James Baker's Billion-Dollar Scam as 'Special Envoy' re Iraq

[lostnfound]

What ought to be common knowledge isn't, or James Baker would be skating on thin ice on charges of treason and fraud. I hope everyone at DU is aware of the ground-breaking report by Naomi Klein in the November 2004 issue of the Nation, that Baker was trying to convert the power of the US government into $1 billion of Saudi money for his very own Carlyle group. At that very minute he was trying to use the leverage of his role as "special envoy" of the United States in charge of negotiating away Iraq's debt, where he was meeting with heads of state in order to persuade them to forgive the debts owed to them by Iraq, to persuade the Saudis to invest $2 billion in a private consortium which would in turn invest $1 billion in the Carlyle Group. The deal was actually in the works while Klein was reporting on it, and likely, her report stopped the deal in its tracks.

At stake -- Baker's leverage -- was $57 billion in unpaid Iraq debt to Kuwait. If Kuwait said 'No', they would be dealing with Baker. If Kuwait said 'Yes', they would be dealing with Baker. Should we call it extortion or simple bribery?

James Baker's Double Life: A Special Investigation
http://www.thenation.com/doc/20041101/klein

When President Bush appointed former Secretary of State James Baker III as his envoy on Iraq's debt on December 5, 2003, he called Baker's job "a noble mission." At the time, there was widespread concern about whether Baker's extensive business dealings in the Middle East would compromise that mission, which is to meet with heads of state and persuade them to forgive the debts owed to them by Iraq. Of particular concern was his relationship with merchant bank and defense contractor the Carlyle Group, where Baker is senior counselor and an equity partner with an estimated $180 million stake.

Until now, there has been no concrete evidence that Baker's loyalties are split, or that his power as Special Presidential Envoy--an unpaid position--has been used to benefit any of his corporate clients or employers. But according to documents obtained by The Nation, that is precisely what has happened. Carlyle has sought to secure an extraordinary $1 billion investment from the Kuwaiti government, with Baker's influence as debt envoy being used as a crucial lever.

The secret deal involves a complex transaction to transfer ownership of as much as $57 billion in unpaid Iraqi debts. The debts, now owed to the government of Kuwait, would be assigned to a foundation created and controlled by a consortium in which the key players are the Carlyle Group, the Albright Group (headed by another former Secretary of State, Madeleine Albright) and several other well-connected firms. Under the deal, the government of Kuwait would also give the consortium $2 billion up front to invest in a private equity fund devised by the consortium, with half of it going to Carlyle.

The Nation has obtained a copy of the confidential sixty-five-page "Proposal to Assist the Government of Kuwait in Protecting and Realizing Claims Against Iraq," sent in January from the consortium to Kuwait's foreign ministry, as well as letters back and forth between the two parties. In a letter dated August 6, 2004, the consortium informed Kuwait's foreign ministry that the country's unpaid debts from Iraq "are in imminent jeopardy." World opinion is turning in favor of debt forgiveness, another letter warned, as evidenced by "President Bush's appointment...of former Secretary of State James Baker as his envoy to negotiate Iraqi debt relief." The consortium's proposal spells out the threat: Not only is Kuwait unlikely to see any of its $30 billion from Iraq in sovereign debt, but the $27 billion in war reparations that Iraq owes to Kuwait from Saddam Hussein's 1990 invasion "may well be a casualty of this U.S. effort."

Educate. Enlighten. Take away the innocence of those who can't imagine how deeply greedy the smooth-talking allies of the Bush family can be. They know about the Carlyle group from Fahrenheit 9-11, but most people don't know about this.