This article appeared in the September 12, 2003 issue of Executive Intelligence Review - Follow the money:
Cheney's Carpetbaggers: Looking for the Loot at the End of the Tunnel
by Edward Spannaus
http://www.larouchepub.com/other/2003/3035cheney_cptbggrs.htmlGoing into the Iraq War, Vice President Dick Cheney and his cronies were not only telling Congress and the American people that the invading U.S. troops would be welcomed in the streets as "liberators" by the Iraqi people, but that those streets would be paved with gold. Cheney and Co.'s public line was that the war would pay for itself and that reconstruction would be self-financing. Privately, they were cooking up fanciful schemes to loot Iraq's oil resources as soon as the war was over, as a by-product of their imperial dreams of dominating and remaking the the Gulf region and the Middle East.
In a Feb. 27 appearance before the House Budget Committee, Deputy Secretary of Defense Paul Wolfowitz—one of Cheney's architects of the imperial war doctrine in 1991-92, when Cheney was Secretary of Defense—was questioned about the costs of the coming Iraq War and its aftermath. Wolfowitz blithely dismissed various projections for both costs and troop requirements as "quite outlandish." Gloating over Iraq's "$15 billion to $20 billion a year in oil exports, which might finally be turned to a good use," plus billions more in frozen assets, Wolfowitz declared, "There's a lot of money there." And referring to the costs of the occupation and reconstruction, he protested that "to assume that we're going to pay for it is just wrong."
Dick Cheney, in his now-notorious March 16 appearance on NBC's "Meet the Press," stated repeatedly that U.S. troops "will be greeted as liberators" by the Iraqi people. When host Tim Russert asked him about estimates that the war and recovery might cost $100 billion over two years, Cheney answered, "I can't say that, Tim." Cheney pointed out that Iraq has got "the second-largest oil reserves in the world," and that "It will generate billions of dollars a year in cash flow, if they get back to their production of roughly 3 million barrels of oil a day, in the relatively near future."
At the outset, we warn that it is a fraudulent oversimplification, by those too cowardly to face the full, horrific implications of Cheney's drive for fascist world domination, to claim that oil was the primary motivation for the Iraq War. Nonetheless, Cheney and his cronies did and do expect, as a side benefit, to personally profit from this and coming imperial wars. Let's look at his scheme, step by step.
Cheney's Energy Task Force
Ten days after taking the oath of office, President George W. Bush created a task force, headed by Vice President Dick Cheney, to develop a national energy policy. Less than four months later, the task force's report was issued.
Its final chapter deals with global energy supplies. Noting that the United States currently imports 53% of its net oil requirements, the report declares that continued access to international energy supplies is a vital matter of national security. Strategically, the report divides the sources of oil into two categories: the Middle East—with 67% of proven world oil reserves—and the rest of the world. The report asserts that the Persian Gulf region "will remain vital to U.S. interests," and it will be "a primary focus of U.S. international energy policy."
The report's recommendation is for Saudi Arabia, Kuwait, Algeria, Qatar, the United Arab Emirates, and other suppliers "to open up areas of their energy sectors to foreign investment." Iraq is not mentioned by name, even though Iraq has the second-largest reserves, next to Saudi Arabia—and potentially, with full exploration, even the largest. Moreover, because of special geological conditions, Iraq oil can be extracted considerably more cheaply than in most areas of the world.
Was this somehow just overlooked by Cheney and the Task Force? Or did they have other ways in mind to "open up" Iraq for foreign investment?
The Secret Iraq Map
In mid-July 2003, the watchdog group Judicial Watch announced that, as a result of a court order, it had just obtained a set of documents concerning the Energy Task Force, which included a map of Iraqi oil fields, pipelines, refineries and terminals, as well as two charts detailing Iraqi oil and gas projects, and a list of "Foreign Suitors for Iraqi Oil Field Contracts"—pertaining, of course, to contracts with the Saddam Hussein regime.
The maps and charts were dated March 2001—at the peak of activity of the Cheney task force; it was created at the end of January, and issued its report in mid-May 2001. The only other countries for which such maps were provided were Saudi Arabia and the U.A.E., both of which were openly discussed in the Task Force report.
It took Judicial Watch more than two years, and a court order, to obtain these documents, and it's not hard to imagine why. The implications are rather staggering, when the documents are examined in the context of the Task Force report final chapter, which places overwhelming importance on opening up the Gulf region for foreign investment. The deliberate omission of Iraq is itself almost an admission of guilt, for we know that Cheney and Co. had their eye on Iraq since the 1991 Gulf War, which they considered a failure for not going on to Baghdad to remove Saddam Hussein from power.
The 1991 draft Defense Policy Guidance, prepared by Paul Wolfowitz, Lewis Libby and Eric Edelman (all key players in the current Administration) for then-Secretary of Defense Cheney, called for the United States to prevent the emergence of any rival superpower globally, and to prevent domination of any strategically critical region by any hostile power. Among seven classified scenarios for war, was one involving Iraq.
Halliburton's Contract
Even before the second war against Iraq was officially launched in March 2003, Dick Cheney's Halliburton Co., through its subsidiary Kellogg Brown & Root (KBR), had received a no-bid contract to extinguish oil fires in Iraq and to rebuild Iraq oil facilities. The contract is reportedly worth up to $7 billion. Over time, as details of the secret contract leaked out, it was learned that the contract also contained provisions for KBR to operate the Iraqi oil fields and organize distribution of Iraqi oil.
While all sorts of grandiose plans to quickly restart Iraq oil exports were flying around, the big problem, as more sober observers noted, was that it might prove impossible to find anyone to buy Iraqi oil, because of the problem of legal title. Who owns it? The United States certainly doesn't, and there was no recognized Iraqi government. The lack of clear title was making it impossible for oil purchasers or shippers to even get insurance for their deals.
Because of this legal cloud preventing the United States from selling the oil, and with protests from other countries against the U.S. plans to simply grab the Iraqi oil, the United States was compelled to put the Iraqi oil revenues under some fig-leaf of United Nations control. This was done through a plan to create a new "Development Fund for Iraq," which was established under UN Security Council Resolution 1483, adopted on May 22. The funds accumulated under the UN Oil-for-Food program were to be deposited in the Fund, along with all future proceeds from oil and gas sales.
The Fund is controlled by Paul Bremer, the Administrator of the Coalition Provisional Authority (CPA). According to CPA Regulation No. 2, issued by Bremer on June 15, the Fund is managed "in coordination with" the Federal Reserve Bank of New York, where all receipts of Iraqi oil and gas sales are to be deposited and held. Provision is also made for coordination with the Bank for International Settlements (BIS), if accounts are opened there.
Mortgaging Iraq's Oil
Already in the works by this time, was a plan developed by Halliburton, Bechtel and others, to mortgage future Iraqi oil revenues to pay for their reconstruction contracts. The plan, contained in a U.S. Export-Import Bank memorandum dated May 28, is that the Ex-Im Bank or another facility would issue bonds secured by future oil revenues, and use the proceeds of the bonds to pay for reconstruction contracts, i.e. to pay Halliburton and Bechtel. The June 19 Wall Street Journal reported that the plan "has the enthusiastic endorsement" of Halliburton and Bechtel, who are also operating through the "Coalition for Employment Through Exports." This was also confirmed to EIR by sources at the Ex-Im Bank.
(After Cheney became the CEO of Halliburton in 1995, he sharply increased its political contributions and lobbying activities. Under Cheney, Halliburton received $1.5 billion of guarantees or direct loans from the Ex-Im Bank and related agencies, including projects in Russia and the Caspian Sea region.)
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An internal CPA report says that it "has inadequate funds for security, electrical, water, sewage, irrigation, housing, education, health, agriculture." As the Christian Science Monitor put it on Sept. 3, this means "leaving many Iraqis with worse standards of living than they had under Saddam Hussein," and also, that many of those suffering the effects, are joining the resistance.
Thus, the Cheney-Shultz vultures, hovering and waiting for the spoils of this war, may have to wait a while longer, or else start a new war someplace else.
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