Thursday, 11 December 2003

Baker Takes the Loaf

President's Business Partner Slices Up Iraq

by Greg Palast


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 Botts' 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 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 isn't going to let something as meaningless 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 President, says the official press release, has not appointed 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. It's key member, Ahmed Chalabi, is a convicted bank swindler.)

The Bush team must see the other advantage in having the rump government of Iraq make the choice of 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 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.

For the Bush administration, this marks a new low in their Conflicts-R-Us appointments process.

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 old theocracy of Saudi Arabia, the conflict disappears.

Iraq owes 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 says 'No!' Wolfensohn, president of the World Bank, 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 have certainly promoted.

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