Senators Question Halliburton Executive About Dealings in Iran

May 1, 2007

By MICHAEL LUO

WASHINGTON, April 30 — A Halliburton executive, facing withering criticism from Democratic lawmakers during a Senate hearing on Monday about the company’s business dealings in Iran, insisted that the firm had not broken any laws.

The official, Sherry Williams, a Halliburton vice president and corporate secretary, said the company had consulted several law firms in 1995 after sanctions were imposed on Iran. Officials of the company, which recently announced it was moving its chief executive from Houston to Dubai and establishing a corporate headquarters there, determined that it was legal for independent foreign subsidiaries of United States companies to do business there, she said.

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Mystery of the Missing Meters: Accounting for Iraq's Oil Revenue

by Pratap Chatterjee, Special to CorpWatch March 22nd, 2007

The line of ships at the Al Basra Oil Terminal (ABOT) stretches south to the horizon, patiently waiting in the searing heat of the Northern Arabian Gulf as four giant supertankers load up. Close by, two more tankers fill up at the smaller Khawr Al Amaya Oil Terminal (KAAOT). Guarding both terminals are dozens of heavily-armed U.S. Navy troops and Iraqi Marines who live on the platforms. These two offshore terminals, a maze of pipes and precarious metal walkways, deliver some 1.6 million barrels of crude oil, at least 85 percent of Iraq's output, to buyers from all over the world. If the southern oil fields are the heart of Iraq's economy, its main arteries are three 40-plus inch pipelines that stretch some 52 miles from Iraq's wells to the ports. Heavily armed soldiers spend their days at the oil terminals scanning the horizon looking for suicide bombers and stray fishing dhows (boats). Meanwhile, right under their noses, smugglers are suspected to be diverting an estimated billions of dollars worth of crude onto tankers because the oil metering system that is supposed monitor how much crude flows into and out of ABOT and KAAOT - has not worked since the March 2003 U.S. invasion of Iraq. Officials blame the four-year delay in repairing the relatively simple system on "security problems." Others point to the failed efforts of the two U.S. companies hired to repair the southern oil fields, fix the two terminals, and the meters: Halliburton of Houston, Texas, and Parsons of Pasadena, California. The Special Inspector General for Iraq Reconstruction (SIGIR) is scheduled to publish a report this spring that is expected criticize the companies' failure to complete the work. Smuggled Three Ways Oil smuggling is believed to be occurring in three different ways in Iraq: 1. Iraqi crude. At ABOT, officials at Iraq's state-owned South Oil Company (SOC) that extracts the crude, and at the State Oil Marketing Organization (SOMO) that pipes the crude to the terminals, would have to know about smuggling, even if they were not benefiting from the scheme. Buyers from Brazil to India, from Thailand to the United States, purchase crude from Iraq at ABOT. The tanker operators would also have to be part of smuggling schemes. They would sign receipts for a lower quantity than they actually receive, and pay the extra directly to the smugglers. The most likely collaborators are either Iraqi or U.S. officials who supervise the production and delivery. Or both. 2. Imported fuel. Iraq spends a small fortune to buy fuel from neighboring countries including Iran, Kuwait, Saudi Arabia, and Turkey. Much of this fuel goes to local drivers at a subsidized rate, and constitutes possibly the single most expensive item in the national budget after government salaries. In 2005 Iraq spent $4.2 billion of its $24.2 billion gross domestic product (GDP) on imported oil; the bill for 2006 is expected to exceed $5 billion. Smugglers siphon off a significant amount of the government subsidized fuel to sell back overseas at full price: The Ministry of Oil estimates the value at $800 million. 3. Theft of locally-produced gasoline. Iraqi gasoline is stolen from refineries or illegal taps on pipelines and resold within the country or smuggled abroad. Another $800 million worth of black market fuels is sold within Iraq, in places from Penjwin in the far north, to Abu al-Khasib in the south. (see next box) The U.S. military believes that the money from these operations funds insurgent operations, although evidence suggests that some also goes to straightforward petty corruption. In mid-March 2007, the U.S. military launched "Operation Honest Hands" which brought the Beiji refinery under control of the 82nd Airborne Division. The U.S. government paid to install video cameras, digital weighing machines for the trucks, and "sophisticated data-sifting methods" to identify senior Iraqi officials with ties to black-market oil rings, according to the Wall Street Journal. Two senior officials have been arrested so far: Ibrahim Muslit, who ran the Beiji refinery's oil-distribution operation and allegedly allowed 33 tankers in a single day to receive fuel without any paperwork. Ahmed Ibrahim Hamad, a senior transportation official at the refinery who allegedly tried to help smuggle out seven tankers of heavy fuel oil. Soldiers are also checking up on trucks and gasoline stations in the neighborhood around the refinery to try and catch smugglers in the act. Rumors are rife among suspicious Iraqis about the failure to measure the oil flow. "Iraq is the victim of the biggest robbery of its oil production in modern history," blazed a March 2006 headline in Azzaman, Iraq's most widely read newspaper. A May 2006 study of oil production and export figures by Platt's Oilgram News, an industry magazine, showed that up to $3 billion a year is unaccounted for. "Iraqi oil is regularly smuggled out of the country in many different ways," an oil merchant in Amman told the Nation (U.S.) magazine last month. "Emir al-Hakim [the head of the Supreme Council of the Islamic Revolution in Iraq] is spending all his time in Basra selling oil as if it were his own. People there call him Uday al-Hakim, meaning he is behaving the same way Uday Saddam Hussein was acting. Other merchants like myself have to work through him with the big deals or smuggle small quantities on our own. The petroleum is now divided among political parties in power." The Resource Curse The smuggling and black market operations bear striking parallels to Saddam Hussein's tactics for circumventing the UN embargo. Saddam was accused of selling some $5.7 billion worth of petroleum products on the black market over the six years of the Oil-for-Food program while United Nations inspectors turned a blind eye. Today, his successors stand accused of similar abuses. Iraq sits on 115 billion barrels of proven oil reserves, the third largest in the world (behind Saudi Arabia and Canada). From a society that once used its oil revenue to create a social welfare state that provided education, health care and social services, the country has plummeted into the ranks of the poorest countries of the world. Economists call this the "resource curse." Those blessed with non-renewable resources often benefit the least, because a few wealthy people control the resources, or war prevents almost anyone from the benefiting. Iraq's main revenue source – earnings from the export sales of petroleum, petroleum products and natural gas – is currently managed by the Development Fund for Iraq. DFI's May 21, 2003 document, United Nations Security Council Resolution 1483, assigns this money to benefit the Iraqi people. The resolution replaces the previous United Nations-run Oil-for-Food scheme that lasted from 1997 until the March 2003 invasion. Almost four years after the DFI was created, officially logged crude sales have generated more than $80 billion. The U.S.-led Coalition Provisional Authority (CPA) managed the DFI from the immediate aftermath of Saddam's removal until June 28, 2004, when the CPA was disbanded. During those 14 months, the CPA spent $19.6 billion of Iraq's DFI funds. The three succeeding governments have been officially in charge of the DFI revenues, although the influence of the U.S. military and political advisors has remained significant throughout. In the 32 months after the CPA left, the three governments spent $47 billion more. Three Kinds of Gasoline A ten-foot-high hill of empty jerry cans is all that remains of a recent unauthorized gasoline delivery. The green plastic containers sit by the side of a road leading out of the town of Penjwin, high up in the Kurdish mountains, a stone's throw from the border of Iran. A little further down the road that winds through some of the most heavily mined countryside in Iraq, boys and men openly hawk smuggled gasoline. A smiling boy runs up to drivers who slow and stop. He quickly produces a funnel and up-ends full jerry cans into their gas tanks. This is Iraqi's unofficial version of a gas station or petrol pump. Authorities are well aware of the smuggling, but there is nothing they can do. "They bring it over the border from Iran," says a police officer pointing east to the mountain pass just a couple of miles away. He continues to direct traffic nearby and asks not to be named, The official price of gasoline in Iraq today is about 300 dinar a liter for regular and 350 dinar for diesel (about $1 a gallon). Official gasoline supplies are in short supply and heavily rationed. Drivers often queue for more than a day for a meager allotment. This situation is in stark contrast to Saddam Hussein's Iraq where new cars were rationed to wealthy or well- connected individuals, and subsidized gasoline sold for five cents a gallon. Today at many busy street corners in Iraq, black market fuel is readily available. In northern Iraq, for example, three kinds of gasoline are available to buyers: a plastic 20 liter jerry can of the cheapest transparent Iraqi gasoline retails for 12,000 dinar. It comes from the northern Iraqi refinery of Beiji. Better quality yellowish Iraqi gasoline retails for 15,000 dinar and comes from the Baghdad refinery of Daura. The best stuff, pale red Iranian gasoline, has been trucked over the mountain and sells for 17,000 dinar for a smaller 16 liter jerry can. This is two to three times the official price, and five times more expensive than in Kuwait or Saudi Arabia. Paradoxically, while Iraqis have to buy smuggled gasoline from Iran, some of their own reserves are being trafficked in the opposite direction, from Iraq to Iran. Some 600 miles to the south of Penjwin, in the riverside town of Abu al-Khasib, near Basra, a small flotilla of fishing boats sets sail every morning. The boats, filled with fuel supplied by the Iraqi government at the specially subsidized price of just 10,000 dinar a ton (about $7.50), return every night, empty of fish, but stocked with cash. The source of their wealth is Iranian vessels that deliver freight to the harbor of Abu Floos, where prices are almost 100 times higher. Ironically, Colonel Najim Abdulla, the commander of coast guard patrols in Basra, told a reporter that his force is denied enough fuel to pursue the scofflaws. "I can't chase smugglers who are well aware of our shortages," he said. Halliburton & Parsons U.S. contractors have played a key role in the repair and upgrading of Iraq's oil infrastructure and expected the industry to pay for reconstruction. In January 2004, under project Restore Iraqi Oil II (RIO II), the Bush administration contracted with Halliburton to fix southern Iraq's oil fields and with Parsons to handle the northern fields. The two companies were supposed to be supervised by yet another contractor, New Jersey-based Foster Wheeler. (The first RIO contract was the infamous, secret no-bid contract issued to Halliburton before the invasion of Iraq. Although RIO II was competitively bid, Sheryl Tappan, a former Bechtel employee wrote a book criticizing the award as unfair.) Halliburton and Parsons have long histories in Iraq, going back more than 40 years. Brown & Root, which is now part of Halliburton , began work in Iraq in 1961, while Parsons dipped into Iraq's oil sector in the 1950s. Foster Wheeler dates its work in Iraq to the 1930s. These companies have a lot of experience at the terminals where the black market now thrives. Indeed, Halliburton built the ABOT terminal, then known as Mina al-Bakr, in the early1970s. After it was damaged during the Iran-Iraq war in the 1980s, Halliburton repaired the terminal, before it was bombed yet again during the 1991 Persian Gulf War. The Khor al-Amaya oil terminal also saw a similar cycle of destruction and rebuilding. Built with Halliburton 's help in 1973, it was heavily damaged by Iranian commandos during the Iran-Iraq war, then again during Operation Desert Storm in 1991, and most recently in May 2006 by a major fire that destroyed 70 percent of its facilities. During the sanctions, Ingersoll Dresser Pump Company, a Halliburton subsidiary, had a secret contract to sell Iraq spare parts, compressors, and firefighting equipment for the refurbishment. ( Halliburton also a long history near the Turkish port of Ceyhan, from where Iraq sells oil produced at Kirkuk in northern Iraq. Halliburton runs the nearby U.S. military base at Incirlik, which was the staging ground for Operation Northern Watch that provided air protection for the Kurds during the 1990s.) Measuring the Oil With billions of dollars to spend and extensive experience with oil infrastructure and Iraqi ports, Haliburton and Parsons seem unable to deal with the routine problem of broken meters at the Southern Iraq terminals. The kinds of meters they were supposed to repair or replace at ABOT are commonly found at hundreds of similar sites around the world. Because they are custom-built, shipped, then assembled and calibrated on site, the process can take up to a year. But the probelm has persisted for four years. After the 2003 invasion, the meters appear to have been turned off and there have since been no reliable estimates of how much crude has been shipped from the southern oil fields. (The northern oil fields in Kirkuk, which supply the Beiji refinery in Iraq and export crude to the Turkish port of Adana, has reliable metering but little oil to measure since insurgent attacks largely shut down the facility.) Oil Meters Three kinds of meters are used around the world today: positive displacement meters, turbine meters and ultrasonic meters. A displacement meter measures the rate at which compartments of known volume are filled with the liquid or gas; a turbine meter is simply a pipe with a spinner that measures the volume that passes through it; while an ultrasonic meter uses sound frequencies to measure flow rates. Each has advantages and disadvantages. Before the 1991 Gulf War, ten turbine meters were installed on ABOT's platform A, while ABOT's platform B got 16 positive displacement meters. In January 2007, the U.S. government installed ultrasonic meters to verify the older meters. In the late 1990s, the United Nations hired Saybolt International, a Dutch company, to make sure that Saddam Hussein was only selling crude under the Oil-for-Food program. However CorpWatch interviews indicate that the inspectors could not rely on the meters at the time because they were not calibrated. Instead Saybolt relied on a simple and effective way of determining how much was being shipped: It measured the amount of crude loaded into the tankers. Lieutenant Aaron Bergman, the U.S. Navy officer in charge of Mobile Security Squadron 7 at ABOT, says export authorities have "guesstimated" how much is being sold, with a back-of-the-envelope formula: Every centimeter a tanker lowers into the water equals 6,000 barrels of oil cargo. "So you can imagine," he said earlier this month to Stars & Stripes, a newspaper serving the U.S. military, the numbers could be off, "A couple of inches could equal 180,000 barrels of fuel." "I would say probably between 200,000 and 500,000 barrels a day is probably unaccounted for in Iraq," Mikel Morris, who worked for the Iraq Reconstruction Management Organization (IRMO) at the U.S. embassy in Baghdad, told KTVT, a Texas television station. Neither US officials nor contractors have provided good reasons why, four years into the US occupation, the meters have not been calibrated, repaired, or replaced. One excuse is that the job of calibration requires special devices to assess the current meters and security issues make importing these devises problematic. Yet that and other security-related explanations fall apart given that the oil terminals are under 24 hour high security guard, lie more than 50 miles off-shore, and are accessible only by helicopter or ship. There are two possible explanations: that the project has been delayed by bureaucracy or that vested interests benefiting from the lack of oil metering (such as smugglers or corrupt officials) have prevented the project from moving forward. Skyrocketing Costs The RIO II project, which includes the meter repair work, has come under much criticism, although specific details are scarce. For example, the Bush administration issued Halliburton the RIO II order in January 2004 and gave detailed task orders in June. But despite not starting work until November 2004, the company charged the government millions of dollars for engineers who sat idle. Halliburton 's $296 million bill included at least 55 percent overhead. (In an estimate due later this month, SIGIR may predicts even higher overhead costs.) A Parsons joint venture (with Worley of Australia), was also issued a contract in January 2004, given detailed task orders in June, and started work in July 2004. It has also been accused of charging high overhead costs while idle, although not as much as Halliburton . SIGIR estimate pegs its overhead at 43 percent. In addition, in a series of scathing internal reports uncovered by Congressman Henry Waxman, supervisors Foster Wheeler criticized Halliburton 's cost. The U.S. Army Corps of Engineers issued a "cure" notice on January 29, 2005, ordering Halliburton to do a better job or else. After Halliburton did improve its cost controls, the military turned over the southern oil work to Parsons in mid 2005. When Parsons took over the contracts, two years after the invasion, it hired a Saudi Arabian sub-contractor, Alaa for Industry, to help repair or replace the meters. The turbine meters were shipped to Kuwait for repairs but do not appear to have been fixed in a timely manner, although some have been fixed and re-installed earlier this year. Unofficial sources suggest that the Kuwaiti bureaucracy delayed the repair work: "The real reason for the hindrance to work at the ABOT is because Kuwait has a vested interest in minimizing Iraqi oil exports," an anonymous source who worked on the project told CorpWatch. His claim could not be verified. In mid-September 2006, the Iraqi oil ministry abruptly announced that it would pull the plug on the oil metering project, making future monitoring even less certain. Asim Jihad, the oil ministry spokesman, told Al Hayat: "The American company had failed in keeping its promise to finish installing these meters; also, refusing to reveal the exact cost, except for saying that it is executing it within the American grant to Iraq and the sum of that grant is unknown to us too. This relieves the ministry from its obligation to it. Besides, many international companies presented good offers to implement the project in a record time due to its importance." The oil ministry then invited British Petroleum and Shell to plan a comprehensive national metering project that would cover not only the oil terminals, but also the productions wells and the even the refineries. A SIGIR team traveled to ABOT in November 2006 to check on progress. Its unpublished report suggests that the work was less than half complete. Suddenly, in December 2006, a high-level U.S. team traveled out to ABOT to inspect the meters. In a little-noticed announcement issued on a Saturday just before Christmas, John Sickman, the resident oil expert at the U.S. Embassy in Baghdad, said the meters had been fixed and were working fine. "The measurement using the existing turbine meters and displacement meters at the offshore terminal at ABOT is transparent and the measurement devices are more than adequate," Sickman was quoted in the press release. "Furthermore, the crude oil vessels have measurement and quality samplers." Indeed this is how the Dutch company Saybolt measured oil export under the United Nations Oil for Food program. The problem even today, according to experts consulted by CorpWatch, is that the meters have yet to be calibrated, so the data are basically useless. Even if the meters are working properly, smuggling could still occur. "It's easy to steal crude if you knew what you were doing," Don Deaver, a petroleum metering expert who worked for Exxon for 33 years, told CorpWatch. "If you meaure too low or too high, someone will lose and some will one gain. It's why you need professionals who understand how the meters work to make sure that nothing is being lost or stolen." U.S. government officials claim that little is being stolen. SGS (a British consultancy) "is providing independent third party loading certifications onsite for the customers. This, coupled with the recent installation of ultrasonic meter provides more than redundant measurement capability," said Sickman in December. Days after the press release, in early January 2007, Parsons began work on the meters under a $57.8 million U.S. government-funded contract supervised by Major Dale Winger of the Joint Contracting Command in Basra. Almost as soon as work started, Winger was replaced by Lieutenant Commander Brian Schorn. When CorpWatch reached Schorn, he said he was not up to speed on what work had been done, and referred questions to his "front-office" in Baghdad at the U.S. Army Corps of Engineers. Parsons Iraq Joint Venture spokesman Don Lassus also refused to comment to CorpWatch. The contract with the military does not permit the release of "any unclassified information," he said, without prior approval of the military. Today no government officials have been able to establish conclusively whether oil is being smuggled or not. Even the future of the oil metering remains unclear. The latest report issued by SIGIR in January 2007 notes that repair and rehabilitation work at ABOT is scheduled to be finished by May 2007, but "it is unclear whether this project will be completed because of de-obligation requirements" that is to say that the funding could be cut. This is the second in a series on the failure of reconstruction in Iraq. The first article, on healthcare in Iraq, may be read here: http://www.corpwatch.org/article.php?id=14290 To contact the author, e-mail pratap@corpwatch.org

Halliburton flees Iran

Halliburton winds up Iran work

Mon Apr 9, 5:45 PM ET

US oil services giant Halliburton said Monday it had wrapped up its work commitments in Iran and was no longer conducting any projects in the Islamic republic.

Halliburton announced in January of 2005 that it was shutting-down its Iran operations, but would honor existing "contractual commitments" until they were fulfilled. Its activities in Iran were managed by non-US staffers.

"Halliburton announced today that all of its contractual commitments in Iran have been completed and the company is no longer working in Iran," the firm said in a brief statement.

The company, headed by Dick Cheney from 1995 to 2000 before he became vice president, added that its "prior business" in Iran was "clearly permissible under applicable laws and regulations."

Halliburton was involved in at least one contract to drill for gas in Iran in 2005 although the contract was subsequently cancelled by Iran's government.

It had won the contract even though a US law, dating to 1996, threatens sanctions on US and foreign groups that invest over 40 million dollars in Iran's energy sector.

Halliburton carried out between 30 and 40 million dollars worth of oilfield service work in Iran, according to the firm, which has said its operations in the country were "miniscule."

The company might be pulling out of Iran, which has troubled political relations with the United States, but it is boosting its footprint elsewhere in the region.

Halliburton said last month that it was relocating to the United Arab Emirates to capitalize on the Gulf region's booming energy market.

Halliburton: From Bush's favourite to a national disgrace

It is a symbol of American cronyism, the beneficiary of lucrative Iraq contracts thanks to its relationship with Dick Cheney. Now Halliburton is relocating to Dubai - and US politicians are outraged.

By Andrew Buncombe

Published: 14 March 2007

The story begins in 1919 with Erle Halliburton sitting up late one night with his wife, Vida, worrying about money. Squeezed together in their one-room home in the Oklahoma dustbowl town of Wilson, the couple were trying to work out how to meet the next payment on Halliburton's fledgling business, the New Method Oil Well Cementing Company.

At about 1am, so the story goes, the pale light from a small lamp reflected off his wife's wedding ring. "I sat there admiring it when the thought came to me," Vida would later tell Jeffrey Rodengen, author of The Legend of Halliburton. "Here is the money we need. At first hubby would not listen to me... but I argued we could get it back. So we went to sleep all thrilled with the new idea of cementing, the new means of getting jobs, and the money."

The rest, as is so often said, is history. Halliburton pawned his wife's wedding ring and set to work servicing drilling operations not just on the Healdton oilfield close to where they lived in Oklahoma, but also in Louisiana and Texas. The following year he changed the company's name to the Halliburton Oil Well Cementing Company.

Today, almost 90 years after Vida Halliburton's eyes glanced upon the gold band around her finger, the company that took the family name is now a vast multinational with operations in more than 120 countries. It enjoys a remarkably close relationship with the Bush administration whose Vice-President, Dick Cheney, was its CEO between 1995 and 2000, and holds no-bid contracts worth billions of dollars. Last year it made $2.6bn (£1.3bn) in profits from revenues of $22.6bn.

But Halliburton also comes with plenty of controversy and the company has been at the centre of numerous inquiries over alleged accounting malpractice, suspicious payments to officials and overcharging. It has been accused of breaching US sanctions that prohibit companies from operating in places such as Iran and was also blamed for damaging the historic Iraqi site of Babylon, where it helped establish a US base. Currently the company is being investigated by the Justice Department and the Securities and Exchange Commission over allegations of improper dealings in Kuwait, Nigeria and Iraq. And this week the company fuelled even more controversy when it announced that it was moving its chief executive and its corporate headquarters from Houston, Texas, to Dubai in the United Arab Emirates. It has insisted that it would remain incorporated in the US - actually in the state of Delaware - and that its move would not affect its tax position. It also emphasised that it would retain a corporate office in Houston from where most of its executives would continue to operate.

But news of the proposed move, announced at the weekend, has brought an immediate and bitter backlash. A number of senior Democrats have accused the company of nothing less than a blatant attempt to avoid both paying US taxes and the heat of the ongoing federal investigations into its business operations. How could a company that had benefited from so many government contracts, they asked, simply up and leave? There were vows that Congress would launch new investigations.

The outrage was led by no one less than Senator Hillary Clinton, one of the leading contenders for the Democratic nomination for president. "I think it's disgraceful that American companies are more than happy to try and get no-bid contracts, like Halliburton has, and then turn around and say 'But you know, we're not going to stay with our chief executive officer, the president of our company, in the United States any more'," she said at a press conference in New York.

"Does this mean they're going to quit paying taxes in America? Is this going to affect the investigations that are going on? Because we have a lot of evidence about their misuse of government contracts and how they have cheated the American soldier, cheated the American taxpayer. They have taken money and not provided the services."

Democratic Senator Patrick Leahy of Vermont said the move was "an example of corporate greed at its worst". He added: "This is an insult to the US soldiers and taxpayers who paid the tab for their no-bid contracts and endured their overcharges all these years. At the same time that they're avoiding US taxes, I'm sure they won't stop insisting on taking their profits in cold, hard US cash."

Halliburton dismisses the criticisms. Announcing the company's decision at a regional energy conference in Bahrain, the company's president, chairman and CEO, Dave Lesar, said the move reflected the growing importance of the Middle East and the Asian energy markets. Last year more than 38 per cent of Halliburton's $13bn oil field services revenue came from the eastern hemisphere.

"As we invest more heavily in our eastern hemisphere presence, we will continue to build upon our leading position in the North American gas-focused market through our excellent mix of technology, reservoir knowledge and an experienced workforce," he said. "The eastern hemisphere is a market that is more heavily weighted toward oil exploration and production opportunities and growing our business here will bring more balance to Halliburton's overall portfolio." The company also insists that it will gain no tax advantage from the move, as it will remain legally incorporated in the US.

In a statement to The Independent, a company spokeswoman, Melissa Norcross, said: "These assumptions and suppositions are absolutely untrue and unfounded. Halliburton is, and will remain, a US corporation, incorporated in Delaware, with its principal executive office in Houston, Texas. As such, we anticipate absolutely no tax benefits from this decision."

Halliburton, which is in the process of spinning off its KBR arm, has long enjoyed a close relationship with the Bush administration, and indeed, with previous US governments. It has most recently been in the public eye for its contracts in Iraq - the Logcap (or Logistics Civilian Augmentation Programme) under which it provides military support services such as meals, laundry and fuel supplies and the Restore Iraqi Oil (RIO) contract. Reports say the estimated value of the contracts stands at more than $25bn. A number of its contracts were awarded on a no-bid basis - which drew criticism not just from watchdogs but from other companies seeking their share of the spoils of the so-called Iraqi "reconstruction" projects.

Industry observers say Halliburton enjoys a near unique position within the US corporate world. "People always look at Dick Cheney and say he is the poster-boy of cronyism but at a bureaucratic level there has also been a lot of revolving doors from the Army Corps of Engineers to Halliburton or else consultants to Halliburton," said Charlie Gray of HalliburtonWatch.Org, a project of the Centre for Corporate Policy, a non-profit group based in Washington. He added: "Given the multiple ongoing investigations into Halliburton's alleged wrongdoing, policy-makers should closely scrutinise Halliburton's latest move, and whether it will allow the company to further elude accountability. Moreover, this underscores the need for Congress to bar companies that have broken the law, or avoided paying taxes, from receiving federal contracts."

Pratap Chaterjee, director of CorpWatch, another watchdog organisation, agreed that Halliburton's position was remarkable. But he said the company was not simply close to the Bush administration - to which it has been a sizeable political donor - but that it had enjoyed a relationship with previous US administrations. He pointed out that KBR's predecessor, Brown and Root, had operated in Vietnam and had faced similar accusations of over-charging and corruption as well as allegations that it was too close to President Lyndon Johnson. Indeed, a young Illinois congressman called Donald Rumsfeld travelled to Vietnam to investigate such allegations. Brown and Root also won contracts from President Bill Clinton for work in the Balkans. Long before that, Erle Halliburton, who died in 1957, had loaned his yacht to the US military during the Second World War.

"They are somewhat unique in that their former CEO is now the Vice-President," said Mr Chaterjee. "They are somewhat unique in that they have a long relationship with US governments. It's not limited to the Bush administration." Mr Chaterjee, along with some industry analysts, believes the move to Dubai could make sense from a business point of view alone. "There's not much oil in Texas any more," Dalton Garis, a US energy economist at the Petroleum Institute in Abu Dhabi, told the Associated Press. "Halliburton is in the oil and gas industry and guess what? Sixty per cent of the world's oil and gas is right here. If they didn't move now, they'd have to do it later."

Yet others have pointed out that even if the company remains incorporated in the US and eligible to pay some US taxes there are likely to be financial benefits of moving to Dubai, a boom city, whose tax-free zones have lured around a quarter of the Fortune 500 top companies to establish corporate headquarters there. Sarah Anderson of the Institute for Policy Studies, said: "With today's technologies, there's no real reason to have to physically relocate. Those that have are trying to evade US oversight and tax authorities. And Dubai is a tax-free haven - no corporate or employee taxes. Halliburton claims this is not a big deal, but I can't imagine Lesar will be working over there alone in a little cubicle. This will be a much-expanded operation in Dubai." She added: "Despite the billions in US government contracts Halliburton has received, it has no loyalty or sense of obligation to US troops or taxpayers. I find it ironic that Lesar is going to the same place as one of the only other individuals who's received even more bad publicity in recent years - Michael Jackson."

The controversy is not going to go away any time soon. Congressman Henry Waxman, the Democrat who heads the House Oversight and Government Reform Committee, is poised to announce that he will hold an inquiry into the proposed move.

Halliburton: In the Company of Thieves

This Week in Babylon

Posted on Friday, March 9, 2007. Halliburton in Nigeria, Iran Pushback, Comfort Women Make Abe Uncomfortable

Sources

Over the past few years, information has been dripping out about a scheme in which an international consortium led by a Halliburton subsidiary apparently bribed Nigerian officials to win construction contracts worth $5.3 billion. The four-member consortium, called TSKJ, beat out a bid from another group headed by Bechtel Corporation, and it now seems possible that Bechtel may be dragged into the scandal as well. In addition, there are questions about whether Vice President Dick Cheney, the former head of Halliburton, had knowledge (or chose not to have knowledge) of the illegal payments.

The story dates to 1995, when TSKJ was awarded an initial contract for $2.2 billion by the notorious regime of General Sani Abacha. It subsequently emerged that the consortium's agent in Nigeria, a British lawyer named Jeffrey Tesler, had created a firm in Gibraltar to manage the consortium's Nigerian business, and it seems that the Gibraltar company made $176 million in mysterious payments related to the project, with much of that money believed to be kickbacks to Nigerian officials.

When the original deal was signed in 1995, TSKJ was headed by an American firm called M.W. Kellogg. Halliburton got involved in 1998 (when Cheney was CEO) and it purchased Kellogg's parent firm. Kellogg was then merged with Brown & Root, a Halliburton unit, to form KBR, which continued to manage the firm's business in Nigeria. In March 1999, with Cheney still at the helm, TSKJ won a second contract worth $1.4 billion, and three years later, when Cheney was already V.P., the consortium won a third contract worth $1.7 billion.

Ever since these accusations first saw light, Halliburton has claimed that any dirty deals that took place occurred almost entirely before it became a partner in the consortium. But the series of agreements that TSKJ signed with Tesler to manage the deal includes several agreements that were made after Halliburton got involved, as well as one signed when Cheney was CEO. A few years ago, I interviewed Olivier Schnerb, an attorney for a former executive with another TSKJ member, the French firm Technip, and he affirmed Tesler made questionable payments well after Halliburton joined the project. “The plan,” he explained, “was to corrupt Nigerian officials.”

Meanwhile, Le Figaro has reported that Tesler deposited several million dollars in a Swiss bank account controlled by A. Jack Stanley, whom Cheney had picked to head KBR and oversee the company's interests in Nigeria. Tesler acknowledged making payments to Stanley, but he claims they were only to obtain local Nigerian currency for the project. This seemed far-fetched even to Halliburton, which subsequently severed all ties with Stanley on the grounds that he had violated the company's “codes of business conduct.”

That's the recap. But Halliburton's newly filed 10-K with the Securities and Exchange Commission includes some interesting new revelations and hints that more damaging information will be coming down the pike. According to the filing there are ongoing probes into the matter in the United States (by the SEC and the Justice Department), in Nigeria, in France, and in Switzerland. “We also believe,” reports the filing, “that the Serious Frauds Office in the United Kingdom is conducting an investigation.” According to the filing the SEC has issued a subpoena to Stanley, “and to others, including certain of our and KBR's current and former employees, former executive officers of KBR, and at least one subcontractor of KBR.”

After becoming the target of multiple international investigations, Halliburton says that it believes that payments were in fact made to Nigerian officials. In fact, the 10-K states that information uncovered by the company last summer indicates that, “prior to 1998, plans may have been made by employees of The M.W. Kellogg Company to make payments to government officials in connection with the pursuit of a number of other projects in countries outside of Nigeria.”

A well-placed source has been telling me for years that TSKJ and the Bechtel consortium secretly coordinated their bids on the Nigerian contract, and that a loser's pot was created to compensate the also-ran bidder. I'd never been able to confirm that, but the Halliburton filing suggests that there may be something to the allegation: “Information has been uncovered suggesting that Mr. Stanley and other former employees may have engaged in coordinated bidding with one or more competitors on certain foreign construction projects.”

Antony Goldman, a London-based political-risk consultant specializing in West Africa, wonders how Halliburton managed to uncover all of this troubling information only after investigations were launched on three continents. “The filing suggests that Halliburton's due diligence in acquiring Kellogg and its efforts to understand how its subsidiary had obtained this exceptionally lucrative business in Nigeria couldn't have been terribly rigorous,” he told me. “It looks like it could have done far more to explore the matter and to protect shareholders from this type of exposure.”

Iran Pushback

For months the Bush Administration has been claiming that it has the goods on Iran's meddling in Iraq and on its dirty doings in other parts of the world. In a series of press briefings and statements, officials have trotted out a host of evidence, including pictures of weapons captured in Iraq that have serial numbers “proving” that they were made in and supplied by Iran. But for some mysterious reason, these claims by the White House have encountered some skepticism, even (of all places) on Capitol Hill, according to an article (not online) by Laura Rozen in National Journal.

Rozen says that the case against Iran appears to be “murkier and less decisive than the thrust of recent administration statements suggests,” and that the Senate Select Committee on Intelligence is “moving aggressively to vet” a series of past National Intelligence Estimates on Iran. She identified three NIEs that are being reviewed:

One from May 2005 entitled “Iran's Nuclear Weapons Program”; a second from the same month that includes a look at Iran's foreign relations; and a third from three months earlier that focuses on Iran and terrorism.

According to Rozen's story, members of the Intelligence Committee are demanding to see the raw data that purports to back up the NIEs—because of what a congressional source described to Rozen as “the debacle of October 2002.” The source was referring to an NIE from that month in which it was claimed that Iraq was sitting atop stockpiles of WMDs. “Up to that point, we took the documents from the intelligence community at face value,” Rozen quotes this person as saying. “There's no way to tell there's anything wrong with the October 2002 NIE until one reads the source documents. The key part to understand is that there's not enough evidence to support key judgments they had in there.”

Hopefully the source was not exaggerating when he told Rozen that the intelligence community and the administration would no longer “get the benefit of the doubt . . . . This committee is not walking into another debate without performing due diligence on these documents.”

Comfort Women Make Abe Uncomfortable

I wrote last fall about Japan's lavishly financed Washington lobbying campaign to block a congressional resolution that would urge Japan to accept responsibility for forcing women and girls from other Asian countries into sexual slavery during the World War II era. Now there's a new effort in Congress on the “Comfort Women” issue that looks to be gaining momentum.

There's a good (and not just because it cited my old story) roundup on new developments by Tom Zeller Jr. at the New York Times website. Zeller cited the recent congressional testimony of Koon Ja Kim, who said that in 1942, when she was 16, she and a group of other Korean girls were loaded on to a freight train and taken to occupied China. “The next evening, a Japanese officer came to the house [where she was held],” she said. “He spoke Japanese, which I did not understand. I did not know what he was saying or what he wanted until he raped me. When I refused and fought back, he punched me in the face and the blow split my eardrum. That was the first of many days and nights that I was raped. On a daily basis, I was raped by Japanese soldiers, and it was common to be raped by 20 different soldiers a day.”

Despite such testimony and a mountain of other evidence, Japanese officials continue to deny the abuses against the Comfort Women. And Prime Minister Shinzo Abe told the BBC that “Even if the [congressional] resolution passes, that doesn't mean we will apologize.”

By Ken Silverstein

This is This Week in Babylon by Ken Silverstein, published Friday, March 9, 2007. It is part of Washington Babylon, which is part of Harpers.org.

Halliburton May Forfeit $400 Million for Using Mercenaries in Iraq

Contractor could lose $400 million
N.C. company's role defended

Military contracting giant KBR Inc. could be docked up to $400 million for improperly using private security companies in Iraq, the company disclosed this week.
The Army has already said it withheld about $20 million in payments to KBR's parent company, Halliburton, because the company's subcontractors used private security contractors, including North Carolina-based Blackwater USA. Army officials have said that private security companies were not allowed under Halliburton's main contract in Iraq and that the military was to provide security.

The Army began looking into the use of private security firms by KBR's subcontractors after a congressional investigation sparked by a series of stories in The News & Observer. KBR has won billions in contracts to provide troops in Iraq with basic needs.

In its annual report to the Securities and Exchange Commission on Wednesday, KBR said the Army was continuing to review its contract and that it would begin withholding more payments unless the company "can provide timely information sufficient to show that such action is not necessary to protect the government's interests." If KBR fails, it could lose $400 million in Army payments, although the actual losses could be lower, according to the report.

KBR contends that its Army contract does not prohibit subcontractors from hiring private security services. It's unclear how many security companies might have worked under the KBR contract, but it's certain that Blackwater was not the only one.

In 2004, The N&O investigated Blackwater's work in Iraq and the deaths and public mutilation of four of its workers in Fallujah. Prompted in part by the articles, U.S. Rep. Henry Waxman, a Democrat from California who now heads the House Oversight and Government Reform Committee, started an investigation into how layers of subcontracts in Iraq add to the Pentagon's costs and limit its ability to oversee the work.

It was during a hearing of Waxman's committee last month that a top Army contracting official revealed that the Army had decided to withhold $19.6 million in payments to KBR. Waxman released a statement Thursday saying that the Army's decision showed why Congress must keep an eye on Pentagon contracts.

"Our investigation might mean a savings of hundreds of millions of dollars for taxpayers," Waxman said. "It would have been better if the money had never been wasted in the first place, but there's at least a chance now to fix this expensive mistake."


Staff writer Jay Price can be reached at 829-4526 or jprice@newsobserver.com.
© Copyright 2007, The News & Observer Publishing Company
A subsidiary of The McClatchy Company

Human Rights Watch Financier Soros buys Halliburton

The guy who wants to start a new Israel lobby. I smell Nobel Peace prize, Medal of Honor...
---
Soros buys Halliburton

Tue, 02/27/2007 - 3:22pm.

Normally, I'm willing to overlook the hypocrisy of the liberal elite. If Al Gore and his Hollywood cronies want to fly around on gas-guzzling, atmosphere-polluting private jets while railing against global climate change, I'm willing to overlook it.

But the latest move by globe trotting, hyper-liberal billionaire George Soros borders on being too much. According to papers filed with the SEC, in the fourth quarter of 2006 Soros purchased nearly 2 million shares of ... hold your breath ... Halliburton. The Halliburton shares reportedly went for an average purchase price of $31.30 a share. That puts Soros' total investment in Halliburton at around $62.6 million, or about 2 percent of his total portfolio.

Soros, of course, is the dean of Democratic money giving. And Halliburton, of course, is the company that embodies everything the Democrats see as evil. Dick Cheney is its former chief, for goodness' sake. But Soros is also a man of contradictions. He supported campaign finance reform for years, only to declare that defeating President George W. Bush was the "central focus" of his life. To prove it, he sunk $24 million of his own "soft" money into the 2004 campaign, helping make that election one of the most divisive in modern history.

Soros' position in Halliburton is reported to be his first, which means he bought it with a full understanding of Halliburton's reputation. Soros may not see a problem with profiting from a company that has been accused of everything from sweatheart deals to cooking the books to serving U.S. troops lousy food in Iraq. The real question, however, is whether MoveOn.org, the Center for American Progress, and other organizations that have benefitted from Soros' charity will see a problem with accepting money earned off Halliburton shares?

Mike Boyer |

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Army Says It Will Withhold $19.6 Million From Halliburton, Citing Potential Contract Breach

February 8, 2007

WASHINGTON, Feb. 7 — The Army announced during a House oversight committee hearing on Wednesday that it would withhold $19.6 million from the Halliburton Company after recently discovering that the contractor had hired the company Blackwater USA to provide armed security guards in Iraq, a potential breach of its government contract.

The Army has said that its contracts with Halliburton, which has a five-year, $16 billion deal to support American military operations in Iraq, generally barred the company and its subcontractors from using private armed guards. But in a statement, Halliburton disagreed with the Army’s interpretation and suggested that there was nothing to prohibit Halliburton’s subcontractors from hiring such guards.

The announcement came during a hearing of the House Government Oversight Committee that included emotional testimony about the killing of four Blackwater employees in Falluja, Iraq, in 2004.

In an e-mail message made public in the hearing and written only hours before the four were killed, another Blackwater worker told the company to end the “smoke and mirror show” and provide its employees in the war zone with adequate weapons and armored vehicles.

“I need ammo,” the worker, Tom Powell, said in an e-mail message dated March 30, 2004, to supervisors at Blackwater, which is based in North Carolina. “I need Glocks and M4s — all the client body armor you got,” he wrote. “Guys are in the field with borrowed stuff and in harm’s way.”

Mr. Powell said he had requested heavily armored vehicles “from the beginning, and from my understanding, an order is still pending.”

“Why? I ask,” he added.

By PHILIP SHENON

--MORE--

Changing the Subject: From Bush’s Mess in Mesopotamia to the Peril in Persia

Feb 3, 2007

By Tom Turnipseed

President Bush faces a rebellion among the American people and Congress against his call for a surge of troops that will escalate the killing in his Iraq war of choice. So Bush is now attempting to change the subject from the monumental mess of his making in Mesopotamia to an even more monstrous peril in Persia. Iraq and Iran are contemporary names for the ancient civilizations known as Mesopotamia and Persia. Bush lacks public and Congressional support to widen the war in Iraq. His oft-stated cause for war---that Iraq had weapons of mass destruction for imminent use against the U.S. and was complicit in the 9/11 attacks---has proven to be fabrication. Bush appears puppet-like under the influence of Vice-President Cheney and his cabal of neo-con warmongers, the principle architects of the imperialistic mis-adventure in Iraq. We are facing another fear driven, made-up run-up to an even more costly war against Iran to divert our attention from the debilitating debacle in Iraq that has taken such a terrible toll in lives, suffering and money, and to make more money for oil and war profiteers.

By February 1, 2007, Bush/Cheney’s Iraq War had killed 3088 U.S. military personnel, 130 Brits and 123 more coalition troops. 770 U.S. civilian contractors were also killed by January 28th. Bush/Cheney’s war of folly has killed about 655,000 Iraqis, according to a study led by Gilbert Burnham of the Johns Hopkins Bloomberg School of Public Health in Baltimore. By January 28, 2007, 23,114 U.S. military personnel had been wounded in action.

A study by Columbia University Nobel Prize winning economist, Joseph E. Stiglitz, and Linda Bilmes says the total costs of the Iraq war could top $2 trillion, taking into account the long term healthcare costs for US soldiers injured in Iraq so far. "Even taking a conservative approach,” the study said, referring to total war costs, "We can state, with some degree of confidence, that they exceed a trillion dollars."

U.S. oil and war profiteers are making out like bandits. On January 7, 2007 the UK Guardian reported that Kellogg, Brown & Root (KBR), a division of the energy and military giant Halliburton, had secured contracts in Iraq worth $13 billion including an uncontested $7 billion contract to rebuild Iraq's oil infrastructure. KBR has 30,000 employees in Iraq. Over 150 US companies have been given contracts in Iraq worth over $50 billion.

When oil and war profiteer-in-chief Dick Cheney was Defense Secretary, he commissioned a study for the U.S. Department of Defense by Brown and Root Services (now KBR). It recommended that private firms like Halliburton take over logistical support programs for U.S. military operations around the world. Just two years after he was Secretary of Defense, Cheney stepped through the revolving door linking the Department of Defense with defense contractors and became CEO of Halliburton. Halliburton was the principal beneficiary of Cheney’s privatization efforts for our military’s logistical support and Cheney was paid $44 million for five year's work with them before he slipped back through the revolving door of war profiteering to become Vice-President of the United States. Asked about the money he received from Halliburton, Cheney said. "I tell you that the government had absolutely nothing to do with it."

Before the Iraq War began, Halliburton was 19th on the U.S. Army's list of top contractors and zoomed to number 1 in 2003. In 2003, Halliburton made $4.2 billion from the U.S. government. Cheney stated he had “severed all my ties with the company, gotten rid of all my financial interest."

In 2005, Sen. Frank Lautenberg (D-NJ) said Cheney's stock options which were worth $241,498 the year before and were valued at more than $8 million in 2005-- an increase of 3,281%. Cheney receives a deferred salary from the company---$205,298 in 2001; $162,392 in 2002; $178,437 in 2003; and $194,852 in 2004.

Adding to the Bush Administration’s jeopardy is the on-going trial of Lewis “Scooter” Libby. The former chief of staff and confidante of Cheney faces perjury charges in federal court in D.C. Cheney will testify--- the first time a sitting vice president has testified under oath in a criminal proceeding. The case involves attempts by Cheney, Libby and the Bush Administration to discredit a former Ambassador to Niger, Joseph Wilson, by outing his wife, Valerie Plame, a CIA agent. Wilson challenged the Administration’s made-up charge that Saddam Hussein purchased weapons grade uranium from Niger in a New York Times op.ed. Testimony has focused attention on the central role played by Cheney in the administration’s efforts to suppress political opposition to the war in Iraq.

Cheney pulls the strings and Bush hypes war with Iran, where Halliburton secretly worked with one of Iran’s top nuclear program officials on natural gas related projects and sold the officials' oil development company key components for a nuclear reactor. On August 5, 2005, Jason Leopold a former reporter for the Wall Street Journal wrote that during Cheney’s tenure as CEO from 1995 to 2000, Halliburton Products and Services set up shop in Iran. The off-shore Halliburton subsidiary did approximately $40 million a year worth of oil field service work for the Iranian government.

As Exxon-Mobil reported the largest profits ever for a U.S. corporation in 2006 –$39 billion–or $4.5 million a minute, international scientists and climate experts on the Intergovernmental Panel on Climate Change issued an urgent warning that there is a 90% certainty that the human activity of over-consumption of fossil fuel is causing global warming.

Let’s change the subject to oil and war profiteering and hold Bush/Cheney accountable.


Tom Turnipseed is an attorney, writer and political activist in Columbia, South Carolina.

Cheshire Cheney: menace on a limb

Les Payne

January 21, 2007

Trade the grin of the Cheshire cat for a scowl and you have Vice President Dick Cheney. OK, the cat in "Alice in Wonderland" never shot a friend. Still, it is the scowl, all crooked and evil, that makes up the Cheney menace. He is arguably the most powerful vice president ever, filling the vacuum his boss leaves in the Oval Office.

During President George W. Bush's six years in office so far, Cheney has been as famous as the Cheshire cat for vanishing and suddenly reappearing. He was back out on the limb last week promoting Bush's escalation of the Iraq war. The Scowl was all over Fox TV news, rendering the clenched visage of Brit Hume downright charming by comparison.

The Cheney menace also haunted the courtroom where the jury was being picked last week for the trial of the vice president's former chief of staff. Lewis "Scooter" Libby is facing felony charges of obstruction of justice and perjury in the grand jury probe of how Valerie Plame was exposed as a CIA agent, possibly as a punitive act. Defense attorneys reportedly struggled with the daunting task of eliminating from the Libby jury those with "strongly negative feelings" about Cheney.

On the first day two such potential jurors, civic-minded we must assume, couldn't conceal their distaste for Cheney. One reportedly lasted 15 seconds, another weighed his civic duty for 15 minutes before confessing "low regard" for the sitting vice president. Cheney is scheduled as a star witness in Libby's leak case, which is on the periphery of the administration's pursuit of the Iraq war.

Cheney is very much at the heart of the war and deserves as much blame as anyone. His involvement also bears, in the opinion of more than a few, the hint of profiteering, if not conflict of interest. He has amassed great wealth and power in the all too common - and questionable - practice of shuttling between top corporate jobs and posts at the government trough. He is the former chief executive of the giant Halliburton energy and government services conglomerate that has landed multi-billion-dollar U.S. war contracts without competitive bidding.

The vice president may well have met all federal ethical requirements for severing his corporate ties before taking office. The imprint of his association with Halliburton, however, remains as strong as the Cheshire grin when the cat has disappeared. It's a fair bet that if the republic frees itself of Cheney, he is likely to benefit from Halliburton's gorging during his tenure in office.

As for the recent promotion of the troop buildup, Halliburton stands to profit handsomely from the 21,500 additional troops to be dispatched to the Iraq war zone, where its subsidiaries provide housing and food. Early on, Halliburton was accused of fleecing the government by feeding the troops spoiled food and by overcharging for the number fed. There also have been allegations some subsidiaries overcharged for fuel, transportation and other services and wasted millions due to inadequate management of personnel and war materiel.

After almost four years of such management, the new Democrat-controlled Congress may well discover that the waste by Halliburton and others is incalculable. This finding should not, of course, deter the legislative branch from re-establishing its oversight and fiduciary responsibilities. During the roar of the U.S. war machine in Iraq, the Congress, until now, has been as quiet as church mice, and just as impotent.

After 3 1/2 years of watching Bush-Cheney mismanage the war, the American people finally ran out of patience in the November elections. And so it appears particularly unseemly for Cheney to push so aggressively - and wrongheadedly - for almost dictatorial powers for himself and the president to continue budget-busting spending and escalation in Iraq.

While acknowledging Congress' attempts to adhere to the popular will and redirect the war, Bush chillingly declared, "But I've made my decision. And we're going forward" with the buildup. "You cannot run a war by committee," said Cheney. He obviously intends to increase the flow of money to Iraq.

Perhaps it's time for Cheney to vanish like the Cheshire cat, beginning with the tip of the tail and ending with the scowl, which will likely remain long after the rest of him has gone.

Professor says America seeks Afghanistan Oil Deal

Saturday 20. Jan 2007

Is Stephen Harper's Conservative minority government supporting another Oil War? This would yield enormous profits for greed-driven investors, and the atmosphere will continue to dangerously heat from the increasing use of those fossil fuels.

by David Michael Smith

In the aftermath of the terrorist attacks of September 11, 2001, President Bush declared that the United States would launch a "War on Terrorism." In early October, U.S. airplanes began bombing Afghanistan and providing assistance to the Northern Alliance and other groups opposed to the Taliban regime. Within a few months, U.S. troops and their Afghan allies had succeeded in ousting the Taliban and installing a new regime. Although Osama bin Laden and his top lieutenants apparently escaped, U.S. officials proclaimed that a significant blow had been dealt to the al-Qa'ida network.

Traumatized and outraged by the horrific events of September 11, the majority of Americans supported the war in Afghanistan. Most people believed the U.S. Commander-in-Chief when he said that the replacement of the Taliban regime was required to safeguard our country against another catastrophic attack by al-Qa'ida forces. Even Princeton Professor Richard Falk, a longtime anti-war activist, wrote in The Nation ("Defining a Just War," Oct. 29, 2001) that the war in Afghanistan was "the first truly just war since World War II." But was it?

Since last October, thousands of people have participated in anti-war rallies, marches, and teach-ins in New York City, Washington, San Francisco, Houston, and other cities. People opposed to the war have made clear that they condemn the atrocity of September 11. But they also condemn the U.S. role in the deaths of thousands of Afghan people who had nothing to do with the attack on the World Trade Center and the Pentagon.

In the British Guardian ("The innocent dead in a coward's war," Dec. 20, 2001), journalist Seumas Milne estimated that about ten thousand Afghan soldiers may have died in the war and cited University of New Hampshire Professor Marc Herold's estimate that about four thousand civilians have also died.

Moreover, anti-war activists and progressive writers argue that the war in Afghanistan has been, in large part, another "oil war." The September 11 attacks provided a compelling pretext for military action against the al-Qa'ida forces in Afghanistan. But a growing body of research by journalists and scholars reveals that the Bush Administration's decision in favour of a regime change and all-out war in Afghanistan was significantly influenced by the desire to install a new government that would be more sympathetic to U.S. economic interests in Central Asia.

	Has Prime Minister Harper risked the lives of Canadians for an "Oil War" in Afghanistan under the guise of a "War on Terrorism"?

Although Afghanistan itself has no significant oil or natural gas reserves, it is strategically located in a region which does. As Eric Margolis observed in the Toronto Sun ("The U.S. is Determined to Dominate the World's Richest New Source," Jan. 13, 2002), Central Asia's Caspian Basin, over which sit the former Soviet states of Uzbekistan, Tajikstan, Kyrgystan, Turkmenistan, and Kazakhstan, is the world's "richest new source of oil." In the Jurist ("The Deadly Pipeline War," Dec. 8, 2001), Marjorie Cohn noted that some analysts have estimated the potential value of Caspian oil and natural gas reserves at four trillion dollars. Phil Gasper recalled in the Socialist Worker ("The Politics of Oil," Jan. 25, 2002) that the Middle East Economic Digest editors have described Central Asia as "the Middle East of the twenty-first century."

Even if this latter projection proves overly optimistic, Martha Hamilton concluded in a Washington Post article ("The Last Great Race For Oil Reserves," April 26, 1998) that the "largely untapped subterranean treasure" in the Caspian Basin may be "the third-largest reserve in the world, after the Persian Gulf and Siberia."

This planned pipeline would carry $3-5 trillion in oil and natural gas from the Caspian Sea basin via Turkmenistan, Afghanistan, and Pakistan, where ships docked in Arabian Sea ports.

As Hamilton wrote, "The possibility of bringing those huge energy reserves to market has touched off a scramble by international oil and gas companies to get in on what may be one of the world's last great energy plays." As Cohn pointed out in "The Deadly Pipeline War," Dick Cheney, then chief executive officer of the energy company Halliburton, told a meeting of oil industry leaders in 1998: "I can't think of a time when we've had a region emerge as suddenly to become as strategically significant as the Caspian."

U.S. government officials and energy company executives have been anxious to exploit what Daniel Yergin, renowned energy expert and author of The Prize (1993), has called "the number-one prize in world oil." However, the transportation of oil and natural gas extracted from the region has posed a serious challenge for them. The Caspian Pipeline Consortium, led by the Chevron Corporation, opened a new oil pipeline from Kazakhstan to Russia in October, 2001. But, as George Monbiot reported in the Guardian ("America's pipe dream," Oct. 23, 2001), policymakers in Washington have generally opposed the construction of pipelines through Russia or Iran. This is why U.S. energy companies and government officials have been so interested in Afghanistan. As Ahmed Rashid explained in his book, Taliban: Militant Islam, Oil, and Fundamentalism in Central Asia (2001), U.S. policy toward Afghanistan during the past decade has been largely driven by corporate interests in the region's resources. Rashid noted that in 1995, the California-based UNOCAL Corporation began negotiating with the government of Turkmenistan to build oil and gas pipelines from that country through Afghanistan to Pakistani ports on the Arabian Sea. Soon after the Taliban came to power in Afghanistan in 1996, UNOCAL executives initiated discussions with them in order to secure the pipeline agreement.

According to Rashid, the Taliban's religious fundamentalism and harsh repression precluded normal diplomatic relations at the time but did not pose an insurmountable obstacle to a potential business deal. Strikingly, neither did the relocation of Osama bin Laden and numerous al-Qa'ida fighters to Afghanistan in 1996 and 1997. As Rashid recounted, UNOCAL Vice President Marty Miller and other company executives even wined and dined Taliban representatives in Houston in November 1997. Mullah Mohammed Ghaus and his Afghan colleagues stayed at an expensive hotel and visited the Houston Zoo and the NASA Space Center during their visit. Miller offered the Taliban representatives a lucrative contract and thought a formal agreement was imminent.

The Clinton Administration quietly supported UNOCAL's efforts, but these negotiations eventually failed. Taliban leaders finally decided against the pipeline deal, and Washington's willingness to do business with them ended after the al-Qa'ida bombings of U.S. embassies in Kenya and Tanzania in 1998. President Clinton ordered cruise missile attacks on al-Qa'ida training camps in Afghanistan and even authorized efforts to assassinate bin Laden. At the same time, the U.S. tried to persuade Taliban officials to surrender bin Laden. As Monbiot has noted, notwithstanding these developments, U.S. business executives and government officials remained deeply interested in the potential of oil and gas pipelines through Afghanistan.

In May 2001, the mainstream media widely reported that the new U.S. Bush Administration had awarded the Taliban regime forty-two million dollars to support the eradication of opium production in Afghanistan. Less well known is the fact that, shortly after taking office, the Bush Administration had quietly resumed negotiations with the Taliban. In an important new book, Bin Laden: The Forbidden Truth (2001), French authors Jean-Charles Brisard and Guillaume Dasquie have revealed that the Bush Administration worked long and hard to "decouple" bin Laden from the Taliban and lay the foundations for U.S. diplomatic recognition and pipelines for oil and natural gas.

Brisard and Dasquie have drawn on numerous sources, including discussions with John O'Neill, the former FBI Deputy Director who retired in July 2001. Ironically, O'Neill then became security director for the World Trade Center, where he died in the September 11 attacks. According to the authors, O'Neill resigned from the FBI because the State Department had continually blocked his investigation into al-Qa'ida's roots in Saudi Arabia. The authors report that O'Neill bitterly complained about the ability of the U.S. oil companies and their State Department allies to thwart an investigation that might offend the Saudi royal family and jeopardize U.S. economic interests in that country.

Brisard and Dasquie's account of the negotiations between the Bush Administration and the Taliban between February and August 2001, provides a helpful framework for understanding the eventual U.S. decision to topple the Afghan regime after the tragedy of September 11. The authors have explained that Washington saw the Taliban as a potential partner who could provide stability in Afghanistan and benefit from the construction of pipelines by U.S. corporations. But, in a series of meetings in Washington, Islamabad, and Berlin, U.S. officials demanded that the Taliban surrender bin Laden and invite other Afghan political forces to join their government.

When the Taliban equivocated over and eventually refused these demands, U.S. officials threatened to take military action against them. As Brisard revealed in an interview in Paris, at one point in the negotiations, these officials told the Taliban, "Either you accept our offer of a carpet of gold, or we bury you under a carpet of bombs." As Jonathan Steele and his colleagues reported in the Guardian ("Threat of US strikes passed to Taliban weeks before NY attack," Sept. 22, 2001), U.S. representatives told Russian, Iranian, and Pakistani diplomats at a mid-July meeting in Berlin that Washington was seriously contemplating this option. Although these U.S. officials have since denied making such a threat, former Pakistan Foreign Minister Niaz Naik, who was present at the meeting, confirmed their remarks in an interview with the Guardian reporters. Is it a coincidence that the deadliest terrorist attacks in U.S. history occurred just several weeks after negotiations with the Taliban broke down? Perhaps. But Brisard and Dasquie have speculated that the prospect of U.S. military action against Afghanistan may have led bin Laden to approve the massive assault on New York City and Washington. Similarly, Steele and his colleagues have raised the possibility that bin Laden "was launching a preemptive strike in response to what he saw as U.S. threats." Other analysts have suggested that bin Laden may have authorized such a "preemptive strike" because he feared that the Taliban might finally accede to Washington's demands and try to force him to leave Afghanistan.

Although such speculation cannot be confirmed, it seems clear that long-standing U.S. economic interests in pipeline construction played a major role in the U.S. government's decision in favor of a regime change and all-out war in Afghanistan. Notably, as Shaun Casey emphasized in the Boston Globe ("Ethics of This War Have Yet to be Spelled Out," Oct. 11, 2001) and Stephen Zunes pointed out in the San Jose Mercury News (" U.S. Military Response is Wrong -- And It Won't Work," Oct. 12, 2001), there has never been any evidence of the Taliban regime's involvement in the attacks on the U.S. As John Pilger remarked in the British Daily Mirror ("Hidden Agenda Behind War on Terror," Oct. 29, 2001), the Bush Administration knew well before the Pentagon's first bombs began falling on Afghanistan that the attacks of September 11 were planned in Britain and the United States, and that none of the actual perpetrators were Afghan nationals.

As Howard Zinn observed in The Progressive ("A Just Cause, Not a Just War," December 2001), the U.S. government rejected the alternative of turning to international law, diplomacy, and limited multinational military action in order to bring al-Qa'ida forces to justice. As Zinn has noted, the U.S. government also rejected the Taliban regime's offer to surrender bin Laden for trial in a third country after receiving evidence of his involvement in the September 11 atrocity. As Phil Gasper wrote in the International Socialist Review ("Afghanistan, the CIA, bin Laden, and the Taliban," November-December 2001), the Bush Administration's refusal to seriously consider these options revealed that the overthrow of the Taliban and the installation of a new, more business-friendly regime had already been designated as primary objectives of the impending war. In his book Resource Wars: The New Landscape of Global Conflict (2002), Professor Michael Klare of Hampshire College has acknowledged that one purpose of "Operation Enduring Freedom" was to "capture and punish those responsible for the September 11 attacks." But Klare has explained that a second objective was "to consolidate U.S. power in the Persian Gulf and Caspian Sea area, and to ensure continued flow of oil." As Klare has emphasized, while this latter objective "may get far less public attention than the first, this does not mean it is any less important."

In a report released just days before the attacks on the World Trade Center and the Pentagon, the U.S. Energy Information Administration described Afghanistan as a significant "potential transit route for oil and natural gas exports from Central Asia to the Arabian Sea." However, the report noted that the potential construction of oil and natural gas pipelines has "been undermined by Afghanistan's instability." As Monbiot has written, "Given that the U.S. government is dominated by former oil industry executives, we would be foolish to suppose that such plans no longer figure in its strategic thinking." Indeed, the way in which the Bush Administration sought to "capture and punish" the al-Qa'ida forces in Afghanistan was significantly influenced by its commitment to promoting U.S. economic interests and power in the region.

Gore Vidal argues in his book entitled, Perpetual War for Perpetual Peace (2002), that the drive for profits and power are central to the Bush Administration's so-called "War on Terrorism." Vidal writes, "We need Afghanistan because it's the gateway to Central Asia, which is full of oil and natural gas... That's what it's all about. We are establishing our control over Central Asia."

Many Americans may not want to believe that such economic motives could play so important a role in U.S. foreign policy. But developments in the aftermath of the war in Afghanistan make it difficult to deny journalists Jim Hightower and Phillip Frazer's observation that "War is politics by other means, and politics is business, and oil is very big business."

As Hightower and Frazer concluded in their book The Hightower Lowdown (January, 2002), the tragedy of September 11 and the subsequent war in Afghanistan "put the U.S. pipeline plans back on track." Hightower and Frazer cited a remarkable article in the Pakistani Frontier Post (Oct. 10, 2001). This article reported that, though the U.S. war against the Taliban had barely begun, U.S. Ambassador Wendy Chamberlain had already informed the Pakistan government that, "in view of recent geopolitical developments," the negotiations for a pipeline through Afghanistan would be revived.

After the Taliban regime collapsed, the Bush Administration hand-picked Hamid Karzai to head the new Afghan government and named Zalmay Khalilzad, an Afghan-American, as its new special envoy to the Karzai government. As Richard Neville pointed out in the Australian Sydney Morning Herald ("Beyond Good and Evil," April 15, 2002), both Karzai and Khalilzad are former consultants to UNOCAL. Eric Margolis has disclosed in the Toronto Sun ("America's New War: A Progress Report," Dec. 9, 2001) that Karzai is also a former "asset" for the U.S. Central Intelligence Agency. As Salim Muwakkil wrote in the Chicago Tribune ("Pipeline Politics Taint U.S. War," March 18, 2002), the "rise to power" of these two former UNOCAL employees will "make things even smoother" for the resumption of the pipeline project in Afghanistan. As Daniel Fisher reported in Forbes Magazine (Feb. 4, 2002), "It has been called the pipeline from hell, to hell, through hell" but "now, with the collapse of the Taliban, oil executives are suddenly talking again about building it." To be sure, the giant U.S. energy corporations are unlikely to make major investments in the project until the new Afghan regime proves able to suppress the outbreaks of violence among the various warlords' forces and any military challenge from resurgent Taliban fighters. This is certainly one reason why U.S. and British troops in Afghanistan are struggling to piece together a viable Afghan national army that can defend the new regime.

In the meantime, Karzai has already made clear that his government fully intends to work closely with neighboring countries and U.S. oil companies to reap the immense profits from the transport of Caspian Basin oil and natural gas. On Feb. 8, 2002, Karzai visited Pakistan and joined with General Pervez Musharraf in pledging "mutual brotherly relations" and cooperation "in all spheres of activity." As the Irish Times reported on Feb. 11, 2002, Karzai announced that he and Musharraf had discussed the proposed Central Asian pipeline project "and agreed that it was in the interest of both countries."

The mounting U.S. military presence in Afghanistan and other Central Asian countries may enable Chevron, Exxon-Mobil, UNOCAL, and other giant corporations to lay claim to "the number-one prize in world oil." But the extension of U.S. military power and economic domination into this region comes with very grave risks. As hundreds of millions of people in Central Asia and the Middle East watch their oil and natural gas being extracted and transported for the profit of Western companies, the prospects for a massive, violent backlash against the U.S. and its client regimes are likely to grow. As horrific as the September 11 attacks were, they may only be the beginning.

Make comments about this article in The Canadian Blog.

About the Author:

David Michael Smith is a professor of government at the College of the Mainland in Texas City, Texas , in the United States.

We've gotcher timetable for Iraq withdrawal right here (w/FREE hidden message inside!)

by occams hatchet, wmofoccamgillette@yahoo.com

Dec 04, 2006

"Timetable! Timetable! What's the TIMETABLE??!!

Calm. Down.

Oh, I've got your timetable, alright. But you have to promise to sit still long enough for me to explain a teeny bit to you, okay? Okay.

Speaking of "timetables," to better understand the schedule for withdrawing from Iraq, we first need to look at a bit of a timeline. So -

- come along with me now as we travel back in time [cue dreamy harp music] . . .

ATTENTION, BOYS AND GIRLS: SECRET HIDDEN MESSAGE INSIDE
Hidden in this diary are all the clues you need to solve the mystery of Why We Went To War In Iraq! See if you can figure it out by carefully reading the whole diary – including between the lines! Good Luck!

(HINT: The words "weapons of mass destruction" and "spreading democracy" are NOT part of the answer!)

In June 1997, during the heart of the Clinton administration, Project for a New American Century (PNAC) was founded. Among those signing its founding Statement of Principles were Dick Cheney, Donald Rumsfeld, I. Lewis "Scooter" Libby, Zalmay Khalilzad (current U.S. ambassador to Iraq), Paul Wolfowitz, Jeb Bush and Elliot Abrams.

In January 1998, PNAC wrote a letter to then-President Bill Clinton advocating the removal of Saddam Hussein from power in Iraq. The letter read, in part (emphases added):

if Saddam does acquire the capability to deliver weapons of mass destruction . . . a significant portion of the world’s supply of oil will all be put at hazard. [snip]

The only acceptable strategy is one that . . . [consists of taking] military action as diplomacy is clearly failing. [I]t means removing Saddam Hussein and his regime from power. That now needs to become the aim of American foreign policy.

We urge you to articulate this aim, and to turn your Administration's attention to implementing a strategy for removing Saddam's regime from power.

That letter was signed by, among others, Donald Rumsfeld, Zalmay Khalilzad, John Bolton, Richard Armitage, Richard Perle, Paul Wolfowitz, William Kristol, Bill Bennett and James Woolsey.

At the time, Iraq was a sovereign nation, with whom we were not at war, nor had we been for seven years.

In September 2000, PNAC came out with its seminal work, "Rebuilding America's Defenses," (PDF file) which contained, among much else, the following passages:

From an American perspective, the value of such bases would endure even should Saddam pass from the scene. Over the long term, Iran may well prove as large a threat to U.S. interests in the Gulf as Iraq has. And even should U.S.-Iranian relations improve, retaining forward-based forces in the region would still be an essential element in U.S. security strategy given the longstanding American interests in the region.

[snip]

As a supplement to forces stationed abroad under long-term basing arrangements, the United States should seek to establish a network of "deployment bases" or "forward operating bases" to increase the reach of current and future forces. Not only will such an approach improve the ability to project force to outlying regions, it will help circumvent the political, practical and financial constraints on expanding the network of American bases overseas.

[snip]

elements of U.S. Army Europe should be redeployed to Southeast Europe, while a permanent unit should be based in the Persian Gulf region [emphases added]

That study was signed by, among others, Paul Wolfowitz, I. Lewis "Scooter" Libby and William Kristol.

At the time, Iraq was a sovereign nation, with whom we were not at war, nor had we been for nine years.

"Rebuilding America's Defenses" also contains the following statement:

Further, the process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event – like a new Pearl Harbor.

So - why all this background on PNAC? Well, PNAC's philosophies and core beliefs have come to play a huge role in the foreign policy practices of the Bush administration - and hence, in its course of action with regard to Iraq. Many members of and contributors to PNAC went on and continue to play important roles in that administration, as shown in this alphabetical chart from Wikipedia:

Elliott Abrams	National Security Council	Representative for Middle Eastern Affairs	President of the Ethics and Public Policy Center
Richard Armitage	Department of State (2001-2005)	Deputy Secretary of State	Leaked Valerie Plame's identity to Robert Novak in the Plamegate scandal.
John R. Bolton	Department of State	U.S. Ambassador to the United Nations	Previously served as Undersecretary for Arms Control and International Security Affairs in the first administration of GWB.
Richard Cheney	Bush Administration	Vice President
Seth Cropsey	Voice of America	Director of the International Broadcasting Bureau
Paula Dobriansky	Department of State	Undersecretary of State for Global Affairs
Francis Fukuyama	President's Council on Bioethics	Council Member	Professor of International Political Economy at Johns Hopkins University
Bruce Jackson	U.S. Committee on NATO	President	Former Lockheed Martin VP for Strategy & Planning
Zalmay Khalilzad	U.S. Embassy Baghdad, Iraq	U.S. Ambassador to Iraq	Previously served as U.S. Ambassador to Afghanistan from November 2003 to June 2005
I. Lewis Libby	Bush Administration (2001-2005)	Chief of Staff for the Vice President	Indicted by Grand Jury on charges of Obstruction of Justice, False Statements, and Perjury and resigned October 28, 2005.
Peter W. Rodman	Department of Defense	Assistant Secretary of Defense for International Security
Donald Rumsfeld	Department of Defense (2001-2006)	Secretary of Defense	Former Chairman of the Board of Gilead Sciences Developer of Tamiflu
Randy Scheunemann	U.S. Committee on NATO, Project on Transitional Democracies, International Republican Institute	Member	Founded the Committee for the Liberation of Iraq.
Paul Wolfowitz	World Bank	President	Deputy Secretary of Defense, 2001-2005
Dov S. Zakheim	Department of Defense	Comptroller	Former V.P. of System Planning Corporation
Robert B. Zoellick	Department of State	Deputy Secretary of State	Office of the United States Trade Representative (2001-2005);

On January 21, 2001, President George Bush was inaugurated. On January 29, 2001, newly minted Vice President Dick Cheney (who just six months earlier had been CEO of Halliburton, one of the world's largest oil and gas exploration and construction companies), being well-known for his public decorum, had the courtesy to wait a full eight days after the last of the stragglers had been sent home from the last of the inauguration parties, the last of the confetti had been swept up and the last of the bunting had been taken down, before convening - behind closed doors, doors that would remain closed by the Supreme Court and appellate courts - what was called an "energy task force," (officially, the National Energy Policy Development Group). The task force's ostensible purpose, according to President Bush, was to

report back to me, and to the nation, how best to cope with high energy prices and how best to cope with reliance upon foreign oil; how best to encourage the development of pipelines and power-generating capacity in the country so that we can help our fellow citizens.

Curiously, the president did not specify in exactly which country the task force would seek to encourage the development of pipelines. Nor was it immediately clear how certain documents such as "Foreign Suitors for Iraqi Oilfield Contracts," would help in determining "how best to cope with reliance upon foreign oil."

At the time, Iraq was a sovereign nation, with whom we were not at war, nor had we been for 10 years. Why was a domestic energy task force discussing potential suitors for Iraqi oilfield contracts?

Another puzzling document was a map of Iraq, with oilfields and pipelines called out, and most of the western desert region divvied up into "blocks."

At the time, Iraq was a sovereign nation, with whom we were not at war, nor had we been for 10 years. Why was a domestic energy task force circulating a map of Iraq's oilfields and pipelines?

The map and the documents are dated March 2001, two months after George Bush and Dick Cheney took office, six months before 9/11, and two years before the invasion of Iraq.

Never one to wait until the last minute, that Dick Cheney. From The New Yorker:

Additional evidence that Cheney played an early planning role is contained in a previously undisclosed National Security Council document, dated February 3, 2001. The top-secret document, written by a high-level N.S.C. official, concerned Cheney’s newly formed Energy Task Force. It directed the N.S.C. staff to coöperate fully with the Energy Task Force as it considered the "melding" of two seemingly unrelated areas of policy: "the review of operational policies towards rogue states," such as Iraq, and "actions regarding the capture of new and existing oil and gas fields." [emphases added]

At the time, Iraq was a sovereign nation, with whom we were not at war, nor had we been for 10 years. Why was the National Security Council talking about "the capture of new and existing oil and gas fields"?

On September 11, 2001 the PNAC neocons got the "new Pearl Harbor" they needed to implement their plans:

They did not lose any time. On September 20, 2001, using the terrorist attacks as a rationalization, PNAC wrote a letter to President Bush, exhorting him to attack Iraq. While some might object to tying Iraq to the 9/11 attacks, in fact, PNAC simply was doing what it had been doing for more than four years: pushing for military action against Iraq. The attacks of September 11 merely gave the organization another fulcrum with which to apply leverage.

But even if evidence does not link Iraq directly to the attack, any strategy aiming at the eradication of terrorism and its sponsors must include a determined effort to remove Saddam Hussein from power in Iraq.

The Bush administration hardly needed the urging.

By March 2002, a full year before the invasion of Iraq, George Bush knew exactly what he was going to do about Saddam Hussein:

"F**k Saddam, we're taking him out."

At the time, Iraq was a sovereign nation, with whom we were not at war, nor had we been for 11 years.

The public rhetoric ratcheted up, to the point where the neocons' Iraqi-exile darling Ahmed Chalabi was able to say in September 2002, six months before the first bombs fell on Baghdad,

"American companies will have a big shot at Iraqi oil."

A big shot, indeed.

Prior to the 2003 invasion, the principal vehicle for planning the new post-war Iraq was the US State Department’s Future of Iraq project. This initiative, commencing as early as April 2002, involved meetings in Washington and London of 17 working groups, each comprised of 10-20 Iraqi exiles and international experts selected by the State Department.

The "Oil and Energy" working group met four times between December 2002 and April 2003. Although the full membership of the group has never been revealed, it is known that Ibrahim Bahr al-Uloum, the current Iraqi Oil Minister, was a member. The 15-strong oil working group concluded that Iraq "should be opened to international oil companies as quickly as possible after the war" and that "the country should establish a conducive business environment to attract investment of oil and gas resources."

On March 20, 2003, the United States of America invaded Iraq, a sovereign nation. Saddam Hussein's government collapsed within three weeks. PNAC's long-sought dream of overthrowing Hussein's regime had been realized. In the chaos shortly after Saddam's fall, U.S. troops had the job of guarding just one government building: the Iraqi Oil Ministry. Looters, vandals and insurgents were given carte blanche to the country's museums and munitions dumps.

Construction of military bases began almost immediately after the invasion. For the first year or so after the invasion, hundreds of temporary bases were thrown together with the intent of supporting ongoing, relatively short-term operations. But that had changed by March 2004, when the Chicago Tribune could report this:

Now U.S. engineers are focusing on constructing 14 "enduring bases," long-term encampments for the thousands of American troops expected to serve in Iraq for at least two years. The bases also would be key outposts for Bush administration policy advisers.

Those 14 bases were scattered about the country, seemingly at random, at least from a glance at this map:

Meantime, the U.S. had put in place a colonial viceroy of sorts in Paul Bremer, head of the Coalition Provisional Authority (CPA). Under the temporary governance of the CPA, laws were enacted which essentially made Iraq an absolutely free-trade zone for foreign investors. Foreign companies could profit from Iraqi resources and take their profits out of the country, without any requirement to pay taxes, or to reinvest in Iraq. Those laws remain in place today, and have priority over any subsequent conflicting laws, including the Iraqi constitution.

But not to worry. Even the Iraqi constitution was very foreign-business friendly. It should be - it was written with the heavy hand of Iraq's U.S. occupiers all over it. As a result, the fledgling Iraqi government made sure that the final draft of the constitution, presented to the Iraqi people for their approval in August 2005, included provisions that would facilitate foreign investment in, and massive profit from, Iraq's oilfields.

In the last few days before that final draft of the constitution came out, a key change was made to it:

Another key article disappeared from the final (ie, today's) draft. It used to be Article 16, according to which:

1) It is forbidden for Iraq to be used as a base or corridor for foreign troops.
2) It is forbidden to have foreign military bases in Iraq.
3) The National Assembly can, when necessary, and with a majority of two thirds of its members, allow what is mentioned in 1 and 2 of this article.

Here's how Riverbend reported it in her "Baghdad Burning" blog:

The most interesting article in Chapter 1, however, was in the first draft of the constitution published on August 22 by some newspapers but it isn’t in the final draft (at least it’s not in the New York Times English version). It is numbered Article (16), in the version of the draft constitution it appeared in:

Article (16):

1. It is forbidden for Iraq to be used as a base or corridor for foreign troops.
2. It is forbidden to have foreign military bases in Iraq.
3. The National Assembly can, when necessary, and with a majority of two thirds of its members, allow what is mentioned in 1 and 2 of this article.

This one is amusing because in the first two parts of the article, foreign troops are forbidden and then in the third, they’re kind of allowed... well sometimes- when the puppets deem it necessary (to keep them in power). What is worrisome about this article, on seeing the final version of the draft constitution, is its mysterious disappearance- in spite of the fact that it leaves a lot of leeway for American bases in Iraq. Now, in the final version of the constitution, there is nothing about not having foreign troops in the country or foreign bases, at the very least. The ‘now you see it’/ ‘now you don’t’ magical effect of this article, especially, reinforces the feeling that this constitution is an ‘occupation constitution’.

Hmm . . . So the Iraqi constitution was changed at the last minute to allow for foreign military bases on Iraqi soil. And the Iraqi constitution makes it very easy for foreign companies to own the rights to, and profit from, Iraq's oil. Hmmm . . .

Several months after the mysterious last-minute editing of the Iraqi constitution, in June 2006, a conference committee of the U.S. Senate and House of Representatives pulled the same disappearing act:

Thwarting the will of the majority, a joint House and Senate conference committee this week decided to delete language barring permanent U.S. military bases in Iraq from legislation pending in Congress. Meeting behind closed doors, negotiators from the conference committee dropped language that would ban permanent U.S. military bases in Iraq, language that both chambers had approved in the emergency war supplemental spending bill.

In March 2006, the Associated Press filed this report from Iraq, about massive construction at four airbases in Iraq (all emphases added):

The move away from cities, perhaps eventually accompanied by U.S. force reductions, will lower the profile of U.S. troops, frequent targets of roadside bombs on city streets. Officers at al-Asad Air Base, 10 desert miles from the nearest town, say it hasn't been hit by insurgent mortar or rocket fire since October.

Al-Asad will become even more isolated. The proposed 2006 supplemental budget for Iraq operations would provide $7.4 million to extend the no-man's-land and build new security fencing around the base, which at 19 square miles is so large that many assigned there take the Yellow or Blue bus routes to get around the base, or buy bicycles at a PX jammed with customers. [snip]

Here at Balad, the former Iraqi air force academy 40 miles north of Baghdad, the two 12,000-foot runways have become the logistics hub for all U.S. military operations in Iraq, and major upgrades began last year.

Army engineers say 31,000 truckloads of sand and gravel fed nine concrete-mixing plants on Balad, as contractors laid a $16 million ramp to park the Air Force's huge C-5 cargo planes; an $18 million ramp for workhorse C-130 transports; and the vast, $28 million main helicopter ramp, the length of 13 football fields, filled with attack, transport and reconnaissance helicopters.

[snip]

Away from the flight lines, among traffic jams and freshly planted palms, life improves on 14-square-mile Balad for its estimated 25,000 personnel, including several thousand Americans and other civilians.

They've inherited an Olympic-sized pool and a chandeliered cinema from the Iraqis. They can order their favorite Baskin-Robbins flavor at ice-cream counters in five dining halls, and cut-rate Fords, Chevys or Harley-Davidsons, for delivery at home, at a PX-run "dealership."

Fourteen square miles? Nineteen square miles? Two 12,000-foot runways? (Even Hartsfield International Airport in Atlanta - the busiest airport in the world - doesn't have two 12,000-foot runways.) Burger King? Harley-Davidsons?

Sounds permanent to me. Evidently to the engineers building the place, too:

From the start, in 2003, the first Army engineers rolling into Balad took the long view, laying out a 10-year plan envisioning a move from tents to today's living quarters in air-conditioned trailers, to concrete-and-brick barracks by 2008.

So - all of this construction has kept Halliburton, and Parsons, and Fluor, and Bechtel, and a host of other administration cronies, busy making billions of dollars off the American taxpayer - and for what purpose?

Here's a map of the four "super bases" detailed in the Associate Press story:

Huh.

Now, that's interesting

Oh, sorry - it's just that I noticed there's . . . something peculiar about the layout of those four bases. Let's see - what could it be . . . ?

Hey, I've got an idea! What if we were to take the map of these four large, permanent-seeming bases, and superimpose it on a map of the Iraqi oilfields and pipelines? (For the "oil map," though, let's use the map from the Department of Energy's Energy Information Administration - it's a bit higher-quality than the March 2001 Energy Task Force version.)

(Diarist's note: Please forgive the crude "Photoshop for by Dummies" work on these - I'm a bit of a hacker.)

Wow! Those big new airbases sure will come in handy, being so close to the pipelines and oilfields and all!

Hmm - I wonder what the superimposed map would look like if we were to use the "14-base" map from the earlier article:

Yup, pretty much the same situation. I wonder if there's a connection . . .

Now, I am not a military strategist (IANAMS), but if I had to bet, I'd guess that in the United States, military bases are not laid out in such amazingly close correspondence to oilfields and oil lines.

Well, heck! That's easy enough to test! Let's take a map of military bases here in the contiguous United States (PDF file) -

- and combine it with a map of oil pipelines in the Lower 48 -

Sure enough - the location of the bases pretty much bears no relation to the location of the pipelines:

Huh. I wonder why our pipelines and oilfields here in the U.S. don't have huge military bases right next to them, but the Iraqi pipelines and oilfields do?

Hmmm . . .

And now, guess what? Longtime Bush family hatchet man James Baker has brought the PNAC plan full circle. With the Iraq Study Group's recommendation that U.S. troops be "redeployed" to "bases on the periphery", all Bush and Cheney have to do is strenuously object, wait until Halliburton et al. complete their work, and then "acquiesce" by "redeploying" to "bases on the periphery."

"Periphery" - heh. Yeah, that's rich. "Periphery" = NeoconSpeak for "close to the oil."

My guess is, that was the plan all along. But with James Baker and Lee Hamilton's imprimatur, the whole thing sounds like some big "withdrawal."

Ummm - NO. Not really. Just a fulfillment of the neocon oilmen's plan for Iraq. And we're truly staying until the mission of securing the oil is accomplished. (Hint: In NeoconSpeak, "stable democracy" = "secure oilfields and pipelines.")

President George W. Bush brushed aside talk of civil war in Iraq on Tuesday and insisted the United States would not withdraw its forces before its mission of building a stable democracy there was complete. [emphasis added]

Okay, we're getting warmer. How about this:

And the definition of success, by the way, is for there to be a country where the terrorists and Saddamists can no longer threaten the democracy, and where Iraqi security forces can provide for the security of their people, and where Iraq is not a safe haven from which the terrorists -- al Qaeda and its affiliates -- can plot attacks against America.

I think that what the President means when he says we aren't leaving until the Iraqi government is stable enough to defend itself, is that we're not leaving until the Iraqi government is stable enough to defend these:

- otherwise, they'll look like this:

But actually, I think it's simpler than that.

Remember way back at the start of this diary, I promised you I'd share with you the Actual Timetable For Withdrawal Of American Troops From Iraq?

Ahh, yes, well, um, after all this, I must confess - I do not have the, uh, Actual Timetable For Withdrawal Of American Troops From Iraq. But if I did, if I did, I suspect it would look a lot like this:

This is a Gantt chart. Gantt charts are used to track the workflow of large and complicated projects - like construction projects, for instance.The Gantt chart allows you to plug in the various components of your project along a timeline, and to track the "critical path" of the particular components without which other components cannot be completed. Gantt charts are very familiar in the construction industry. (The Gantt chart above happens to be for the renovation of the city hall in Pasadena, California.)

Now, I don't have access to the actual Gantt charts for the construction of the huge bases at Balat, or al-Asad, or Tallil or al-Qayyarah, but rest assured, Halliburton, Bechtel, Parsons, Lockheed Martin, and all the other contractors building those projects do have them. And, until the last task on those Gantt charts - it might be installing the faucet handles in the kitchens of one of the five mess halls at Balat, for instance - is completed, our troops in Iraq aren't going anywhere. Which means, the big contractors - not Congress, not the Iraqis, not even the President of the United States - are in charge of the Actual Timetable For Withdrawal Of American Troops From Iraq.

Well, most of our troops, anyway.

Poll

The real reason we invaded Iraq was:

	George wanted to be able to say to Condi, â€oeWeâ€TMll always have the Green Zone.”
0%	0 votes
	Dick Cheney felt inadequate about the size of his pipelines
41%	7 votes
	Because democracy isnâ€TMt cheap â€" right now, itâ€TMs running about $63 a barrel
11%	2 votes
	The President had $2 trillion in political capital burning a hole in his pocket
0%	0 votes
	George Bush wanted to be the Jed Clampett of the 21st century â€" heâ€TMs fixinâ€TM to build a gigantic see-MENT pond down in Argentina
17%	3 votes
	Saddam had to go - the President had promised John Bolton a monopoly on the â€oeCrazy Mustachioed Tyrant” franchise
5%	1 votes
	Apple Pie is on the march here
23%	4 votes

| 17 votes | Results

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