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I must respond to the comments of Amina Baker which are insulting, inflammatory, and untrue. Ms. Baker's most offensive assertion is also her most puzzling, namely that my opinions and those of others in CASI are somehow "pro sadam'"(sic). This is ludicrous: Saddam Hussein is vile*, and I can recall no message from CASI that argues otherwise. Only a complete mis-reading of my comments on oil futures could infer a pro-Saddam stance. Ms. Baker's ire is raised by the statement, "Saddam has absolutely no access to oil-for-food funds". Yet this statement is plainly true and, in fact, it reflects the very intent of OFF. It is embodied in the UN resolution under which OFF was chartered. Oil for food funds are not available at the discretion of Saddam Hussein, but rather are kept in a UN escrow account in the Banque nationale de Paris . The UN's 661 Committee agrees to each disbursement. The United Nations documents and periodically updates its listings of all expenditures which show where every penny of Iraq's oil sales are spent. Any claim that Saddam Hussein has access to OFF funds is farcical. Ms. Baker refers to the "latest reports published in new york" showing "hussain has gained billions of dollars by the oil for food programme" and that "his baathist party are benefiting daily by selling the food in the black market". Several issues are conflated here, which I will analyze separately (and no references are given, but I assume their basis is the recent State Department report on "Saddam Hussein's Iraq"). The "billions" probably refers to the figure the State Department report cites for Hussein's palace construction. I have no idea whether the figure is accurate or not; however, this amount has been cited in U.S. briefings since 1996, and it thus predates the oil for food program, the first revenue from which appeared on January 15, 1997. It's possible the "billions" refers to Forbes' recent $6B quess-timate of Saddam's overall wealth; however, this wealth also predates oil-for-food (as Saddam has ruled a once-vastly-richer Iraq since 1979). Although Saddam has no access to OFF funds, the consolidation of contracting and distribution under the embargo has created a shadow economy in Iraq. Smuggling , black markets, and contractual kickbacks are all areas where Saddam, his Ba'athist thugs, and the cruelly pressured middle class can turn a dollar. Ironically -- as with the rumored manipulation of oil futures -- these "opportunities" were birthed amid the economic constrictions and distortions due to sanctions; they're amplified by the heightened control over the economy now vested in Saddam's regime. As regards the selling of OFF goods on the black market, this has doubtless occurred and will occur again. However, the scale of such diversion appears small and, in this regard, the oil-for-food program appears amazingly clean. The State Department report lists three instances of Iraqi diversion into black markets: (1) the ship M/V Minimare and its contents, 2,000 metric tons of rice; (2) unspecified quantities of OFF baby milk, found in Persian Gulf markets; and (3) a shipment of baby talcum powder and bottles, seized by Kuwaiti authorities. Only points (1) and (3) offer specifics, and on these the following is now known: (1) The shipment of rice on the M/V Minimare was actually discussed months before the State Department's report by the UN's Humanitarian Coordinator, Hans von Sponeck. In April 1999, he said "... we have just now had a case, we don't know yet how it will end - 2,600 tons of rice coming into the country, and we discover that the first layer of that rice is looking nicely and good as it should. You go a little bit further down and what you get is crusted, caked up with filth and dirt, infested stuff, obviously a supplier who has tried to pull a fast one." In other words, the rice was unfit for human consumption and was rejected for OFF. That this shipment is the one referred to months later by the State Department was confirmed recently by Mr. Bob Odeh, retiring head of the UN's observation unit in Baghdad. (3) As regards the shipment seized by Kuwaiti authorities, the items were aboard a launch-sized Indian vessel called the Naurani. This seizure was well-covered in the West, because early reports claimed baby milk powder was being shipped (though this later proved to be talcum powder). It was also later revealed (though little reported) that these items were not part of the OFF program at all. Rather, they were purchased by a private businessman, Tahsin Mahmud Rastam, and failed to meet Iraqi product standards. The items were being shipped back to the United Arab Emirates following their rejection. This was confirmed by George Somerwill, Chief of Information of UNOCHI. In closing, let me add I took no particular offense in being called "naive" by Ms. Baker. Concerning Iraq, however, I have learned that true naivete lies in blindly accepting the reports of the media. And when the original UN documents are available online to all, it is not only naive to ignore them -- it is deeply negligent. Regards, Drew Hamre Golden Valley, MN USA --- * It's commonly held that during his rise to power as a Ba'athist enforcer, Saddam personally committed several murders. This figure is dwarfed, of course, by the hundreds of thousands killed during the wars with Iran and Kuwait. Ba'athist security forces remain among the most brutal in the world, with a history of torturing children in front of their parents. Saddam continues to repress Kurds and other ethnic groups. His invasion of Kuwait ended in an orgy of spiteful violence and caused an ecological disaster of biblical proportions. Prisoners from the Kuwait war - along with the civilian population of Iraq - remain hostages, caught between Saddam's desire to retain power, and the West's obscenely cruel policies of containment.  I consciously chose these words to echo the comment of Denis Halliday (from Colin Rowat's post of 99.09.21): "Contrary to State Department issuances, the Office of Sevan knows full well that the government in Baghdad has no access to OiI for Food monies."  The resolutions and the financial updates are all available from the UN's OIP web site, at http://www.un.org/depts/oip/  Following are the web addresses for the U.S. State Department's special briefing on Iraq (September 13, with Spokesman James Rubin and Undersecretary Martin Indyk): > Report: http://www.usia.gov/regional/nea/iraq/iraq99.htm > Transcript: http://www.state.gov/www/policy_remarks/1999/990913_indyk_rubin.html  The association and the conversation with Count von Sponeck are here: http://www.scn.org/ccpi/ The conversation with Mr. Odeh is summarized in Harriet Griffin's CASI post of 99.10.01  The Economist (Aug 21-27, 1999, page 36); http://www.spintechmag.com/9910/rb1099.htm > -----Original Message----- > From: Amina Baker [SMTP:AMB71@hermes.cam.ac.uk] > Sent: Thursday, November 25, 1999 10:12 PM > To: Hamre, Drew > Cc: 'Iraq-CASI - Discussion' > Subject: Re: 1) More on oil futures 2) Boutros-Ghali on sanctions > > > to drew and all others with the same pathetic naive pro sadam opinion, i > do not know whehter many of you are plain ignorant or you simply have not > read the latest reports published in new york, they found that saddam > hussain has indeed gained billions of dollars by the oil for food > programme. what makes saddam wealthy are a number of factors, one of which > is this!!! we are not assuming that saddam is making money, it is a fact > that saddam and his baathist party are benefiting daily by selling the > food in the black market in asia, s.e asia etc etc. now i am sure that > those of us who actually doo want to help the cause of iraq will agree > that and evil amn of his power, who has and remains to kill his own > people, will do anything and everything in his power to gain all the funds > he can for meeting his needs. so please next time a statement is made, i > suggest it is thought about first... > a very angry AB!! > > > > > On Wed, 24 Nov 1999, Hamre, Drew wrote: > People sometimes assume that, because of Saddam Hussein's great wealth, he *must* be diverting oil-for-food monies or otherwise bleeding humanitarian resources from Iraq. In countering, it should be stressed that Saddam has absolutely no access to OFF funds. Instead, as noted yesterday, Saddam can resort to other sources of income including the oil futures market. Ironically, nine years of sanctions have vested in Saddam a unique degree of individual leverage over oil market prices, as evidenced by this past week's fluctuations stemming from the Iraqi OFF announcement. This scenario is discussed in the following: a) http://www.ndu.edu/ndu/inss/books/sanctions/chapter1.html Institute for National Strategic Studies "ECONOMIC SANCTIONS AGAINST IRAQ (1990- )" "Some oil traders (claimed) that Saddam and his entourage had also enriched themselves by speculating in oil futures, manipulating the market to their advantage by periodically sending false signals that they were about to comply with Resolution 986. The prospect of a substantial increase in world supply resulting from the sale of Iraqi oil would trigger a price drop in oil futures, only for the price to soar up again, each time Saddam derailed implementation of the oil-for-food program with another incident. Reportedly, since the end of the Gulf War, Saddam had used $2 billion of his covert income to build huge palaces for himself and his supporters." <Note: This article also cites Thomas L. Friedman, "Follow the Money," The New York Times, 13 October 1996, E-13> b) http://www.slate.com/Gist/97-11-15/Gist.asp Iraq Since the Gulf War by Franklin Foer c) "Unvanquished" by Boutros Boutros-Ghali, Random House, 1999 Page 209: "Some speculated that Saddam was playing this game (negotiating oil-for-food) as a way to manipulate the world oil market. This was not implausible. Whenver the oil-for-food talks were reported to go well, the world market price of oil fell in anticipation of Iraqi oil coming onto the market; when Saddam Hussein broke off talks, the price of oil rose ... I did not, however, accept this theory. Saddam Hussein thinks of himself as a romantic hero confronting the forces of evil. He is totally isolated and shielded from hard information about world affairs." More generally, here's a great quote from BB-G concerning the Iraq sanctions (also page 209): "Again we are confronted the fundamentally contradictory character of sanctions: the innocent population suffers greatly but the oppressive regime feels little or nothing, while the process only deepens its control over the people." Regarding the reasons for the 2-week OFF turn down, a very believable (and exasperated) explanation comes from Iraq's Ambassador Hasan in the report at http://biz.yahoo.com/rf/991123/bce.html : "What can you export in two weeks? What kind of a distribution plan can you submit? What kind of commodities can you bring to the country in two weeks? It's ridiculous to extend it for two weeks this program with all of its complexities," Hasan said. Regards, Drew Hamre Golden Valley, MN USA -- ----------------------------------------------------------------------- This is a discussion list run by the Campaign Against Sanctions on Iraq For removal from list, email email@example.com Full archive and list instructions are available from the CASI website: http://welcome.to/casi