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[casi] Development Fund for Iraq: Protecting U.S. Oil Interests in Iraq

Protecting U.S. Oil Interests in Iraq.

Instead of bailing-out the Iraqi people, new debt for Iraq’s people will
formally accrue through the program that President Bush pledged would
"benefit the people of Iraq."

By Mr. Craig B Hulet

07/28/03: Most did not know that during the initial assault on Baghdad,
soldiers set up forward bases named Camp Shell and Camp Exxon. Soldiers
often know the score, even if Rumsfeld, Cheney and Bush and of course the
Pentagon’s talking points dismissed any ties between Iraqi oil and their

But often their actions demonstrate that yes indeed this is about oil; not
just Iraqi oil but our oil, read: corporate oil: in fact U.S. corporate
ownership of that oil from Iraq. How does one make such a claim? One looks
to the law. Under U.S. law, whose oil and oil products belong to whom are
decided by law. The Development Fund for Iraq established by the United
Nations does not spell out ownership as it was assumed it would be the Iraqi
people who would own the oil from Iraq. Putting Mr. Paul Bremer, an old
American oil-hand in charge of Iraq made him the perfect choice as head of
the fund, though most would have disagreed had they been asked, and seemed
natural for the U.N. and the Bush regime.

As two authors recently pointed out, "The Bush/Cheney administration has
moved quickly to ensure U.S. corporate control over Iraqi resources at least
through the year 2007. The first part of the plan, created by the UN under
U.S. pressure is the Development Fund for Iraq which is being controlled by
the U.S. and advised by the World Bank and the International Monetary Fund
(IMF). The second is a recent Bush executive order that provides absolute
legal protection for U.S. interests in Iraqi oil....In May, the UN Security
Council unanimously adopted Resolution 1483, which ended sanctions and
endorsed the creation of the Development Fund for Iraq, to be controlled by
Paul Bremer and overseen by a board of accountants, including UN, World
Bank, and IMF representatives. It endorsed the transfer of over $1 billion
(of Iraqi oil money) from the Oil-for-Food program into the Development
Fund. All proceeds from the sale of Iraqi oil and natural gas are also to be
placed into the fund." (Sources: Steve Kretzmann and Jim Valette, Media
Culture, July 24, 2003; See also, White House home page)

In the creation of the Development Fund for Iraq, it was argued that this
was to alleviate the poverty in Iraq and was sold as Humanitarian Assistance
yet "one finds the fingerprints of the global economic structural adjustment
that has attracted so much protest in recent years. World Bank and IMF
programs, backed by the rules of the World Trade Organization, have imposed
dramatic financial restructuring upon much of the world. Developing
countries have amassed huge debts in exchange for selling out their natural
resources to powerful Northern corporations." (Ibid.)

Instead of bailing-out the Iraqi people, new debt for Iraq’s people will
formally accrue through the program that President Bush pledged would
"benefit the people of Iraq." The Development Fund, derived from actual and
expected Iraqi oil and gas sales, apparently will be used to leverage U.S.
government-backed loans, credit, and direct financing for U.S. corporate
operations in Iraq. Some of the funds are to go towards restructuring
facilities and oil systems, pipelines, etc., and all are aware of
Halliburton, Bechtel, Brown and Root receiving contracts under the Pentagon’
s non-competitive bidding; some of the funds will also be used as collateral
for projects approved by the U.S. Export-Import Bank (ExIm Bank). The
mission directive of the ExIm Bank is the creation of U.S. jobs and the
promotion of American business abroad, not humanitarian assistance.

As the two authors noted "ExIm recently announced that it was open for
business in Iraq and would begin considering applications by subcontractors
(that is, companies hired by Bechtel and Halliburton) in Iraq." (Ibid.) U.S.
Corporations have found it difficult to obtain private bank credit for work
in Iraq, due to the ongoing insecure environment. But the ExIm Bank has
stepped in to take a lead role in facilitating U.S. business in Iraq just as
it did during the Cold War when the ExIm Bank financed hundreds of American
corporate projects in the Soviet Union even as Ronald Reagan called the
regime the "Evil Empire." Also the Overseas Private Investment Company
(OPIC) has, as its charter spells out, obliged by underwriting (insuring)
the corporate ventures in Iraq and Afghanistan with U.S. taxpayers dollars.
(Source; See "The Hydra of Carnage" this author, 2002)*

They blow-up a pipeline you and I pay to repair it. They blow up an oil
facility, not only do you and I pay up front, but the Iraqi people find
their debt burden increasing, as in the end it will be the Iraqi people who
must pay for all of this. The corporations make their money in compensation
and profit, all their costs covered, they never lose as they control the
machinery of governance as surely as they profit by it. Peter S Watson is
the current director of OPIC, and has the usual suspect’s credentials for
this particular governing administration.**

"The primary source of repayment, is the Development Fund for Iraq,

or another entity established under the auspices of the

Coalition Provisional Authority with access to

foreign exchange and protection from

claims of creditors of the former regime."

(Source: ExIm Bank Press Release)

In other words, the U.S. government is happy to provide credit to any U.S.
business wishing to do business in Iraq – especially because the money comes
from Iraq. OPIC guarantees the investments with U.S. taxpayers dollars. For
the Bush/Cheney oil administration and their allies in the oil industry,
this was not enough. Hours after the UN endorsed U.S. control of the
Development Fund for Iraq, Bush signed an executive order 13303 (see text
below) that we were told was simply implementing Resolution 1483, but in
reality, went much further towards attracting investment and minimizing risk
for U.S. corporations in Iraq.

Executive Order 13303 states categorically that "any attachment, judgment,
decree, lien, execution, garnishment, or other judicial process is
prohibited, and shall be deemed null and void," with respect to the
Development Fund for Iraq and "all Iraqi petroleum and petroleum products,
and interests therein."

If ExxonMobil ChevronTexaco remove Iraqi oil, they will be immune from legal
proceedings in the U.S.. Anything goes wrong where U.S. corporate oil
operations are in play and they will be immune to any legal judgment. An oil
tanker accident; an explosion at an oil refinery; pipelines destroyed, etc.,
"the President, with a stroke of the pen, signed away the rights of Saddam’s
victims, creditors and of the next true Iraqi government to be compensated
through legal action. Bush’s order unilaterally declares Iraqi oil to be the
unassailable province of U.S. corporations. (Ibid.) In their closing
argument the two authors make their point as well as I could ever have done:

In the short term, through the Development Fund and the Export-Import Bank
programs, the Iraqi peoples’ oil will finance U.S. corporate entrees into
Iraq. In the long term, Executive Order 13303 protects anything those
corporations do to seize control of Iraq’s oil, from the point of production
to the gas pump - and places oil companies above the rule of law.

It should be noted that Mr. Bush signed the EO less than three weeks after
declaring a coalition victory and secession of all hostilities. We know he
was dead wrong about the first; I would suggest this scam to protect U.S.
monopoly corporate interests will be challenged not only in the courts, no
matter that Bush has already declared all claims null and void, but
challenged in blood for decades to come!


* The Overseas Private Investment Corporation (OPIC) was established as a
development agency of the U.S. government in 1971. OPIC helps U.S.
businesses invest overseas, fosters economic development in new and emerging
markets, complements the private sector in managing the risks associated
with foreign direct investment, and supports U.S. foreign policy. By
expanding economic development in host countries, OPIC-supported projects
can encourage political stability, free market reforms and U.S. best
practices. OPIC projects also support American jobs and exports—over 280,000
new U.S. jobs and $65 billion in exports since 1971.

OPIC supports projects and investments in almost every industry and economic
sector, including:

· Energy

· Construction

· Telecommunications

· Banking & services

· Internet & information technology

· Manufacturing

OPIC insurance is backed by the full faith and credit of the United States
Government (Source OPIC website)


** Peter S. Watson, prior to becoming Chairman, President & CEO of the U.S.
Overseas Private Investment Corporation, was Counsel to Winthrop Stimpson
Putnam & Roberts advising on international business and trade policy
matters. He concurrently served as Senior Advisor to Armitage Associates,
L.C. (As did Dick Cheney’s daughter, who was given the newly created post
Undersecretary of State for Middle east Development.) National Security
Advisor Condolliza Rice proudly admits she is also an Armitage protege.


For Immediate Release

Office of the Press Secretary
May 22, 2003

Executive Order Protecting the Development Fund for Iraq and Certain Other
Property in Which Iraq Has An Interest

By the authority vested in me as President by the Constitution and the laws
of the United States of America, including the International Emergency
Economic Powers Act, as amended (50 U.S.C. 1701 et seq.) (IEEPA), the
National Emergencies Act (50 U.S.C. 1601 et seq.), section 5 of the United
Nations Participation Act, as amended (22 U.S.C. 287c) (UNPA), and section
301 of title 3, United States Code,

I, GEORGE W. BUSH, President of the United States of America, find that the
threat of attachment or other judicial process against the Development Fund
for Iraq, Iraqi petroleum and petroleum products, and interests therein, and
proceeds, obligations, or any financial instruments of any nature whatsoever
arising from or related to the sale or marketing thereof, and interests
therein, obstructs the orderly reconstruction of Iraq, the restoration and
maintenance of peace and security in the country, and the development of
political, administrative, and economic institutions in Iraq. This situation
constitutes an unusual and extraordinary threat to the national security and
foreign policy of the United States and I hereby declare a national
emergency to deal with that threat.

I hereby order:

Section 1. Unless licensed or otherwise authorized pursuant to this order,
any attachment, judgment, decree, lien, execution, garnishment, or other
judicial process is prohibited, and shall be deemed null and void, with
respect to the following:

(a) the Development Fund for Iraq, and

(b) all Iraqi petroleum and petroleum products, and interests therein, and
proceeds, obligations, or any financial instruments of any nature whatsoever
arising from or related to the sale or marketing thereof, and interests
therein, in which any foreign country or a national thereof has any
interest, that are in the United States, that hereafter come within the
United States, or that are or hereafter come within the possession or
control of United States persons.

Sec. 2. (a) As of the effective date of this order, Executive Order 12722 of
August 2, 1990, Executive Order 12724 of August 9, 1990, and Executive Order
13290 of March 20, 2003, shall not apply to the property and interests in
property described in section 1 of this order.

(b) Nothing in this order is intended to affect the continued effectiveness
of any rules, regulations, orders, licenses or other forms of administrative
action issued, taken, or continued in effect heretofore or hereafter under
Executive Orders 12722, 12724, or 13290, or under the authority of IEEPA or
the UNPA, except as hereafter terminated, modified, or suspended by the
issuing Federal agency and except as provided in section 2(a) of this order.

Sec. 3. For the purposes of this order:

(a) The term "person" means an individual or entity;

(b) The term "entity" means a partnership, association, trust, joint
venture, corporation, group, subgroup, or other organization;

(c) The term "United States person" means any United States citizen,
permanent resident alien, entity organized under the laws of the United
States or any juris-diction within the United States (including foreign
branches), or any person in the United States;

(d) The term "Iraqi petroleum and petroleum products" means any petroleum,
petroleum products, or natural gas originating in Iraq, including any
Iraqi-origin oil inventories, wherever located; and

(e) The term "Development Fund for Iraq" means the fund established on or
about May 22, 2003, on the books of the Central Bank of Iraq, by the
Administrator of the Coalition Provisional Authority responsible for the
temporary governance of Iraq and all accounts held for the fund or for the
Central Bank of Iraq in the name of the fund.

Sec. 4. (a) The Secretary of the Treasury, in consultation with the
Secretary of State and the Secretary of Defense, is hereby authorized to
take such actions, including the promulga-tion of rules and regulations, and
to employ all powers granted to the President by IEEPA and the UNPA as may
be necessary to carry out the purposes of this order. The Secretary of the
Treasury may redelegate any of these functions to other officers and
agencies of the United States Government. All agencies of the United States
Government are hereby directed to take all appropriate measures within their
statutory authority to carry out the provisions of this order.

(b) Nothing contained in this order shall relieve a person from any
requirement to obtain a license or other authorization in compliance with
applicable laws and regulations.

Sec. 5. This order is not intended to, and does not, create any right,
benefit, or privilege, substantive or procedural, enforceable at law or in
equity by a party against the United States, its departments, agencies,
entities, officers, employees, or agents, or any other person.

Sec. 6. This order shall be transmitted to the Congress and published in the
Federal Register.

May 22, 2003.

Mr. Craig B Hulet; Security, Military Affairs & International Relations
Expert (Author: The Hydra of Carnage: Bush’s Imperial War-making and the
Rule of Law)

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