a bit too dismissive of the Iraqi make-believe government.  After all, it's not as if George Bush were elected by voters either.  It would be more accurate to say that TWO puppet governments have agreed to let the man who has always pulled the strings come out from behind the curtain, take a bow, take charge -- then take the money and run.

[Deborah]

http://letters.statesman.com/WBRH05DA42 ... 5F3EB6B3B5

Excerpts:
Bush says Halliburton will repay any overcharges
President also dismisses any concerns about conflicts in interest for James Baker's in seeking Iraqi debt relief

The Pentagon said Thursday it had evidence that Halliburton had failed to obtain a reasonable price for the fuel it delivered to Iraq from a subcontractor in Kuwait, overcharging American taxpayers by as much as $61 million.

Bush also defended his choice of James Baker, a former secretary of state and treasury secretary, as his personal envoy for negotiations with other nations on forgiving Iraq's debts.

On Friday an editorial in The New York Times called on Baker to sever ties to his law firm, Baker Botts, and an investment firm, the Carlyle Group, both of which have business interests in the Middle East.

When asked whether Baker's business interests posed a conflict of interest in his task of renegotiating Iraq's debt, Bush described Baker as a "man of high integrity" and of "enormous experience."

White House spokesman Scott McClellan said Baker "is fully complying with all laws and rules on the books and has taken significant steps to avoid even the potential for a conflict of interest."

McClellan said Baker will renounce his partnership share of fees Baker Botts gets from clients whose interests might pose a conflict. The firm's clients include Halliburton. Baker is taking similar steps at the Carlyle Group, McClellan said. The Carlyle Group is an international investment company that has had dealings with the Saudi royal family.

Among nations disqualified from the work were France, Germany and Russia, three of the countries Baker will ask to help put Iraq, which has more than $100 billion in foreign debt, on a sounder financial footing.

At the center of the disputes over the reconstruction of Iraq stands Halliburton, which the United States awarded, without competitive bidding, a lucrative contract in the rebuilding efforts.

Pentagon officials said their reviews of the Halliburton contracts had turned up two problems, both related to a Halliburton subsidiary, Kellogg, Brown & Root. In one case, they said, the company submitted a proposal for cafeteria services that appeared to be $67 million higher than what Halliburton had agreed to pay a subcontractor to carry out the services. The Pentagon rejected Halliburton's proposal but attributed it to miscommunication rather than to an effort to defraud the government.

In the case of the gasoline, Halliburton charged the government $2.27 a gallon for 56.6 million gallons of gasoline from Kuwait, Pentagon officials said. That was $1.09 a gallon higher than the government was charged by another contractor, they said. The difference amounted to more than $61 million.

Halliburton's president, Dave Lesar, said the Kuwaiti company, Altanmia Commercial Marketing Co., was the only one that met the contract's requirements. Lesar said Halliburton earned "a few cents on the dollar" for delivering the fuel.

Under the contract, Halliburton gets a guaranteed profit calculated as part of the company's costs. In other words, the higher the costs, the more money Halliburton gets.

Halliburton is guaranteed a profit equal to at least 2 percent of its costs. So if the Kuwaiti subcontractor did overcharge by $61 million, Halliburton would be guaranteed an additional $1.2 million in profit.

Depending on performance, Halliburton could earn a profit of up to 7 percent of costs. If Halliburton were granted the entire 7 percent, its profit on the overcharge would be about $4.3 million.

Democratic presidential candidates on Friday pounced on the Halliburton controversy, accusing the administration of cronyism. Sen. Joe Lieberman, D-Conn., said the deal was lining "the pockets of well-connected corporations," while Sen. John Edwards, D-N.C., accused Halliburton of "war profiteering."

Former Vermont Gov. Howard Dean sought to link the Halliburton issue with the administration's decision to block nations that opposed the Iraq invasion from winning U.S.-funded contracts there. "George W. Bush is preventing entire nations from bidding on contracts in Iraq so his campaign contributors can continue to overcharge the American taxpayers," he said.

http://letters.statesman.com/WBRH05DA4A ... 5F3EB6C112
Defense officials said the Pentagon was negotiating over how to resolve the issue over the fuel charges. But Michael Thibault, deputy director of the Defense Contract Audit Agency, said that a draft report by his agency has recommended that the Army Corps of Engineers seek reimbursement from the company.

The defense officials said that Halliburton didn't appear to have profited from the overcharging for fuel, but had instead paid a subcontractor too much for the gasoline in the first place.

Halliburton also has said that one reason it needs to charge a high price for fuel is that it must be delivered in a combat zone. Several of its workers have been killed or wounded in attacks by Iraqi insurgents.

Other questions, in a second contract with the Army, involve unacceptable delays by the Halliburton subsidiary in providing cost estimates to the government for dozens of separate projects already under way in Iraq, Thibault said. These violations, for work that includes the construction of food, housing and other facilities for the military, could involve inflated costs as well, Thibault said.

Thibault would not be specific about the basis on which the auditors have found evidence that the Halliburton subsidiary has overcharged for the fuel it is providing in Iraq under the oil contract. But government documents show that the U.S. government is paying Halliburton an average of $2.64 a gallon to import gasoline to Iraq from Kuwait, more than twice what others are paying to truck in Kuwaiti fuel.

Rep. Henry Waxman, D-Calif., the leading congressional critic of the Halliburton contracts, said that the audit "confirms what we've known for months: Halliburton has been gouging taxpayers and the White House has been letting them get away with it."