The scandal the NY Times ought to be investigating.

[igloo]

October 27, 2004, 3:36 p.m.

Bomb-gate

The scandal the Times ought to be investigating.

The United Nations is already embroiled in the largest economic scam in world history: the multibillion dollar Oil-for-Food scandal. Now there is reason to ask whether a senior U.N., official also has attempted to influence an American election by spreading misleading information.

To understand why this scenario is plausible, let's connect some dots.

The headline of the New York Times front-page story on Monday read: "Huge Cache of Explosives Vanished from Site in Iraq." According to the Times, powerful HMX and RDX explosives — used to "make missile warheads and detonate nuclear weapons" — were stolen from Al Qaqaa, an Iraqi installation that "was supposed to be under American military control."

The source for this politically explosive charge? The Times quoted unnamed White House and Pentagon officials acknowledging that the explosives vanished sometime after the American-led invasion last year. But named White House and Pentagon officials have said the opposite. And a senior government official told me flatly: "The stuff in Iraq was missing as of April 10, 2003 — the day after Baghdad fell."

The Times also quoted experts at the International Atomic Energy Agency (IAEA) saying they assumed Saddam Hussein had moved the explosives — before the U.S. invasion of Iraq.

But, those experts speculated, perhaps the explosives were only moved to nearby fields where, the Times suggests, they would be "ripe for looting."

But how? The Times neglects the fairly obvious fact that looters could not have stuffed 380 tons of explosives into shopping bags. To transport that much material would have required about 38 large trucks — 10 tons per truck. Before the U.S. invasion, such truck convoys moved about Iraq freely. Once the U.S. was in occupation, that kind of effort could hardly have gone unnoticed.

On Tuesday, the Times ran another page one headline: "Iraq Explosives Become Issue In Campaign." Yes, that's true — thanks to the Times.

As for the holes in Monday's story, the Times tried to fill them this morning with a page A17 story: "Commander Says Brigade Didn't Inspect Explosives Site," quoting Col. Joseph Anderson of the 101st Airborne Division, saying that when his troops arrived at Al Qaqaa, they didn't look for the HMX and RDX. But what does that imply? That tons of HMX and RDX were still there? Or that the explosives were no longer there? The Times doesn't know and doesn't appear to care.

What's more, the Belmont Club argues today, persuasively I think, that the Times "interviewed the wrong unit commander" because it was the Third Infantry Division that first searched Al Qaqaa "with the intent of discovering dangerous materials," almost a week before the 101st arrived.

If the 3ID had found tons of HMX and RMX, we'd have heard about it. On April 5, the Washington Post reported on their discoveries at "Al QaQa," including "vials of white powder, packed three to a box," and stocks of "atropine and pralidoxime, also known as 2-PAM chloride, which can be used to treat exposure to nerve agents...."

If the 3ID got so close and personal that they were counting the vials in boxes, how likely is it that they would have missed 380 tons of HMX and RMX?

At this point, Times editors ought to be asking who got their story rolling and to what end?

Here's one theory: It was Mohammed ElBaradei, the head of the International Atomic Energy Agency. Why would he do that? "The U.S. is trying to deny ElBaradei a second term," a high U.S. government official told me. "We have been on his case for missing the Libyan nuclear weapons program and for weakness on the Iranian nuclear weapons program."

ElBaradei also opposed the liberation of Iraq. And he would like nothing better than to see President Bush be defeated next week.

If all this is true it would amount to a major scandal: It would mean that a senior U.N. official may be changing the outcome of an American election by spreading false information. And major U.S. media outlets are allowing themselves to be manipulated in pursuit of that goal.

The Times and other news organizations also have ignored this pertinent question: Why did Saddam Hussein have the kinds of explosives favored by terrorists — and why was he permitted to keep them? Such explosives, according to the Times, also "are used in standard nuclear weapons design," and were acquired by Saddam when he "embarked on a crash effort to build an atomic bomb in the late 1980s."

Writing in The Corner, former federal terrorism prosecutor Andrew C. McCarthy pointed out that U.N. Security Council Resolution 687, which imposed the terms of 1991 Gulf War ceasefire, required Iraq to "unconditionally accept the destruction, removal, or rendering harmless, under international supervision, of . . . [a]ll ballistic missiles with a range greater than 150 kilometres and related major parts, and repair and production facilities[.]"

Yet the IAEA made no attempt to force Saddam to comply with his obligations to destroy these "related major parts" of its ballistic missiles.

In addition, McCarthy noted, Iraq was required "not to acquire or develop nuclear weapons or nuclear-weapons-usable material or any subsystems or components[,]" and, to the extent it had such items, present them for "urgent on-site inspection and the destruction, removal or rendering harmless as appropriate of all items specified above."

It shouldn't require a rocket scientist to understand that a detonator is a key component of a nuclear bomb. But according to the Times, Saddam persuaded ElBaradei that he wanted to hold on to the explosives in case they were needed "for eventual use in mining and civilian construction" — and ElBaradai agreed.

It gets worse: The U.N. weapons inspectors led by Rolf Ekéus asked the IAEA to dispose of these explosives back in 1995. The IAEA did not do so — and between 1998, when Saddam forced the U.N. inspectors out of Iraq, and late 2002 when U.S. pressure caused him to allow inspectors to return, 35 tons of HMX went missing. Saddam claimed he used it in Iraq's cement industry. Evidently, ElBaradei saw no reason to doubt Saddam who — as noted — was working hand-in-globe with the U.N. on the Food for Oil program, an enterprise which, we now know, stole billions of dollars from the Iraqi people.

So when all the dots are connected what we see revealed is Bomb-gate — a controversy that should be about foreign interests that may be improperly influencing the U.S. media to affect the outcome of an American election.

But that story will be written after the elections. For now, the question is who voters will believe.

If they are persuaded that the dangerous weapons went missing because of Bush's incompetence, he is likely to lose (and ElBaradei will be breaking out the cigars and bongos this time next week). On the other hand, if voters come to believe that this is another instance of Kerry shooting from the hip, basing charges on flawed information, saying anything in order to win, they will almost certainly abandon him.

— Clifford D. May, a former New York Times foreign correspondent, is president of the Foundation for the Defense of Democracies, a policy institute focusing on terrorism.

[karch]

Your right they should, because there were many texas oil men that have their hands dirty in the Iraq oil-for-food fraud also.

[vicman]

texaco, exxon and some oil company from texas were also recieveng oil bonds from the iraqi govmn't...of course conservatives only see the chinese, french and russian companies as the ones being involved.

[igloo]

[mursa]

..excuse igloo , he slept on a tall pillow some 12 years ago , and hasn't been able to turn his head other than to the right side .

lol. kid just got owned !

[igloo]

..excuse igloo , he slept on a tall pillow some 12 years ago , and hasn't been able to turn his head other than to the right side .

lol. kid just got owned !

Mental midget,

You are dumb, clueless, useless, and retarded. Stick to doing what you do best--staring at a Michael Moore poster as you shove a Kerry bobble head doll up your twat (your ass sewn shut from the amount of times your lame-ass shit has been shoved back up your hole).

It's OK--the world needs court jesters--and the world got a perfect one in you. Congrats jerkoff.

[mursa]

Mental midget,

You are dumb, clueless, useless, and retarded. Stick to doing what you do best--staring at a Michael Moore poster as you shove a Kerry bobble head doll up your twat (your ass sewn shut from the amount of times your lame-ass shit has been shoved back up your hole).

It's OK--the world needs court jesters--and the world got a perfect one in you. Congrats jerkoff.

.....Listen , most folks except for tres-b and obby can see through your CRAP , so why do you even bother posting such Feces ???

I can't take a being like you serious ..

[vicman]

LOL!!!!!

Firms in Iraq's Oil-for-Food Program Revealed

Corruption Probe Names 4,734 Companies That Traded Under U.N. Arrangement

By Colum Lynch

Washington Post Staff Writer

Friday, October 22, 2004; Page A21

UNITED NATIONS, Oct. 21 -- A U.N.-appointed investigator probing corruption in the world body's oil-for-food program in Iraq published today a list of all 4,734 companies that traded with Saddam Hussein's government through the arrangement. The 300-page list provides the most comprehensive public account to date of Iraq's business dealings under the former program, under which Iraq was allowed to sell oil to purchase humanitarian supplies.

Paul A. Volcker, the former U.S. Federal Reserve chairman who heads the investigation, said he hoped the list would provide governments and investigators the data required to pursue their own evaluations of the program. He also noted that it was legal for the companies listed to trade with Iraq through the program.

Volcker also said his team is preparing to begin discussions with former U.S. weapons inspector Charles A. Duelfer, whose recent report on Iraqi weapons of mass destruction detailed Iraq used the oil-for-food program to take in more than $1.7 billion in kickbacks from companies. Duelfer alleged that Iraq demanded that firms exporting Iraqi oil after September 2000 were required to deposit kickbacks in Iraqi bank accounts in Jordan and Lebanon.

Volcker said his investigators had made "substantial progress" in tracking down and "assessing the allegations of maladministration and corruption" in the program, but he declined to provide any details. He would not produce a substantial report until the fall of 2005, he said.

U.N. Secretary General Kofi Annan said revelations of misconduct in the program had damaged the United Nations. "That's why we want to get to the bottom of it and clear it as quickly as possible," he said.

Volcker said the French bank BNP, which handled most of the U.N. oil-for-food business, has not cooperated adequately with his investigators, but he said he expected that the dispute will be resolved. He also said the accounting firm of Ernst & Young, which is conducting its own probe for the Iraqi Board of Supreme Audit, had withheld vital information.

Robert S. Bennett, who is acting as BNP's lead counsel, said the French bank was "fully cooperating" with Volcker's panel. "I really think there must be this disconnect, because we have from time to time had difficulty clearly understanding what they want," he said. Charles Perkins, a spokesman for Ernst & Young, said, "All parties involved are in continuing discussions to work out the sharing of documents."

The latest data provide the most authoritative account to date of Iraq's business dealings. Firms based in Russia, France, Switzerland, Britain and Turkey purchased about $32 billion of Iraqi crude through the U.N. oil-for-food deal, about half of all oil sold by Hussein's government under the U.N. program, according to the list. Four U.S. companies are listed as having purchased $482 million worth of Iraqi crude.

Russian oil traders captured nearly one-third of Iraq's oil export market. Three Russian companies, Zarubezhneft and J.S.C. Alfa Eco and an unnamed company, bought more than $7.3 billion in oil. Two French firms, Total International Ltd. and SOCAP International Ltd., bought more than $3 billion. And a London-based Chinese firm, Sinochem International Oil London Co., bought $2.2 billion in crude.

The list includes direct sales to Texaco, which bought $28.3 million in oil, and Mobil Export Corp., which paid $152 million. Purchases by Chevron Products Co. and Phoenix came to $140.2 million and $162.25 million, respectively. The overall U.S. stake in Iraq's oil market was far greater. But U.S. oil companies, which consumed more than 40 percent of Iraq's exported oil, were forced to purchase through foreign traders.

[vicman]

LOL!!!!! LOL!!!!!

Iraq

U.S. Names Under Scrutiny in Iraq Oil for Food Inquiry

http://www.npr.org/templates/story/story.php?storyId=4080618

[vicman]

oh my, i am really laughing!!!!

http://www.theaustralian.news.com.au/common/story_page/0%2C5744%2C11034448%255E462%2C00.html

US firms in 'oil deals'

From correspondents in New York

October 11, 2004

US companies and individuals had received vouchers from Saddam's government that let them buy Iraqi crude under the UN oil-for-food program, The New York Times reported at the weekend.

A report released last week by chief US weapons inspector in Iraq Charles Duelfer listed beneficiaries of the program from other nations, but not Americans, due to US privacy laws, the Times said. The report was prepared by the Iraq Survey Group.

However the US names were listed in copies of the report that were given to Congress and the White House, and which were shown to the Times, the newspaper said.

The report said US companies Chevron, Mobil, Texaco and Bay Oil, as well as three US individuals, including oil baron Oscar Wyatt, were together allotted 111 million barrels of oil, the Times said.

Spokesmen for the companies and for Mr Wyatt said the transactions were legal, but confirmed they had received subpoenas from a grand jury investigating the transactions.

Mr Duelfer's report said the deals had been made under the UN-run $US60 billion ($82.51 billion) oil-for-food program, which was launched in 1996 to alleviate the suffering of the Iraqi people under a UN oil embargo imposed in the wake of Iraq's 1990 invasion of Kuwait.

The program allowed limited supervised sales of Iraqi oil under the condition that the proceeds buy food and medicine for impoverished Iraqis.

In London, a newspaper has reported that history will judge that Britain and the US made the world a worse place with the war on Iraq and Saddam.

Former UN weapons inspector Scott Ritter wrote in The Independent on Sunday: "History will show that it was the US and Britain that consistently operated outside the spirit and letter of international law in their approach towards dealing with Saddam."

He said "the world's two greatest democracies" had undermined the legal framework of the United Nations set up after World War II at exactly the time when the world needed multilateralism most, to fight a global war on terror.

"Saddam is gone, and the world is far worse for it – not because his regime posed no threat, perceived or otherwise, but because the threat to international peace and security resulting from the decisions made by Bush and Blair to invade Iraq in violation of international law make any threat emanating from an Iraq ruled by Saddam pale in comparison," he wrote.

In Baghdad, reports that Saddam's former deputy prime minister Tareq Aziz was dead were denied by the US military yesterday.

Earlier, news outlets reported that he had died in custody.

"I can confirm that Tareq Aziz is alive, there is no change in his status and he is in our custody," Barry Johnson, a spokesman for the US-led prisons authority in Iraq, said.

Dubai-based Al-Arabiya television said Aziz, 668, had died in custody, quoting sources in the International Committee of the Red Cross in Iraq, while reports of his demise also surfaced in Moscow and Tehran.

Aziz surrendered in April last year and has been in US custody ever since.

[vicman]

http://newstandardnews.net/content/?action=show_item&itemid=1104

Oil-for-Food probe looks at American oil firms, businessmen

by Barry Saunders (bio)

Oct 12 - Although the United States’ desperate search for weapons of mass destruction in Iraq has turned up evidence of no such inventory or programs, it was recently revealed that American citizens and oil companies were allegedly secretly profiting from Iraqi oil under Saddam Hussein while Iraq was under sanctions.

Four major American oil companies and three individuals are under investigation for allegedly receiving vouchers that allowed them to buy Iraqi oil under the UN oil-for-food program.

The final report by CIA chief arms inspector Charles Duelfer says US oil companies Chevron, Mobil, Texaco and Bay Oil, along with three American investors received vouchers and used them to obtain 111 million barrels of oil between them from 1996 to 2003. The vouchers allowed them to sell or trade the oil.

All three of the individuals suspected of wrongdoing campaigned against the current Iraq war.

A grand jury is investigating Iraqi oil transactions in the UN Oil-for-Food program, as well as corruption allegations against its former head, Benon Sevan, and has served subpoenas to the companies under investigation.

Treasury Department spokesman Tony Fratto told the New York Times that US sanctions on Iraq had prohibited American companies and individuals from interacting directly with Iraqi officials, but oil dealers were allowed to apply for special authorization from the federal government to bid on UN Oil-for-Food contracts. He said the Treasury Department was investigating whether American companies or individuals had avoided the requirement.

[vicman]

http://www.atimes.com/atimes/Middle_East/EG11Ak01.html

Iraq's other looting

By Michael Renner

(Posted with permission from Foreign Policy in Focus)

Chaos and lawlessness have gripped large parts of Iraq following the US-British invasion. The country's civilian population finds itself bereft of jobs and even basic services. Museums, hospitals, universities, power stations, water plants and telecommunication facilities have been stripped bare by looters, leaving the country in dire straits. Several weeks after the end of major fighting, ordinary Iraqis have seen little in the way of benefits from whatever reconstruction is going on. Indeed, the focus of the occupation regime is more on emergency repairs than on a major rehabilitation of Iraq's dilapidated and war-destroyed public infrastructure. (1)

Less visible than the pedestrian plundering afflicting Iraq's cities and archeological treasures, another looting operation from on high is in the works: the Bush administration has been moving with great alacrity to take control of the major prize to be won in Iraq - strategic control over the country's considerable oil wealth.

While the invaders tolerated the widespread ransacking, they moved swiftly to secure the country's oil facilities. In Baghdad, the oil ministry was heavily guarded and was thus spared the fate of other Iraqi ministries, which went up in flames. But the occupiers' inconsistent attitude toward looting has backfired: in the two months since the official end of the war, general looting and sabotage have impeded even the oil industry, frustrating efforts to quickly return oil production to prewar levels. (2)

It has become clear that there is a yawning gap between the Bush administration's sharply focused war plans and the absence of workable postwar plans. Post-Saddam Hussein Iraq is caught in the twilight of an occupation veering between high imperial purpose and profit-making impulses. Symptoms of crony capitalism - championing privatization schemes and rewarding corporations closely connected to the George W Bush team with reconstruction contracts - collide with strategic visions of remaking Iraq in the US image. And the sobering reality of unrelenting chaos that has engulfed much of the country may well unravel Washington's ambitions to present a remade Iraq as an irresistible political and economic model for the rest of the Middle East and to use this new asset to reinforce US leverage over the world oil market.

Legitimizing conquest

The Bush administration was eager to have its occupation of Iraq legitimized by the United Nations. However, it first had to ensure that the international body - legally in charge of Iraqi oil sales under the sanctions regime - was effectively sidelined and tasked primarily with humanitarian issues.

The desired UN imprimatur came in late May, when the Security Council approved a resolution drafted by the US government with British and Spanish support. Although leading war opponents - France, Germany and Russia - made much of several concessions that altered an initial draft, Washington and London essentially got what they wanted. (3)

Reluctant to continue confronting the Bush administration and afraid that they would be depicted as obstructionists harming ordinary Iraqis' interests, the war opponents caved in. But hidden "carrots" were also used to marshal their consent: under the Security Council resolution, the UN-administered "oil for food" program will run for another six months, permitting several billion dollars worth of contracts - initialed but not operational at the time of the invasion - to be consummated. A large share of this business involves Russian, French and Chinese firms.

The Security Council resolution lifts the sanctions imposed on Iraq in 1990 (with the exception of arms-related provisions) and gives the occupiers (dubbed "the Authority" in the resolution) sweeping powers. The Authority will have broad control over the Iraqi oil industry, principally by means of a development fund for Iraq, into which all of Iraq's oil export revenues, all funds left over from the UN's "oil for food" program and all assets of the former Iraqi government located anywhere in the world are to be transferred. (4)

The Authority is vested with the sole decisionmaking power over the use of these revenues (leaving a yet-to-be-created Iraqi interim administration with no more than "consultation" rights). The resolution bars any legal challenges by rival claimants to Iraq's oil revenues until December 2007. But since the initial draft of the resolution mentioned no time limit at all, the 2007 date was characterized as a "critical concession" by the United States. (5)

The initial draft empowered the Authority for one year, but specified an automatic extension "to continue thereafter as necessary, unless the UN Security Council decides otherwise" (6) - meaning that the US and Britain could have vetoed any effort to terminate their self-awarded mandate. The final resolution provides for a review by the Security Council after one year but still does not require an explicit reauthorization of the occupation regime. (7) Without a timetable for establishing a legitimate government, the occupation - and control over Iraqi oil - is essentially open-ended.

Open for business

Most of the individuals assembled under L Paul Bremer to run the occupation regime lack the kind of expertise in reconstruction, nation-building and humanitarian assistance that Iraq so badly needs. Closely linked to US corporate interests, they are instead primed to streamline the privatization of the Iraqi economy. (8) For example, Gary Vogler, a former ExxonMobil executive, is the newly minted senior adviser to the oil ministry. (9) And Dan Amstutz, a former executive of Cargill and well-equipped to represent the commercial interests of US grain companies, has been pegged as the point man for agricultural reconstruction. (10)

The Wall Street Journal reported on May 1 that beginning in February 2003 - well before the start of the war - the Bush administration had drafted "sweeping plans to remake Iraq's economy in the US image". Detailed planning for such a makeover will apparently be left to a range of US financial consulting firms (including BearingPoint, Booz Allen Hamilton, Deloitte Touche Tohmatsu, and PricewaterhouseCoopers). (11)

The plan envisions asset sales, private concessions, leases and management contracts across the Iraqi economy, including the oil industry. It foresees that the first year would be spent building consensus for privatization, to be followed by asset transfers over a three-year period. (12) The Wall Street Journal article compares the program to what was done in Russia, but does not mention the corruption, massive job loss and gaping inequality that ensued during the Russian makeover.

Calling the shots in the oil industry is Philip Carroll, who was named on May 4 to head an advisory board to the Iraqi oil ministry. (13) Carroll was chief executive officer of Shell Oil, the US arm of Royal Dutch/Shell in the 1990s, and subsequently became head of the construction giant Fluor, a company he ran until 2002. (14) Carroll still owns substantial stock in both of these corporations. (15) He is not known as an Iraq oil specialist and apparently had never been to the country prior to his appointment.

An innocent observer may well wonder why Carroll was chosen when Iraqi nationals presumably have much better insights about the requirements of getting Iraq's oil industry back on its feet. The answer lies in the difference between a disinterested rebuilding program and an effort to establish foreign control, as suggested by Raad Alkadiri, a director at PFC Energy in Washington, DC, when he said, "But the bottom line is [that] bringing in people from the outside gives you a better chance of controlling the oil sector, even directly." (16)

The Halliburton empire

A bounty of postwar reconstruction contracts is being awarded to a closely drawn circle of politically well-connected US corporations. Halliburton, Bechtel and Fluor are companies that have generously supported Republican politicians and whose executives are no strangers to the revolving door connecting government and corporate jobs. (17)

Perhaps no company is better connected than Halliburton - the oil services and construction firm that Dick Cheney headed from 1995 to 2000 before running for vice president. Halliburton's government contracting business surged under Cheney in the 1990s, and it surged again in the wake of the September 11, 2001, attacks. (18) Prior to the invasion, the company had completed a classified study for the Pentagon, assessing the state of the Iraqi oil industry and how to revive it after the war. (19) In early March, the Army Corps of Engineers secretly awarded Kellogg, Brown & Root (KBR, a Halliburton subsidiary) a no-bid contract to fight oil well fires and make emergency repairs. (20) Persistent probing by Congressman Henry Waxman brought to light that the company was also given a far more lucrative, and somewhat open-ended, role in running Iraq's oil facilities and in distribution of petroleum products. The contract has an overall ceiling of $7 billion but is expected to yield a maximum of $800 million for KBR, given that it is to be opened to bidding later in 2003. (21) The secret deal was apparently struck as early as November 2002 - at a time when the administration insisted that no decision had yet been made to go to war. (22)

KBR is also making money in other ways, including a $36 million contract to rebuild and operate Camp Arifjan (a US Army base in Kuwait), a $28 million program to build and maintain prisoner-of-war camps, and a $62 million undertaking to feed and house troops in Iraq. These projects are carried out in the context of an exclusive US Army contract awarded in December 2001, under which the company provides a broad range of logistical services to army troops deployed outside the United States. With the mushrooming of US military bases in the past two years, Halliburton has set up shop in Afghanistan, Uzbekistan, Djibouti, Cuba (Guantanamo Bay) and now Iraq. The 2001 contract - the Logistics Civil Augmentation Program or Logcap in Pentagon-lingo - spans a decade and has no cost cap. Because the company receives a set percentage of its contract-related expenses, it has an incentive to bill more in order to maximize profits. (23)

What merits such generosity? Perhaps it has nothing to do with the fact that Dick Cheney used to be the Halliburton CEO. (Although Cheney sold his Halliburton stock when he left the company to run for vice president, he still receives annual deferred compensation payments until 2005. (24) Perhaps it's irrelevant that Joe Lopez, a military aide to Cheney when he was defense secretary in the early 1990s and who was subsequently hired by Halliburton at Cheney's suggestion, is in charge of KBR's Pentagon contracts. (25) After all, the vice president's office and Halliburton spokespeople strenuously deny that any favoritism is involved in the awarding of these contracts.

Halliburton may be qualified for the job, but its performance has not exactly been free of blemish. The December 2001 contract was awarded even though KBR had been sued for overbilling the army between 1995 and 1997, allegedly to the tune of $6 million. The company paid $2 million to settle but did not admit any wrongdoing. (26) There have been other irregularities as well. Among them are allegations that the company overcharged the army for support operations for troops deployed in Bosnia, a deal worth $3 billion so far. (27) And in 2002, Halliburton was investigated by the Securities and Exchange Commission for alleged accounting improprieties during Cheney's tenure. (28)

The political and commercial fates of Dick Cheney, Halliburton and Iraq have repeatedly intersected. As defense secretary in the first Bush administration, Cheney directed the 1991 Gulf War. He also initiated the policy to make much greater use of private contractors in running military bases. This practice is now a major profit center for Halliburton. After the war - Cheney took the CEO job after Bush Senior lost his re-election bid - Halliburton made money by selling oilfield supplies to Iraq and helping it to repair some of the war damage incurred due to US bombing. (29) As George W Bush's vice president, Cheney was a major player in drumming up support for the recently concluded war, and now his former company again stands to benefit handsomely from the carnage in Iraq.

The future of Iraq's oil

Following a quarter century of wars and international sanctions, Iraq's oil industry is dilapidated and in need of extensive rehabilitation. Halliburton and others are set to make a killing on related work. But beyond reconstruction, a big outstanding question concerns Iraq's longer-term oil development. How much will Iraqi production capacity expand in coming years? Who will decide? Will there be a big role for foreign multinationals, bringing 30 years of state control to an end?

Iraqi oil - plentiful, of high quality, cheap to produce - is indeed a major prize for any oil company. Although many companies continue to explore for oil in far-flung places, often under forbidding physical conditions, the Middle East harbors most of the world's remaining oil. In the 1960s, the world oil industry discovered an average of 47 billion barrels per year. But as companies concentrated their search outside the Middle East (in response to nationalization in most Organization of Petroleum Exporting Countries (OPEC) countries), the annual rate of discovery plummeted to 35 billion barrels in the 1970s, 24 billion in the 1980s, and a mere 14 billion in the 1990s. (30) Against the background of ever-rising demand, there is simply no avoiding the Middle East.

Assuming a significant role for foreign companies - which is what Philip Carroll and others have indicated (31) - who will get preferential access to Iraq's riches? To what extent will existing contracts concluded by Russian, French and Chinese companies with Saddam's regime be upheld? Before the war, there were thinly veiled threats that companies whose home governments refused to support an invasion would be shown the door. By implication, the big winners in such a reshuffling were to be the US and British companies - ExxonMobil, Chevron-Texaco, BP, Shell - which were left out in the cold by the nationalization of 1972.

It's possible that the Russians, French and others will not be entirely excluded, if only to induce them to accept and legitimate the new masters of Iraq. But the manner in which the reconstruction contracts have been handled to date suggests a winner-take-all attitude in Washington. In a recent interview, Philip Carroll hinted again that contracts signed with Saddam's regime may be voided or subject to renegotiation. (32)

As of early July, the future of Iraq's oil is still a matter of speculation. In the first place, rehabilitating oil facilities and preparing the ground for an expansion of output will take time. Current projections are that because of widespread looting, it will take 18 months just to return to prewar production levels of 3 million barrels per day. (33) So it's not surprising that no concessions have been awarded and no contracts have been negotiated so far.

A two-pillar strategy?

Both Iraq's desperate need for revenue and the Bush administration's energy policy preferences point to a future in which Iraq's immense petroleum deposits will be far more fully exploited than at any time in the past. But there is the sticky question of Iraq's future status within OPEC.

Unrestrained Iraqi oil production would undermine OPEC's ability to set oil prices and might even trigger a price war among member countries. Though some have argued for pulling Iraq out of OPEC, several rounds of talks between the State Department and exiled Iraqi oil experts reportedly generated broad consensus that Iraq should remain an OPEC member but be exempt from the organization's quota restrictions. This option is also favored by Philip Carroll. (34)

A weakened OPEC and lower oil prices would not be unwelcomed by the Bush White House. After all, cheap oil is an essential ingredient of the administration's energy policy, which foresees virtually unrestrained growth of US oil consumption, as spelled out in Dick Cheney's 2001 task force report. (35)

But there are other considerations that may yet win the day. If oil prices dip too low, large segments of US oil production will be rendered uncompetitive. This outcome may be less of a concern for the large multinationals, but it is of critical interest to domestic oil producers, which form an important part of George Bush's power base. Very low prices could also trigger greater political instability among oil producing nations in the Middle East, potentially undermining US allies in the region.

In the end, US economic interests require oil prices that are low but not too low and an avoidance of wild price swings. Saudi Arabia has long played a key role in this regard - ensuring stability by making up for any shortfalls in output elsewhere in the world and by paring back its own production when supply gluts threaten to drive prices into the ground.

But in the aftermath of September 11, there are indications that Saudi Arabia may no longer be as politically reliable as was once the case. It is in this context that a boost in Iraqi oil production is critical. Then, instead of exclusively relying on Riyadh, Washington could erect Iraq as an alternate pillar helping to shore up US dominance of the oil-rich Middle East and ensuring US access to oil on favorable terms.

For such visions to become reality, however, Iraq needs to be pacified. The upheaval following the overthrow of Saddam suggests that it's far from a foregone conclusion that the occupation regime will be able to govern Iraq and bend the country to Washington's designs. The privatization of Iraq's oil may yet derail, if the occupation regime finds itself unable to provide a sufficiently secure and stable investment environment. It would be an ironic outcome if the very triumph of Donald Rumsfeld's war doctrine - reliance on "smart" weapons and fewer soldiers to achieve victory - also meant that there simply weren't enough occupation forces to pacify Iraq.

Although the Bush administration was exceedingly well prepared in its drive toward war, it apparently has given far less thought to maintaining order in the conflict's aftermath.

Notes

(1) Edmund L Andrews, "US Focus in Iraq Is on Repairs, Not Building", New York Times, June 20, 2003.

(2) Edmund L Andrews, "Iraqi Smugglers Are Brazen and Don't Stop at Oil," and Neela Banerjee, "Barrels of Oil Exported for the First Time Since the War," both in New York Times, June 23, 2003.

(3) Felicity Barringer, "Security Council Almost Unanimously Approves Broad Mandate for Allies in Iraq," New York Times, May 23, 2003.

(4) The approved text can be found in: United Nations Security Council, "Spain, United Kingdom of Great Britain and Northern Ireland and United States of America: Draft Resolution," S/2003/556, May 21, 2003.

(5) Ibid; Colum Lynch, "US Proposes Broader Control of Iraqi Oil, Funds," Washington Post, May 9, 2003; "US-UK-Spain Revised Draft Resolution on Post-War Iraq," Global Policy Forum

(6) "US-UK-Spain Revised Draft Resolution on Post-War Iraq," Global Policy Forum

(7) United Nations Security Council, "Spain, United Kingdom of Great Britain and Northern Ireland and United States of America: Draft Resolution," S/2003/556, May 21, 2003.

(8) Edmund L Andrews, "Overseer in Iraq Vows to Sell Off Government-Owned Companies," New York Times, June 23, 2003.

(9) Donald L Barlett and James B Steele, "Iraq's Crude Awakening," Time, May 10, 2003

(10) The Transnational Foundation (Sweden.

(11) Neil King, Jr, "Bush Officials Devise a Broad Plan for Free-Market Economy in Iraq," Wall Street Journal, May 1, 2003.

(12) Ibid.

(13) Neela Banerjee, "3 Get Top Posts to Revive Iraqi Oil Flow," New York Times, May 4, 2003.

(14) Neela Banerjee, "Shell Veteran in Line for Iraq Oil Post," New York Times, April 3, 2003.

(15) Peter S Goodman, "US Advisor Says Iraq May Break with OPEC," Washington Post, May 17, 2003.

(16) Neela Banerjee, "Oil Experts Say US Hasn't Come to Grips with Blueprint for Industry," New York Times, April 23, 2003.

(17) Danny Penman, "US Firms Set for Postwar Contracts," The Guardian, March 11, 2003; Sheryl Fred, "Postwar Profiteers", TomPaine.com; Robert Bryce and Julian Borger, "Cheney Is Still Paid by Pentagon Contractor", The Guardian, March 12, 2003.

(18) Dan Baum, "Nation Builders for Hire," New York Times Magazine, June 22, 2003.

(19) Mark Fineman, "Getting Iraq's Oil Pumping Again," Los Angeles Times, April 22, 2003.

(20) Edward Epstein, "Firm Linked to Cheney Wins Oil-Field Contract," San Francisco Chronicle, March 8, 2003.

(21) US Army Corps of Engineers, "DoD Mission for Repair and Continuity of Operations of the Iraqi Oil Infrastructure,"; Mark Fineman, "Halliburton Unit's Bill for Iraq Work Mounts," Los Angeles Times, May 9, 2003; Edward Epstein, "Congress Curious About Iraq Deals," San Francisco Chronicle, May 20, 2003.

(22) Jason Leopold, "Defense Dept Secretly Tapped Halliburton Unit to Operate Iraq's Oil Industry," ZNet, May 13, 2003, as reposted on Global Policy Forum

(23) Lisa Myers and NBC News investigative team, "Halliburton Cash Registers Ring in Iraq," MSNBC.com, May 3, 2003.

(24) Robert Bryce and Julian Borger, "Cheney Is Still Paid by Pentagon Contractor," The Guardian, March 12, 2003.

(25) Jeff Gerth and Don Van Natta, Jr, "In Tough Times, a Company Finds Profit in Terror War," New York Times, July 13, 2002.

(26) Keith Ashdown, "Hail to the Chief Executive Officer," The Waste Basket (Taxpayers for Common Sense), August 9, 2002.

(27) "Halliburton Unit Got Exclusive Military Bid," CBS News.com, August 4, 2002,

(28) Farhad Manjoo, "War Inc," Salon.com, March 17, 2003.

(29) Greater use of private contractors and Halliburton sales to Iraq from Dan Baum, "Nation Builders for Hire," New York Times Magazine, June 22, 2003.

(30) "Oil War," BBC, March 26, 2003, as reposted in Global Policy Forum

(31) Peter S Goodman, "US Advisor Says Iraq May Break With OPEC," Washington Post, May 17, 2003.

(32) Ibid.

(33) Neela Banerjee, "Barrels of Oil Exported for the First Time Since the War," New York Times, June 23, 2003.

(34) Carola Hoyos, "Exiles Call for Iraq to Let in Oil Companies," Financial Times, April 7, 2003; Peter S Goodman, "US Advisor Says Iraq May Break with OPEC," Washington Post, May 17, 2003.

(35) National Energy Policy Development Group, Reliable, Affordable, and Environmentally Sound Energy for America's Future (Washington: US Government Printing Office, May 2001).

Michael Renner is a senior researcher at Worldwatch Institute and a policy analyst for Foreign Policy In Focus.

***************************

LOL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Oh God, I'm bored.

[vicman]

but i'll post one more from the houston chronicle just for kicks

*******************************

Panel names Iraq oil buyers

Companies aren't accused of wrongdoing

By DAVID IVANOVICH and TOM FOWLER

Copyright 2004 Houston Chronicle

NEW YORK - A panel investigating possible corruption connected with Iraq's oil-for-food program disclosed on Thursday the names of 248 companies known to have purchased crude while Saddam Hussein was still in power.

The investigators, led by former Federal Reserve Chairman Paul Volcker, tracked more than $64 billion known to have flowed into Iraq under the United Nations-sponsored relief program.

Volcker's committee, still months away from completing its probe, accused none of the firms of wrongdoing.

But he made it clear investigators believe at least some buyers were paying Saddam's regime illicit surcharges to obtain Iraqi oil.

The list provided by Volcker's committee largely corresponds with information detailed by CIA investigator Charles Duelfer in a report released this month on Iraq's weapons programs.

Unlike the Duelfer report, Volcker's committee refused to provide names of any people believed to have purchased crude from Baghdad prior to the U.S.-led invasion.

"To list those names might appear to carry some emphasis that we, at this point, could not justify," Volcker said.

The CIA report repeatedly mentioned Houston oilman Oscar Wyatt as a crude allocation holder working through Cyprus-based entities known as Mednafta Petroleum and Nafta Petroleum.

According to the list provided by Volcker's committee, Nafta and Mednafta Trading Co. purchased $506 million in crude through the program, while Coastal Petroleum, which it describes as an Aruba-registered outfit, purchased nearly $714 million worth of oil over the seven-year period.

Wyatt was the long-time head of Houston-based Coastal Corp., which owned a refinery in Aruba. Coastal was later purchased by El Paso Corp.

The New York Times reported this week that Coastal paid $201,877 in surcharges to the Iraqis, but a spokeswoman for Wyatt denied that claim.

"Although he doesn't doubt some companies paid surcharges, Mr. Wyatt does not believe that Coastal ever paid any surcharges to Iraq," she said.

Wyatt has served for years as an adviser to U.S. companies interested in investing in the Middle East, which could explain the his name's appearance in association with companies other than Coastal on the list, the spokeswoman said.

"Mr. Wyatt has never held a contract to purchase crude oil from Iraq, nor has he ever purchased oil from Iraq. Mr. Wyatt has never personally earned any money from the sale of Iraqi oil except as a Coastal shareholder," she said.

Volcker refused to discuss Wyatt or characterize his cooperation with the investigation.

Under the program, companies that wanted to buy oil from Iraq registered with the U.N. through their government. The companies were selected by and contracted with Iraq's State Oil Marketing Organization.

International oil companies, including U.S. firms, were permitted to buy Iraqi crude under the program. But Iraq was known to smuggle out crude, and oil buyers were long suspected of making under-the-table payments to the regime. The CIA report calculated those surcharges were typically 25 cents to 35 cents per barrel.

Among the oil purchasers mentioned on the Volcker panel's list was Bayoil, a company based in Houston that is registered in the Bahamas, which reportedly purchased $102 million in oil.

Other U.S. companies that bought oil through the program include Mobil Refining, which bought $489 million in oil through Erdem Holding Co.; Chevron Products, which purchased $140 million in oil; and Texaco, which purchased $28 million in oil.

The Volcker committee's list also includes companies that sold other goods to Iraq during the embargo years through U.N. programs. This includes grain supplier Cargill, Dentsply U.K. Export, a subsidiary of a York, Pa., firm, and drug maker Wyeth-Ayerst.

Baker Atlas, a Houston-based subsidiary of Baker Hughes, sold $8.2 million in equipment to Iraq in the late 1990s.

Chronicle reporter David Ivanovich covered this story in New York while Tom Fowler worked out of Houston.

david.ivanovich@

[mursa]

Cmon now vicman , there is no chance any american would let greed take over ones judgement , especially oil-tycoons .

lol

igloo and other parrots who talk about the Un scandal with such frequency just got OWNED ! .

[igloo]

.....Listen , most folks except for tres-b and obby can see through your CRAP , so why do you even bother posting such Feces ???

I can't take a being like you serious ..

Son, just blow away already....you are a retard. Case closed. Post after post, thread after thread, you cement your status as a mental midget. Deal with it already--you are dumb.