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News supplement 1/10/00 ­ 7/10/00

NEWS SUPPLEMENT 1/10/00 ­ 7/10/00

*  Iranian daily responds to Iraqi daily on two countries' eight-year-long
*  Turkish drought worsens regional water row ­ Iraq and Syria say new dams
threaten supply
*  Editorial: Iraqi sanctions are a dead end (Seattle Times ­ a very
hard-hitting attack on American policy)
*  Despite U.S. opposition, Hussein in `great shape'  (Chicago Tribune)
* A Nominee's Long Road to 'No' (on controversy surrounding US Iraqi policy
with regard to the next US ambassador to Kuwait)
*  Iraqi smugglers net oil bonanza
*  Chavez a new revolutionary (account of the first foreign head of state to
visit Iraq since the war)
*  Saddam sells medicines and aid for life's little luxuries (The Times)
*  Turkey Warns of Retaliation If U.S. Makes Genocide Charge (Washington
*  Cheney, Lieberman differ on dealing with US foes
BBC Monitoring Service - United Kingdom, Oct 1, 2000, 385 words

Text of commentary in English by 'Iran Daily' web site on 1st October
During the Sacred Defence Week (21st-27th September), President Mohammad
Khatami's remarks implied that Iran only gained from the war that aimed to
topple the Islamic system and that Iran has never sought and will never seek

In response, the Baghdad-based daily `Al-Thawrah' in its 22nd September
issue rejected this reality. We intend to respond to this reaction. The
paper claimed that Iraq never intended to topple the Islamic system and at
no juncture did any Iraqi official declare so. Did Iraq's military attack on
Iran, with the full backing of the majority of Arab states, the US, France,
England and the former Soviet Union, imply anything other than toppling the

Let us look at the matter from a different angle. If Iraq had managed to
permanently separate some parts of Iran, what would have happened? Wouldn't
that have resulted in the collapse of the newly-formed Islamic system from
within? The paper's claim that an Arab foreign minister had told Saddam
before the start of the war that Iranian officials behaved wickedly towards
the Arabs is also very ambiguous. It is clear that Iraq fanned the flames of
war to overthrow the Islamic republic. Thus, Iraq's and its allies' failure
in toppling the Islamic system or bringing about the disintegration of the
country is a great triumph for Iran.

Now let us presume that Iraq never intended to bring about the fall of the
Islamic republic. Can anyone explain why the Iraqi leadership tore the 1975
Algiers Accord at the beginning of the war and then accepted its
implications at the end? Doesn't this mean Iran was ultimately the victor?
With regard to the notion of Iran rejecting all international and Iraq's
peacemaking efforts and not immediately accepting the UN Resolution 598, if
Iraq never wanted to indulge in a war, a conscious mind can explain quite
reasonably [sentence as received]. Throughout the conflict, with the
exception of the ratification of UN Resolution 598, which surfaced when Iran
had apparent battlefield superiority, there were never any meaningful
peacemaking attempts detectable by Iran.

The supporters of Iraq initiated all those so-called efforts and there was
never a mention of Iraqi withdrawal from occupied Iranian lands in them.

All angles considered, the Islamic system, in line with its policy of
detente, is firm on establishing sound ties with all Muslim countries of the
world, including Iraq. Tehran has repeatedly proved its good intentions in
the past few years.

Source: 'Iran Daily' web site, Tehran, in English 1 Oct 00 p 1 /BBC
Monitoring/ © BBC.,3604,375983,00.html

Chris Morris in Ankara, Monday October 2, 2000

After the driest summer in 20 years, Turkish officials are warning that they
cannot supply Syria with all the water it wants from the Euphrates and
Tigres rivers. The announcement will cause concern in the Middle East, where
water is one of the most sensitive strategic issues.

Under an informal agreement, Syria is supposed to receive 500 cubic metres
of water per second from the two rivers as they cross the border from
Turkey. This month, however, the average flow has been only 160 cubic metres
per second, and next month it could be even less.

The water levels in Turkish reservoirs have become dangerously low, and
Turkey is bracing for a winter of severe energy shortages. The head of the
state water authority, Dogan Altinbilek, has said that the amount of water
Turkey can send across the border will depend on rainfall in the next few

Syria and Iraq, which is also downstream from Turkey, complain that Ankara's
ambitious programme of dam-building on the Euphrates and the Tigres is a
threat to their water supply. Turkey, however, insists that the shortages
have nothing to do with the dams, which officials in Ankara say have
improved the situation.

"Syria would have received only about 50 cubic metres [per second] if there
had been no dams on the rivers," Mr Altinbilek said.

Water has been a contentious issue between Turkey and its neighbours for
years. Sporadic talks on the issue have failed to reach any formal

Turkey insists that there is more than enough water in the two rivers for
all three countries, but it claims both Syria and Iraq waste supplies
because of inefficient water management and poor agricultural techniques. In
turn, Damascus and Baghdad accuse Turkey of trying to dictate terms.

The lack of an agreement on water sharing has been one of the main points
emphasised by opponents in Britain of the proposed Ilisu dam, which would be
one of the biggest dams in the region.

The British government is still considering whether to grant Balfour Beatty
export credit guarantees worth £200m to build the dam on the Tigres, a few
miles north of the Syrian border. Current signs are that the plan has run
into serious difficulties.

If the drought intensifies, Turkey's use of water on the two most important
rivers in the region will come under even closer scrutiny. Some strategic
analysts have predicted that water, rather than oil or land, could be the
spark which ignites a future war in the Middle East.

Sunday, October 01, 2000, 12:00 a.m. Pacific


Imagine if a U.S. cruise missile were to land on a kindergarten and kill 165
children. Imagine now that it was launched knowing it would hit that
kindergarten, and further, that one of these missiles was launched at a
different kindergarten every day for a month. That's 5,000 children.

To kill that many children as a matter of state policy would be unspeakable.
The American commander in chief would be condemned as a barbarian. And yet,
that is what the economic embargo of Iraq has done: According to the United
Nations International Children's Emergency Fund (UNICEF), the embargo has
caused 5,000 extra deaths per month among children under 5. This has gone on
for nearly 10 years, killing more than half a million children. These deaths
were caused not by bombs but by germs, mainly preventable water-borne
diseases such as typhoid and dysentery. They were caused because the United
States and its allies wrecked Iraq's water-purification plants in 1991 and
because the U.S. led embargo on Iraqi oil has prevented Iraq from rebuilding

Water systems were not likely to matter much in a 100-hour war, or even a
six-month war. They were targeted for long-term leverage. The justification
was to put pressure on Saddam Hussein. Whatever deaths resulted from the
policy could be blamed on Saddam. If the policy worked quickly, one could
argue it was a success. But when the policy goes on and on, causing deaths
of children with no end in sight, it becomes unconscionable.

Americans like to say the economic embargo is the policy of the United
Nations. But the UN's General Assembly, if given a chance, would repeal it.
So would the Security Council, where the embargo is sustained only by the
United States and Britain. If President Clinton decided otherwise, the
embargo would end tomorrow.

Americans also keep this policy going by disingenuously misidentifying the
target. Government officials speak of the squeeze on Iraq in terms of a
campaign against one man. Officials do not say that we bomb the people of
Iraq; we are "hitting back at Saddam Hussein." They do not say we embargo
the people of Iraq; we are "putting the squeeze on Saddam Hussein." And yet,
the price is not paid by Saddam Hussein, personally, but by children who die
and their families.

What has been gained? The goal was to prevent Iraq from developing weapons
of mass destruction. American officials also hoped it might lead to the
downfall of Saddam. Today, it is not clear that such weapons exist or that
Saddam retains any ability to manufacture them. Within Iraq, it's likely the
sanctions have strengthened, not weakened, Saddam's grip on power.

Despite all that, the United States continues to enforce an economic embargo
that kills 5,000 children per month. After 10 years, it's time for Americans
to take notice and name the policy for what it is: a tragic failure.,2669,SAV

By John Diamond, Washington Bureau
October 2, 2000

WASHINGTON -- The U.S. strategy of containment against Iraq is unraveling
amid rising oil prices, bickering among allies and concern about the
suffering of the Iraqi people.

President Saddam Hussein's hold on power is as strong as ever.

Using money diverted from the UN-sanctioned oil-for-food program, his
military has begun to rebuild from the damage sustained in the Persian Gulf

The surge in fuel prices suddenly places the West in the awkward posture of
beseeching Iraq not to cut crude oil production.

"Make no mistake about it. Iraq is awash with money," said Richard Butler,
the former UN weapons inspector whose team was turned out of Iraq two years

"The regime is in great shape," he told lawmakers last week.

Mild protestations from Washington have done nothing to stop an increasing
flow of commercial flights into Iraq from France, Russia, Jordan and Yemen.

Iraq has avoided international arms inspections for two years, leaving the
Pentagon in the dark as to Baghdad's arsenal.

The economic sanctions kept in place at Washington's urging are coming under
increasing attack not only from countries such as Russia and France that
hope to do a booming business with Iraq but also from U.S. lawmakers of both
parties concerned about the effect on nutrition and infant mortality in

No one seems happy with the U.S. containment strategy.

But after months of intensive internal review by the Clinton administration,
no workable alternative has emerged. Admitting frustration, the
administration counæݵݬW0ile Hussein ¼? s every indication that
time is on his side.

"We would like to see Saddam gone," Undersecretary of State Thomas Pickering
told Arab journalists recently. "But I can't tell you that there is a magic
formula to see this done. Our magic formula, in reality, is patience. ... It
is not a perfect policy."

One of the participants in Capitol Hill's policy review was retired Marine
Gen. Anthony Zinni, until recently the head of the U.S. military command in
charge of the Persian Gulf region.

Zinni has briefed senior administration officials on a secret war plan that
details how the U.S. military, with limited allied help, would seek to
topple Hussein. The effort would be massive, involving possibly as many as
half a million troops, according to one knowledgeable official.

Although he has confidence in U.S. forces, Zinni has no illusions that such
a scheme could win public support, considering the cost in lives and dollars
it would almost certainly involve.

Nor, he said, would any gulf nation allow such an offensive to spring from
its territory without a major provocation by Iraq.

"I wracked my brain for over four years to come up with a strategy other
than containment that might work," Zinni told the Senate Armed Services
Committee. "I have to be honest with you: I didn't come up with a better
one. Containment is what you do when you can't come up with the popular will
to take decisive military action."

The gulf war almost a decade ago left Hussein with a shaky hold on power.

Armchair generals complained that the Bush administration ended the war too
soon and blew a chance to drive Hussein from power.

Bush allies such as retired Gen. Colin Powell, then the chairman of the
Joint Chiefs of Staff and now an active supporter of Texas Gov. George W.
Bush's run for the presidency, call those criticisms preposterous. They say
the coalition of nations, including many Arab countries, would have fallen
apart had the United States marched on Baghdad.

Nevertheless, the notion that Hussein somehow survived because of U.S.
weakness has persisted, and the Iraqi leader's ability to tweak Washington
has remained a major foreign policy irritant to the Clinton administration
for the past eight years.

Since the gulf war, the United States has spent $8 billion building up an
arsenal in the gulf, deploying thousands of troops to the region, conducting
occasional "pinprick" strikes, and flying hundreds of combat sorties over
northern and southern Iraq. Under U.S. and allied scrutiny, Iraq has
refrained from threatening military moves against its neighbors, and for
this reason U.S. allies in the gulf such as Saudi Arabia, Bahrain and Oman
continue to allow a U.S. military presence.

But the 30-nation coalition that fought Iraq in 1991 has nearly evaporated.
Only U.S. and British warplanes participate in keeping Iraqi planes from
entering the northern and southern Iraq no-fly zones.

"Why is the United States virtually alone?" Sen. John Warner (R-Va.),
chairman of the Senate Armed Services Committee, asked at a recent hearing.

Frustrated by Iraq's ability to defy international sanctions and to throw
out U.S. arms inspectors, Congress passed legislation two years ago to
funnel $97 million to opposition groups seeking to topple Hussein. Yet so
far, the money has gone to fax machines and copiers, and not a single bullet
has been purchased with the aid, according to Clinton administration

Opponents of Hussein inside Iraq are far too weak to challenge his regime.

Arab-language newspapers have reported that he has cancer and that the
recent flights from France carried medical specialists to treat him. But
U.S. intelligence dismisses this as wishful thinking, saying there's no
evidence to support rumors that Hussein is ailing.

Richard Perle, a senior Reagan administration official and close adviser to
Gov. Bush, advocates a more active U.S. military role, including arming and
training indigenous Iraqi opposition groups.

"It is increasingly clear that the only solution to the danger posed by
Saddam Hussein is a sustained, determined plan to remove him from power,"
Perle said. "Saddam has emerged from each new bombing stronger than before.
Support for sanctions, whose most visible effect is the impoverishment of
the Iraqi people, is sinking fast."

The technical term used by the Pentagon to explain the current military
posture toward Iraq is "keeping Saddam in his box."

Increasingly it appears Washington is boxed in by its own Iraq policy.

The United States got involved in the gulf war for economic reasons.

"Jobs, jobs, jobs," was how then-Secretary of State James Baker explained

The idea was that aggression by one nation in the heart of the world's
richest oil region would upset energy markets, with potentially enormous
repercussions in the United States, perhaps leading to recession and

To win public support for waging the gulf war, however, Washington had to
demonize Hussein, and the Iraqi leader gave the Bush administration plenty
of material.

There were his Scud missile attacks on Israel and poison gas attacks on his
own Kurdish population in the north in the late 1980s. There was the brutal
treatment of Kuwait during Iraq's occupation.

Immediately after the war, there was the iron-fisted repression of an
uprising by the so called marsh Arabs in southern Iraq.

Subsequent UN inspections revealed a huge Iraqi chemical and biological
weapons program and the beginnings of a nuclear weapons effort.

Today, the rest of the world appears to see Iraq in economic terms, as a
possible trading partner, as holder of the world's second-largest oil
reserves whose production capacity could ease the latest fuel price spike.

The State Department acknowledges that even if Hussein observed all the
requirements imposed by the UN, the containment policy would remain until he
was out of power.

With no arms inspectors inside Iraq, it is difficult to tell whether Hussein
has reconstituted his programs to build weapons of mass destruction. But
there is some evidence to indicate that he is.

Despite the suspicions of an arms buildup by Baghdad, the administration,
pressured by France and Russia in the UN Security Council, has acquiesced
repeatedly on Iraq.

Just last week, the U.S. lifted its earlier objections and voted to allow
Iraq to lower the percentage of its oil revenue that must go into a fund to
compensate victims of Iraq's invasion and occupation of Kuwait.

Meanwhile, U.S. intelligence suspects that some of the food and drugs Iraq
is buying with oil money are being exported for cash the regime can use for

Stephen Solarz, a former Democratic congressman from New York known for his
foreign policy expertise, told Congress last week that the United States has
declared its intention of toppling Hussein without a plan that offers a
realistic hope of achieving that objective.

"We're paying a very heavy price in terms of our credibility in the region,"
Solarz said.

By John Lancaster, Washington Post Staff Writer, Tuesday, October 3, 2000;
Page A03

With his Arabic language skills and more than 30 years of experience as a
Foreign Service officer, much of it in the Middle East, Larry Pope seemed
destined for diplomatic stardom when President Clinton picked him last
February as the next U.S. ambassador to Kuwait.

In an Aug. 8 letter, Defense Secretary William S. Cohen urged Senate Foreign
Relations Committee Chairman Jesse Helms (R-N.C.) to support Pope's
confirmation by the Senate, citing his "invaluable" service as political
adviser to Gen. Anthony C. Zinni during Zinni's recent tour as commander of
U.S. military forces in the Middle East, Africa and Central Asia.

But it was that very service that proved to be Pope's undoing.

Angered by Zinni's open scorn for a Republican-backed plan to provide Iraqi
opposition groups with arms and military training, Helms decreed last month
that his committee would not grant Pope a hearing, sinking the nomination
and prompting Pope, 55, to retire from government service.

Washington "is a pretty poisonous town these days," said Pope, who departed
last weekend with his wife for their 60-acre farm in Maine. "It will be a
while before I come back to the Beltway."

A Helms spokesman said the chairman blocked the nomination because of Pope's
close association with Zinni and also in the belief that with just a few
months left in the Clinton administration, the filling of such a sensitive
post should be left to the next president. But to Pope and his allies at the
State Department, the episode is evidence of an excessively partisan
confirmation process that permits individual lawmakers to hold would-be
ambassadors hostage to narrow political agendas, damaging careers as well as
U.S. foreign policy.

"Something has really gone off the tracks on this nomination review for
career people," said Peter Burleigh, a 33-year Foreign Service veteran who
served most recently as the acting U.S. representative at the United

Burleigh knows whereof he speaks. In July 1999, Clinton named him ambassador
to the Philippines. But Sen. Charles E. Grassley (R-Iowa) blocked his
nomination for 12 months pending resolution of the unrelated case of Linda
Shenwick, a State Department employee who said she had been transferred from
her job at the U.S. mission to the United Nations for blowing the whistle on
management abuses.

Grassley released his "hold" last summer after the federal Office of Special
Counsel found that the State Department had not mistreated Shenwick. By
then, however, a frustrated Burleigh had already put in his retirement
papers. He left the Foreign Service in August.

"This was not an isolated incident," Marshall Adair, president of the
American Foreign Service Association, wrote in the October issue of the
organization's magazine. He also cited seven ambassadorial appointees whose
nominations were placed on hold last summer by Sen. Rod Grams (R-Minn.) to
force the State Department to tighten security.

"These actions incur a cost," Adair said in an editorial. "The absence at
post of an Ambassador, the President's personal representative, reduces
American access to the highest levels of the host government and
correspondingly reduces our influence."

Senate aides respond that the constitutional duty to "advise and consent" on
nominations requires rigorous scrutiny. In the aftermath of security lapses
at the State Department, including the bugging of a conference room and the
loss of a laptop computer containing classified information, Senate staffers
were incensed by Adair's suggestion that Grams had no business holding up
the seven ambassadorial nominees, each of whom had compiled double-digit
totals of security violations.

"One . . . had been suspended twice, once for 10 days and once for 16 days
without pay, for mishandling classified information," said Marc Thiessen,
spokesman for the Foreign Relations Committee. "Senator Grams held those
nominations up in order to force the State Department to institute new
regulations and new penalties and to finally start taking security

Last Wednesday, satisfied that the State Department had gotten the message,
committee members voted to send the seven nominees to the full Senate for
confirmation. "So the Congress did its job," Thiessen said. "It's called

Pope was not so lucky. A Boston native whose first overseas posting was in
Vietnam, he spent much of his career in the Arab world and Africa, including
a stint as ambassador to Chad from 1993 to 1996. He held senior posts in
Washington and in 1997 was named political adviser to Zinni, then head of
the Tampa-based U.S. Central Command.

Pope traveled frequently with Zinni to the Persian Gulf, experience he
assumed would work to his benefit after Clinton tapped him for the Kuwait
City job. In June, Pope left Tampa with his wife, moved into a rented
apartment in Ballston and began brushing up on his Arabic.

But Pope quickly discovered that his nomination was in trouble. In an
unusual e-mail to colleagues last month, he described his experience,
opening a rare window on a process that usually is shrouded in secrecy. A
copy of the e-mail was provided to the Washington Post by a third party,
after which Pope agreed to be interviewed.

By his account, the bad news was delivered by Danielle Pletka, a staff
member on Helms's committee known for her acerbic style and prickly
relations with the State Department. At a meeting with Pope in June, Pletka
raised the subject of Zinni's well-known views on the Iraq Liberation Act, a
1998 law that authorized the spending of up to $97 million to arm and train
Iraqi opposition groups.

Though Clinton signed the bill, he did so reluctantly. To the irritation of
Helms and other Republicans, the administration has limited its assistance
to non-lethal training and equipment such as fax machines, arguing that the
opposition is not sufficiently organized to lead a rebellion against Saddam

Zinni has gone even further. "There are congressmen today who want to fund
the Iraq Liberation Act, and let some silk-suited, Rolex-wearing guys in
London gin up an expedition," he said last spring at the U.S. Naval
Institute. "We'll equip a thousand fighters and arm them with $97 million
worth of AK-47s and insert them into Iraq. And what will we have? A Bay of
Goats, most likely."

Such comments did not sit well with Helms and his staff. "Referring to Tony
Zinni's forthright statements under oath to the [Senate Armed Services
Committee] in which he had opposed the coup schemes . . . being promoted in
some quarters, Pletka said there were two possibilities," Pope wrote in his
e-mail. "Either I agreed with General Zinni, and certainly wouldn't be
confirmed, or I was an ineffectual adviser."

According to his written account, Pletka then said that "the nomination
might be salvaged, but only if I was willing to inform on Zinni, providing
the Committee with documents I had generated . . . advising him against the
position he had taken."

Pope replied, according to his e-mail, that his advice to Zinni was a
private matter but that he would be happy to discuss his own views with
anyone on the committee. But he added, "She wasn't much interested in my
views, since, as she put it, nominees often say one thing and do another
after they are confirmed."

Pope was accompanied at the meeting by Susan Jacobs, the State Department's
deputy liaison to Congress. Jacobs declined to comment on his account. A
senior State Department official who discussed the meeting with Jacobs
described Pope's description as "a true and accurate report."

Pletka declined to comment on Pope's account and referred questions to
Thiessen, the committee spokesman. "The description in the letter is
inaccurate, doesn't reflect reality, and it's fiction," Thiessen said,
declining to provide further details. "We consider it a private meeting."

Pope's nomination languished all summer. On Sept. 15, he and Jacobs met with
committee staff director Stephen Biegun, who informed them that the Senate
would not act on his nomination but that Helms bore him no grudge and would
support his confirmation to another post. Pope described Biegun as a "decent
guy" who delivered the news with regret.

"What he said to me was, 'You are not being held responsible for General
Zinni's statements. It's just that the Senate wants someone who would be
more forward-leaning on the Iraqi opposition,' " Pope said.

The Kuwait embassy post is a sensitive one for supporters of the Iraqi
opposition; the tiny emirate could well play a role as a staging area for an
armed uprising against Baghdad. Biegun declined to comment.

Since his meeting with the staff director, Pope has occupied his time by
taking retirement seminars and planning his move to Maine.

Over a beer at the Army-Navy Club last week, Pope said he is proud of his
friendship with Zinni and acknowledged that he shares the
administration's--and Zinni's--doubts about the wisdom of arming the Iraqi
opposition. But he added, "If you start saying to Foreign Service officers
that because you were a loyal servant of this administration, therefore you
won't be a loyal servant of the next, you've got a spoiled system."

Thiessen defended Helms's decision. "Probably the greatest foreign policy
failure of the administration has been Iraq policy and the crumbling of the
coalition against Saddam Hussein, combined with nonenforcement of the Iraq
Liberation Act, which the president signed into law," he said. "We're now
six weeks away from a presidential election, so there is actually no reason
why the Senate should impose on the next president in the key post of
ambassador to Kuwait somebody who's associated with the old policy."

Thiessen added that "we would have been perfectly happy to have confirmed
him for another post."

But Pope said he had considered the Kuwait assignment ideal, given his
background, and had no interest in waiting around for another opportunity.
"And go through this again?" he said.

By Robin Allen in Dubai
Published: October 3 2000 17:37GMT (Financial Times)

Iraq is smuggling out $2bn of oil a year in spite of the United Nations
economic embargo and spending the proceeds on weapons and luxuries for
Saddam Hussein's inner circle.

The smuggling bonanza is benefiting officials in Iraq and Iran, together
with shareholders of small Gulf-based oil trading companies, according to
oil traders in the United Arab Emirates.

The scale of the smuggling, and the blind eye turned by regional
authorities, they say, make a mockery of the UN embargo, as well as claims
by Iraqi leaders that the UN embargo causes widespread public hardship and

According to these traders, more than $600m a year is being shared among
senior Iraqi officials, including President Saddam's cronies, with the money
going on imports of "cigars, whisky and weapons".

According to the United Nations, Iraq's daily oil production is between 2.6m
and 2.8m barrels, worth between $16bn and $20bn a year. Seventy per cent of
the revenue goes to the oil-for-food programme and 25 per cent to the UN's
Gulf war compensation fund.

Estimates by oil traders of the value and volume of Iraqi oil smuggling
suggest 10m tonnes a year of oil products are being sold on the open market
at an average $200 a tonne. Two thirds of this traffic is fuel oil fetching
$160 a tonne when Dubai spot crude sells at $32 or $33 a barrel, and a third
is diesel and gas oil selling at more than $300 a tonne.

The traffic, which started in earnest four years ago when sanctions were
making it harder for President Saddam to pay off key constituents, has been
"hot and heavy" for the past year as prices for fuel oil and middle
distillates such as diesel have risen.

The sanctions-busting covers a variety of land and sea routes, with pay-offs
to various third parties. There is even a "ring" among many trader-smugglers
who agree not to bid against each when buying back their own confiscated

Iraqi beneficiaries use some of the proceeds to buy more than 10,000 bottles
of whisky and 50m cigarettes a week, plus quantities of cash-counting
machines. At the same time, Iraq is exporting grain, other food and medical
equipment overland to Jordan and Syria and by sea through the Gulf.

About a third of smuggled Iraqi oil products go by road into central and
northern Iran. Traders call it Iranian "displacement" oil because it
replaces products from Iran's own refineries in the south of the country,
where products are often blended with Iraqi contraband.

But the bulk of Iraq's smuggled oil traffic goes through Gulf ports, with
more than half finding its way to the UAE.

The journey for smuggled products starts at the Iraqi ports of Fao and Umm
Qasr in the Khawr Az-Zubair channel, where it is loaded into old, small and
environmentally hazardous vessels. Smugglers pay Iraqis between $60 and $95
a tonne for all types of oil products.

Once they leave Iraqi ports, the vessels steam into Iranian coastal waters,
putting in at Iranian ports where officials of the Islamic Revolutionary
Guards Corps (IRGC) take $50 to $60 per tonne of products in exchange for
"authentic" bills of lading. To put pressure on the smugglers for more
money, the IRGC occasionally intercepts their ships, while simultaneously
demanding financial assistance from the UN to defray the cost of
intercepting the smugglers.

If US naval ships, which comprise 95 per cent of UN surveillance forces, are
being particularly vigilant, the smugglers avoid making the cross-Gulf
journey. Instead they lay up in Iranian ports, including the free zones of
Kish, Qeshm and Chah Behar, where additional demurrage and customs "fees"
are paid to port officials.

Last year the US navy stopped and questioned more than 2,400 ships, boarded
700 of them, and arrested 19 which were taken to Gulf Arab ports, with both
ship and cargo being confiscated before being sold at public auction.

Most of the arrested ships have been taken to Abu Dhabi, where this month
six sanction busting vessels were sold off for Dh4m ($1.1m). Their cargoes
of diesel and fuel oil were sold about $20 a tonne below the market price,
fetching $3m, a drop in the ocean compared with the total scale of the

The sanctions-busting vessels are registered in Panama, Belize and other
flag-of-convenience countries.

Their owners frequently operate through "brass-plate" companies and
UAE-based agents under the benignly neutral eye of the authorities.
Owner/agents frequently buy back their own confiscated oil. The buyers of
seven vessels auctioned in Abu Dhabi last May were all Dubai-based
businessmen and companies.

UAE businessmen insist the US could, if it really wanted to, completely
block the Gulf maritime smuggling routes. That it does not, they argue, is
evidence that it is in Washington's wider regional interests to keep Mr
Saddam in power and "locked up in his cage".

This argument is rejected by senior British and US diplomats, who say
western officials have no right to supervise the enforcement of
international law inside other countries' jurisdiction.

As one trader put it: "On the one hand you have a regime [in Iraq]
determined to stay in power no matter the cost. That's politics. On the
other, at $65 a tonne clear profit, a vessel has paid for itself after only
two successful trips, so entrepreneurs are prepared to take a risk. On both
fronts, there is complete cynicism."

By Roger Fontaine

 WASHINGTON, Oct. 2 (UPI) -- No one in this hemisphere has seen anything
quite like him since Fidel Castro's entry on the world stage in 1959 or
Argentina's Juan Perón in 1945.

 Venezuela's President Hugo Chávez has charm, charisma, and world-class

 Chávez, an ex-paratrooper from a small town in Venezuela's remote
savannahs, is intent on carrying out a revolution in his oil-rich, but
down-at-the-heels country.

 In less than three  years in office, he already has transformed the
country's political institutions, written a new constitution, and promises
to yank 80 percent of Venezuela's 23 million  people above the poverty line.
Even if it will take him another decade.

 According to the new rules -- Chávez can do that by succeeding himself
after his first term in office, which ends in 2006.  At 46, Hugo Chávez
should have no trouble staying in office for another dozen years.

 The comparison with Fidel Castro is instructive. Chávez has already
irritated Washington by calling the Cuban "lider máximo" ) or "Maximum
Leader")  a great man and the Cuban revolution a shining  success.

 Venezuela, he once declared, is swimming "toward the same sea as the Cuban
people," a sea, he added, "of happiness, social justice and true peace."

 A star-struck Chávez also last August became the first head of state to
visit Saddam Hussein since multilateral sanctions were imposed after Iraq's
invasion of Kuwait.

 Said Chávez: Saddam Hussein is a "brother" and at one press conference he
positively gushed about the Iraqi leader personally driving him about the
streets of Baghdad.

 The State Department was not amused. "Particularly galling," pronounced the
Department's press spokesman Richard Boucher.

 Not to be outdone, Chávez has also had kind words for Moammar Gadhafi and
corresponded with convicted international terrorist Carlos the Jackal, who
is a Venezuelan by birth.

 Some of Chávez's neighbors are not thrilled at Venezuela's new diplomacy

 Colombia's President Andrés Pastrana bluntly warned Chávez not to get
involved in his country's internal affairs - Chávez had offered to talk to
Colombia's guerrilla groups.

 To the east, Guyanese leaders were appalled at the Venezuelan president's
resurrecting a once buried claim on two-thirds of Guyana's territory.

 Meanwhile, Chávez's enemies in Venezuela are not the only ones seeing a bit
of Fidel in their new leader.

 Like Castro, Chávez favors long, rambling speeches as he talks to his
people in earthy, street language.

 Like Fidel, his grasp of economics is shaky as he spends money on state-run
programs designed to help the poor.

 And like Fidel he made his start in national politics by staging an armed
uprising that nearly toppled a corrupt government - albeit an elected one.

 For Chávez, the big moment was February 1992.  He was the last to surrender
and got two years in jail --  about the time Castro served on the Island of

 But Chávez did something else.  Although under lock and key, he somehow
managed to smuggle out a videotape supporting a second coup attempt nine
months later.

 U.S. officials and independent analysts and experts saw only the horrible
prospect of South America's oldest democracy being taken over by a bunch of
cowboys in uniform.

 Many Venezuelans, however, saw a gutsy guy who just didn't talk about
change, but was willing to risk his life for a cause.  In Venezuela that was
the headline. That was macho.

  It has been reported that Chávez, aside from plotting, spent much of his
time in jail reading and reading widely -- another echo of Fidel.

 In fact, Chávez is fond of quoting from a wide assortment of authors just
to prove he is no yokel from the south of nowhere.  But like Castro, he may
have read widely but perhaps not too well.

 In all the lists of readings favored by the Venezuelan and the Cuban, no
one yet has cited a classical economist.  Walt Whitman yes,  but Adam Smith.
definitely not.

 Having risked his life in a coup plot and been a plotter ever since he was
young junior officer, Chávez's ambition is formidable.  But he has combined
that with a native criollo shrewdness.

 He knew perfectly well that a large majority of Venezuelans were sick of a
two-party democracy in which the politicians from each side shared the jobs
and the oil wealth leaving only a little to trickle down.

 When oil prices dropped in the 1980s, even the trickle stopped.  But the
políticos did not care.

 By the time Chávez declared his candidacy for the presidency in 1998,
Acción Democrático and Copei combined had a popular approval rating of 5
percent.  Chávez got 58 percent of the vote.

 Once in office, Chávez campaigned to change the rules -- he called it a war
on the oligarchy - while critics said he was building himself a
dictatorship.  In reality, it was a bit of both.

 The old constitution was scrapped and another written by a constituent
assembly that was completely in the pocket of Chávez.

 The new constitution, a monster of 350 articles, abolished the bicameral
Congress, limited the powers of the new unicameral chamber, and gave the
president the kind of authority even Abraham Lincoln or Franklin Roosevelt
in wartime could only envy.

 The new constitution also provided for new elections and a six-year term in
office, just like Mexico.  Unlike Mexico, however, President Chávez can run

 Since creating a constitution to suit himself, Chávez is beginning to build
an international reputation.

 He likes to travel and he offers advice. In the case of Cuba he offered
aid.  And he has seized Venezuela's current presidency of the 11-nation
Organization of Petroleum Exporting Countries (OPEC) and made it a bully

 Chavez demands that the oil cartel gets serious about maintaining the
current level of prices, the highest they have been in 25 years.

 His concern for keeping oil at $30 plus a barrel is not just the starving
masses of say, Nigeria.  Chávez knows his presidency can founder as his
predecessors' did on the rocks of bankruptcy.

 Therefore Chávez needs that expected $26 billion in oil revenues this year
to pay for his increasingly extravagant social welfare spending.

 After all, it's not too early to think about 2006.

By Roland Watson, Richard Beeston and Michael Theodoulou
October 4 2000

SADDAM HUSSEIN is importing vast quantities of Scotch whisky and cigarettes
every week while illegally exporting food and medicine destined for the
Iraqi people, according to a confidential Foreign Office report.

The Foreign Office document, which discloses the anger in London at the
West's failure to win the propaganda war, spells out blow by blow how the
Iraqi President has effectively shattered the sanctions regime imposed on
Iraq. As the soaring price of oil shores up his power, Britain and the
United States have found themselves increasingly isolated among the
countries of the world in trying to keep the sanctions in place.

The report says that the Baghdad regime is buying an average of 10,000
bottles of whisky - much of it Scotch - and 50 million cigarettes each week
for the dictator's extended political and military elite.

At the same time, humanitarian goods that have been bought for the Iraqi
people under United Nations supervision are being stockpiled and sold
abroad. The Kuwaiti coastguard has intercepted ships loaded with food
leaving Iraq, while emergency drugs meant for Iraqis have been discovered in
pharmacies in Lebanon.

The contrast between the luxury enjoyed by Saddam and his circle and the
poverty elsewhere in the country was typified by his birthday celebrations
this year, which included a 3- metre-high cake, the ingredients of which
would have fed 100 children for 30 days.

The details are contained in Foreign Office papers compiled from informed
sources within Iraq and the Middle East.

On Monday the United States announced that it would spend £3 million funding
Iraqi groups opposed to Saddam. However, William Cohen, the US Defence
Secretary, conceded that Iraq had been successful in its battle to win
international public opinion for the lifting of sanctions.

In particular, Iraq has effectively broken out of its decade-long isolation
thanks to a series of recent aid flights from France, Russia and from around
the Arab world.

There is even the prospect of a resumption of regular flights between
Baghdad and Moscow with the signing of a memorandum between Aeroflot and
Iraqi Airways. Iran said yesterday that it would allow the flights to cross
its airspace and expected the service to begin later this month.

Yesterday a Moroccan flight landed at Baghdad's Saddam International
airport, which was reopened earlier this year to cope with the sudden influx
of air traffic. Delighted Iraqi officials said that similar flights were
expected in the coming days from Tunisia and Libya.

George Galloway, the Scottish Labour MP, who is in Baghdad attending a
conference on Jerusalem, welcomed the sudden rush of flights, which he said
had "proved the illegality of the air embargo".

Part of Saddam's new-found confidence comes from the high price of oil,
which has opened the way to an elaborate oil-smuggling operation via Turkey
and the Gulf, which should bring him an estimated £700 million this year.

Some 150,000 barrels are exported overland to Turkey. This cross-border
trade has never been authorised by the United Nations, but is conducted
quite openly and Turkey even levies a tax on it. A further 50,000 to 100,000
barrels are smuggled daily through the Gulf.

Yet another 100,000 barrels of Iraqi oil are sold to neighbouring Jordan,
although these sales are not viewed as illegal. The UN has not authorised
this trade, but neither has it criticised it.

The proceeds help to buy the loyalty of the ruthless security services that
keep Saddam in power.

The volume and variety of luxury goods being spirited into Iraq have grown
in recent months as oil prices soared.Some of the whisky imported by Saddam
originates from Scotland, while many of the cigarettes are manufactured in
the United States.

Both the alcohol and tobacco take extremely circuitous routes, being
repeatedly sold on until they arrive in Baghdad. Most of the cigarettes are
channelled through Cyprus, where they are stockpiled before being shipped

The main smuggling routes into Iraq are by sea through the Gulf, overland
through Turkey and via Jordan, although the third is less widely used than
the others.

Robin Cook, the Foreign Secretary, and Madeleine Albright, the US Secretary
of State, are concerned to see that recent disagreements, particularly with
the French Government, do not develop into deeper tactical splits in the
West about how to handle Saddam.

One senior British official said: "It's not just the media and it's not just
domestic opinion - it's some allies, too, who tend to overlook the fact that
he could relieve the suffering if he wanted to, and these luxury imports
show just how cynical he is."

Whitehall's anger also focuses on Saddam's failure to make the most of the
amendments to United Nations sanctions, imposed after the Gulf War but
relaxed at the turn of the year. The changes, pushed through with the help
of Mr Cook, lifted the ceiling on Iraqi oil exports, allowing Iraq to
reclaim a place among the world's top-five oil producers, with present
revenue at record levels.

However, Baghdad is largely ignoring billions of dollars sitting in the UN
account, set up after Operation Desert Storm, which is designed to ensure
that proceeds from Iraq's oil exports are channelled into buying food and

It has ordered only $1 billion-worth of humanitarian goods over the past
four months, even though there is a further $4.5 billion sitting in the

When the United Nations Secretary General recommended recently that Iraq set
aside $91 million for targeted nutrition for vulnerable groups such as
infants and new mothers, Iraq allocated only $24 billion.

Yet reports from around the region disclose the extent to which Baghdad is
exporting humanitarian goods. As well as selling food to Syria and trying to
sell food to Jordan, Kuwaiti coastguards have intercepted Iraqi vessels in
the Gulf loaded with grain and other foodstuffs.

The Foreign Office papers also contain recent reports indicating that asthma
drugs, including 15,000 emergency inhalers, destined for Iraq under the UN
programme, have been found on sale in Lebanon.

The dossier has been compiled in an effort to blunt the efforts of Saddam's
propaganda and to persuade Western opinion that most of the suffering in
Iraq is of Saddam's choosing.

by Molly Moore and John Ward Anderson
Washington Post Foreign Service, Friday, October 6, 2000

ISTANBUL, Oct. 5 ­­ Turkish officials warned today that the United States
risks losing the use of a Turkish base for launching air patrols over
northern Iraq if the House of Representatives approves a resolution accusing
Turkey of genocide against Armenians about 80 years ago.

The non-binding resolution, introduced by representatives in an
election-year appeal to Armenian American voters, has infuriated Turkey, a
strategically important NATO ally. As part of their response, Turkish
officials said they are considering appointing an ambassador to Baghdad for
the first time since the end of the Persian Gulf War in 1991 and said Turkey
will join a growing number of nations in sending humanitarian aid to Iraq,
despite U.N. sanctions aimed at bringing down Iraqi President Saddam

The resolution was approved Tuesday by the House International Affairs
Committee. "If it is passed by the House of Representatives, serious effects
should be expected on Turkish U.S. relations," Turkish Foreign Minister
Ismail Cem said, according to the Anatolian News Agency.

In a statement today, the leaders of all five parties in the Turkish
parliament declared "The Turkish Grand National Assembly will evaluate the
extension of Operation Northern Watch in the framework of changing
conditions." In that operation, U.S. and British pilots based at Turkey's
Incirlik air base have flown patrols over northern Iraq since the end of the
Gulf War to enforce U.N. restrictions on Iraqi military deployments. The
Turkish parliament votes every six months on whether to renew approval for
that use of Incirlik. The current extension ends Dec. 30. Prime Minister
Bulent Ecevit also has suggested that the flights could be affected by the
U.S. resolution.

Other Turkish politicians and business leaders have threatened retaliation
against U.S. businesses, including the cancellation of military contracts.

But some Western diplomats said it seemed unlikely that Turkey would take
measures, such as canceling defense contracts, that could hurt itself as
much as the United States. Others expressed skepticism that Turkey would
stop the Incirlik-based patrols because Iraq might then launch military
operations in the north. That would likely force thousands of Kurdish
refugees into Turkey, where the Turkish military has been fighting Kurdish
separatists for much of the past 15 years.

Turkey might retaliate more strongly against Armenia, with whom it has no
diplomatic relations, the diplomats said. Turkey set tough new visa
restrictions on Armenians today.

The Armenian Foreign Ministry welcomed the House committee vote endorsing
the genocide resolution and declared Wednesday that "the recognition of the
genocide . . . will make it possible to overcome the barriers existing
between [Armenia and Turkey] and contribute to . . . stability in the
region." Armenian Foreign Minister Vardan Oskanian called on Turkey to begin
a dialogue on the genocide issue and on economic cooperation, the Russian
news agency Interfax reported.

The House resolution is a symbolic measure focusing on the killings and
forced eviction from Turkey of as many as 1.5 million Armenians during the
collapse of the Ottoman Empire between 1915 and 1923. The bill urges
President Clinton to characterize that event as genocide.

Armenians say that, in those years, Armenian villages were ransacked,
civilians--including children--were slaughtered and tens of thousands of
Armenian men disappeared. The Turkish government argues that the deaths were
wartime casualties, caused as the Ottoman Empire battled Armenian rebels
trying to carry out Russian plans to take over slices of the country.
Turkish history books place the death toll closer to 300,000.

There are no official records to conclusively determine how many Armenians
died, and the era remains a dark and controversial chapter in Turkey's
modern history.

Clinton, who opposes the resolution, spoke with Turkish President Ahmet
Necdet Sezer on Monday before the committee vote. After the committee passed
the resolution, the State Department issued a statement that House approval
of the measure "will likely complicate our efforts to bring peace and
stability to the Caucasus and harm our relations with Turkey, our strategic
partner in the region."

The Turkish news media has reported the government is considering other
retaliatory measures, including dropping scheduled negotiations with the
U.S. defense contractor Bell Textron to buy 145 attack helicopters costing
an estimated $4.5 billion.

Turkish Chief of Staff Gen. Huseyin Kivrikoglu canceled a trip to Washington
planned for later this month in response to the resolution. Since the Cold
War era, when Turkey was a critical U.S. ally in attempting to contain
expansionism by the Soviet Union, the U.S. has maintained some of its
strongest military ties with Turkey.


DANVILLE, Kentucky: Republican Dick Cheney and Democrat Joseph Lieberman on
Thursday differed -- at least in tone -- on how to tackle U.S. foes in Iraq
and Yugoslavia in a vice presidential debate focusing significantly on
foreign policy.

Cheney urged that Washington use the crisis in Yugoslavia to "test" Russian
President Vladimir Putin's commitment to democracy and said Republican
presidential candidate George W. Bush should get credit for proposing last
week a Russian role in ending the turmoil.

Responding to a question about the stalemate with Iraqi President Saddam
Hussein, Cheney -- who was defense secretary during the 1991 Gulf War that
ousted Iraq from Kuwait -- said a Bush administration might "have to take
military action to forcibly remove Saddam from power."

Appearing at the only debate between the vice presidential candidates ahead
of the November 7 election, the two men spoke hours after the Yugoslav
opposition took charge of Belgrade's streets after a popular and almost
bloodless revolution appeared to have swept Slobodan Milosevic from power.

But there was uncertainty about Milosevic's whereabouts. Serb opposition
sources reported that he was in a bunker in eastern Serbia, protected by
army troops, and could be mounting a coup. U.S. officials were monitoring
the situation, and did not rule out the possibility of a "last stand."
President Bill Clinton said military intervention was not appropriate.

On Yugoslavia, Lieberman said the United States should be proud of the role
it played in recent years in stopping Milosevic's aggression and genocide in
the Balkans.

Lieberman, a U.S. senator from Connecticut, said it appeared there would be
"a very happy ending to a terrible story" of Milosevic's aggression in the

If Milosevic has not yet been ousted, however, then Washington and its
allies "should do everything we can to encourage the people of Serbia to do
exactly what they have been doing over the last few days, to rise up and end
this reign of terror by Milosevic and bring themselves back into the family
of nations where they will be welcomed by the United States and others,"
Lieberman said.

He criticized Republicans for accusing the Democratic administration of
Clinton and Vice President Gore of "overreaching" by using military force in
the Balkans and said the Democrats were proven right.


"We stopped the aggression and the genocide and therefore strengthened our
relationships with our European allies and NATO and in fact, this made us
more respected and trusted by our allies and more feared by our enemies," he

He credited Gore with playing a critical role in the policy.

Cheney said Bush supported the administration's approach to the Yugoslav
province of Kosovo and would "do everything we can to support Mr.
Milosevic's departure." He also ruled out U.S. military force.

He criticized Gore for "poo pooing" Bush's suggestion at last week's
presidential debate that Russia be enlisted to use its influence to
encourage Milosevic to cede power peacefully.

Now that the Yugoslav people have taken to the streets to insist that
Milosevic accept the election of opposition candidate Vojislav Kostunica as
president, "it is time to find out if (Putin) is committed to democracy"
there, Cheney said.

Russia has strong religious and cultural ties with Serbia but Putin so far
has not accepted Kostunica's election.

On Iraq, Cheney said the United States should seriously consider a military
attack on Iraq if there was evidence that it was developing weapons of mass

He noted the coalition that defeated Iraq in 1991 was weaker today, with
Arab states reopening diplomatic ties with Baghdad and U.N. inspectors no
longer in Iraq to monitor its arms program.

"If in fact Saddam Hussein were taking steps to try to rebuild nuclear
capability or weapons of mass destruction you'd have to give very serious
consideration to military action to stop that activity," said Cheney.

"I don't think you can afford to have a man like Saddam Hussein with nuclear
weapons in the Middle East," he added.

Lieberman said the decision to deploy military force against Iraq was too
weighty to discuss in the heat of a political campaign and should be left to
the commanders of the U.S. military and the nation's leaders.

He agreed that "we will not enjoy real stability in the Middle East until
Saddam Hussein is gone" and promised he and Gore would continue to support
Iraqi opposition groups "until the Iraqi people rise up and do what the
people of Serbia have done in the last few days: get rid of a despot."
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