From the Sydney (Australia) Morning Herald.

The business of making enemies
By Alan Ramsey
September 21 2002

Donald W. Riegle jnr was a member of the US Congress for 27 years. He retired in 1995. For six of those 27 years he was chairman of a US Senate committee with responsibilities including oversight of a piece of American law called the Export Administration Act. On the morning of May 25, 1994, Riegle's committee met in room SD 106 of the Dirksen Senate Office Building in Washington for a one-day public hearing. Riegle opened by
announcing: "This is a very important hearing."

Riegle explained, according to the Senate transcript: "Back in 1992, [this] committee held an inquiry into US export policy to Iraq prior to the Gulf War [in 1991]. During that hearing it was learnt that United Nations inspectors [after the war] had identified many US-manufactured items exported to Iraq under licences issued by the US Department of Commerce, and that these items were used to further Iraq's chemical and nuclear weapons development and missile delivery system. The committee has worked to ensure, since that time, this will not happen again."

What Riegle's committee was now working on, he said, was an unexplained illness suffered by American troops known as Gulf War Syndrome. In July 1993 the Czech defence ministry had announced its chemical decontamination units had detected "the chemical warfare agent Sarin" in northern Saudi Arabia "during the early phases of the Gulf War". They attributed it to fallout from "[US and British] bombing of Iraqi chemical warfare agent production facilities". That same year, said Riegle, preliminary US funding was authorised to research the mystery illness and investigate "reported exposures of our Gulf War veterans".

The number affected varied from US defence department estimates of "hundreds" to veterans' department estimates of "thousands" to "tens of thousands". (A total of 700,000 US troops served in the Gulf War region, despite the war lasting only a few months.) Those afflicted complained of "muscle and joint pain, memory loss, intestinal and heart problems, fatigue, nasal congestion, urinary urgency, diarrhoea, twitching, rashes, sores and other symptoms".

That same morning, before the Senate hearing, Riegle released a report of its investigations to date. It established, he said, that "contrary to Department of Defence assertions" there was "clear evidence that chemical agents" were at "sufficient levels" in the Gulf War region to harm US troops. Also, the report "provides evidence the United States shipped biological materials to Iraq which contributed to the Iraqi biological warfare program".

In the Australian Parliament this week, during a debate in both houses in which 84 MHRs and 31 senators spoke, Labor's Carmen Lawrence (WA) and Lindsay Tanner (Vic) drew on the Riegle report eight years earlier to underscore the hypocrisy of White House hysteria eight years later over Iraq's chemical and biological warfare capability.

Said Tanner: "[The 1994 report] revealed the US Government licensed the delivery to Iraq [during its seven-year war with Iran] of chemical warfare precursors, chemical warfare filling equipment, biological warfare materials, including anthrax and botulinum toxin, and missile fabrication and guidance equipment. So the precursor to Iraq getting these capabilities was actually America's contribution of these things." Lawrence was scathing. "As the record shows," she said, "the US and many of its allies were prepared to support Iraq during the Iraq/Iran war because it suited their interests. At the time they showed almost no interest - they do now, but not then - in his use of chemical weapons on Iranians and the Kurdish people...

"[The Riegle report] details, in graphic fact, the American-type culture collection supplied - with department of commerce approval - disease producing and toxic and biological research materials from at least 1985 until the outbreak of the Gulf War [in 1991]. The US was selling these to the Iraqi regime. They were sent in large quantities to Iraqi agencies such as the Iraqi atomic energy commission ... They were sent at a time when US intelligence suspected Iraq was conducting biological warfare research in addition to its known chemical and nuclear research programs. The US knowingly exported this material ...

"We might ask why the US did this. It pays to remember their support of Iraq in the war with Iran. They were prepared then to turn a blind eye to Saddam Hussein's oppressive regime in a war in which over 1 million people were killed and chemical weapons used. We are now asked to see Iraq as a rogue state, a pariah state, because it has ignored UN resolutions. I note the refusal by the US itself to allow inspections of its own facilities under the relevant UN convention on the same terms as they demand from Iraq. They passed into law, in 1997, an act that stipulates the president may deny a request to inspect any US facility where he determines the inspection may pose a threat to national security. That act also demands the right to object to individual inspectors. I note in passing that, until today, these conditions were also insisted upon by Saddam Hussein..."

Lawrence was wrong in one respect. US intelligence did not "suspect" in the mid-1980s that Iraq was conducting biological warfare research. It knew Iraq was doing so. And not just US intelligence agencies knew, either. The knowledge went right up to Ronald Reagan's White House: knowledge of both the Iraqi program and the involvement of US suppliers. We know this - and we knew eight years ago - because of an appearance, remarkable for its candour, before that one-day public hearing of the Riegle committee in May 1994 of a single witness.

That witness was Dr Gordon C. Oehler, identified at the time as "director, non-proliferation centre, Central Intelligence Agency, Washington, DC". It is one of the great strengths of the American system that such people can be held accountable on the public record. It never happens in this country. Oehler read a 2600-word statement. He was then questioned at length by its chairman, Riegle. Some exchanges were extraordinary.

Oehler began: "Thank you very much, Mr Chairman. I'm pleased to appear before you this afternoon to address our concerns about the proliferation of weapons of mass destruction [WMD]. I'm specifically going to address Iraq's efforts to obtain critical technologies for its weapons programs in the years preceding the Gulf War. First, let me tell you briefly about what we knew about Iraq's WMD program prior to Desert Storm ..."

What the CIA knew was a great deal, from the gradual development of Iraq's nuclear program in the 1970s through the '80s, including "aggressive chemical and biological warfare programs" before its invasion of Kuwait in 1990, by which time these programs had become "deeply entrenched, flexible and well orchestrated". European suppliers of machinery, technology and "chemical precursors", predominantly German and Dutch companies, met the "majority of [Iraq's] needs". German construction firms usually got the contracts to build chemical plants, with Iraq "claiming" they were for agriculture.

Riegle broke in at this point. "May I just ask a question here?" Oehler: "Sure." Riegle: "This is all extraordinarily important and valuable information. Am I to understand that the CIA would have had the knowledge of this going on, contemporaneous? When it was actually happening? In other words, this was not learnt later. This was not a retrospective construction? We were tracking this, or we had knowledge of this - and knowledge of this would have been at other high levels of government - at the time it was occurring?"

Oehler: "That is right. What I am running through here is what we knew at the time, and what we reported to our customers at the time. We had been quite aware of Iraq's chemical weapons program from its very early inception." Riegle: "I take it the CIA must have had a concern about it to have kind of zeroed in on it to that degree?"

Oehler: "Very much so. And that was reported to our customers, and our customers attempted to take actions." Riegle: "It would have been reported also to the president, to the secretary of defence, the secretary of state, I assume, as a matter of course?" Oehler: "Yes, sir. They are our customers, sir."

Later, Riegle asked: "Were the Russians helping them?" Oehler: "No. No evidence of Russian involvement at all." Riegle: "You see, part of the picture that emerges here - this is really an extraordinary story you are sharing with us, because according to you, the CIA was tracking this in real time, as it was happening, and had a great concern about this robust program on chemical weapons. Yet, as we get further down in time, we find out that, as Saddam Hussein needed other items to go into his war machine, he actually came and got them from us, particularly in the biological warfare area. So you wonder how anybody in the licensing regime reading the CIA reports at the time, and who could see this build-up of weapons potential, you would think people would have been very, very reluctant to approve anything of this kind. You would think this would have had everybody on full alert. Is not that the logic of learning this?"

Oehler: "Well, what I would like to point to is that there was really not much involvement of US firms ... Remember, by law the CIA does not focus on US persons, including US companies. We cannot engage in law enforcement or target their activities in the US. That is not to say we did not occasionally come across information [the CIA was] obligated to turn over ... Between 1984 and 1990, the CIA did provide five alert memos [to Commerce, Justice, Treasury and the FBI] covering Iraqi dealings with US firms on purchases, discussions or visits that appeared related to weapons of mass destruction programs."

Riegle: "Are they classified?"

Oehler: "Yes they are."

For more than 20 years, the US, through four presidents, maybe five, from Jimmy Carter to George jnr, watched Iraq develop, to various degrees, WMD programs of various sorts. Some US firms even profited. Now Washington, with its own agenda, insists we go to war to stop them.

They've got a bloody hide, really. >>



s soon as President Bush rolled out his new war on Iraq, the Democrats in Washington demanded a debate, and debates they got, all right. There was the debate between Matt Drudge and Barbra Streisand about the provenance of an antiwar quote she recited at a party fund-raiser. There was the debate about whether Jim McDermott, Democratic Congressman from Washington, should have come home from Baghdad before announcing on TV that we can take Saddam Hussein's promises at "face value." There were the debates about why Al Gore took off his wedding ring, why Robert Torricelli took a Rolex, and why Al Sharpton and Jesse Jackson took noisy offense at so benign and popular a Hollywood comedy as "Barbershop."

But as for the promised debate about Iraq, it became heated only after Congressional approval of the president's mission was a foregone conclusion. Though the party's leaders finally stepped up, starting with Mr. Gore, most of them seemed less concerned with the direction of the nation in 2002 than with positioning themselves for the White House in 2004 (or '08). They challenged the administration's arrogant and factually disingenuous way of pursuing its goal, then beat a hasty retreat to sign on to whatever fig-leaf language they could get into the final resolution. (Mr. Gore, after his Sept. 23 Iraq speech, dropped the subject altogether.)

Even at their most forceful they failed to state their qualified, Bush-lite case for war with anything like the persistence, eloquence and authority of Chuck Hagel, the Republican Vietnam War hero. Speaking with almost mournful resignation from the floor on Wednesday, the senator was naked in his doubts about what lies ahead. "We should not be seduced by the expectations of `dancing in the streets' after Saddam's regime has fallen," he said.

That Democratic leaders added so little to the discussion is attributed to their intimidation by the president's poll numbers, their fear of being branded unpatriotic and their eagerness to clear the decks (whatever the price) to return to the economy, stupid, before Election Day. None of these motives constitute a profile in courage; no wonder George W. Bush was emboldened to present himself as the new John F. Kennedy in his Iraq speech on Monday night.

Agree with him or not, the president does stand for something. He led, and the Democrats followed. The polls, far from rationalizing the Democrats' timidity, suggest they might have won a real debate had they staged one. Support for an Iraq war is falling, with the dicey 51 percent in favor in the latest CNN/USA Today survey dropping to a Vietnam-like 33 percent support level if there are 5,000 casualties, as there could well be. But even so, the Democratic leaders never united around a substantive alternative vision to the administration's pre-emptive war against the thug of Baghdad. That isn't patriotism, it's abdication.

Perhaps more than he intended, Tom Daschle summed up the feeble thrust of his party's opposition on "Meet the Press" last weekend when he observed, "The bottom line is . . . we want to move on." Now his wish has come true — but move on to what? The dirty secret of the Democrats is that they have no more of an economic plan than they had an Iraq plan.

Nor do they want to dwell on Iraq and the economy in the same breath. No one really knows how many billions are needed to pay for both the war itself and the years to follow of shouldering what James Fallows in The Atlantic calls "The Fifty-first State," post-Saddam Iraq. The Democrats are in lockstep with the president in refusing to say that we will have to sacrifice anything to pay these bills, because that would mean 'fessing up to the unpleasant truth that either domestic spending will have to be cut or taxes will have to be raised.

The economic rant the Democrats offer instead is the safely generic one they've used in war and peace, regardless of the state of the economy, since the Reagan years. As befits a clownish approach, it is all too fittingly presented this election season in the form of a cartoon — a now notorious ad in which Mr. Bush is depicted pushing Social Security recipients in wheelchairs to their doom. It's a funny example of its "South Park" genre, and we do get the point: Privatized Social Security accounts could hurt Our Seniors. As indeed they could.
It's the War, Stupid
(Page 2 of 2)

But such accounts are likely less imminent than a Saddam nuclear attack; even Republican ideologues are running away from them in this economic environment. The real wolves at the door today are rising unemployment and falling consumer confidence, a cratered stock market that may soon be mirrored in the real estate market and . . . well, every Democratic candidate (and most American voters) can recite the litany. But in the words of Fritz Hollings, a Democratic senator so old that, like Robert Byrd, he sometimes commits the political sin of speaking the truth: "Our problem is the Democrats whine and whine. Everybody knows what the trouble is. The question is, `What's the solution?' "

The solution seems to be the same as that for Iraq — call for a debate and pray. Here is what Richard Gephardt had to say last week: "I have asked the president for nine months to have a summit on the economy to try to figure out a new economic game plan for this country." On Thursday Mr. Daschle asked for Congress to extend unemployment compensation and help bail out teetering budgets in the states (without saying where the money would come from), floated the whimsy that Mr. Bush might replace all his economic advisers with Clinton administration alumni and, yes, again called for an "economic summit." This kind of visionary leadership and a tin cup will get an unemployed American another presidential economic conclave of fat cats in Waco.

You might think that Mr. Gore, who has much to gain by showing political spine, would seize the moment. But fresh from his Iraq oration, he trotted out an economic address that offered only the familiar recitation of woes, followed by a few boilerplate bullet points largely remaindered from the 2000 campaign (including, of all musty Gore golden oldies, a plea for maximizing Internet bandwidth).

Like his party's Congressional leaders, he conspicuously avoided suggesting any kind of rollback of the Bush tax cut that now looms over the nation's economic future like the sword of Damocles. Pressed in a subsequent Q/A to take a stand on this fiscal elephant in the room, Mr. Gore said: "This is the time when we ought to be making some tough choices and reassessing what parts of the plan work and don't work." Far be it from him to offer his own reassessment at a time of national crisis. With or without his wedding ring or beard, the current new Al Gore is the same old Al Gore who fudged tough choices on issues like gun control and the death penalty during the 2000 debates.

As if to complete the picture of Democratic bankruptcy on what is supposed to be its signature issue, the party's chairman, Terry McAuliffe, was sitting in the front row for Mr. Gore's talk. No one is a more brazen role model for pseudo-populist hypocrisy at a time when corporate corruption has undermined fundamental American faith in the integrity of capitalism. Forever decrying the crooks of the dot-com bubble, Mr. McAuliffe has made millions (all legally, of course) from his serial insider's status at two telecom companies, Global Crossing and Telergy (where he was a director). While both subsequently went belly up, costing many Americans their jobs, their retirements or both, he was long gone when those non-insiders took the hit, much as Mr. Bush was at Harken.

In Washington, the main question about such Democratic fecklessness is: How will it play on Nov. 5? Is the economy so bad that despite everything, the party might hold onto the Senate and retake the House? I have no idea, and, I suspect, neither does anyone else in a punditocracy that with near unanimity erroneously predicted a G.O.P. sweep during the impeachment midterms of '98. But we're not in the frivolous 90's any more, and as we hurtle into war a better question might be: Do the Democrats stand for anything other than the next election?

As Congress prepared to sign off on the war resolution Thursday, Mr. Daschle sounded relieved, predicting that Americans would start brooding over the economy "once we get this question of Iraq behind us." Behind us? Given that he just signed on to a policy that by the C.I.A.'s estimation may increase the likelihood that a ruthless foe will attack us with biological and chemical weapons, you have to wonder just what America he is living in.



By Richard Reeves

WASHINGTON -- Presidents don't declare war from the old Cincinnati train station, so it seems that President Bush 's latest Iraq speech was either a space-holder or a device to buy more time to plot or plan invasion. Whatever it was meant to be, the timing and location did not make a lot of sense and did not move the national debate forward.

In fact, the president moved back from threatening regime change. It seemed to be a disarmament speech. That may be wishful thinking. But Bush sounded more moderate and patient than he does here in the war capital. Around here, the politicians, lobbyists and journalists who populate official Washington -- and the president, too -- talk and act as if Saddam Hussein and his weapons of mass destruction have reached the New Jersey Turnpike. And he's headed south toward the Beltway that separates the capital from common sense.

What's the hurry? What's going on here? I hope the president knows. The rest of us can't be sure, but watching and talking to some of the president's men, this is my guess:

The president and his folk, particularly his most hawkish advisers -- that group would include National Security Adviser Condoleezza Rice , Deputy Secretary of Defense Paul Wolfowitz and man of war Richard Perle -- see this as a window of opportunity to re-create the Middle East in our image and interests. Saddam, who is a monster, but a regional and contained one, is just an excuse. The real goal is stability. The Bush administration wants stable oil prices, stable Arab governments and a secure Israel. This, they think, is the right time, and Iraq is the place to start.

Bush and company are ready to roll the dice. All the talk of tough weapons inspections and U.N. resolutions is for cover. Many of the people in charge are hoping there will be no resolutions of any kind, which will give them greater reason to use greater U.S. military power in lieu of diplomacy or any kind of regional solutions. The Middle East as it is right now is just too irrational for our purposes. Maybe we can straighten these people out.

Good luck. I am not opposed to that. Not many Americans are. We want to be the masters of a new and benevolent "democratic" colonialism. But listening to that kind of talk about a democratic Iraq and Saudi Arabia, which we would like to surround, I find myself thinking of Nov. 1, 1963, the day we changed the regime in South Vietnam.

That was the day, 39 years ago, when President Ngo Dinh Diem was assassinated in a military coup signed off on by President Kennedy. Diem was our boy, as Saddam was when the Iraqis attacked Iran 22 years ago, but the South Vietnamese leader resisted American control one time too often. The generals, with our encouragement, took over and proved to be incompetent fools. We meant well, really. But from that day on, South Vietnam was an American colony and our defeat and humiliation were predestined.

That analogy is not exact, of course. But we wasted almost 20 years there, trying to remake the place and its people in our image. If we try the same thing in Iraq, the result will be about the same over the long run: early victories, occupation and, one day, withdrawal.

One of the more sensible theoretical debates going on in Washington is about how long we will have to stay in Iraq if we or unnamed Iraqi conspirators are able to remove Saddam by coup, asassination or invasion. Optimists talk about five years; pessimists talk about 50 years. OK, there is an obvious next question: How long do you think Iraqis will be there?

So who will prevail over time? I don't know, but I know it won't be us.

This letter from Scott Ritter, UN Weapons Inspector.

>I urge you to prevent the misuse of our armed services and oppose a
>unilateral, first strike on Iraq. Our fighting men and women joined the
>armed services because they wanted to protect and defend this country.
>The proposed action in Iraq is not defensive in nature and is widely
>held to be an act of open aggression. There is no evidence of clear and
>present danger. Such aggression would violate international law and
>numerous agreements with with our allies. It would serve to isolate the
>United States at a time when global cooperation is critical to the
>national defense, in our ongoing fight against international terrorism.
>“As an officer of Marines, I took an oath to defend the US constitution
>against all enemies, foreign and domestic. It is an oath I take very
>seriously and I am willing to give my life in defence of this
>document.... As signatories to the UN charter, Americans have agreed to
>abide by a body of international law that explicitly governs the
>conditions under which nations may go to war.... President Bush's case
>for war simply has not been demonstrated to meet any of these
>-- Scott Ritter
>The administration hawks speak with a stunning lack of credibility on
>issues of armed conflict. Many avoided service in Vietnam, not because
>of principled opposition, but because they thought it was someone
>else’s war to fight. President Bush took advantage of his father’s
>influence to enlist in the Texas Air National Guard, while other men of
>his generation were fighting and dying in the jungle. Even that cushy
>post proved too much for him and he went AWOL for over a year. Vice
>President Cheney obtained multiple deferments and once quipped that he
>"had other priorities in the Sixties than military service."
>“It’s pretty interesting that all the generals see it the same way and
>all the others, who have never fired a shot and are hot to go to war,
>see it another way.”
>-- General Anthony Zinni USMC
>The ambivalence about the proposed action in Iraq, on the part of the
>Joint Chiefs of Staff and other military brass, is very telling. It
>could well indicate a greater division within military ranks that is
>not publicly visable. Military regulations put strict limits on
>expressing dissent against the Commander in Chief.
>Yet, many of our nation’s veterans are voicing active condemnation of
>this administration’s policies. Large numbers of Gulf War veterans have
>expressed alarm about re-engaging in the region. The Gulf War Veterans
>Association recently called for the resignation of Defense Secretary
>Donald Rumsfeld because he denied knowledge of the US sale of bio
>weapons materials to Iraq on the Senate floor. The AGWVA states that
>such ignorance constitutes “a clear and present danger to the lives of
>our military, our country, and the American people, and should be
>considered a very serious threat to the national security.”
>We cannot afford to properly care for our combat veterans now. Budget
>constraints, no doubt caused by Bush’s tax cuts for the wealthy, have
>reduced available care to disabled veterans. The Bush administration's
>answer? Stop informing veterans of services they’re entitled to.
>President Bush has threatened to veto the defense authorization bill
>because it would increase pension benefits to our disabled veterans.
>Most analysts agree that remoiving out Saddam's regime would take the
>battle to the city streets and hand to hand combat would produce
>numerous US casualties. Many will come home in body bags. Many others
>will need continuing medical care. Who's going to pay for it?
>We owe our fighting men and women more than a hypocritical show of
>support once the bombs start falling. The US military is not our
>football team. It is not their job to put their lives on the line so
>that rest of us can sit in our easy chairs and watch “war as video
>game” on our televisions, smug in our patriotism, convinced of American
>superiority. War is a matter of life and death. It should be a last
>resort, when all attempts at diplomacy have failed. Civilized countries
>do not wage war on countries that do not pose a clear and demonstrable
>threat. Don’t let this administration put our troops in harm's way, to
>indulge their dreams of empire.
>“It is well that war is so terrible -- we would grow too fond of it.”
>-- General Robert E. Lee
>"I wear (dog tags) every day as a reminder that we should never again
>get involved in a conflict without the public's clear understanding and
>support... We should not go into Iraq unilaterally unless there is a
>clear and present danger. Unilateral is the key word. And I don't
>believe that Saddam Hussein has nuclear weapons capability right now."
>-- Rep. Rob Simmons (R-Conn.)
>“Many of those who want to rush this country into war and think it
>would be so quick and easy don't know anything about war... They come
>at it from an intellectual perspective versus having sat in jungles or
>foxholes and watched their friends get their heads blown off. I try to
>speak for those ghosts of the past a little bit."
>-- Senator Chuck Hagel (R-Nebraska)
>"I'm concerned about the security of this country. I'm concerned about
>what history will say about this nation 50 years from now. Did we
>brutalize people, or did we carry on ourselves as civilized people?...
>To attack a nation that has not attacked us will go down in history as
>something that we should not be proud of."
>-- Senator Daniel Inouye (D-Hawaii)
>"The soldier above all other people prays for peace, for he must suffer
>and bear the deepest wounds and scars of war."
>-- General Douglas MacArthur
>“I’m a Vietnam vet. This feels like 30 years ago. It’s the same --
>immoral war. They have learned nothing, not surprising since Bush
>evaded the Nam...”
>-- Jim Davidson
>Trent Lott -- Did Not Serve
>Dick Armey -- Did Not Serve
>Tom “Minorities took all the military jobs” DeLay -- Did Not Serve Joe
>Lieberman -- Did Not Serve Rush Limbaugh -- Did Not Serve
>Richard “Army guys don't know anything” Perle -- Did Not Serve
>Paul Wolfowitz -- Did Not Serve
>John Bolton -- Did Not Serve
>Rudy Giuliani -- Did Not Serve
>Dan Quayle -- Did Not Serve
>Dennis Hastert -- Did Not Serve
>George Will -- Did Not Serve
>Brit Hume -- Did Not Serve
>Andrew Card -- Did Not Serve
>John Ashcroft -- Did Not Serve
>etc., etc., etc.
>Source List:

The enemy of liberty: Corporate personhood
by StevetheGreen 10:30am Fri Oct 4 '02 (Modified on 6:08pm Fri Oct 4 '02)

Corporate Personhood is a legal fiction. The choice of the word "person" arises from the way the 14th Amendment to the U.S. Constitution was worded and from earlier legal usage of the word person. A corporation is an artificial entity, created by the granting of a charter by a government that grants such charters.

Author Thom Hartman discussed the "history of Corporate personhood" last night at Liberty Hall and disclosed a very disturbing fact.

In the mid to late 1800's there was a national campaign to get the legal establishment to accept that corporations were persons. This cumulated in the Santa Clara decision of 1886, which has been used as the precedent for all rulings about corporate personhood since then.

The problem?

The Santa Clara County v. Southern Pacific Railroad Company [118 U.S. 394 (1886)] was incorrectly used as a precedence based on the "header" that described the decision vs. the actual supreme court decision itself.
The supreme court decision never found that corporations were "persons" protected by the 14th ammendment and yet that decision was hailed by the corporate lawyers as the precedence that gave corporations personhood.

The following excerpts from an article by William Myers outlines some history regarding corporate personhood:

Beginning in the 1870's corporate lawyers began asserting that corporations were persons with many of the rights of natural persons. It should be understood that the term "artificial person" was already in long use, with no mistake that corporations were claiming to have the rights of natural persons. "Artificial person" was used because there were certain resemblances, in law, between a natural person and corporations. Both could be parties in a lawsuit; both could be taxed; both could be constrained by law. In fact the corporations had been called artificial persons by courts in England as early as the 16th century because lawyers for the corporations had asserted they could not be convicted under the English laws of the time because the laws were worded "No person shall..."

The need to be freed from legislative and judicial constraints, combined with the use of the word "person" in the U.S. Constitution and the concept of the "artificial person," led to the argument that these "artificial persons" were "persons" with an inconsequential "artificial" adjective appended. If it could be made so, if the courts would accept that corporations were among the "persons" talked about by the U.S. Constitution, then the corporations would gain considerably more leverage against legal restraint.

These arguments were made by corporate lawyers at the State level, in court after court, and many judges, being former corporate attorneys and usually at least moderately wealthy themselves, were sympathetic to any argument that would strengthen corporations. There was a national campaign to get the legal establishment to accept that corporations were persons. This cumulated in the Santa Clara decision of 1886, which has been used "incorrectly" as the precedent for all rulings about corporate personhood since then.

Is corporate personhood (including the whole range of corporate constitutional rights) a bad thing? If you are a wealthy corporate stockholder who doesn't care about the environment or the fate of less wealthy human beings, the answer is no. In fact corporate personhood is right up there with corporations= limited liability as one of the good things in life. For the rest of us corporate personhood is a very bad thing.

Corporate personhood changes the relationship between people and corporations and between corporations and the government, and even between government and the people. The effects of this change in relationships range from loss of liberty and income for citizens to the destruction and poisoning of the earth and the corruption of the U.S. governments (including state and local governments).

After corporations were given personhood and constitutional rights in 1886 state governments began to find that attempts to regulate corporations were thwarted both by Supreme Court decisions and the Arace to the bottom." The immediate effect of the Santa Clara decision was the protection of corporations from some (but not all) state regulation; state regulations could be tested in federal courts to see if they violated the corporations constitutional rights. If a state successfully, and with federal court approval, prohibited an industry from dumping waste in streams and rivers (and actually enforced such a law) the industry would simply move to a state that had no such law or enforced it laxly.

In recent decades the Supreme Court has ruled that corporations have the Fourth Amendment constitutional right to freedom from random inspection [See v. City of Seattle, 387 U.S 541 (1967) and Marshall v. Barlow=s, Inc., 436 U.S. 307 (1978), among others]. Without random inspections it is virtually impossible to enforce meaningful anti-pollution, health, and safety laws.

What would it take to make corporations stop polluting and pay to clean up the messes they have created? They would have to be prohibited from lobbying, they would have to be prohibited from contributing to political campaigns, they would need to lose their limited liability status, they would need to have their charters limited and enforced, they would need to be subject to inspections without warrants, and they would have to have their ability to buy decisions in their favor in the courts ended. In order to remove any of this set of privileges we would need to make it legally clear that they do not have corporate personhood or the constitutional rights the courts pretend go with it.

Because of corporate personhood and corporate constitutional rights, the ordinary, natural person has become a second-class person in the eyes of the law. A person who has to work for wages as a corporate employee loses his Constitutional rights (such as free speech) when he steps onto corporate property, according to the courts. In any dispute he has with a corporate person he is confronted with the economic penalty of having to buy justice from lawyers and courts, which for the corporation is a tax-deductible expense. For an international corporation a million dollars in legal costs hardly affects the bottom line; for a real person, a thousand dollars in legal costs may mean missing a rent or mortgage payment. Even if ordinary people try to work together, as in a labor union, they are not afforded the same privileges as a corporate person.

Summing up, corporate personhood is bad because it is the basis of corporations being regarding by the Supreme Court with other rights such as equal protection under the law, free speech, the right to remain silent in criminal cases, and protection from searches. These rights in turn have been used by the corporations to corrupt our citizens, government and legal system, to treat workers and small businesses as economic prey, and to destroy the environment we all depend on to sustain life itself.

According to Thom Hartman, several communities have begun to reject the concept of "corporate personhood" and have passed local resolutions that declare that corporations are not "persons" and do not enjoy the same rights as real people.

I would like to see a similar resolution passed here in Portland and would like to see a grassroots effort to get the city of Portland to put forth a resolution that eliminates corporate personhood.
It is a beginning.

add your own comments
Lotsa Luck
by Joanne 1:56pm Fri Oct 4 '02

Lotsa luck on the notion that corporations can be curbed by legislation--that the current economic system can be tinkered with, altered, fixed. That was tried at the beginning of the 20th century--the "muckraking era"--so why are we having to do it all over again??? The only thing that will change the structure is to change the OWNERSHIP. And the only thing that will change that is the removal of our hands from the creation of their wealth. We are, alas, a long, long way from that, but: think about it.
Oops, pardon my typo
by Kenesaw Mountain Landis 5:58pm Fri Oct 4 '02

Wouldn't it be nice to think that capitalism could be stopped in its tracks by getting a 'header' changed on a court document?
Good luck.
I'm With You Steve
by Patty 6:08pm Fri Oct 4 '02

Pragmatic steps toward change are just as important as dreaming of a purist utopia.

So-called "progressive" Portland should have progressive laws on the books!


Bush planned Iraq 'regime change' before becoming President
By Neil Mackay

A SECRET blueprint for US global domination reveals that President Bush and his cabinet were planning a premeditated attack on Iraq to secure 'regime change' even before he took power in January 2001.
The blueprint, uncovered by the Sunday Herald, for the creation of a 'global Pax Americana' was drawn up for Dick Cheney (now vice- president), Donald Rumsfeld (defence secretary), Paul Wolfowitz (Rumsfeld's deputy), George W Bush's younger brother Jeb and Lewis Libby (Cheney's chief of staff). The document, entitled Rebuilding America's Defences: Strategies, Forces And Resources For A New Century, was written in September 2000 by the neo-conservative think-tank Project for the New American Century (PNAC).

The plan shows Bush's cabinet intended to take military control of the Gulf region whether or not Saddam Hussein was in power. It says: 'The United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.'

The PNAC document supports a 'blueprint for maintaining global US pre-eminence, precluding the rise of a great power rival, and shaping the international security order in line with American principles and interests'.

This 'American grand strategy' must be advanced for 'as far into the future as possible', the report says. It also calls for the US to 'fight and decisively win multiple, simultaneous major theatre wars' as a 'core mission'.

The report describes American armed forces abroad as 'the cavalry on the new American frontier'. The PNAC blueprint supports an earlier document written by Wolfowitz and Libby that said the US must 'discourage advanced industrial nations from challenging our leadership or even aspiring to a larger regional or global role'.

The PNAC report also:

l refers to key allies such as the UK as 'the most effective and efficient means of exercising American global leadership';

l describes peace-keeping missions as 'demanding American political leadership rather than that of the United Nations';

l reveals worries in the administration that Europe could rival the USA;

l says 'even should Saddam pass from the scene' bases in Saudi Arabia and Kuwait will remain permanently -- despite domestic opposition in the Gulf regimes to the stationing of US troops -- as 'Iran may well prove as large a threat to US interests as Iraq has';

l spotlights China for 'regime change' saying 'it is time to increase the presence of American forces in southeast Asia'. This, it says, may lead to 'American and allied power providing the spur to the process of democratisation in China';

l calls for the creation of 'US Space Forces', to dominate space, and the total control of cyberspace to prevent 'enemies' using the internet against the US;

l hints that, despite threatening war against Iraq for developing weapons of mass destruction, the US may consider developing biological weapons -- which the nation has banned -- in decades to come. It says: 'New methods of attack -- electronic, 'non-lethal', biological -- will be more widely available ... combat likely will take place in new dimensions, in space, cyberspace, and perhaps the world of microbes ... advanced forms of biological warfare that can 'target' specific genotypes may transform biological warfare from the realm of terror to a politically useful tool';

l and pinpoints North Korea, Libya, Syria and Iran as dangerous regimes and says their existence justifies the creation of a 'world-wide command-and-control system'.

Tam Dalyell, the Labour MP, father of the House of Commons and one of the leading rebel voices against war with Iraq, said: 'This is garbage from right-wing think-tanks stuffed with chicken-hawks -- men who have never seen the horror of war but are in love with the idea of war. Men like Cheney, who were draft-dodgers in the Vietnam war.

'This is a blueprint for US world domination -- a new world order of their making. These are the thought processes of fantasist Americans who want to control the world. I am appalled that a British Labour Prime Minister should have got into bed with a crew which has this moral standing.'

Web report: Iraq
Cronies in Arms

n February 2001 Enron presented an imposing facade, but insiders knew better: they were desperately struggling to keep their Ponzi scheme going. When one top executive learned of millions in further losses, his e-mailed response summed up the whole strategy: "Close a bigger deal. Hide the loss before the 1Q."

The strategy worked. Enron collapsed, but not before insiders made off with nearly $1 billion. The sender of that blunt e-mail sold $12 million in stocks just before they became worthless. And now he's secretary of the Army.

Dick Cheney vehemently denies that talk of war, just weeks before the midterm elections, is designed to divert attention from other matters. But in that case he won't object if I point out that the tide of corporate scandal is still rising, and lapping ever closer to his feet.

An article in yesterday's Wall Street Journal confirmed what some of us have long argued: market manipulation by energy companies — probably the same companies that wrote Mr. Cheney's energy plan, though he has defied a court order to release task force records — played a key role in California's electricity crisis. And new evidence indicates that Mr. Cheney's handpicked Army secretary was a corporate evildoer.

Mr. Cheney supposedly chose Thomas White for his business expertise. But when it became apparent that the Enron division he ran was a money-losing fraud, the story changed. We were told that Mr. White was an amiable guy who had no idea what was actually going on, that his colleagues referred to him behind his back as "Mr. Magoo." Just the man to run the Army in a two-front Middle Eastern war, right?

But he was no Magoo. Jason Leopold, a reporter writing a book about California's crisis, has acquired Enron documents that show Mr. White fully aware of what his division was up to. Mr. Leopold reported his findings in the online magazine Salon, and has graciously shared his evidence with me. It's quite damning.

The biggest of several deals that allowed Mr. White to "hide the loss" — a deal in which the documents show him intimately involved — was a 15-year contract to supply electricity and natural gas to the Indiana pharmaceutical company Eli Lilly. Any future returns from the deal were purely hypothetical. Indeed, the contract assumed a deregulated electricity market, which didn't yet exist in Indiana. Yet without delivering a single watt of power — and having paid cash up front to Lilly, not the other way around — Mr. White's division immediately booked a multimillion-dollar profit.

Was this legal? There are certain cases in which companies are allowed to use "mark to market" accounting, in which they count chickens before they are hatched — but normally this requires the existence of a market in unhatched eggs, that is, a forward market in which you can buy or sell today the promise to deliver goods at some future date. There were no forward markets in the services Enron promised to provide; extremely optimistic numbers were simply conjured up out of thin air, then reported as if they were real, current earnings. And even if this was somehow legal, it was grossly unethical.

If outsiders had known Enron's true financial position when Mr. White sent that e-mail, the stock price would have plummeted. By maintaining the illusion of success, insiders like Mr. White were able to sell their stock at good prices to naïve victims — people like their own employees, or the Florida state workers whose pension fund invested $300 million in Enron during the company's final months. As Fortune's recent story on corporate scandal put it: "You bought. They sold."

It was crony capitalism at its worst. What kind of administration would keep Mr. White in office?

A story in last week's Times may shed light on that question. It concerned another company that sold a division, then declared that its employees had "resigned," allowing it to confiscate their pensions. Yet this company did exactly the opposite when its former C.E.O. resigned, changing the terms of his contract so that he could claim full retirement benefits; the company took an $8.5 million charge against earnings to reflect the cost of its parting gift to this one individual. Only the little people get shafted.

The other company is named Halliburton. The object of its generosity was Dick Cheney.

Congressman Ron Paul
U.S. House of Representatives
September 10, 2002


Soon we hope to have hearings on the pending war with Iraq. I am concerned there are some questions that won’t be asked- and maybe will not even be allowed to be asked. Here are some questions I would like answered by those who are urging us to start this war.

1. Is it not true that the reason we did not bomb the Soviet Union at the height of the Cold War was because we knew they could retaliate?

2. Is it not also true that we are willing to bomb Iraq now because we know it cannot retaliate- which just confirms that there is no real threat?

3. Is it not true that those who argue that even with inspections we cannot be sure that Hussein might be hiding weapons, at the same time imply that we can be more sure that weapons exist in the absence of inspections?

4. Is it not true that the UN’s International Atomic Energy Agency was able to complete its yearly verification mission to Iraq just this year with Iraqi cooperation?

5. Is it not true that the intelligence community has been unable to develop a case tying Iraq to global terrorism at all, much less the attacks on the United States last year? Does anyone remember that 15 of the 19 hijackers came from Saudi Arabia and that none came from Iraq?

6. Was former CIA counter-terrorism chief Vincent Cannistraro wrong when he recently said there is no confirmed evidence of Iraq’s links to terrorism?

7. Is it not true that the CIA has concluded there is no evidence that a Prague meeting between 9/11 hijacker Atta and Iraqi intelligence took place?

8. Is it not true that northern Iraq, where the administration claimed al-Qaeda were hiding out, is in the control of our "allies," the Kurds?

9. Is it not true that the vast majority of al-Qaeda leaders who escaped appear to have safely made their way to Pakistan, another of our so-called allies?

10. Has anyone noticed that Afghanistan is rapidly sinking into total chaos, with bombings and assassinations becoming daily occurrences; and that according to a recent UN report the al-Qaeda "is, by all accounts, alive and well and poised to strike again, how, when, and where it chooses"?

11. Why are we taking precious military and intelligence resources away from tracking down those who did attack the United States- and who may again attack the United States- and using them to invade countries that have not attacked the United States?

12. Would an attack on Iraq not just confirm the Arab world's worst suspicions about the US, and isn't this what bin Laden wanted?

13. How can Hussein be compared to Hitler when he has no navy or air force, and now has an army 1/5 the size of twelve years ago, which even then proved totally inept at defending the country?

14. Is it not true that the constitutional power to declare war is exclusively that of the Congress? Should presidents, contrary to the Constitution, allow Congress to concur only when pressured by public opinion? Are presidents permitted to rely on the UN for permission to go to war?

15. Are you aware of a Pentagon report studying charges that thousands of Kurds in one village were gassed by the Iraqis, which found no conclusive evidence that Iraq was responsible, that Iran occupied the very city involved, and that evidence indicated the type of gas used was more likely controlled by Iran not Iraq?

16. Is it not true that anywhere between 100,000 and 300,000 US soldiers have suffered from Persian Gulf War syndrome from the first Gulf War, and that thousands may have died?

17. Are we prepared for possibly thousands of American casualties in a war against a country that does not have the capacity to attack the United States?

18. Are we willing to bear the economic burden of a 100 billion dollar war against Iraq, with oil prices expected to skyrocket and further rattle an already shaky American economy? How about an estimated 30 years occupation of Iraq that some have deemed necessary to "build democracy" there?

19. Iraq’s alleged violations of UN resolutions are given as reason to initiate an attack, yet is it not true that hundreds of UN Resolutions have been ignored by various countries without penalty?

20. Did former President Bush not cite the UN Resolution of 1990 as the reason he could not march into Baghdad, while supporters of a new attack assert that it is the very reason we can march into Baghdad?

21. Is it not true that, contrary to current claims, the no-fly zones were set up by Britain and the United States without specific approval from the United Nations?

22. If we claim membership in the international community and conform to its rules only when it pleases us, does this not serve to undermine our position, directing animosity toward us by both friend and foe?

23. How can our declared goal of bringing democracy to Iraq be believable when we prop up dictators throughout the Middle East and support military tyrants like Musharaf in Pakistan, who overthrew a democratically-elected president?

24. Are you familiar with the 1994 Senate Hearings that revealed the U.S. knowingly supplied chemical and biological materials to Iraq during the Iran-Iraq war and as late as 1992- including after the alleged Iraqi gas attack on a Kurdish village?

25. Did we not assist Saddam Hussein’s rise to power by supporting and encouraging his invasion of Iran? Is it honest to criticize Saddam now for his invasion of Iran, which at the time we actively supported?

26. Is it not true that preventive war is synonymous with an act of aggression, and has never been considered a moral or legitimate US policy?

27. Why do the oil company executives strongly support this war if oil is not the real reason we plan to take over Iraq?

28. Why is it that those who never wore a uniform and are confident that they won’t have to personally fight this war are more anxious for this war than our generals?

29. What is the moral argument for attacking a nation that has not initiated aggression against us, and could not if it wanted?

30. Where does the Constitution grant us permission to wage war for any reason other than self-defense?

31. Is it not true that a war against Iraq rejects the sentiments of the time-honored Treaty of Westphalia, nearly 400 years ago, that countries should never go into another for the purpose of regime change?

32. Is it not true that the more civilized a society is, the less likely disagreements will be settled by war?

33. Is it not true that since World War II Congress has not declared war and- not coincidentally- we have not since then had a clear-cut victory?

34. Is it not true that Pakistan, especially through its intelligence services, was an active supporter and key organizer of the Taliban?

35. Why don't those who want war bring a formal declaration of war resolution to the floor of Congress?
Bush's Foreign Policy Blueprint
A Grand Global Plan

Jim Lobe writes for Inter Press Service, an international newswire, and for Foreign Policy in Focus, a joint project of the Washington-based Institute for Policy Studies and the New Mexico-based Interhemispheric Resource Center.

As a presidential candidate, George W. Bush stressed the need for America to act like a "humble nation" in foreign policy. He promised, if elected, he would substitute narrow "national interests" in place of his predecessor's globalist aspirations.

At worst, analysts said, Bush would take his foreign-policy cues from his father, a cautious and ‘prudent’ practitioner of balance-of-power diplomacy. The elder Bush was certainly not given to the sudden commitments of U.S. military power in fractious and well-armed locales that we have seen since September -- from Djibouti to Georgia and from Mazar-i-Sharif to Mindanao, Philippines.

But as president, the younger Bush has led the nation in a manner not likely to be described as humble. Since Sept. 11, the Bush administration has aggressively deployed U.S. troops around the globe, promised military aid to dozens of countries, and has unilaterally undermined the global arms-control regime -- all in the name of a "war on terrorism."

In just a few months, Washington has pledged or provided new military aid -- from training, equipment or, most significantly, advisers -- to some two dozen countries, among them Armenia, Azerbaijan, Colombia, Djibouti, Egypt, Ethiopia, Georgia, India, Indonesia, Jordan, Kazakhstan, Kyrgyzstan, Nepal, Oman, Pakistan, the Philippines, Tajikistan, Uzbekistan, and Yemen, not to mention Afghanistan, where the United States intends to build a national army.

Over the same period, Bush walked away from global negotiations on biological weapons control, withdrew the United States from the 1972 Anti-Ballistic Missile treaty, widely considered a cornerstone of international arms-control, and proposed increasing the defense budget in 2003 by $48 billion. The increase alone is greater than the amount any of Washington's NATO allies devotes to its military in an entire year.

Shocking? You bet. Surprising? Not really.
More recently, a leaked government document revealed the administration intends to lower the threshold for using nuclear weapons. The Defense Department is planning to develop smaller, more "precise" nuclear bombs, and may consider using them preemptively against countries suspected of developing weapons of mass destruction.

Shocking? You bet. Surprising? Not really.

The Bush administration's actions fit neatly into a plan for United States hegemony first mapped out in a draft Pentagon paper 10 years ago. The secret document, known as the "Defense Policy Guidance," was written by two relatively obscure civilian Pentagon officials in the aftermath of the Gulf War.

The main authors were Paul Wolfowitz, now the deputy secretary of defense and widely considered among the most hawkish of administration officials, and I. Lewis "Scooter" Libby, a lawyer who now serves as Vice President Dick Cheney's chief of staff and national security adviser. During the first Bush administration, both men were working for Cheney, who was defense secretary.

In 1992, The New York Times was the first to obtain the draft Pentagon paper and break the story. It published excerpts of the document, setting off a storm of controversy in Washington. Democratic Sen. Joseph Biden, now chairman of the Senate Foreign Relations Committee, called it a prescription for "a Pax Americana," or a world order enforced by U.S. power.

The uproar subsided only after National Security Adviser Brent Scowcroft and then-Secretary of State James Baker prevailed on Cheney to tone down the final draft, which he did. Though the document may have been revised, administration initiatives today seem strikingly similar to the original.

According to the original draft, preventing the emergence of a rival superpower "is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power."

In addition to Western Europe, these regions include "...East Asia, the territory of the former Soviet Union and Southwest Asia," the same three regions where the new Bush administration has been most promiscuous in deploying military forces since 9/11.

Indeed, under the new world order envisaged by Wolfowitz and Libby a decade ago, American military intervention around the world would come to be seen "as a constant feature," according to the draft.

If coalitions could not be made, the United States would be prepared to act alone.
"While the U.S. cannot become the world's 'policeman' by assuming responsibility for righting every wrong, we will retain the preeminent responsibility for addressing selectively those wrongs which threaten not only our interests, but those of our allies or friends, or which could seriously unsettle international relations," the 1992 document said.

"Like the coalition that opposed Iraqi aggression, we should expect future coalitions to be ad hoc assemblies, often not lasting beyond the crisis being confronted, and in many cases carrying only general agreement over the objectives to be accomplished," the draft said. "Nevertheless, the sense that the world order is ultimately backed by the U.S. will be an important stabilizing factor."

The United Nations, which authorized the Gulf campaign, was not mentioned in the document, according to The New York Times. If coalitions could not be made, the United States would be prepared to act alone, the draft said.

The document even anticipated the latest nuclear moves by the Pentagon, as well as Bush's warning to the "axis of evil" that he would resort to pre-emptive strikes against countries suspected of developing weapons of mass destruction.

"The U.S. may be faced with the question of whether to take military steps to prevent the development or use of weapons of mass destruction," the document said. It noted that pre-emptive attacks, including attacks on nuclear plants, might be required, even in conflicts that did not directly engage U.S. interests.

Even historic U.S. allies should not be permitted to gain sufficient power to challenge the United States. "We must maintain the mechanism for deterring potential competitors from even aspiring to a larger regional or global role," the draft said.

The plans called for a new order that would satisfy the interests of the advanced industrial nations sufficiently to discourage them from challenging American leadership.

Democratic Sen. Robert Byrd openly criticized the plan at the time. "We love being the sole remaining superpower in the world and we want so much to remain that way that we are willing to put at risk the basic health of our economy and well-being of our people to do so," he said.

Though the strategies in the document outraged many in 1992, the terrorist attacks against the World Trade Center and the Pentagon seem to have provided the pretext for Wolfowitz, Libby, and like-minded officials to use a war against terror to reintroduce their 10-year-old ambitions.

"Team Bush doesn't talk much about its grand global plan, but that doesn't mean there isn't one, stated or unstated," wrote Ben J. Wattenberg in a little-noticed Washington Times column last fall.

Wattenberg, a senior fellow at the American Enterprise Institute, the neo-conservative think tank whose policy prescriptions are virtually identical to those of the Pentagon hawks, was quite clear. "America is No. 1," he wrote. "We stand for something decent and important. That's good for us and good for the world."

Fortunes of war await Bush's circle after attacks on Iraq
By Andrew Gumbel in Los Angeles
15 September 2002

Internal links

Sort out Iraq or we will, Bush tells UN

Straw seeks ultimatum on Iraqi weapons

Britain and US marshal crack troops to intensify pressure on Saddam

Fortunes of war await Bush's circle after attacks on Iraq

Saddam's Iraq is the ideal enemy

FBI joins interrogation of prime suspect

Al-Qa'ida still a threat despite loss of key men

Robert Fisk: America's case for war is built on blindness, hypocrisy and lies

The case for attacking Iraq is still not made

Neutral? Not on your life!
The last time the United States went to war against Iraq, Dick Cheney did very nicely from it.

Having served as Defence Secretary, and basked in the reflected glory of the US military's surprisingly rapid advance across the desert sands to end the Iraqi occupation of Kuwait, he then managed to reap benefits of a very different kind once the war was over and he left government to become chief executive of Halliburton, the Texas-based oil services company.

When the United Nations relaxed its sanctions regime in 1998 and permitted Iraq to buy spare parts for its oil fields, it was Halliburton, under Mr Cheney's leadership, that cleaned up on the contract to repair war damage and get Saddam Hussein's oil pipes flowing at full capacity again. Two Halliburton subsidiaries did business worth almost $24m (£15m) with the man whom these days Mr Cheney calls a "murderous dictator" and "the world's worst leader".

Since taking over as George Bush's vice-president, Mr Cheney has severed all formal ties with his former employer, notably when he cashed in $36m in stock options and other benefits at the height of the market in August 2000. But Halliburton – currently struggling with a corporate accounting scandal that may or may not implicate Mr Cheney – could profit all over again if the much-threatened new war against Iraq comes to pass.

We can certainly expect more air strikes against the oil fields, possibly combined with a ground invasion. Then, when it is all over, someone is going to have to mop up the damage once again. Halliburton, with its previous experience and unparalleled political connections (not limited to Mr Cheney), would be in pole position for the job.

Nobody could justifiably accuse the Bush administration of wanting to wage war on Iraq solely as a favour to its friends in the oil business and the military-industrial complex. But many of the companies that stand to gain most from a war enjoy remarkably close ties to senior figures in the administration. And some of the President's closest confidants have shown extraordinary elasticity down the years in their attitudes to President Saddam, America's on-again, off-again public enemy number one.

Mr Cheney, who has gone from warmonger to dealmaker and back to warmonger, is just one example. Donald Rumsfeld, the current Defence Secretary, has repeatedly raised the spectre of Iraq's arsenal of weapons of mass destruction. But in 1983, when Mr Rumsfeld was President Reagan's special envoy to Iraq, he turned a blind eye to Iraqi use of nerve and mustard gas in its war with Iran, concentrating instead on forging a personal relationship with the Iraqi leader, then considered a valuable US ally.

Mr Rumsfeld was actually in Baghdad on the day the United Nations first reported Iraqi use of chemical weapons, but chose to remain silent, as did the rest of the US establishment. Five years later, he cited his ability to make friends with Saddam Hussein as one of his qualifications for a possible run at the presidency.

This Bush administration has been much more upfront about the role of oil in its deliberations on Iraq than the last Bush administration. That is partly a matter of circumstance: since the 11 September attacks, the stability of Middle Eastern oil states has been a big policy consideration. But it also reflects the fact that much of the Bush inner circle, including the President himself, is made up of former oilmen. The oil and gas industry has pumped about $50m to political candidates since the 2000 election.

There are also uncomfortably cosy ties between the government and the defence industry. Mr Rumsfeld's oldest friend, Frank Carlucci, a former defence secretary himself, now heads the Carlyle Group, an investment consortium which has a big interest in the contracting firm United Defense.

Carlyle's board includes George Bush Sr and James Baker, the former secretary of state. One programme alone – the Crusader artillery system – has earned Carlyle more than $2bn in advance government contracts. Carlyle's European chairman is John Major, who may have played a role in the Ministry of Defence's controversial recent decision to declare Carlyle the "preferred bidder" for a stake in its scientific research division.

None of these links is illegal, but that does not mean there is no conflict of interest. Messrs Bush, Cheney and friends have either sold their stock holdings or put them in a blind trust, meaning personal gain is off the agenda. But gain for their friends and family may well be a by-product of the looming war against Iraq.

Iraq's oil

Don't mention the O-word

Sep 12th 2002
From The Economist print edition


If America goes to war against Iraq, what will become of all that oil?

Get article background

AMERICA'S chief interest in going after Iraq's president, Saddam Hussein, is doubtless to save the world from his actual or potential weapons of mass destruction. Another large consideration, secondary as it may be, has attracted less attention than it should have: the effects that would follow from the opening up of the country's enormous reserves of oil.

Iraq's reserves are the second-biggest in the world, after Saudi Arabia's (see table). At present, thanks to UN sanctions and Mr Hussein's attempts to evade them, the country is producing a fraction of its potential. If it were to produce oil at a rate to match its reserves, say some geopolitical strategists, it could end Saudi Arabia's domination of world oil markets.

That would not come too soon for the United States. America is by far the world's biggest oil-user, burning up a quarter of the total consumed. Its imports have risen in recent years, to more than half its total consumption. Since Saudi Arabia is the chief supplier of those imports, successive American presidents have gone to great lengths to cultivate the unsavoury and dictatorial House of Saud. They have also tolerated Saudi Arabia's command of the Organisation of Petroleum Exporting Countries (OPEC), which keeps oil prices much higher than they would be if market forces prevailed. Now America's leaders increasingly feel—as Winston Churchill remarked of converting the British fleet from coal to petroleum before the first world war—that “safety and certainty in oil lie in variety, and variety alone.”

In hopes of finding such variety, George Bush is now changing American policy. He has openly embraced Vladimir Putin's goal of expanding Russia's oil industry, with talk of increased exports and a big ministerial conference on energy planned for Houston in October. Another opportunity, openly acknowledged or not, is the present showdown with Iraq. Rumours of war are likely to dominate the meeting of OPEC ministers on September 19th in Osaka, in Japan.

The fear premium
Conventional wisdom says war drums are good news for OPEC and the Saudis today, but bad news in the longer term. Talk of war always heats up the oil price, giving producers an instant windfall. Yet tomorrow, if America succeeds in toppling the bully-boy of Baghdad, the world could be awash in Iraqi oil. Look closer, and matters are more complicated.

In the short term, jittery traders are already handing oil producers a handsome windfall profit. Last week, on ill-founded rumours of a huge air strike by American and British planes in western Iraq, prices shot to their highest level in a year, passing $30 a barrel for West Texas Intermediate, America's benchmark crude. Daniel Yergin, head of Cambridge Energy Research Associates (CERA), an industry consultancy, estimates that the “fear premium” on each barrel of oil is now $3-5.

As war gets closer, prices seem bound to go higher. During the Gulf war, a decade ago, prices spiked past $40 a barrel in nominal terms. Phillip Ellis of the Boston Consulting Group, who has analysed the history of oil shocks and their impact on prices, argues that prices fall into two ranges. The peace curve, as he calls it, “forms around an average of about $22-24 in today's money. The war curve forms around a price north of $50.”

Some would put it higher. Sheikh Zaki Yamani, Saudi Arabia's oil minister during the shocks of the 1970s, gave warning last week that if America invades Iraq, Mr Hussein could attack Saudi Arabia and Kuwait and so send oil prices to $100 a barrel. Iraq's vice-president, Taha Yassin Ramadan, stirred the pot further this week by goading fellow Arabs to strike American targets in the Middle East if Iraq is attacked.

High prices are clearly a nightmare for consumers. Paradoxically, and here is where the complications begin, they are bad news for producers, too. Prices much above Mr Ellis's “normal” range act as a brake on economic growth. There are signs of this happening already, especially in Asia. Some economists worry about an oil-induced global downturn. As the earlier oil shocks have taught OPEC, prolonged periods of high prices only kill the goose that lays the golden egg.

Another reason why sky-high prices are bad for OPEC, and especially for Saudi Arabia, is that they spur oil production from uneconomic places. In a genuinely free market, most of the world's oil would be produced by Saudi Arabia and its neighbours, where the cost of exploration and production is a dollar or two a barrel. In contrast, trying to force drills through rocks in the Arctic or beneath deep water can heap up costs to $10-12 a barrel.

Getting round the Saudis
Because OPEC's “price-defence” strategy has kept prices above $18 a barrel for three years, argues the Petroleum Finance Company (PFC), an industry consultancy, projects in non-OPEC regions—the frozen wilds of Russia, the turbulent Caspian basin, the deep waters of the Gulf of Mexico—have attracted many billions of dollars in investment. High prices have already inspired the development of 2.6m barrels per day (bpd) of non-cartel oil, besides investment in projects that promise to deliver another 5.2m bpd from alternative sources by 2008. This new supply, says the PFC, “has and will continue to eat up all the increase in global demand, leaving OPEC no room to expand its own output and making the cartel's price-defence strategy increasingly difficult to maintain.”

However, the pain is not equally shared among cartel members. It is felt mostly by Saudi Arabia, the self-appointed “swing” producer. That is because higher prices have also encouraged some of the smaller fry in the cartel, such as Nigeria, Algeria and Libya, to develop new production capacity and to bypass existing production quotas set by OPEC. John Mitchell, an energy analyst at Britain's Royal Institute of International Affairs, offers a more fundamental reason to suppose that the cartel's “aggressive collusion” will not endure: the ratio of production to reserves varies greatly among cartel members, and so the incentive to increase output rather than keep it flat also varies greatly.

The result, according to estimates by Deutsche Bank, is that new supply could outstrip expected demand by as much as 1m barrels a day by 2004. The only country that has historically been willing to reduce its own output—and revenue—by such a large volume to “balance” the market and prevent a price collapse is Saudi Arabia.With years of graft and heaps of money, they may be a force again

All this explains why Saudi Arabia has long advocated a moderate stance on prices. Yet when ministers meet in Osaka next week, they face a dilemma. Thanks to fears about war with Iraq, prices are high and the markets are anxious. Winter is on the way, and with it a seasonal upturn in demand for oil. On September 11th the International Energy Agency (IEA), a quasi-governmental watchdog set up by the world's biggest oil consumers, said that stocks of crude were “uncomfortably low” going into the winter, and the whole situation “every bit as precarious” as in 1999, before a notably volatile spell for oil prices.

This being so, the Saudis might argue at Osaka for a modest increase in quotas. On the other hand, as Venezuela and Iran point out, the greatest risk facing the cartel is not high prices but a price collapse. That could happen if OPEC releases oil into a weakening global economy. It did precisely that in the run-up to the Asian economic crisis a few years ago, and oil prices fell to around $10 a barrel.

Even if Saudi Arabia somehow smooths over the meeting in Osaka, some argue, the longer-term picture for the cartel is bleak. The expulsion of Mr Hussein, which looks likelier than not, could turn the oil market upside down. This is because Iraq, with its vast reserves, is the only country that could challenge the Saudis by throwing open the taps.

If a post-Saddam regime did that, Saudi Arabia's strategy of keeping OPEC prices between $22 and $28 a barrel would be under threat. If the flood of Iraqi oil continued indefinitely, goes the argument, the Saudis would have no choice but to abandon price (and, with it, their allies in OPEC with higher costs and smaller reserves) and go for volume instead. Though politically difficult, that need not be economic folly: Deutsche Bank calculates that Saudi Arabia could maintain oil revenues at $60 billion or so either by producing 6m bpd at around $30 a barrel, or by cranking out 10m bpd at about $17 a barrel.

Will the flood of Iraqi oil occur? It is possible. Any future government in Iraq, needing vast amounts of money to rebuild the country, will try to expand the oil sector as fast as it can. At least some oil executives believe that this bonanza could draw much foreign capital into Iraqi oil production. Even if the new government did not break ties with OPEC, as the United States might like, it would probably argue—bearing in mind the years of UN supervision of its oil exports—for a lengthy exemption from quotas.

It might seem, then, that knocking out Mr Hussein would kill two birds with one stone: a dangerous dictator would be gone, and with him would go the cartel that for years has manipulated prices, engineered embargoes and otherwise harmed consumers. Yet several factors suggest that the transition to a post-Saddam oil world will be messy—and that such a world could still have a forceful OPEC in it.

Consider again Sheikh Yamani's fear: that Mr Hussein, in a desperate last act, may attack the Saudi and Kuwaiti oil infrastructure and bring the global economy to a halt. The oilfields could be set ablaze, as they were during the Gulf war. Refineries and terminals could be contaminated with radioactive or biological agents. With help from outsiders, Mr Hussein might be able to shut down shipping lanes such as those in the Straits of Hormuz, preventing Saudi Arabia from getting its oil to market.

On balance, though, the risks of a prolonged physical disruption seem small. One senior European oilman insists that it would be very difficult to engineer a complete shutdown of all Middle Eastern oil: “That's a bit like thinking you could shut down all North Sea production by firing SCUD missiles from Germany.” CERA's Mr Yergin says it is difficult to target all the oilfields, pipelines and export terminals that matter in the area. Saudi Arabia has plenty of spare capacity and transport options for its oil; besides, pipelines are pretty quickly patched up.

The world also holds emergency stocks of oil much bigger than those it held back in the 1970s. These should not inspire complacency; as the chart shows, they cover only a few weeks of disruption, and a prolonged war could still mean disaster. Yet the world at least has the IEA, monitoring oil markets and emergency stocks and engaging OPEC in “consumer-producer dialogues” (another one will take place in Osaka next week) to encourage stable prices. If oil supplies are suddenly threatened, as Robert Priddle, the IEA's boss, explains, governments have even given him the extraordinary power to release oil stocks unilaterally.

Fears of a physical disruption to supply are therefore overblown. More worrying, however, is the possibility that Saudi Arabia will decide it does not want to get extra oil to market. Historically, the Saudis have always acted as the market's guarantor of last resort. During the Iran-Iraq war, for example, they stepped into the breach and increased output to smooth prices. As they intentionally keep a whopping 3m bpd or so of spare capacity to hand, their country alone can easily compensate for the loss of Iraq's current output.

But the Saudis do not like the way the Bush administration is setting about Iraq. The regime also faces great anger on the “street” for its cosiness with the American government. Add to that the Saud dynasty's precarious grip on power, and the ruling family might find it politically impossible to crank up production to help the Americans. The result could be chaos in the world markets, and OPEC left firmly in control.

Another reason to doubt that an invasion would kill off OPEC is the state of Iraq's oil infrastructure. Thanks to a dozen years of UN sanctions, and many more years of mismanagement and over-exploitation, the country's petroleum industry is in pitiful shape. Even in its best times, the country produced only 3m-3.5m bpd: a third of Saudi Arabia's peak and half of Russia's. As one American oil executive says, “Under the very best scenario, Iraq might manage that peak again.” To do better, the country would need massive investment from the world oil industry.

Expect no miracles
That, says the same senior oilman, will be slow in coming until companies are sure that the new regime will be stable and will respect the rule of law. Realistically, experts say, it will take Iraq perhaps five years of hard work, western know-how and big money to turn its oil industry into a serious force again. CERA puts it bluntly: Iraqi output can only increase from today's low levels, but that does not mean “a massive, rapid increase in production that will depress prices, displace other Gulf producers and render OPEC impotent.”

In short, a “regime change” of the sort that Mr Bush has in mind for Iraq might rewrite all the rules of the oil game—on paper. The president's new friendship with Mr Putin also heralds an important change in the geopolitics of energy. In practice, however, the second Bush to take on Mr Hussein will probably be long gone from the White House before the oil markets are transformed by Iraqi oil. Don't write off Saudi Arabia, or OPEC, just yet


Subject: Charles Jacobs: Why Israel and Not Sudan, is
Singled Out

Boston Globe

Why Israel and not Sudan, is singled out
-- The West's "Human Rights Complex"

By Charles Jacobs

Harvard President Larry Summers recently criticized those on his campus who speak in the name of human rights but selectively censure Israel while ignoring much greater problems in the Middle East. He described the divestment campaign at Harvard singling out Israel "among all the nations as the lone country where it is inappropriate" for universities to invest, as anti-Semitic ''in effect if not intent.''

But human rights (and media) attention is often disproportionate to the severity or urgency of human conflicts. What determines their focus is not mainly anti-Semitism. It is something else.

An instructive case is Sudan. Atrocities there exceed every other world horror. For twenty years the blacks of South Sudan have been victims of an onslaught that has taken more than two million lives. Colin Powell calls it "the worst human rights nightmare on the planet." Yet with the important exception of the black Christian community here, there has been a disturbingly muted reaction from the well-known American human rights champions. The media covers the deaths in Sudan only occasionally.

Do rights activists and editorialists care more for Palestinians than for blacks? Surely not. It is the nature of the conflict, I propose, not the level of horror, which determines the response of Westerners.

In Khartoum, a Taliban-like Muslim regime is waging a self-declared jihad on African Christians, and followers of tribal faiths in South Sudan. Non-Arab African Muslims are also targeted for devastation. Two million people have been killed - more than in Bosnia, Kosovo, Somalia, Haiti, Rwanda and Burundi combined. Tens of thousands have been displaced, one hundred thousand, according to the U.S. Committee on Refugees, forcibly starved.

Western lack of interest is all the more stunning as Khartoum's onslaught has rekindled the trade in black slaves, halted (mostly) a century ago by the British abolitionists. Arab militias storm African villages, kill the men and enslave the women and children. Accounts by journalists, Catholic and Episcopal Bishops in Sudan, abolitionists -- and by the survivors themselves -- depict unspeakable horror. In these African pogroms, after the men are summarily slaughtered, women, girls and boys are gang raped - or have their throats slit for resisting. The terrorized survivors are forced-marched northward, and distributed to Arab masters, the women to become concubines, the girls domestics, the boys goatherds. I went to Sudan and saw for myself the scars on bodies of former slaves. There are photos of fingers, even a nose chopped off of boys who lost their masters' goats.

Given the sympathies of the human rights movement, it is hard to explain why victims of slavery and slaughter are virtually ignored, no, turned away, by American progressives. How can it be that there is no storm of indignation at Amnesty International or Human Rights Watch who, though they rushed to Jenin to investigate false reports of Jews massacring Arabs, yet care so much less about Arab-occupied Juba, South Sudan's black capital? How can it be that they have not raised the roof about Khartoum's black slaves? Neither has there been a concerted effort by the press (the Globe is a partial exception) - even the progressive press -- to pressure American Administrations to intervene. Nor has the socialist left spoken of liberating the slaves or protecting black villages from pogroms, even though Wall St. helps bankroll Khartoum's oil business, which finances the slavery and slaughter. What is this literally murderous silence about?

Surely it is not because we don't care about blacks. Progressives champion oppressed black peoples daily. My hypothesis is this: to predict what the human rights community (and the media) focus on, look not at the oppressed; look instead at the party seen as the oppressor. Imagine the media coverage and the rights groups' reaction if it were "whites" enslaving blacks in Sudan. Having the "right" oppressor would change everything. Alternatively, imagine the "wrong" oppressor; say if Arabs, not Jews, shot Palestinians in revolt. In 1980 ("Black September") Jordan murdered thousands of Palestinians in two days. We saw no divestment campaigns, and we wouldn't today.

This selectivity (at least in America) does not come from the hatred of Jews. It is "a human rights complex" - and is not hard to understand. The human rights community, composed mostly of compassionate white people, feels a special duty to protest evil done by those who are like "us." "Not in my name" is the worthy response of moral people. South African whites could not be allowed to represent "us." But when we see evil done by "others," we tend to shy away.

Though we claim to have a single standard for all human conduct, we don't. We fear the charge of hypocrisy: We Westerners after all, had slaves. We napalmed Viet Nam. We live on Native American land. Who are we to judge "others?" And so we don't stand for all of humanity. The biggest victims of this complex are not the Jews who are obsessively criticized, but victims of genocide, enslavement, religious persecution and ethnic cleansing who are murderously ignored: the Christian slaves of Sudan, the Muslim slaves of Mauritania, the Tibetans, the Kurds, the Christians in Pakistan, Indonesia, Egypt.

Seeking expiation instead of universal justice means ignoring the sufferings of these victims of non-Western aggression, and making relatively more of the suffering of those in confrontation with people like "us." If the Israelis are being "profiled" because they are like "us," the slaves of Sudan are ignored because their masters' behavior has nothing to do with us.

In America, it is not predominantly anti-Semitism that causes the human rights community to single Israel out for intense criticism. It is rather our failure to apply to all nations the standards to which we hold ourselves. The effect, as President Summers correctly said, is anti-Semitic. But it is also the abandonment of those around the world in the worst of circumstances whose oppressions we find beside the point.


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March/April 1993 | Contents


The Big One That (Almost) Got Away

Who Chased it -- and Who Didn't

by Russ W. Baker

Baker, a member of the adjunct faculty at Columbia University's Graduate School of Journalism, is a free-lance writer who regularly contributes to The Village Voice. Research assistance was provided by Julie Asher in Washington and Daniel Eisenberg in New York.

ABC News Nightline opened last June 9 with words to make the heart stop. "It is becoming increasingly clear," said a grave Ted Koppel, "that George Bush, operating largely behind the scenes throughout the 1980s, initiated and supported much of the financing, intelligence, and military help that built Saddam's Iraq into the aggressive power that the United States ultimately had to destroy."

Is this accurate? Just about every reporter following the story thinks so. Most say that the so-called Iraqgate scandal is far more significant then either Watergate or Iran-contra, both in its scope and its consequences. And all believe that, with investigations continuing, it is bound to get bigger.

Why, then, have some of our top papers provided so little coverage? Certainly, if you watched Nightline or read the London Financial Times or the Los Angeles Times, you saw this monster grow. But if you studied the news columns of The Washington Post or, especially, The New York Times, you practically missed the whole thing. Those two papers were very slow to come to the story and, when they finally did get to it, their pieces all too frequently were boring, complicated,and short of the analysis readers required to fathom just what was going on. More to the point, they often ignored revelations by competitors.

The result: readers who neither grasp nor care about the facts behind facile imagery like The Butcher of Baghdad and Operation Desert Storm. In particular, readers who do not follow the story of the Banca Nazionale del Lavoro, which apparently served as a paymaster for Saddam's arms buildup, and thus became a player in the largest bank-fraud case in U.S. history.

Complex, challenging, mind-boggling stories (from Iran-contra to the S&L crisis to BCCI) increasingly define our times: yet we don't appear to be getting any better telling them. In the interest of learning from our mistakes, this reporter examined several hundred articles and television transcripts on Iraqgate and spoke to dozens of reporters, experts, and generally well-informed news consumers.

Before evaluating the coverage, let's summarize the Iraqgate story itself:


The United States and its European allies have laws and policies designed to prevent arms and military technology from getting into the hands of developing countries, especially where there is a likelihood of their reckless deployment. If these controls were aimed at anyone, certainly they were aimed at the highly repressive, swaggering Iraqi regime, with its history of threatening both its neighbors and its citizens.

Still, when Saddam went to war against Iran, becoming the world's chief practitioner of chemical warfare, U.S. realpolitikers dubbed him the lesser of two evils, and the one less likely to disrupt the oil flow. The essence of Iraqgate is that secret efforts to support him became the order of the day, both during his long war with Iran and afterward.

Much of what Saddam received from the West was not arms per se, but so-called dual-use technology -- ultra sophisticated computers, armored ambulances, helicopters, chemicals, and the like, with potential civilian uses as well as military applications. We've learned by now that a vast network of companies, based in the U.S. and abroad, eagerly fed the Iraqi war machine right up until August 1990, when Saddam invaded Kuwait.

And we've learned that the obscure Atlanta branch of Italy's largest bank, Banca Nazionale del Lavoro, relying partially on U.S. taxpayer-guaranteed loans, funneled $ 5 billion to Iraq from 1985 to 1989. Some government-backed loans were supposed to be for agricultural purposes, but were used to facilitate the purchase of stronger stuff than wheat. Federal Reserve and Agriculture department memos warned of suspected abuses by Iraq, which apparently took advantage of the loans to free up funds for munitions. U.S. taxpayers have been left holding the bag for what looks like $ 2 billion in defaulted loans to Iraq.

All of this was not yet clear in August 1989, when FBI agents raided U.S. branches of BNL, hitting the jackpot in Atlanta. The branch manager in that city, Christopher Drogoul, was charged with making unauthorized, clandestine, and illegal loans to Iraq -- some of which, according to the indictment, were used to purchase arms and weapons technology. Yet three months after the raid, White House officials went right on backing Saddam, approving $ 1 billion more in U.S. government loan guarantees for farm exports to Iraq, even though it was becoming clear that the country was beating plowshares into swords.

At the time, inquiring minds wondered whether Drogoul could possibly have acted alone in such a mammoth operation, as the U.S. government alleged. Was there a formal, secret plan to arm Iraq? And did the U.S. government engage in a massive coverup when evidence of such a plan began to emerge?

In fact, we now know that in February 1990, then Attorney General Dick Thornburgh blocked U.S. investigators from traveling to Rome and Istanbul to pursue the case. And that the lead investigator lacked the basic financial know-how to handle such an investigation, and made an extraordinarily feeble effort to get to the bottom of things. More damningly, we know know that mid-level staffers at the commerce department altered Iraqi export licenses to obscure the exported materials' military function -- before sending the documents on to Congress, which was investigating the affair.

Eventually, it would turn out that elements of the U.S. government almost certainly knew that Drogoul was funneling U.S.-backed loans -- intended for the purchase of agricultural products, machinery, trucks, and other U.S. goods -- into dual-use technology and outright military technology. And that the British government was fully aware of the operations of Matrix Churchill, a British firm with an Ohio branch, which was not only at the center of the Iraqi procurement network but was also funded by BNL Atlanta. (Precision equipment supplied by Matrix Churchill was reportedly a target this January when the Western allies renewed their attack on Iraq).

It would later be alleged by bank executives that the Italian government, long a close U.S. ally as well as BNL's ultimate owner, had knowledge of BNL's loan diversions. It looked to some like an international coalition. As New York Times columnist William Safire argued last December 7, "Iraqgate is uniquely horrendous: a scandal about the systematic abuse of power by misguided leaders of three democratic nations to secretly finance the arms buildup of a dictator."

Safire had been on the case since 1989, turning out slashing op-ed pieces. But readers of the Times's news pages must have wondered where Safire's body-blows were coming from, since the news columns contained almost nothing about Iraqgate for the longest time.


Not everyone was slow to spot trouble. The coverage might be said to have begun in 1987, when Alan Friedman, a correspondent in Italy for the London Financial Times who was writing a book -- Agnelli: Fiat, and the Network of Italian Power -- learned of a European-based arms-procurement network that had gathered equipment for Iraq. In the book, published in 1988, he explored a five-year-old joint Argentine-Egyptian-Iraqi effort to build a ballistic missile capable of carrying a nuclear warhead, code-named CONDOR 2. Friedman's claims that Iraq was developing a nuclear weapon were shrugged off by colleagues in the press.

In August 1989, while working in Milan, Friedman noticed a four-line press release from Banca Nazionale del Lavoro. "Irregularities," it seemed, had been uncovered at BNL's Atlanta branch. (Later, Friedman would learn that this was the bank's way of acknowledging something troubling that had just transpired, unnoticed by the press: the FBI raids on BNL's U.S. branches.) Shortly thereafter, a London tipster told Friedman to look at a seemingly unrelated story -- the possible role of a British company, Matrix Churchill, in secretly arming Iraq. When Friedman phoned a source in Rome and mentioned both firms, he was told to get on a plane and come down for a little chat. It lasted all night.

Beginning in September 1989, a Financial Times team, reporting from Milan, Baghdad, and London, laid out the first charges that BNL, relying heavily on U.S. government-guaranteed loans, was funding Iraqi chemical and nuclear weapons work. Led by Friedman, who relocated to New York City in early 1990, the reporters went on to produce about 300 articles over three years, painting a compelling portrait of a massive -- and seemingly coordinated -- international effort to aid Iraq. For the next two and a half years, the Financial Times provided the only continuous newspaper reportage on the subject.

The London paper tied CONDOR 2 to BNL Atlanta -- which had just been publicly identified as the source of $ 3 billion in unauthorized loans to Iraq. And in one 1989 article it warned that the BNL story was more than just another dull tale of banking malfeasance: "The CONDOR story raises questions about the effectiveness of the commitment of Western governments to preventing military technology transfer." It pointed out that, while U.S. intelligence had long bragged about aggressively monitoring the transfer of military technology, Washington had fallen down on the job. The paper noted that if government sleuths had been serious about stopping the arms flow, they could have followed either the money trail or the technology trail. "In each case, they appear to have slipped up," it concluded.

The Financial Times extensively quoted top former officials at the International Monetary Fund, the Pentagon, and elsewhere, who expressed alarm over Export-Import Bank loan guarantees to Iraq. Some asserted that Washington had, as one of them put it, "allowed and abetted the development and stockpiling of a major chemical warfare capability" in Iraq. Among the companies shipping militarily useful technology under the eye of the government, according to the Financial Times, were Hewlett-Packard, Tektronix, and Matrix Churchill, through its Ohio branch.

The most striking thing about the paper's revelations is that they were published before Saddam Hussein invaded Kuwait in 1990. Douglas Frantz of the Los Angeles Times, who deserves a lot of credit for his own reporting on Iraqgate, nevertheless says the Financial Times was without question the early leader on the story. "Events subsequent have shown inmost cases they were on the money," he says.

By early 1990 the Financial Times was no longer alone. Representative Henry Gonzalez, chairman of the House Banking Committee (who also had noticed the four-line BNL press release back in 1989), began a long, lonely crusade to expose the affair. Soon he would be entering related documents into the Congressional Record in late-night speeches before an empty chamber. Attorney General Thornburgh even wrote to him, demanding that he stop looking into BNL in the interests of "national security." He didn't. Meanwhile, many reporters, accepting the administration's line that it was shocked -- shocked! -- to discover the BNL subterfuge, treated Gonzalez as a crank.

On August 2, 1990, Saddam Hussein invaded Kuwait and the debate began in the U.S. over an appropriate response. But only a handful of reporters bothered to ask where he had acquired the military muscle for the invasion. One who did, Thomas L. Flannery of the Intelligencer Journal, a 45,000-circulation paper in Lancaster, Pennsylvania, warned in November: "If U.S. and Iraqi troops engage in combat in the Persian Gulf, weapons technology developed in Lancaster and indirectly sold to Iraq will probably be used against U.S. forces. . . . And aiding in this . . . technology transfer was the Iraqi-owned, British-based precision tooling firm Matrix Churchill, whose U.S. operations in Ohio were recently linked to a sophisticated Iraqi weapons procurement network." Flannery, who wrote in impressive string of stories identifying Pennsylvania companies that supplied Iraq, had been hired by the Financial Times as an occasional stringer the year before.

Meanwhile, The Village Voice published a major investigation by free-lancer Murray Waas in its December 18, 1990, issue. Under the headline GULFGATE: HOW THE U.S. SECRETLY ARMED IRAQ, Waas pulled together a massive amount of information, ranging from senior White House officials' accounts that George Bush was a behind-the-scenes advocate of a pro-Iraq tilt, to an accounting of U.S. trade with Iraq that had a potential military application. "That American troops could be killed or maimed because of a covert decision to arm Iraq," Waas wrote, "is the most serious consequence of a U.S. foreign policy formulated and executed in secret, without the advice and consent of the American public."

The gulf war began shortly after, on January 16, 1991, and the media went wild. But when it ended six weeks later, most Americans knew little more about the war's root causes then they did before.

There would, however, be more to the story. Within hours after hostilities ceased on February 27 -- and nine-teen months after the FBI had raided BNL -- the government indicted Drogoul, painting him as a lone-wolf financier of the Iraqi war machine. He was charged with defrauding his Rome employers of billions of dollars.

Nightline, which had been looking at Iraqgate for some time, hooked up with the Financial Times in an unusual and productive arrangement. On May 2, 1991, the team reported the secret minutes of the President's National Advisory Council, at which, despite earlier reports of abuses, an undersecretary of state declared that terminating Iraqi loans would be "contrary to the president's intentions."

Nightline/Financial Times also cited intelligence reports that Iraq was using U.S. government farm credits to procure military technology. On July 3, 1991, the Financial Times reported that a Florida company run by an Iraqi national had produced cyanide -- some of which went to Iraq for use in chemical weapons -- and had shipped it via a CIA contractor.

In another unusual and productive partnership, Douglas Frantz of the Los Angeles Times teamed up with The Village Voice's Murray Waas. The Times published the first of their three-part series on February 23, 1992. "Classified documents obtained by the Times show . . . a long-secret pattern of personal efforts by Bush -- both as President and as Vice-President -- to support and placate the Iraqi dictator," the paper reported. It cited a top-secret National Security decision directive signed by President Bush in 1989, ordering closer ties with Baghdad and paving the way for $ 1 billion in new aid. Although the directive had been briefly described in other publications, the Times put it in context. Assistance from Washington was critical for Iraq, Frantz and Waas pointed out, since international bankers had cut off virtually all loans to Baghdad because Iraq was falling behind on repayments -- precisely because it was busily pouring millions into arms purchases.

And it emphasized the striking fact -- buried deep in a 1991 Washington Press piece -- that Secretary of State James Baker, after meeting with Iraqi Foreign Minister Tariq Aziz in October 1989, intervened personally to support U.S. government loan guarantees to Iraq.

"Nobody responded to that [February 1992] series," says Frantz. "That week, Gonzalez went onto the house floor to deliver another speech, and nobody followed that either." The Los Angeles Times went on to publish 100 articles exploring the history of U.S.-Iraq relations before and after the war. The reportage was, admirably, light on anonymous sources and heavy on information from internal documents, shared with the paper by government employees troubled by what they had seen.

Still, the top national papers ignored most of the Financial Times/Nightline and Los Angeles Times revelations. In fact, when in March an obscure Italian newspaper reported Drogoul's claim that both the Italian and U.S. governments had known and approved of his lending operation, only the Financial Times picked up the story.

Things began to heat up last June when, in an abrupt turnabout, the feds suddenly agreed to drop 287 of 347 charges against Drogoul in return for a guilty plea and pledge of cooperation. Drogoul, who had asked for an opportunity to explain his actions fully, suddenly decided to go mute. A troubled Judge Marvin Shoob, presiding over Drogoul's case, wrote to the head of the House Judiciary Committee: "[Drogoul] decided not to provide a statement until sentencing, after debriefing over a two-month period by the government."

By July, five other congressional committees had joined Gonzalez's banking panel in launching probes into various aspects of the Iraqgate affair, and Democrats were demanding that an independent prosecutor be named to investigate it.

Since Drogoul had made a deal, the fall sentencing hearings were expected to be brief. But they turned into a major show when, in October, Drogoul's lawyer suddenly began introducing new evidence that the head office of the Italian-government-owned bank had known all along what Drogoul was up to. He also produced testimony suggesting that figures with ties to U.S. intelligence may have been involved. The prosecution quickly asked to withdraw its plea bargain, and agreed to a trial (which had the net effect of postponing public airing of the affair until after the November election).

Earlier, The Village Voice's Robert Hennelly had assembeled a massive timeline documenting a pro-Saddam U.S. tilt dating back a full decade. He concluded: "At worst, that support was a frightening exercise in capitalistic opportunism (we made money both supporting and attacking Hussein). . . ."


Drogoul's plea bargain and sentencing hearing provided a perfect new peg, and everyone finally jumped in. With the Financial Times far in the lead and the Los Angeles Times, The Washington Post, and The Wall Street Journal -- got into Iraqgate late, leaving beat reporters struggling to untangle the story's many complex international strands.

The Journal set the pace. Chiefly through reporter John Fialka, the paper made up for its late awakening by demystifying technicalities through striking headlines and crystal-clear prose. Despite a small general news hole, the Journal constantly found space for explanatory Iraqgate pieces.

The Post's early coverage had a protective tone. In July, reporter John Goshko wrote about Bush administration actions that "unwittingly bolstered" Iraq's military. And he asserted: "The record suggests that Bush . . . Baker and other senior foreign policy advisers were not paying much attention to Iraq. . . ."

The Post's R. Jeffrey Smith, whose Iraqgate coverage included the Drogoul hearing, produced several exclusives from Washington sources. Yet the paper did not significantly advance the story. "It was a story with high political content, and a paucity of hard evidence to back up charges of conspiracy," Smith says. "Some papers allowed themselves to be manipulated, acting almost as agents of the Democratic opposition. Some people made this a crusade."

The New York Times, meanwhile, shifted into high gear -- and promptly crashed into a pile of charges and countercharges. To cover BNL and the Drogoul sentencing, the Times brought in Elaine Sciolino, the national security correspondent, who had returned to daily reporting after writing a book about Iraq. She had other credentials that might have been helpful: she had served as Newsweek's Rome bureau chief before coming to the Times, and had covered intelligence matters for years.

She came in cold, and her sudden coverage was almost without context, since, aside from columnist William Safire, the newspaper had failed to follow up on the massive amount of evidence already gathered by others in the greater Iraqgate story. When much of the Financial Times's early scoop material resurfaced during the trial, the Times reported some of it -- without noting who had originally unearthed it. Safire, on the other hand, cited the Financial Times often in his early crusade to rise above his paper's seeming indifference to the larger scandal. During Drogoul's hearings, the Times brought in Martin Tolchin, an old Washington hand. He had covered the Neil Bush S&L affair, and seemed adept at telling this story clearly, but he made only a cameo appearance.


The Times largely ignored Representative Gonzalez, meanwhile, as he made his allegations and entered supporting documents into the Congressional Record. Sciolino got around to a close look at the man making the charges on July 3. Her piece, headed ECCENTRIC STILL BUT OBSCURE NO MORE, cast Gonzalez as something of a buffoon, and included charges that his disclosure of sensitive information was a threat to national security -- without explaining why it would be. The piece could almost be read as a justification for the Times's failure to follow Gonzalez's earlier charges.

The Journal, which regularly reported Gonzalez's steady flow of documents and pronouncements, was far more charitable in Fialka's July 31 profile of the congressman. Headed LONER GONZALEZ TOILS TO EXPOSE WHITE HOUSE ROLE IN AIDING IRAQ IN YEARS LEADING UP TO GULF WAR, it presented a tough, uncorruptible maverick.


Many incendiary allegations reported by the Journal, the Los Angeles Times, and The Atlanta Constitution (covering the Drogoul hearing in its home town) were simply ignored by The New York Times, and sometimes by The Washington Post, as well. A few of many examples, all from 1992:

Intelligence Connections?

On October 3, the Journal reported Drogoul's assertion that the director general of Iraq's Ministry of Industry and Military Production had told him "We are all in this together. The intelligence service of the U.S. government works very closely with the intelligence service of the Iraq government." Three weeks later, the Journal reported that Gonzalez "produced a phone-book-sized packet of documents" showing the involvement of U.S. exporting firms. The documents mentioned one, RD&D International of Vienna, Virginia -- which designed parts for Iraq's howitzers and was financed through BNL -- that was run by a man with reputed connections to U.S. intelligence. The Times and the Post missed the first story and failed to follow up on the second.

Quayle involvement?

On three separate occasions it was reported (first by Representative Gonzalez, then by The Atlanta Constitution, and finally by the Journal) that BNL bankers claimed that companies seeking Iraqi business had come to the Atlanta branch at the urging of Vice-President Dan Quayle. One such corporation was owned by a man with close personal and business ties to the Quayle family; he built a brass refinery that recycled spent Iraqi artillery shells. Neither the Times nor the Post reported this.

Scuds and Superguns?

September 16: the Journal, in a piece headed IRAQ FUNDED SCUDS WITH MONEY GAINED FRAUDULENTLY IN U.S., INVESTIGATOR SAYS, recounted prosecution testimony that Drogoul had toured an Iraqi military facility, was shown a drawing of a missile, and was told that it had been financed through BNL Atlanta. The Atlanta Constitution reported this, as did the Los Angeles Times, whose lead stated: "Loans from an Italian bank branch here paid for improving Iraqi Scud missiles like the one that killed 28 Americans in the Persian Gulf War, a top federal investigator testified Tuesday." The Times and Post didn't report the story.

How high does it go?

September 23: The Constitution reported that Judge Shoob, complaining in open court about the prosecution's failure to call BNL officials to testify, actually sought to call his own witness. The Journal quoted Shoob: "I've read all the secret documents, and I can't believe [Drogoul] was the sole actor or principal actor in the enterprise." The Times and Post were AWOL on this story.

A question of bribery?

Even when the Times raised startling facts, it often failed to follow up on itself. On October 17 the newspaper noted that the CIA had "uncovered a document suggesting the possible payoff of government officials in the United States and Italy in the elaborate bank-fraud case." Readers of the Times never learned more about this development.


In other cases, the Big Two -- but particularly The New York Times -- simply muddled matters.

In October, it was revealed that the CIA had withheld from Congress -- and possibly from prosecutors -- crucial documents showing what the government knew about BNL. The Justice department blamed the CIA the CIA blamed the Justice department; and Senator David Boren, chairman of the Senate intelligence committee, got angry at everyone.

Sciolino did her most energetic work covering this turf battle, often using unnamed sources, which made it difficult to discern whose agenda was being advanced. And although the Times finally started producing exclusives in its coverage of this matter, its daily revelations over the finger-pointing were hard to follow and did little to foster understanding of the bigger story. (In the end, evidence suggested that the CIA had withheld the documents at the request of Justice. If so, in retrospect, the story was the collusion, not the feud.)

Readers' comprehension suffered when this complex story was reported as a he said-she said exercise. Here's Sciolino on October 11, writing about the intergovernmental feud: "The unusual finger-pointing over the case came after reports that CIA officials had disclosed to Congress on Thursday that, at the urging of the Justice Department, they had deliberately withheld information about the bank fraud from federal prosecutors in Atlanta. . . . CIA and Justice Department officials denied those reports today. . . . But their denials came amid a new disclosure by lawmakers that the Justice Department also had withheld information that the CIA wanted to make public. . . . The CIA, the Justice Department, and the Bush Administration have all denied wrongdoing in the case. . . . In a sharply worded statement today, the CIA denied that its officials had told the Senate Committee that it had deliberately withheld information from Federal prosecutors in Atlanta at the urging of the Justice Department."

Wording like this, one television producer who has followed Iraqgate observed, "makes The New York Times responsible for gross public apathy."

Dean Baquet, who had earned a reputation as a formidable investigative reporter during his years with the Chicago Tribune, worked to advance the story on several occasions, especially covering Matrix Churchill developments in a separate trial in London. But he was only sporadically assigned to the story.

On October 18, Sciolino and Baquet wrote an overview piece, a belated effort to advance the story, although they appeared hesitant to state what, for others, had been all but proven long ago. Notice the qualifiers: "Some Congressional Democrats say the recent revelations are only a tiny part of a two-pronged Government-wide cover-up; to protect and conceal its dealings with Mr. Hussein, and to accommodate the Italian government. Even more ominously, these critics, without any real proof, have begun to suggest that the administration knew about the loans all along."

Six congressional committees was hardly "some" Democrats; the revelations were hardly "recent"; the evidence of administration knowledge was, by now, fairly overwhelming. As even the national-security minded columnist Jim Hoagland, writing a week earlier in The Washington Post, put it, "That Bush is tolerating a coverup on Iraq conducted by others on his behalf can no longer be seriously doubted. That Bush has lied about his knowledge of shipments of U.S. arms to Iraq can no longer be seriously disputed."

On November 2, Representative Gonzalez announced that the Agriculture department, which had approved BNL loans, had learned back in 1990 for the CIA that BNL Rome was involved in the alleged Atlanta fraud. This revelation not only challenged the government's assertion that Drogoul had acted alone, but also implied that a coverup was under way.

Gonzalez's disclosure represented another news peg. The Journal covered the disclosure in a piece headed FARM AGENCY KNEW SCOPE OF BNL FRAUD. Working from the same material that same day, the Times, in a story headed 1990 LETTER ADDS NEW QUESTIONS ON CIA ROLE IN IRAQ BANK CASE, chose to emphasize the CIA-Justice turf battle, obscuring the main point: that the Agriculture department was in the BNL loop. (And while the Journal cited Gonzalez in the second paragraph, the Times waited until they very last sentence to credit the congressman.)

Times deputy national editor Philip Taubman, who was deputy bureau chief in Washington until late last year and supervised much of the reporting on Iraqgate (except when it was assigned to the paper's business or foreign desk), sees the Times's heavy coverage of the CIA-Justice fight as a plus. "I don't think it's inside baseball when two major branches of government are involved in a donnybrook, both accusing each other of malfeasance," he says.

Many reporters from other newspapers criticize the Time's coverage of Iraqgate, and much of its coverage in general, for a bias toward authority, an unwillingness to challenge power. Taubman, however, sees his newspaper as properly cautious. "I think it's off base to suggest that our coverage was somehow deficient because we attempted to lay out what charges were confirmed and which might still fall short of being confirmed," he says. "We try in all our stories to make clear what we don't know, as well as what we know. And in a complicated story of this type I think it's good journalism to clue the reader in where inflammatory accusations are not yet, and may never be, confirmable or provable."

Sciolino, who recently moved on to become the paper's chief diplomatic correspondent, admits that coming in late to such a complicated story was tough. "I couldn't summarize the story in one sentence," she says. "That's what made it so difficult to explain -- to an editor, to people at a cocktail party. It's even more complicated than Iran-contra."

In retrospect, she says, "I think our paper could have done a better job, especially in the beginning. One spinoff could be to look at the whole arms procurement network around the world, how independent arms dealers, banks, and governments who own weapons-production facilities promote arms proliferation." Yet, Sciolino adds, arms proliferation "is not a sexy story."

She praises the Los Angeles Times for putting two people on the story, and for treating it as an investigation rather than as a beat story. She says her paper was hobbled because the story affected several sections of the paper -- foreign, national, and business -- and was parceled out to them. So no one editor was in charge of coordinating coverage.


With Dragoul's new trial set for October, there is still time for news organizations to wise up. Some things everyone agrees on: besides exploring the proliferation of weapons into unstable or dangerous hands, a serious Iraqgate investigation would look at the power of America's largest corporations to sway foreign policy in ways that help them make sales. The Los Angeles Times, the Financial Times, and others did explore this, but there was little follow-up. One exception was the Journal, which led an October 12 piece this way: "In the unfolding drama of how the U.S. financed and supplied Saddam Hussein's Iraq, there's more than a walk-on part for corporate America." The Journal's John Fialka cited a list of major U.S. corporations that "saw Iraq as a gusher of business -- so long as credits were wrung out of government agencies such as the Agriculture department, Commodity Credit Corp., and the Export-Import Bank."

Serious coverage would also examine geopolitical arrangements between countries like the U.S. and Italy, the place of banks in global scandals, and the role of American and foreign intelligence agencies in secretly carrying out policies that the American people have not endorsed. And to do this it would also seem necessary to report this story with some distance from partisan sources, whether Robert Gates or Henry Gonzalez, and not just count on leaks alone.

As it was, for a long time reporters couldn't even count on partisan political warfare to generate scoops. In Congress, both parties had repeatedly backed legislation authorizing farm credits to Iraq -- despite warnings from Kurdish representatives that the funds would end up being used against them, in the form of poison gas. With no one to hand the story to the media on a platter, unraveling it required following hunches, and spending time and money -- serious investigative reporting that roams far afield from the constraints of the conventional beat.

For ABC, which broke plenty of stories in concert with London's Financial Times, only to watch them sink, covering Iraqgate has been a sobering experience. "It's been very frustrating for us," says Gordon Platt, a Nightline producer. "We'd put it on the air, but there would be no follow-up by the other press. We'd expect the Times or Post would pick up on it. But until this last summer, they didn't."

As for why much of the press fears this kind of story, perhaps Ted Koppel put it best. "There's a good reason why we in the media are so partial to a nice, torrid sex scandal," he said as he opened yet another Nightline Iraqgate report last July. "It is, among other things, so easy to explain and so easy to understand. Nothing at all, in other words, like allegations of a government coverup, which tend to be not at all easy to explain, and even more difficult to understand."

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