Newsgroup: it.politica.internazionale
Titolo: Re: Iraq: gruppo Carlyle esce da consorzio per recupero debito Kuwait

Osservare come la Carlyle cambi la propria posizione ogni giorno.
Puttanata.
Osservare come siano indicate consociate della Carlyle come se
parlassero per essa.
---
Jamie Smith, spokeswoman for the Albright Group LLC
---
and by the consortium's leader, Shahameen Sheikh of the "International
Strategy Group". 
---
Il resto sono parole senza alcun valore visto che non dicono chi sia
stato e quando a fare simili affermazioni
-Stefano

James Baker's Double Life
by NAOMI KLEIN
[from the November 1, 2004 issue]
When President Bush appointed former Secretary of State James Baker III as 
his envoy on Iraq's debt on December 5, 2003, he called Baker's job "a noble 
mission." At the time, there was widespread concern about whether Baker's 
extensive business dealings in the Middle East would compromise that 
mission, which is to meet with heads of state and persuade them to forgive 
the debts owed to them by Iraq. Of particular concern was his relationship 
with merchant bank and defense contractor the Carlyle Group, where Baker is 
senior counselor and an equity partner with an estimated $180 million stake.
Until now, there has been no concrete evidence that Baker's loyalties are 
split, or that his power as Special Presidential Envoy--an unpaid 
position--has been used to benefit any of his corporate clients or 
employers. But according to documents obtained by The Nation, that is 
precisely what has happened. Carlyle has sought to secure an extraordinary 
$1 billion investment from the Kuwaiti government, with Baker's influence as 
debt envoy being used as a crucial lever.
The secret deal involves a complex transaction to transfer ownership of as 
much as $57 billion in unpaid Iraqi debts. The debts, now owed to the 
government of Kuwait, would be assigned to a foundation created and 
controlled by a consortium in which the key players are the Carlyle Group, 
the Albright Group (headed by another former Secretary of State, Madeleine 
Albright) and several other well-connected firms. Under the deal, the 
government of Kuwait would also give the consortium $2 billion up front to 
invest in a private equity fund devised by the consortium, with half of it 
going to Carlyle.
The Nation has obtained a copy of the confidential sixty-five-page "Proposal 
to Assist the Government of Kuwait in Protecting and Realizing Claims 
Against Iraq," sent in January from the consortium to Kuwait's foreign 
ministry, as well as letters back and forth between the two parties. In a 
letter dated August 6, 2004, the consortium informed Kuwait's foreign 
ministry that the country's unpaid debts from Iraq "are in imminent 
jeopardy." World opinion is turning in favor of debt forgiveness, another 
letter warned, as evidenced by "President Bush's appointment...of former 
Secretary of State James Baker as his envoy to negotiate Iraqi debt relief." 
The consortium's proposal spells out the threat: Not only is Kuwait unlikely 
to see any of its $30 billion from Iraq in sovereign debt, but the $27 
billion in war reparations that Iraq owes to Kuwait from Saddam Hussein's 
1990 invasion "may well be a casualty of this U.S. [debt relief] effort."
In the face of this threat, the consortium offers its services. Its roster 
of former high-level US and European politicians have "personal rapport with 
the stakeholders in the anticipated negotiations" and are able to "reach key 
decision-makers in the United Nations and in key capitals," the proposal 
states. If Kuwait agrees to transfer the debts to the consortium's 
foundation, the consortium will use these personal connections to persuade 
world leaders that Iraq must "maximize" its debt payments to Kuwait, which 
would be able to collect the money after ten to fifteen years. And the more 
the consortium gets Iraq to pay during that period, the more Kuwait 
collects, with the consortium taking a 5 percent commission or more.
The goal of maximizing Iraq's debt payments directly contradicts the US 
foreign policy aim of drastically reducing Iraq's debt burden. According to 
Kathleen Clark, a law professor at Washington University and a leading 
expert on government ethics and regulations, this means that Baker is in a 
"classic conflict of interest. Baker is on two sides of this transaction: He 
is supposed to be representing the interests of the United States, but he is 
also a senior counselor at Carlyle, and Carlyle wants to get paid to help 
Kuwait recover its debts from Iraq." After examining the documents, Clark 
called them "extraordinary." She said, "Carlyle and the other companies are 
exploiting Baker's current position to try to land a deal with Kuwait that 
would undermine the interests of the US government."
The Nation also showed the documents to Jerome Levinson, an international 
lawyer and expert on political and corporate corruption at American 
University. He called it "one of the greatest cons of all time. The 
consortium is saying to the Kuwaiti government, 'Through us, you have the 
only chance to realize a substantial part of the debt. Why? Because of who 
we are and who we know.' It's influence peddling of the crassest kind."
In the confidential documents, the consortium appears acutely aware of the 
sensitivity of Baker's position as Carlyle partner and debt envoy. 
Immediately after listing the powerful players associated with 
Carlyle--including former President George H.W. Bush, former British prime 
minister John Major and Baker himself--the document states: "The extent to 
which these individuals can play an instrumental role in fashioning 
strategies is now more limited...due to the recent appointment of Secretary 
Baker as the President's envoy on international debt, and the need to avoid 
an apparent conflict of interest." [Emphasis in original.] Yet it goes on to 
state that this will soon change: "We believe that with Secretary Baker's 
retirement from his temporary position [as debt envoy], that Carlyle and 
those leading individuals associated with Carlyle will then once again be 
free to play a more decisive role..."
Chris Ullman, vice president and spokesperson for Carlyle, said that 
"neither the Carlyle Group nor James Baker wrote, edited or authorized this 
proposal to the Kuwait government." But he acknowledged that Carlyle knew a 
proposal was being made to the government of Kuwait and that Carlyle stood 
to land a $1 billion investment. "We were aware of that. But we played no 
role in procuring that investment."
Asked if Carlyle was "willing to take the billion but not to try to get it," 
Ullman answered, "Correct."
Iraq is the most heavily indebted country in the world, owing roughly $200 
billion in sovereign debts and in reparations from Saddam's wars. If Iraq 
were forced to pay even a quarter of these claims, its debt would still be 
more than double its annual GDP, severely undermining its capacity to pay 
for reconstruction or to address the humanitarian needs of its war-ravaged 
citizens. "This debt endangers Iraq's long-term prospects for political 
health and economic prosperity," President Bush said when he appointed Baker 
last December.
But critics expressed grave concern about whether Baker was an appropriate 
choice for such a crucial job. For instance, one of Iraq's largest creditors 
is the government of Saudi Arabia. The Carlyle Group does extensive business 
with the Saudi royal family, as does Baker's law firm, Baker Botts (which is 
currently defending them in a $1 trillion lawsuit filed by the families of 
September 11 victims). The New York Times determined that the potential 
conflicts of interest were so great that on December 12 it published an 
editorial calling on Baker to resign his posts at the Carlyle Group and 
Baker Botts to preserve the integrity of the envoy position.
"Mr. Baker is far too tangled in a matrix of lucrative private business 
relationships that leave him looking like a potentially interested party in 
any debt-restructuring formula," stated the editorial. It concluded that it 
wasn't enough for Baker to "forgo earnings from clients with obvious 
connections to Iraqi debts.... To perform honorably in his new public job, 
Mr. Baker must give up these two private ones."
The White House brushed off calls for Baker to choose between representing 
the President and representing Carlyle investors. "I don't read those 
editorials," President Bush said when asked by a reporter about the Times 
piece. Bush assured reporters that "Jim Baker is a man of high integrity.... 
We're fortunate he decided to take time out of what is an active life...to 
step forward and serve America." Carlyle was equally adamant: Chris Ullman 
assured a Knight-Ridder reporter that Baker's post "will have no impact on 
Carlyle whatsoever."
In fact, several months earlier, on July 16, 2003, Carlyle had attended a 
high-level London meeting with Kuwaiti officials about the deal. According 
to the document, the Kuwaitis asked Carlyle and the other consortium members 
to "prepare a detailed financial proposal for the protection and 
monetization" of reparation debts from Iraq. But at the time Baker was 
appointed envoy, the consortium had not yet submitted its proposed plans to 
Kuwait. That means that the Carlyle Group could have pulled out of the 
consortium, citing the potential conflicts of interest. Instead, Carlyle 
stayed on, and the consortium proceeded to use Baker's powerful new position 
to aggressively pitch a deal that positioned the consortium as the Kuwaiti 
government's chief lobbyist on Iraq's debts and that gave Carlyle a clear 
stake in the fate of Iraq's debts.
However, several changes were made in the way the consortium presented 
itself. The documents state, "Prior to [Baker's] appointment [former US 
Secretary of Defense Frank] Carlucci had played a convening and guiding role 
on behalf of Carlyle." But after the appointment, according to Carlyle's 
Chris Ullman, the firm's role was scaled back. "When James Baker was named 
special envoy...Carlyle explicitly restricted its role to only investing 
assets on behalf of Kuwait." Shahameen Sheikh, chairman and CEO of 
International Strategy Group, a company created by the consortium to manage 
this deal, said that Carlyle told her that "they are not a lobbying firm." 
Days before Baker's appointment, the consortium reached out to another 
high-profile Washington firm, the Albright Group, which eventually signed on 
as the leading political strategists and lobbyists for the consortium.
Moreover, Ullman said that Carlyle put "controls in place" that would insure 
that Baker "would play no role in nor benefit from" the proposed $1 billion 
investment--an amount that would constitute nearly 10 percent of Carlyle's 
total equity investments.
But it's not clear that Carlyle has been straightforward about its dealings 
so far. The day before Baker's appointment was announced, John Harris, 
managing director and chief financial officer of Carlyle, submitted a signed 
statement to White House Counsel Alberto Gonzales. "Carlyle does not have 
any investment in Iraqi public or private debt," he wrote. He didn't mention 
that Carlyle had for months been in negotiations with Kuwait to help secure 
its unpaid war debts from Iraq. Asked if the White House had been informed 
of the Carlyle Group's dealings with Kuwait at any point, Ullman replied, 
"I'll get back to you on that." He did not.
According to Kathleen Clark, it is unclear whether Baker is complying with 
the criminal statute and administrative regulations that prohibit government 
officials from participating in government business in which they have a 
financial interest-including matters that affect an outside company that 
employs the official. Clark notes, "even if Baker is somehow being screened 
from profiting from this deal, Carlyle is using Baker's government position 
to benefit themselves." She says it's time for Carlyle and the White House 
to come clean. "There's a tremendous need for transparency here." The White 
House and James Baker's office did not respond to repeated requests for 
comment.
Baker occupies a complicated place in the consortium's January proposal--he 
is both problem and solution, stick and carrot. In the documents, Baker's 
name comes up repeatedly, usually in tones of high alarm. "Mr. Baker's new 
role and the likely emergence of what will be understood as a new round of 
global negotiations over Iraqi debt--casts all of these issues in a new 
light and gives them a new, perhaps even intense, sense of urgency," states 
a letter signed by Madeleine Albright; David Huebner, chairman of the 
Coudert Brothers law firm (another consortium member); and Shahameen Sheikh.
But after establishing Baker's envoy job as the embodiment of the threat 
that Kuwait will lose its reparations payments, the proposal goes on at 
length about the powerful individuals connected to the consortium who will 
"have the ability to gain access to the highest levels of the United States 
Government and other Security Council governments for a hearing of Kuwait's 
views." According to Levinson, "What they are proposing is to completely 
undercut Baker's mission--and they are using their connection with Baker to 
do it."
On January 21, 2004, James Baker's dual lives converged. That morning Baker 
flew to Kuwait as George Bush's debt envoy. He met with Kuwait's prime 
minister, its foreign minister and several other top officials with the 
stated goal of asking them to forgive Iraq's debts in the name of regional 
peace and prosperity.
Baker's colleagues in the consortium chose that very same day to 
hand-deliver their proposal to Foreign Minister Mohammad Sabah Al-Salem 
Al-Sabah--the same man Baker was meeting. The proposal "takes into account 
the new dynamics that have developed in the region," states the cover 
letter, signed by Albright, Huebner and Sheikh--dynamics that include 
"Secretary Baker's negotiations" on debt relief. If Kuwait accepts the 
consortium's offer, they explain, "we will distinguish Kuwait's 
claims--legally and morally--from the sovereign debt for which the United 
States is now seeking forgiveness."
Was it a coincidence that the consortium submitted its proposal on the same 
day Baker was in Kuwait? And which James Baker were Kuwait's leaders 
supposed to take more seriously--the presidential envoy calling for debt 
forgiveness or the businessman named in the proposal as a potential ally in 
their quest for debt payment?
Ahamed al-Fahad, under secretary to the prime minister of Kuwait, told The 
Nation, "I have seen it [the proposal] and I am fully aware of the 
situation." But when asked about Baker's dual role in Kuwait, he said, "It's 
hard to comment on that issue, especially now. I hope you fully understand."
Shahameen Sheikh, the consortium head who made the delivery, says the timing 
was a coincidence. "It had nothing to do with Mr. Baker's visit.... I was in 
the region so I thought I would stop over on the way to Europe and deliver 
the proposal."
We do know this: After meeting with Baker on January 21, Kuwait's foreign 
minister told reporters that Baker had shown "understanding of Kuwait's 
position on war reparations," confirming that the subject did come up. He 
also said that while sovereign debt might be forgiven, reparations would 
not, because "there is an international decision from the UN."
Three days later, when Baker was back in Washington giving a speech, he made 
this distinction for the first time. "My job is to deal with Iraqi debt to 
sovereign creditors, not with war reparations," he said. He also echoed the 
exact line of the Kuwaiti government: that reparations are outside his 
purview because they are "under the jurisdiction of the United Nations 
Security Council and subject to resolutions it has passed."
This was a curious statement: Why would such a large portion of Iraq's debts 
be off the table? It also seemed to contradict other things Baker said in 
the same speech. He said that "any reduction [in Iraq's debt] must be 
substantial, or a vast majority of the total debt." That is impossible 
without addressing reparations, which by some measures account for more than 
half of Iraq's foreign debts. The Center for Strategic and International 
Studies, the center-right think tank hosting Baker's speech, has said it is 
"unwise" to make any debt relief plan "that does not include reparations."
Baker's statement on reparations also placed him at odds with several other 
members of the Bush Administration, including former chief envoy to Iraq 
Paul Bremer. "I think there needs to be a very serious look at this whole 
reparations issue," Bremer said in September 2003. He compared the Iraq 
situation to that of Germany after World War I, when the 1921 Reparations 
Commission forced the Weimar Republic to pay $33 billion. The massive 
reparations "contributed directly to the morass of unrest, instability and 
despair which led to Adolf Hitler's election," Bremer warned.
Yet Iraq continues to make regular reparations payments for Saddam's 1990 
invasion of Kuwait. In the eighteen months since the US invasion, Iraq has 
paid out a staggering $1.8 billion in reparations--substantially more than 
the battered country's 2004 health and education budgets combined, and more 
than the United States has so far managed to spend in Iraq on 
reconstruction.
Most of the payments have gone to Kuwait, a country that is about to post 
its sixth consecutive budget surplus, where citizens have an average 
purchasing power of $19,000 a year. Iraqis, by contrast, are living on an 
average of just over $2 a day, with most of the population dependent on food 
rations for basic nutrition. Yet reparations payments continue, with Iraq 
scheduled to make another $200 million payout in late October.
This arrangement dates back to the end of the first Gulf War. As a condition 
of the cease-fire, Saddam Hussein agreed to pay for all losses incurred as a 
result of his invasion and seven-month occupation of Kuwait. Payments 
started flowing in 1994 and sped up in 1996, with the start of the UN's 
oil-for-food program. According to UN Security Council Resolution 986, which 
created the program, Iraq could begin to export oil as long as the revenue 
was spent on food and medicine imports, and as long as 30 percent of Iraq's 
oil revenues went to the United Nations Compensation Commission (UNCC), the 
Geneva-based quasi-tribunal in charge of Gulf War reparations.
Some of the claims that have been awarded by the UNCC are huge: the cost of 
cleaning up Kuwait's and Saudi Arabia's coastlines from oil spills and 
fires, or the Kuwait Petroleum Corporation's controversial award for $15.9 
billion in lost oil revenues. So far, the UNCC has paid out $18.6 billion in 
war reparations and has awarded an additional $30 billion that has not been 
paid because of Iraq's shortage of funds. There are still $98 billion worth 
of claims before the UNCC that have yet to be assessed, so these numbers 
could rise steeply. That's why there are no accurate estimates of how much 
Iraq owes in war reparations--the figure ranges from $50 billion to $130 
billion.
But the fate of these debts is now highly uncertain. On May 22, 2003--two 
months after the United States invaded Iraq--the Security Council decided to 
cut the percentage of Iraqi oil revenues going to war reparations to 5 
percent. This past May, an Iraqi delegation went to the UN to ask for the 
percentage to be reduced even further, to accommodate Iraq's own 
reconstruction needs. There is growing sympathy for this position. Justin 
Alexander of the debt relief group Jubilee Iraq says that many of the claims 
before the UNCC are inflated and that "even for genuine claims, this is 
Saddam's responsibility, not the Iraqi people's, who themselves suffered far 
more than anyone."
This is where the Carlyle/Albright consortium comes in. The premise of its 
proposal is that Iraq's unpaid debts to Kuwait are not just a financial 
problem but a political and public relations problem as well. Global public 
opinion is no longer what it was when Kuwait was promised full reparations. 
Now the world is focused on reconstructing Iraq and forgiving its debts. If 
Kuwait is going to get its reparations awards, the cover letter argues, it 
will need to recast them not as a burden on Iraq but "as a key element in 
working toward regional stability and reconciliation."
Several parties involved in the consortium emphasized that the proposal 
concerned only reparations debts. Albright Group spokesperson Jamie Smith 
said, "We were asked to join a proposal to secure justice for victims of 
Saddam's invasion of Kuwait and ensure that compensation to Kuwaiti 
victims--which was endorsed by the US government and the United Nations--be 
used to promote reconciliation, environmental improvements and investment in 
Kuwait, Iraq and the region."
In fact, the proposal does not restrict itself to reparations debt. The 
consortium also asks the government of Kuwait to give the consortium control 
over $30 billion in defaulted sovereign debts to be used as political 
leverage to secure reparations claims. Furthermore, most experts on debt 
restructuring agree that Iraq's debts must be looked at as a whole: There is 
little point forgiving Iraq's sovereign debts if the country is still going 
to be saddled with an unmanageable reparations burden. This understanding is 
reflected in the documents, which repeatedly state that Kuwait's reparations 
payments are endangered by the moves to forgive Iraq's debts.
To avert this threat to Kuwait, the consortium proposes a three-pronged 
strategy of aggressive backroom lobbying, clever public relations and 
creative investing and financing. "Any solution for payment of the Unpaid 
Awards...must be politically sellable as reinforcing stability and growth in 
the Gulf and in Iraq. This Proposal provides the strategy, the architecture, 
and the talent to achieve this goal," the document states.
Lobbying: Since the UNCC exists entirely at the discretion of the Security 
Council, which can vote to reduce, suspend or eliminate reparations at any 
time, the part of the proposal dealing with power-brokering is 
straightforward: It suggests a full-on lobbying offensive directed at 
Security Council members, using Albright's connections, but also other 
"eminent" people associated with the consortium like former US Senator Gary 
Hart and former US ambassador to the UN Jeane Kirkpatrick. "We will first 
seek to preserve the five percent of the revenues from Iraqi oil allocated 
as funding for payment of the UNCC awards," the proposal says. To achieve 
this, the consortium will make "discreet contacts at top levels in key 
capitals of Security Council member states and with influential 
representatives," and "interventions with United Nations senior staff to 
shape presentations to the Security Council." The proposal further notes 
that "Germany and Romania may be pivotal, and The Albright Group has very 
close ties to each."
Public Relations: The consortium also has a detailed plan to address the 
perception that reparations are "diverting resources from rebuilding Iraq to 
a more wealthy neighbor." First, Kuwait must assign its unpaid debts from 
Iraq to a private foundation controlled by the consortium. The foundation 
will manage an investment fund that will invest a portion of reparations 
payments from Iraq to Kuwait back into Iraq. As examples of the types of 
investments the foundation would make, Albright, Huebner and Sheikh suggest 
in their letter that the reparations funds could be used to buy Iraq's 
state-owned companies. "In the near future, 40 state-owned Iraqi enterprises 
in a range of sectors will be available for leasing and management 
contracts," they write. By demonstrating that Kuwait is investing part of 
its reparations proceeds back into Iraq's economy, the consortium-run 
foundation "establishes a humanitarian rationale for the United States and 
other countries to continue their support" for the reparations. The 
consortium appears to see privatization--a highly controversial proposal in 
Iraq--as part of a humanitarian mission.
The proposal also suggests more direct public relations strategies. It calls 
for Kuwait to dedicate $1 billion of the reparations awards it has already 
been paid by the UNCC to a Kuwait Environmental Restoration Fund, which the 
consortium would create. The purpose of this fund would be to remind the 
world of "the gravity of the environmental legacy facing Kuwait" and to 
"position Kuwait as the region's environmental leader." The fund would be 
headed by Carol Browner, former head of the US Environmental Protection 
Agency and a principal in the Albright Group.
Investment/Financing: The proposal predicts that on their own, lobbying and 
PR will not be sufficient to secure the amounts that the Kuwaiti government 
hopes to receive in reparations. For the consortium to "maximize the value 
of Kuwait's compensation," Kuwait will have to part with even more of the 
reparations payments it has received. In addition to the $1 billion for the 
environmental fund, the proposal calls for another $2 billion of Kuwaiti 
money to be invested in a Middle East Private Equity Fund. Of that $2 
billion, "$1 billion would be invested, by way of special agreement, in The 
Carlyle Group equity funds" for a period of at least twelve to fifteen 
years. At the end of that period Kuwait will get the return on these 
investments, as well as whatever the consortium has been able to negotiate 
in reparations payments.
For the consortium, it is an excellent deal: Its members get to manage a $2 
billion investment portfolio, collecting healthy management fees as well as 
a percentage of interest. They also will be paid a "retainer" and 5 percent 
of any debts the consortium gets repaid, and "a negotiated percentage of the 
value returned to Kuwait exceeding" the pre-arranged amount.
Other consortium members sharing in these benefits include Fidelity 
Investments; BNP Paribas, a European bank embroiled in the oil-for-food 
scandal; Gaffney, Cline & Associates, an energy company specializing in oil 
and gas privatization; Nexgen Financial Solutions, a financial engineering 
firm partly owned by the government of France; and Emerging Markets 
Partnership, an AIG affiliate headed by a former senior vice president of 
the World Bank, Moeen Qureshi.
In addition to the financial windfall, the arrangement would give this group 
of private companies tremendous power. Whoever holds Iraq's debt has the 
ability to influence policy in Iraq at a moment of extreme political 
uncertainty. Yet for the government of Kuwait the proposed deal is fraught 
with risk. It's true that the fate of its Iraqi reparations looks grim. The 
consortium estimated that if Kuwait tried to sell those debts on the market, 
its $27 billion would be worth only $1.5 billion. But the consortium is 
asking Kuwait to risk $3 billion of reparations money it has already 
received in the hope that it can be used to leverage some of the rest. 
However, as Jerome Levinson points out, "There are absolutely no guarantees 
of even that."
It is clear that the consortium is extremely eager to seal a deal with 
Kuwait. Consortium CEO Shahameen Sheikh writes of making five trips to 
Kuwait in four months; Albright met with Kuwait's foreign minister about the 
issue on April 2, 2004; and the Albright Group's Carol Browner is reported 
to have "personally delivered a copy" of the proposal to his hotel when he 
was in Washington. Yet Kuwait appears reluctant: It took four months to 
reply to the proposal and then it would only say, in a letter dated August 
10, that the proposal "will be taken into deep consideration and is 
currently being studied by the appropriate authorities." According to Ahamed 
al-Fahad, "The issue is now in the hands of the under secretary of foreign 
affairs," who was unavailable for comment. But Salem Abdullah al Jaber 
al-Sabah, Kuwait's ambassador to the United States, said, "As far as my 
information is concerned, my government is not considering such proposals."
Even if the deal falls through, the fact that the Carlyle Group and the 
Albright Group have been engaged in these negotiations may already have 
damaged debt relief efforts, hurting both Iraqi and US interests. Levinson 
points out that the Bush Administration has made commitments that Iraq's oil 
revenues will be spent on reconstruction. Yet the failure to deal with the 
reparations issue means that "part of those resources instead are being 
diverted to Kuwait. Who pays for this? It's the people of Iraq who continue 
to make reparations payments, and it's US taxpayers, who are asked to foot 
the bill for reconstruction, because Iraq's money is going to debt 
payments."
Levinson says this is all the more remarkable because of who is involved. 
"Here you have two former Secretaries of State seemingly proposing to use 
their contacts and inside information to undercut the official US government 
policy." Washington University's Kathleen Clark says the proposal "lays bare 
how former high-level government employees use their access in order to reap 
financial benefits that appear to be enormous."
A case can certainly be made that James Baker and Madeleine Albright have 
had more direct influence over Iraq's debts and reparations payments than 
any politicians outside Iraq, with the possible exception of the forty-first 
and forty-third Presidents of the United States.
As Secretary of State, Baker played a role in running up Iraq's foreign 
debts in the first place, personally intervening in 1989 to secure a $1 
billion US loan to Saddam Hussein in export credits. He was also a key 
architect of the first Gulf War, as well as of the cease-fire that required 
Saddam to pay such sweeping reparations. In his 1995 memoirs, The Politics 
of Diplomacy, Baker wrote that after seeing the oil-well fires in Kuwait he 
cabled President George H.W. Bush and said, "Iraq should pay for it." Now, 
through the consortium, Carlyle could end up controlling $1 billion of those 
payments.
The role of the Albright Group raises similar questions. As Secretary of 
State and Ambassador to the UN, Madeleine Albright participated personally 
in drafting UN Resolution 986, which created the oil-for-food program, 
diverting 30 percent of Iraq's revenue from oil sales to war reparations. 
"It's a great day for the United States because we were the authors of 
Resolution 986," she said on The NewsHour With Jim Lehrer on May 20, 1996. 
Now, as a private citizen, Albright is a leading member of a consortium that 
is exploiting her connections to try to profit from the very reparations she 
helped secure. Albright also enforced the brutal sanctions campaign against 
Iraq, one of the effects of which was the hobbling of Iraq's state 
companies. Now, she is part of a plan to use Iraq's reparations payments to 
buy the very firms that her sanctions program helped to debilitate.
But it is Baker's envoy post that raises the most serious questions for the 
White House, especially because a Special Presidential Envoy is the 
President's personal representative, meeting with heads of state in the 
President's stead and reporting back directly to the President. If a 
President's envoy has a conflict of interest, it reflects directly on the 
highest office. Clark says, "There is absolutely a conflict of interest. 
Baker is aligned with two parties--the US government and Carlyle--that are 
not aligned with each other."
As envoy, Baker's job is to do his best to clear away Iraq's debts, 
lessening the burden on Iraqis and on US taxpayers. Yet as a businessman, he 
is an equity partner in a company that is part of a deal that would achieve 
the opposite result. If Baker the envoy succeeds, Baker's business partners 
stand to fail--and vice versa.
Have these conflicts influenced Baker's performance as envoy? Has he pushed 
as hard as he could have for debt forgiveness? We know that Iraq's steep war 
reparations to Kuwait have largely escaped public scrutiny--if Baker has 
steered the Bush Administration away from the reparations issue, for whom 
was he working at the time? The White House? Or Carlyle? Clark says 
questions like these are precisely why conflict-of-interest regulations 
exist. "We have reason to doubt that Baker is doing everything he could be 
doing on behalf of the United States because he has an interest in another 
side of the transaction."
This issue is all the more pressing because the file that President Bush 
handed to Baker is in disarray--ten months on, there is significantly less 
goodwill toward forgiving Iraq's debt than when Baker arrived. When 
President Bush appointed him, he praised Baker's "vast economic, political 
and diplomatic experience." And at first, Baker seemed to be making fast 
progress: After top-level meetings, France, Russia and Germany appeared open 
to canceling a large proportion of debt owed to them by Iraq, and Saudi 
Arabia and Kuwait seemed ready to follow.
But now, the negotiations are not only stalled, they seem to be going 
backward. Kuwait, for its part, has hardened its position. "Debts remain 
debts," Foreign Minister Mohammad Sabah Al-Salem Al-Sabah said recently. And 
it has intensified its demands for Gulf War reparations, joining with Saudi 
Arabia, Iran, Jordan and Syria to claim an additional $82 billion from Iraq 
in environmental damages.
And the Europeans? At a Senate Foreign Relations Committee hearing on 
September 15, Senator Joseph Biden Jr. asked Ronald Schlicher, Deputy 
Assistant Secretary of State for Iraq, about the status of the international 
negotiations.
"Has a single nation in the G8...formally said or requested of their 
parliaments to forgive Iraqi debt?" Biden asked.
"Not yet. No sir," Schlicher replied.
Not only has Baker failed to deliver any firm commitments for debt 
forgiveness; at the annual meeting of the International Monetary Fund on 
October 2, it emerged that France had done an end run around Washington and 
was pushing a debt-relief deal of its own. French Finance Minister Nicolas 
Sarkozy announced that he had lined up Russia, Germany and Italy behind a 
plan to cancel only 50 percent of Iraq's debts--a far cry from the 90-95 
percent cancellation Washington had been demanding. Yet Baker was nowhere to 
be found.
Busy negotiating the rules of the presidential debates, Baker has been MIA 
on the debt issue. Since he returned from his trip to the Middle East in 
January, the President's envoy has issued only two public statements on 
Iraq's debt, and he has been completely silent on the topic for the past six 
months--despite having publicly committed to getting the debt issue sewn up 
by the end of the year.
While this is bad news for Iraqis and for US taxpayers, it could be good 
news for Carlyle. A swift resolution to Iraq's debt crisis works against its 
financial interest: The longer the negotiations drag on, the more time the 
consortium has to convince the reluctant Kuwaiti government to sign on the 
dotted line. But if Iraq's debt is successfully wiped out, any proposed deal 
is off the table.
Baker's position as envoy has certainly been useful to his colleagues in the 
consortium. Whether Baker has helped solve Iraq's debt crisis is far less 
clear.

 stato e quando a fare simili affermazioni
certo, certo
-- 
Luca Logi - Firenze - Italy        e-mail: 
ll...@dada.it