From: harelb@math.cornell.edu (misc.activism.progressive co-moderator)
Subject: Background to IRAQ-GATE (3)         SCOWCROFT STOCK OWNERSHIP
Organization: misc.activism.progressive on UseNet ; ACTIV-L@UMCVMB
Date: Sun, 11 Oct 1992 20:30:46 GMT



        SCOWCROFT STOCK OWNERSHIP 
         
        The BNL scandal is not the only instance of Kissinger 
Associates affiliations having had the potential of placing Mr. 
Scowcroft in a potential conflict of interest situation 
involving U.S. national security and foreign policy. 
        Last week I noted that Brent Scowcroft joined Mr. Kissinger 
in setting up Kissinger Associates in 1982. Mr. Scowcroft served 
as vice chairman of Kissinger Associates until being appointed 
as National Security Advisor to President Bush in January 1989. 
In that position, Mr. Scowcroft advises the President on matters 
involving national security including export control policies. 
        I also revealed last week that Mr. Scowcroft owned stock in 
approximately 40 companies while acting in those capacities for 
President Bush. 
        These stocks were valued at well over $1 million. 
        The chart is pretty much self-explanatory. As the chart 
indicates, on October 4,1990, the Office of Government Ethics 
required Mr. Scowcroft to divest some of his stock holdings. But 
that was almost 2 years after he took office and several months 
after the Iraqi invasion of Kuwait. 
            
        MANY LARGE DEFENSE CONTRACTORS 
         
        Many of the companies Mr. Scowcroft owned stock in are 
large defense contractors. The Department of Defense recently 
released a list of the top 100 prime defense contractors. Mr. 
Scowcroft owned stock in 11 of these companies including General 
Electric, General Motors, ITT, and Lockheed while acting as the 
President's National Security Adviser. 
        Several of the companies Mr. Scowcroft owned stock in are 
reported clients of Kissinger Associates. These connections 
raise the question of Kissinger Associates' influence over the 
decisions of Mr. Scowcroft as well as the issue of whether or 
not Mr. Scowcroft can remain independent from the interests of 
his former boss and longtime colleague Henry Kissinger. 
        I am deeply concerned by Mr. Scowcroft's stockholdings, 
particularly those in corporations that are clients of Kissinger 
Associates. Given the position of Mr. Scowcroft, his 
stockholdings present the potential for serious conflicts of 
interest. 
        As an example consider that together, the companies he owned 
stock in received over one in every eight United States export 
licenses for sales to Iraq. No doubt these companies benefited 
from United States policy toward Iraq. Mr. Scowcroft was 
instrumental in setting and carrying out that policy and, at the 
same time owned stock in companies benefiting directly from that 
same policy. Can Mr. Scowcroft be providing the President with 
independent judgement given those circumstances? 
         
        BACKGROUND ON NATIONAL SECURITY COUNCIL 
        [NSC] 
         
        In order to better understand these issues it would help 
to learn more about the role Mr. Scowcroft plays in setting, 
coordinating, and carrying out the national security and foreign 
policies of the United States. As we will see, the NSC can have 
considerable influence over an individual company's ability to 
obtain an export license to sell goods abroad. 
        During his tenure at Kissinger Associates, Mr. Scowcroft was 
appointed by President Reagan to various special commissions on 
national security issues. One such appointment was to the 
President's Special Review Board. The President directed the 
Board to examine the proper role of the National Security 
Council staff in the development, coordination, and conduct of 
foreign and national security policy following the Iran-Contra 
scandal. The following background on the NSC is taken from that 
report. 
        The National Security Council was established by the 
National Security Act of 1947. The NSC functions as an advisory 
body to the President on national security issues and to improve 
coordination between the military service and other executive 
departments. The President is the head of the NSC with other 
members being the Vice President, the Secretary of State, and 
the Secretary of Defense. 
        Statutory advisers to the NSC include the Chairman of the 
Joint Chiefs of Staff, the Director of the Central Intelligence 
Agency, and the Director of the Arms Control and Disarmament 
Agency. Other members of executive branch agencies may serve as 
de facto members of the NSC at the invitation of the President. 
All members are supposed to provide their best advice to the 
President, not merely serve as advocates for their own 
bureaucracies. 
        Perhaps the greatest misconception regarding the NSC is that 
the Assistant to the President for National Security Affairs, 
commonly referred to as the National Security Adviser, is not a 
formal member of the NSC. There is no legislative provision for 
Mr. Scowcroft's present position. 
        Originally, under President Eisenhower, the National 
Security Adviser served as the executive secretary of the 
NSCQsetting the agenda, briefing the President, and supervising 
staff. It was not until President Kennedy, with McGeorge Bundy, 
and also President Nixon, with Henry Kissinger, that the 
National Security Adviser took on its current role. Bundy and 
Kissinger transformed the position from one of coordinator and 
administrator to one of policy advocate, personal adviser, 
spokesman and negotiator for national security issues. 
        The National Security Act also established a National 
Security Staff. The role and size of the staff has changed 
considerably since 1947, but has come to serve the dual role of 
coordinating and monitoring the implementation of national 
security policy as well as providing independent advice, 
options, and ideas to the President. Mr. Scowcroft is the 
current Director of the NSC staff. The role of the NSC staff 
received its greatest notoriety from the actions of felonious 
staff member Oliver North. 
         
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Conf?