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The Iraq Money Trail

Duane Daman

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April 17, 2007

The Inexplicable Enrichment of Bush Cronies

The Iraq Money Trail


It's time for Americans to face the cold hard truth that nothing will be accomplished by allowing the daily carnage in Iraq to continue, and if Bush has his way, our young people will be dying in this war profiteering scheme until hell freezes over. Congress needs to authorize funding to pull our troops out of that deathtrap and not one dime more.

It apparent that Bush is a madman who will listen to no one. After Bush's speech on January 10, 2007, about the plan to send more troops, retired Army Col Doug McGreggor, a former advisor to Don Rumsfeld in 2003, said in a broadcast interview, "There seems to be a complete failure to understand that we have been trying to suppress a rebellion against our occupation."

"As long as we are there," he warned, "we are the number one public enemy for the Muslim-Arab world."

"We were after all," he points out, "a Christian army occupying a Muslim Arab country, something which in the Middle East, is essentially a disaster."

This decorated combat veteran says Bush's strategy will never work. "We did not go to Iraq originally," he explains, "to dismantle the state, dismantle the army, the police, and the government, to occupy the place with the object of changing the people that lived there into something they did not want to become."

After Bush's speech, military families also spoke out publicly against the decision to send more troops. "I don't have words for it," said Nancy Lessin, of Military Families Speak Out, a group of 3,100 families, including 100 who have lost a loved one in the war.

"This is a war," she said, "that should never have happened, that has wreaked so much havoc on our loved ones, Iraqi children, women and men, and now to be facing, almost four years into it, this news of an escalation of the war, is just unbearable."

An Associated Press-Ipsos poll showed that 70% of Americans opposed sending more troops, but Bush went right ahead and did it anyways. And then to make matters worse, this month he announces the plan to extend the 12-month tours to 15-months to allow his 30,000-troop buildup in Baghdad to stay for another year.

This war is going to bankrupt the US. A January 2007 study by Columbia University economist Joseph Stiglitz, who won a Nobel Prize in economics in 2001, and Harvard lecturer Linda Bilmes, estimated that the total costs of the Iraq war could be more than $2 trillion when the long-term medical costs for the soldiers injured so far are factored in.

The only people who are benefiting from Bush's war on terror are members of the Military Industrial Complex. Since 9/11, the pay for the CEOs of the top 34 defense contractors in the US has doubled, according to the August 2006 report, "Executive Excess 2006," by the Institute for Policy Studies, and the United for a Fair Economy.

The bill is rising so fast because the level of war profiteering is unprecedented. The Excess Report lists George David, CEO of United Technologies, as the top earner, making more than $200 million since 9/11, despite investigations into the poor quality of the firm's Black Hawk helicopters.

Halliburton CEO David Lesar made $26.6 million in 2005, and nearly $50 million since 9/11, an amount that even beats the $24 million that Dick Cheney received in exchange for the guarantee that Halliburton would be the number one military contractor during the Bush administration.

Cheney himself is also taking in war profits, contrary to what he told Tim Russert on "Meet the Press" in 2003, when he denied making any money off his former employer. "Since I left Halliburton to become George Bush's vice president," he said, "I've severed all my ties with the company, gotten rid of all my financial interest."

"I have no financial interest in Halliburton," Cheney told Tim, "of any kind and haven't had, now, for over three years."

Those statements were proven false when financial disclosure forms showed that Cheney had received a deferred salary from Halliburton of $205,298 in 2001, $262,392 in 2002, $278,437 in 2003, and $294,852 in 2004.

In 2005, an analysis released by Senator Frank Lautenberg (D-NJ), reported that Cheney continued to hold over 300,000 Halliburton stock options and said their value had risen 3,281% over the previous year, from $241,498 to more than $8 million.

"It is unseemly for the Vice President to continue to benefit from this company at the same time his Administration funnels billions of dollars to it," Senator Lautenberg said.

Cheney may be the most visible profiteer to those who find it difficult to follow the war on terror money trail, but many other members of the administration with insider knowledge set themselves up to profit early on as well.

For instance, there was the Undersecretary of Defense, Doug Feith, largely credited for fabricating the tales that got the US into the war to begin with, along with his fellow neocons and best buddy, Ahmed Chalabi.

Feith was a partner with Marc Zell, in the Feith & Zell, DC law firm before joining the administration. After he left for the White House, Zell renamed the firm, Zell, Goldberg & Co, and teamed up with Salem Chalabi, Ahmed nephew, to solicit contracts for clients in Iraq. This scam operated under the name, "Iraqi International Law Group."

At the time, the National Journal quoted Salem as saying that Marc Zell was the firm's "marketing consultant" and had been contacting law firms in Washington and New York to ask if they had clients interested in doing business in Iraq.

According to its web site back then, the IILG was made up of lawyers and businessmen who "dared to take the lead in bringing private sector investment and experience" to the war-torn country and offered to "be your Professional Gateway to the New Iraq."

"The simple fact is," the site stated, "you cannot adequately advise about Iraq unless you are here day in and day out, working closely with officials at the CPA, the newly constituted governing council and the few functioning civilian ministries [oil, labor and social welfare, etc]."

It is highly likely that the preceding statement was absolutely true when made because Feith helped set up the Coalition Provisional Authority in May 2003, with its leader Paul Bremer, and Feith's office and the CPA were in charge of awarding reconstruction contracts with Iraqi money.

For his part, Salem was a legal adviser to Iraq's governing council, of which his Uncle was a member, and Bremer even tried to appoint him to lead the tribunal that would try Saddam.

Uncle Chabali footprints in the profiteering racket can be traced back to September 2003, when the CPA awarded an $80 million contract to Nour USA, a company with ties to Winston Partners, which is a whole other story in itself because Winston Partners is headed by none other than Marvin Bush, the brother to the president.

In May 2003, Nour was founded by, Abul Huda Farouki, whose financial ties to Ahmed Chalabi date back to 1989, when Chalabi was CEO of the Petra Bank, and helped Farouqi finance projects around the world.

Nour's website at the time described the firm as an "international investment and development company" with more than 100 employees based in Iraq, and listed expertise in telecommunications, agribusiness, internet development, recruitment, construction materials, oil and power services, pharmaceuticals and fashion apparel.

In January 2004, Nour picked up another contract to equip the Iraqi armed forces and police worth $327 million. However, shortly thereafter, Nour came under fire when a shady deal surfaced involving the first $80 million contract and Ahmed Chalabi.

Newsday reported that Chalabi had received $2 million for helping to arrange the contract, but as it turned out, the contract was actually awarded to Erinys International, a firm set up in Iraq immediately after the invasion. The problem arose, Newsday said, because within days of receiving the contract, Erinys became a joint venture operation with Nour.

Next, the $327 million contract was in jeopardy after it was revealed that Nour had no experience providing military equipment and Nour claimed that it planned to subcontract its weapons procurement to Ostrowski Arms. However, the army soon learned that Ostowski had no license to export weapons.

The contract was finally axed in March 2004, after six of the 17 firms that bid on it complained that Nour's winning bid was impossibly low.

Following the money trail on this insider deal turned up the names of a few more suspects. According to the National Journal, a Nour executive said the Cohen Group "introduced us to people in the U.S. government who were involved in oil-industry security."

Former Republican Congressman and Secretary of Defense under President Clinton, William Cohen, sits at the helm of the Cohen Group, and according to a report by David Hilzenrath in the Washington Post on May 28, 2006, when he left office in January 2001, Cohen was saddled with debt and his final financial disclosure form, "listed tens of thousands of dollars of charge-account debts at interest rates as high as about 25 percent."

However, within a matter of weeks Cohen and his wife were residing in a $3.5 million mansion. It seems Cohen had wanted this house but was still in office and had no way to finance the purchase, so Frank Zarb, then chairman of the Nasdaq Stock Market, sold the house to Michael Ansari, chairman and CEO of defense contractor MIC Industries, in October 2000, and the Cohen took up residence in January or February of 2001, according to the Post.

From there, Cohen went on to join the board and audit committee of the Nasdaq Stock Market, and 11 days after he left office, MIC announced Cohen's appointment as chairman of its board of advisers in a press release.

In no time at all the Cohen Group was raking in mega-bucks. In applying for one contract, that earned the Group $490,000 over seven months, the firm bragged that it had helped Lockheed win a $3.6 billion contract for the sale of F-16 fighter jets to Poland, financed by the US government.

The Group's proposal said its efforts for the Lockheed deal included "advocacy with key decision-makers in the White House, Office of the Vice President, National Security Council, Department of Defense and the State Department during an 18-month campaign," according to the Post.

In regard to helping Nour get contracts in Iraq, according to the Post, where the government disclosure form for Nour asks the firm to identify "Specific lobbying issues," the Group's filings say: "Exploring overseas business opportunities."

When it comes to war profiteering, members of the Bush administration have given a whole new meaning to the "revolving door." A whole gang of thugs has been robbing us blind in Iraq since day one and nobody seems to be able to stop it.

Congress knows what's going on. Back on September 30, 2003, during the Senate debate over the first Iraq spending bill, Senator John Edwards said he refused to funnel the $87 billion to Cheney and other Bush cronies after learning that Bush's former campaign manager, Joe Allbaugh, who was later appointed to head FEMA, had quit his job 3 weeks before the bombs began to fall in Iraq to start the consulting firm, New Bridge Strategies, for clients seeking contracts in Iraq.

"First, Vice President Cheney's Halliburton receives more than $2 billion in Iraq reconstruction contracts," he said, "and now this."

He called it outrageous and disrespectful to the young people serving in Iraq. "President Bush should start addressing this credibility gap by calling on Joe Allbaugh and his friends to stop using their influence to secure government contracts in Iraq," he said.

Senator Edwards said there used to be talk about money for Iraq being a blank check but we now "know the president is writing it out to Joe Allbaugh and Halliburton and it's all endorsed by Vice President Cheney," he said.

In hindsight, Edwards should have expressed outrage at a few more people because the profiteering team at New Bridges was stacked with Republicans. The company's address was the same as a lobbying firm run by Haley Barbour, a former chairman of the Republican National Committee that went under the name of Barbour Griffith & Rogers.

And as luck would have it, Lanny Griffith was the CEO of New Bridge, and Ed Rogers was the vice president.

The firm's initial web site told potential clients, "the opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq."

And these greedy thugs were so shameless that they didn't even try to hide their elation over all the money they planned to make in Iraq. "Getting the rights to distribute Procter & Gamble products can be a gold mine," one of the firm's partners told Naomi Klein, quoted in an article in Harper's Magazine in September 2004.

"One well-stocked 7-Eleven," the partner said, "could knock out thirty Iraqi stores; a Wal-Mart could take over the country."

There were rumors that a McDonald's might open, a Starwood hotel was mentioned, and General Motors was said to be planning a factory and according to Ms Klein, Citigroup was preparing to offer loans guaranteed against future sales of Iraqi oil.

However since the war never did end, in 2004, Joe Allbaugh abandoned the quest for reconstruction gold mine in Iraq and started a consulting firm with the former director of Cheney's secret energy task force, Andrew Lundquist, and their first client was Lockheed Martin.

The marriage between the ex-campaign manager, Cheney's buddy, and Lockheed apparently worked out much better than the plan to build 7-Elevens in Iraq, because Lockheed stock value has doubled since 2001, and according to the Excess Report, the firm's CEO has made $50 million since 9/11.

It may well have been that Joe's new firm was simply an outgrowth from the many other firms set up by this same gang because Haley Barbour had already worked as a lobbyist for a Lockheed.

On thing is certain, Lockheed was not lacking for administration insiders when Allbaugh came knocking. For instance, before Cheney took over as VP, his wife, Lynne served on the board of Lockheed, receiving deferred compensation to the tune of half a million dollars in stock and fees, according to a January 16, 2007 report by Richard Cummings.

Cummings notes that Cheney's "2004 financial disclosure statement lists Lockheed stock options and $50,000 in Lockheed stock."

In addition, Cheney's son-in-law, Philip Perry, Cummings says, was appointed to serve as general counsel to the Department of Homeland Security, and he had been a registered lobbyist for Lockheed who had worked for a law firm representing Lockheed with the Department of Homeland Security.

According to Cummings, less than a month after 9/11, in October of 2001, the Pentagon announced a $20 billion contract for Lockheed for the development of the Joint Strike Fighter, called the F-35. At the time, Edward Aldridge was Undersecretary of Defense for acquisitions, technology and logistics, which was responsible for the approval of the contract. Aldridge left his government post in 2003, and he now just happens to serve on Lockheed's board of directors.

However, the most stunning revelation in the Cummings report, is that in November 2002, Stephen Hadley, deputy national security advisor at the time, called Lockheed employee, Bruce Jackson, to a meeting at the White House and told him that the US was definitely going to war in Iraq but there was one small hitch, the administration could not decide what reason to use to justify it.

So Jackson formed the "Committee for the Liberation of Iraq," and its mission statement said it was "formed to promote regional peace, political freedom and international security by replacing the Saddam Hussein regime with a democratic government that respects the rights of the Iraqi people and ceases to threaten the community of nations."

According to Cummings, the "pressure group began pushing for regime change - that is, military action to remove Hussein - in the usual Washington ways, lobbying members of congress, working with the media and throwing money around."

Jackson told Cummings that he did not see the point of going on about WMDs or an Al Queda link because he thought the human rights issue was enough to justify the war.

However, Hadley did not agree. "The committee's pitch," Cummings says, "or rationale as Hadley would call it, was that Saddam was a monster -- routinely violating human rights -- and a general menace in the Middle East."

Jackson said he closed down the Committee in June 2003 because its human rights rationale had been abandoned. "We were cut out," he told Cummings, "after the whole thing went to Rumsfeld," and Hadley explained that "terrorism and WMDs" were now the rationale for the war, not human rights.

However, Cummings reports that members of the war sales team that served with Jackson have done well for themselves. The president of the Committee, Randy Scheunemann, became the president of the Mercury Group, and lobbied for Lockheed and others, and then set up the firms, Scheunemann and Associates, and Orion Strategies, which, among other things, consults with companies and countries looking to do business in Iraq.

In November 2003, another Committee member, Rend Al-Rahim Francke, was appointed Iraqi ambassador to the US.

Meanwhile back in Iraq goldmine, the Iraqis have nothing to show for all the torture that they have endured for the past 4 years. On average, Iraqis still get only about two hours of electricity a day, and the situation won't be improving anytime soon because the US has not built a single major power plant.

And despite the $22 billion funneled to the war profiteers for reconstruction, a US official recently said, Baghdad may not have continuous 24-hour electricity until the year 2013.

For the people drawn to Iraq to fight against the occupation, this is not a war against Americans; it's a war against Bush. He tore this country apart for no reason and then just as the Iraqis predicted, the greedy gang of thugs swooped in and ripped everybody off.

And there is no reason to believe that the thievery has ended or the situation in Iraq will get better because an audit released on January 31, 2007, by Inspector General, Stuart Bowen, reported that the $300 billion war and reconstruction effort continues to be plagued with waste and corruption, and yet Bush now wants us to hand over another $100 billion to be funneled through Iraq to the exact same gangsters.

We will never win in Iraq no matter how long we stay because the other side will always have more people willing to die for the cause, and it doesn't take a genius to figure out that if the number of daily attacks continues to escalate as they have for the last 4 years, the US will run out of troops before they do.


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Once again we agree (let's try and NOT make a habit of it - LOL). Though I don't think padding his friends pockets was Bush's motivation (or main motivation) for going to war he certainly has not been averse to letting or making such things happen. Not that he needs any more money but one must wonder if he got a cut.

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Guest David Guyatt

Joe Stiglits, who is mentioned in the piece, is also a very interesting charater. Former Chief Economist of the World Bank and whistleblower of that institution. That takes courage and integrity.

The Bush family and their Republican allies have been bleeding the US since time began. Ditto the Tories and the UK. Very likely it is ditto most everywhere else too, and that the reason for do called "public service" is very much "private benefit".

I harbour a sneaky suspicion that the original reason for trying to take out Saddam -- also had some bearing on events back in 1991 in Dallas, Texas. In ultra brief, this concerned three gentlemen who entered the Dallas Federal Reserve Bank to request verification of the validity of a peculiar Fed gold bullion obligation in the amount of $33 billion. This was in July immediately after the conclusion of Gulf War 1. The certificate back bore a signature purporting to be that of James Baker III, foremrly Chief of Staff of Poppy Bush and later Secretary of the Treasury. The certificate bore the date 1955. The certificate purported to be in the name of Saddam Hussein (but misspelled as these certificates always are). The gentlemen were arrested by a special agent of the US Secret Service for attemting to negotiate a fake certificate (that, apparently is what happens when you walk into a Fed and ask if the certificate you have is valid -- curious way of conducting the law, huh). The principal gentleman who legally held the certificate was arrested on July 8th 1991 but the federal criminal case wasn't even filed until September 6th. The gentleman was, therefore, detainmed incommunicado without access to a lawyer or heard by a judge for a month (I am told that this level of detention only falls under US National Security measures --- I haven't checked how true this is, however). Thereafter there was a due process trial.

Now here's an interesting rider -- two of them, in fact. Firstly, Representative Charlie Rose invited one of the persons arrested to Washington to speak before the House Committee on Foreign Agriculture. Older heads here may well remember that the Poppy Bush Administration financed Saddam's war against Itan using US Farm Credits that would run through the Italian Banca Nazionale del Lavoro. There was a massive hue and cry about the Lavoro affair when the story broke. Saddam used these farm credits to finance his weapons of mass destruction programme. You have to ask why it was that Charlie Rose extended that invitation in the first place? Could it be that he knew exactly what this certificate actyally represented? And the origin of its value (WWII gold and treausure plundwered by the nazis and Japanese). I am told that the invitation from Charlie Rose was a "ruse" to ensure that the AUSU (Assistant United States Attorney) in the case couldn't sit in on the meeting between Rose and the imprisoned gentlement.

The second point to note is that in exchange for agreeing to assign the certificate to the United States, the case against the person who had sought to verify its validity was dismissed and he was allowed to return to his home country. Also, a very curious way of running the law, don't you think. The government claimed the certificate was fraudulent but agreed to release the person trying (in their argument) to negotiate this fake instrument, providing he legally turned over said fake instrument to the US government. The agreement proposal originated by the government. Other certificates in the possession of this gentleman that were seized when he was arrested were also assigned over to the US as part of the agreement (none of them directly related to the US). They amounted to a few trillion dollars in value.

Nothing, it seems, is what it seems.


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