[casi] Chalabi: "Tinker, Banker, NeoCon, Spy" (fwd)

[H Sutter <citext@DELETETHISchebucto.ns.ca>]

An interesting article - Machiavellian scheme: America's
favourite Quisling dreams about "liberating Iraq's oil".
His chum Perl and others dream about freeing (occupying)
Saudi Arabia next: "Free the Eastern Province of Saudi
Arabia". If they get their way, the dominos start falling
in the Persian Gulf... ushering in a New World Order.

And at this moment, Iraqi mothers and fathers sit at the
bed of a child, watching it die in agony. It is the first,
second, third, fourth, fifth child they have lost to a
disease that is curable in most cases - given the right
medication and equipment. But there are none. To make the
New World Order possible, Iraqi children are condemned to
death - and parents to grief and despair.

Elga

<Start fwd>
http://www.prospect.org/print/V13/21/dreyfuss-r.html

Tinker, Banker, NeoCon, Spy
Ahmed Chalabi's long and winding road from (and to?) Baghdad

By [34] Robert Dreyfuss

[35] Issue Date: 11.18.02

If T.E. Lawrence ("of Arabia") had been a 21st-century
neoconservative operative instead of a British imperial
spy, he'd be Ahmed Chalabi's best friend. Chalabi, the
London-based leader of the Iraqi National Congress (INC),
is front man for the latest incarnation of a long-time
neoconservative strategy to redraw the map of the oil-rich
Middle East, put American troops -- and American oil
companies -- in full control of the Persian Gulf's
reserves and use the Gulf as a fulcrum for enhancing
America's global strategic hegemony. Just as Lawrence's
escapades in World War I - era Arabia helped Britain
remake the disintegrating Ottoman Empire, the U.S.
sponsors of Chalabi's INC hope to do their own nation
building.

"The removal of [Saddam Hussein] presents the United
States in particular with a historic opportunity that I
believe is going to prove to be as large as anything that
has happened in the Middle East since the fall of the
Ottoman Empire and the entry of British troops into Iraq
in 1917," says Kanan Makiya, an INC strategist and author
of Republic of Fear.

Chalabi would hand over Iraq's oil to U.S. multinationals,
and his allies in conservative think tanks are already
drawing up the blueprints. "What they have in mind is
denationalization, and then parceling Iraqi oil out to
American oil companies," says James E. Akins, former U.S.
ambassador to Saudi Arabia. Even more broadly, once an
occupying U.S. army seizes Baghdad, Chalabi's INC and its
American backers are spinning scenarios about dismantling
Saudi Arabia, seizing its oil and collapsing the
Organization of the Petroleum Exporting Countries (OPEC).
It's a breathtaking agenda, one that goes far beyond
"regime change" and on to the start of a New New World
Order.

What's also startling about these plans is that Chalabi is
scorned by most of America's national-security
establishment, including much of the Department of State,
the CIA and the Joint Chiefs of Staff. He is shunned by
all Western powers save the United Kingdom, ostracized in
the Arab world and disdained even by many of his erstwhile
comrades in the Iraqi opposition. Among his few friends,
however, are the men running the Bush administration's
willy-nilly war on Iraq. And with their backing, it's not
inconceivable that this hapless, exiled Iraqi aristocrat
and London-Washington playboy might end up atop the
smoking heap of what's left of Iraq next year.

The Chalabi Lobby

Almost to a man, Washington's hawks lavishly praise
Chalabi. "He's a rare find," says Max Singer, a trustee
and co-founder of the Hudson Institute. "He's deep in the
Arab world and at the same time he is fundamentally a man
of the West."

In Washington, Team Chalabi is led by Deputy Secretary of
Defense Paul Wolfowitz and Richard Perle, the
neoconservative strategist who heads the Pentagon's
Defense Policy Board. Chalabi's partisans run the gamut
from far right to extremely far right, with key supporters
in most of the Pentagon's Middle-East policy offices --
such as Peter Rodman, Douglas Feith, David Wurmser and
Michael Rubin. Also included are key staffers in Vice
President Dick Cheney's office, not to mention Defense
Secretary Donald Rumsfeld and former CIA Director Jim
Woolsey.

The Washington partisans who want to install Chalabi in
Arab Iraq are also those associated with the staunchest
backers of Israel, particularly those aligned with the
hard-right faction of Prime Minister Ariel Sharon and
former Prime Minister Benjamin Netanyahu. Chalabi's
cheerleaders include the Washington Institute for Near
East Policy (WINEP) and the Jewish Institute for National
Security Affairs (JINSA). "Chalabi is the one that we know
the best," says Shoshana Bryen, director of special
projects for JINSA, where Chalabi has been a frequent
guest at board meetings, symposia and other events since
1997. "He could be Iraq's national leader," says Patrick
Clawson, deputy director of WINEP, whose board of advisers
includes pro-Israeli luminaries such as Perle, Wolfowitz
and Martin Peretz of The New Republic.

What makes Chalabi so attractive to the Washington war
party? Most importantly, he's a co-thinker: a
mathematician trained at the Massachusetts Institute of
Technology and the University of Chicago and a banker (who
years ago hit it off with Albert Wohlstetter, the theorist
who was a godfather of the neoconservative movement), a
fellow mathematician and a University of Chicago
strategist. In 1985, Wohlstetter (who died in 1997)
introduced Chalabi to Perle, then the undersecretary of
defense for international-security policy under President
Reagan and one of Wohlstetter's leading acolytes. The two
have been close ever since. In early October, Perle and
Chalabi shared a podium at an American Enterprise
Institute conference called "The Day After: Planning for a
Post-Saddam Iraq," which was held, appropriately enough,
in AEI's 12th-floor Wohlstetter Conference Center. "The
Iraqi National Congress has been the philosophical voice
of free Iraq for a dozen years," Perle told me.

Philosophical or not, since its founding in 1992,
Chalabi's INC has been trying to drag the United States
into war with Iraq. By its very nature, the INC's strategy
-- building a paramilitary presence inside Iraq, creating
a provisional government, launching attacks on Iraqi
cities -- was intended to create inexorable momentum for a
war in which in the United States would be compelled to
support the INC. But American policy in the 1990s was
focused primarily on containing Saddam Hussein and
depriving him of weapons of mass destruction, so the INC's
efforts were sidetracked during the Clinton
administration.

At the time, most of the national-security establishment
saw the INC as weak and ineffectual. Retired Marine Gen.
Anthony Zinni, former head of Central Command for U.S.
forces in the Middle East, famously ridiculed Chalabi and
company as "silk-suited, Rolex-wearing guys in London,"
adding, "I don't see any opposition group that has the
viability to overthrow Saddam." Supporting the INC, he
warned, meant that "the Bay of Pigs could turn into the
Bay of Goats." And a widely cited 1999 Foreign Affairs
article titled "The Rollback Fantasy," lambasted the INC's
strategy for a gusano-style offensive by a ragtag army
operating out of the so-called no-fly zones in northern
and southern Iraq, saying it was "militarily ludicrous and
would almost certainly end in either direct American
intervention or a massive bloodbath."

Indeed, in 1996 an ill-organized INC offensive in northern
Iraq, where Chalabi had assembled about 1,000 fighters,
was half-heartedly backed by the CIA. Not only did Saddam
Hussein's troops not defect en masse, as predicted by
Chalabi, but one of the INC's key allies, the Kurdistan
Democratic Party, chose to ally itself with Baghdad,
inviting the Iraqi army back into northern Iraq's Kurdish
areas for a mop-up exercise. Another of the INC's allies,
the Iraqi National Accord, apparently blew up the INC's
main offices in an act of bloody fratricide. These tragic
failures only increased the distaste for Chalabi at the
CIA and among the U.S. military.

Still, Chalabi is a survivor. Since the 1996 fiasco, he's
managed a precarious balance atop a fractious and
quarrelsome constellation of Iraqi opposition factions,
from Kurds and Shi'a tribal leaders to Islamic
fundamentalists, monarchists and military officers.

Our Man in Baghdad

Born in 1945, Chalabi is the scion of a wealthy,
oligarchic Shi'a family with close ties to the Hashemite
monarchy that was installed in Iraq after World War I by
Lawrence, Gertrude Bell and the British imperial
authorities. Chalabi's grandfather served in nine various
Iraqi cabinet positions, his father was a cabinet officer
and president of the figurehead Iraqi senate, and his
mother ran political salons that catered to Iraq's elite.
In 1958 that all came to a crashing end when a coalition
of army officers and the Iraqi Communist Party led a
revolution that toppled King Faisal II. The Chalabis
scattered.

As a young man Chalabi lived in Jordan, Lebanon, the
United Kingdom and the United States, where he attended
MIT before earning a doctorate in mathematics at the
University of Chicago. He took a position teaching math at
the American University of Beirut. In 1977, Crown Prince
Hassan of Jordan invited Chalabi to Amman to establish the
Petra Bank, a financial institution that would soon become
the second-largest commercial bank in Jordan.

In an August 1989 episode still surrounded by controversy,
however, the government of Jordan seized the Petra Bank
under martial law, arresting its chief currency trader and
using Jordan's central bank to pump $164 million into the
Petra Bank and its allied institutions to keep them
liquid. To avoid arrest, Chalabi fled the country "under
mysterious circumstances," according to a 1989 article in
the Financial Times. The Hudson Institute's Max Singer
says that Prince Hassan personally drove Chalabi to the
Jordanian border, helping him escape. (According to one
account, Chalabi was in the trunk of the car.) Chalabi
eventually was tried in absentia by a Jordanian court and
sentenced to 22 years of hard labor for embezzlement,
fraud and currency-trading irregularities. He reportedly
got away with more than $70 million.

The INC offers a different version. According to Zaab
Sethna, an INC spokesman, King Hussein of Jordan executed
a politically motivated coup against Chalabi in
coordination with Iraq because Chalabi was "using the bank
to fund [Iraqi] opposition groups and learning a lot about
illegal arms transfers to Saddam." Because the Petra Bank
had inside information about Jordanian-Iraqi trade,
Chalabi used his position in a freelance, cloak-and-dagger
operation to feed intelligence about Iraq's trade deals to
the CIA. Because Chalabi was already active in anti-Iraq
opposition groups and had a connection with Perle, it's
possible that Chalabi's account is true.

Further evidence of political motives behind the seizure
of the Petra Bank and Chalabi's intelligence connections:
The American lawyer who represented the Petra Bank's
Washington, D.C., subsidiary was former Secretary of
Defense Caspar Weinberger. And when Chalabi fled the
country, anonymous leaflets reportedly circulated linking
Chalabi to an alliance with Iraq's Shi'a and with (mostly
Shi'a) Iran, all in a vague conspiracy against Iraq and
Jordan. (During the Iran-Iraq war and Iraq's invasion of
Kuwait in 1990, Jordan -- always delicately balanced
between "Iraq and a hard place," as King Hussein was wont
to say -- tilted toward Iraq. Afterward, King Hussein
distanced himself from Baghdad and eventually reconciled
with Chalabi. The jail sentence for bank fraud stands but
reportedly might be lifted soon by Jordan's King
Abdullah.)

Of course, the fact that Chalabi may have been prosecuted
for political reasons does not mean that he is innocent of
embezzlement and fraud. In any case, allegations of self-
dealing have followed him everywhere since.

Puppet Theater

Soon after fleeing Jordan, Chalabi began making the
contacts with the CIA that would eventually lead to the
INC's founding in 1992. Meeting first in Vienna, Austria,
and then in Salahuddin in northern Iraq, the INC emerged
as an umbrella group for the many factions of Iraqi
opposition in exile. In the early 1990s, the CIA spent
about $100 million through the INC and its Kurdish allies
in the north -- until the fiasco of 1996. Though the CIA
cut off the INC after that, Chalabi was undeterred and
went about working with congressional Republicans to pass
the Iraq Liberation Act. That law set up a pool of funds
and in-kind contributions for the INC and other opposition
forces. In its implementation, however, the INC has been
embroiled in repeated disputes with the State Department
over its accounting for funds received. (In 1999, when
asked about secrecy in accounting for certain INC
expenditures, Chalabi blurted: "Damn right! It was covert
money.") "He's a criminal banker," says Akins, the former
ambassador to Saudi Arabia. "He's a swindler. He's
interested in getting money, and I suspect it's all gone
into his bank accounts and those of his friends."

Earlier this year, the State Department and the INC were
deadlocked over payments to the INC, and the dispute was
resolved only when the Pentagon, with its pro-Chalabi
group, agreed to take over payments to the INC for the
latter's intelligence-gathering work inside Iraq.

Even after 1996, Chalabi continued to insist that Saddam
Hussein's government would crumble if the INC, with only
limited American backing, were to launch its planned
offensive. In June 1997, Chalabi spoke to JINSA's board,
which includes, not surprisingly, Perle, Woolsey and key
hard-line backers of Israel such as Jeane Kirkpatrick, Max
Kampelman, Eugene Rostow and former Rep. Steve Solarz (D-
N.Y.). "The INC plan for Saddam's overthrow is simple,"
Chalabi told JINSA. From its base in northern Iraq, the
INC would begin to confront Iraqi forces with only
political and logistical support from the United States,
including U.S. efforts to "feed, house and otherwise
provide for the Iraqi army as it abandons Saddam." Then,
Chalabi concluded, "With U.S. political backing and
regional support for a process of gradual encirclement,
Saddam can be driven into hiding in Takrit and eventually
removed." That's it.

The idea that ridding Iraq of Saddam Hussein is as easy as
that was, of course, ridiculed by virtually all CIA,
military and State Department strategists. But without the
ability to commit hundreds of thousands of American troops
and a relentless wave of bombing sorties, it was all that
Chalabi and his allies had -- until September 11.

Effectively capitalizing on the impact of 9-11, Perle,
Woolsey and company began beating the drums for a full-
scale war against Iraq. With President Bush in tow and
railing against "the guy who tried to kill my dad," the
war party got the upper hand. According to the latest
leaks about U.S. strategy, a war against Iraq now could
involve up to 250,000 U.S. troops and would result in an
open-ended military occupation of Iraq modeled on the
post-World War II occupations of Germany and Japan.

The INC, meanwhile, hopes to ride into Baghdad on American
tanks. Weeks ago the Pentagon began a program to train INC
combatants for a coming conflict in Iraq, but its effort
fooled no one. Ousting Saddam Hussein, if it happens, will
be the work of U.S. troops, not the INC. But a Big
Brother-style public-relations offensive is being readied,
aimed at creating the myth that Iraq has been liberated by
an alliance of the United States and the INC. "I want to
create the national story that Iraqis liberated
themselves," says WINEP's Clawson. "It may have no more
truth than the idea that the French liberated themselves
in World War II." But, insists Clawson, it's a fiction
that will resonate with Iraqis.

Almost no one, not even the INC itself, thinks that
Chalabi has any cachet inside Iraq. Entifadh Qanbar, the
earnest, young ex-Iraqi officer who heads the INC's office
in Washington, says that Chalabi represents Iraq's "silent
majority." Asked whether people in Baghdad have even heard
of Chalabi, Qanbar says: "They may not know the man. But
he represents their views."

Others scoff at even that notion. "It's a formula for
setting up a puppet regime," says David Mack, vice
president of the Middle East Institute, a former U.S.
ambassador to the United Arab Emirates and ex-deputy
assistant secretary of state for Near Eastern affairs
who's dealt extensively with Iraqi opposition politicians
and military officers. "And we will have responsibility
for propping them up for a long, long time to come,
possibly with the blood of American soldiers."

But indefinitely propping up an INC-style quisling regime
might be exactly what the United States wants, as it would
mean that U.S. troops would be occupying Iraq's oil fields
for years to come.

Striking Oil

It's hard to overstate the importance of Iraqi oil. With
proven reserves of 112 billion barrels (and many analysts
saying that its true reserves are double that), Iraq sits
above the second largest supply of oil in the world. Its
crippled industry can produce only 2 million barrels of
oil a day at present, but with a modest effort, Iraq's
output could soar to as high as 7 million to 8 million
barrels per day by decade's end. Controlling that much oil
would give the United States enormous leverage over Europe
and Japan, which depend heavily on Gulf oil; over Russia,
whose economy is hinged to the price of its oil exports,
which could be manipulated by an American-run Iraq; and
over Saudi Arabia, whose regime's survival is linked to
oil. "The American oil companies are going to be the main
beneficiaries of this war," says Akins. "We take over
Iraq, install our regime, produce oil at the maximum rate
and tell Saudi Arabia to go to hell." "It's probably going
to spell the end of OPEC," says JINSA's Bryen.

The INC is quietly courting the American oil companies. In
mid-October, Chalabi had a series of meetings with three
major U.S. oil firms in Washington. "The oil people are
naturally nervous," says INC spokesman Zaab Sethna, who
took part in the meetings between Chalabi and the oil
executives. "We've had discussions with them, but they're
not in the habit of going around talking about them."
That's true. In interviews, oil company officials speak
cautiously and only on background about Iraq, laughing
nervously at the idea of being quoted. They are extremely
wary of associating themselves with the INC or with U.S.
war plans for fear of angering Saudi Arabia and other oil-
producing countries in the Persian Gulf. Asked about talks
with the INC, one U.S. oil executive blanched, saying, "I
can't discuss that, even on background."

But the untold riches that lie beneath the soil of Iraq
are a powerful lure for multinational oil companies. "I
would say that especially the U.S. oil companies ... look
forward to the idea that Iraq will be open for business,"
says an executive from one of the world's largest oil
companies, adding that the companies are trying hard not
to be noticed.

"We don't have a stake in Iraq now," says another oil
industry executive. "One of the frustrations that U.S. oil
companies have is that the Russians, the French and the
Chinese already have existing relations with Iraq. And the
question is: How much of that will be sanctified by the
people who succeed Saddam?"

The INC and its backers make no bones about the fact that
the American forces gathering to attack Iraq will be
liberating Iraq's oil. Unable to restrain himself, Chalabi
blurted to The Washington Post that the INC intends to
reward its American friends. "American companies will have
a big shot at Iraqi oil," he proclaimed.

Meanwhile, economists allied with the INC -- including
strategists at the Heritage Foundation, the AEI and
JINSA -- are abuzz with plans to "denationalize" the Iraqi
oil industry and then distribute it to Western, mostly
American, companies. In late September, in "The Future of
a Post-Saddam Iraq: A Blueprint for American Involvement,"
the Heritage Foundation's Ariel Cohen put forward a nearly
complete scheme for the privatization of Iraq's oil,
creating three separate companies for southern Iraq, the
region around Baghdad and the Kirkuk fields in northern
Iraq, with additional companies to operate pipelines and
refineries and to develop Iraq's natural gas. In an
interview, Cohen warned that France, Russia and China
might find that their existing oil contracts with Iraq
won't be honored by the INC. "It will be up to the next
government of Iraq to examine the legal validity of the
deals signed by the Saddam regime," says Cohen. "From a
realpolitik point of view, these governments should try to
get in early with the Iraqi National Congress and abandon
Saddam. The window of opportunity is closing."

It's hard to imagine that a regime that denationalized
Iraq's oil would be very popular with Iraqis. The
nationalization, which took place between 1972 and 1974,
electrified Iraqis and stunned the industry worldwide. It
also set dominoes falling throughout the Persian Gulf and
the OPEC nations, as other countries ousted the
multinationals and created state-owned enterprises.
Eventually, even Saudi Arabia seized control of all-
powerful Aramco, the consortium of Exxon, Mobil, Texaco
and Chevron that had long been the colossus of the Persian
Gulf. Now, cautiously, the oil industry sees a war in Iraq
as a way to win back what's been lost.

"Even in Saudi Arabia, all we can do is buy their oil,"
says an American oil company official. U.S. companies,
this executive confirmed, want to return to greater direct
control, perhaps through so-called production-sharing
agreements that would give them both a direct stake in the
oil fields and a greater share of the profits.

It's also clear that the INC, the neoconservatives and oil
executives are thinking beyond Iraq to Saudi Arabia. Ever
since Robert W. Tucker wrote an article in Commentary in
the 1970s proposing a U.S. occupation of Saudi Arabia's
oil fields, such a scenario has been a cherished vision
for a small but growing circle of strategists. (Last
summer Perle invited a RAND Corporation analyst to speak
to the Defense Policy Board on exactly that topic.)
Earlier this year, in an article titled "Free the Eastern
Province of Saudi Arabia," Singer suggested that the
United States should help create a Muslim Republic of East
Arabia. "I meant it seriously," says Singer. "Saudi Arabia
is vulnerable not only to a U.S. seizure of their land but
to U.S. unofficial participation in a rebellion by
minority Shi'a in the Eastern Province." The Eastern
Province, which is largely Shi'a, happens to include the
vast bulk of Saudi Arabia's oil fields.

One other problem is that the INC does not represent the
entire Iraqi opposition movement. The two main Kurdish
parties, the Kurdistan Democratic Party and the Patriotic
Union of Kurdistan, though long-time bloody rivals, have
momentarily patched things up. They've allied, in turn,
with the Iraqi National Accord, a CIA-backed group of
former Iraqi military officers, and with the Supreme
Council for the Islamic Revolution in Iraq to form the
Group of Four, an alternative to the INC that, they hope,
will attract further American support. There is even a
monarchist group trying to restore T.E. Lawrence's
Hashemite kingdom in Baghdad that, some say, could promote
a kingship in Iraq for Prince Hassan of Jordan, a
Hashemite himself.

Do these strategic realities, and the wide ridicule of
Chalabi among Middle East experts, matter? "I don't think
their point of view is relevant to the debate any longer,"
says Danielle Pletka, vice president of the American
Enterprise Institute. "Sor-ry!" Thanks to the "entire vast
army [of neoconservatives]" who've successfully won over
Bush and Cheney, she observes, the INC has something that
the other groups lack: the support of the president of the
United States.
<End>





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