Wednesday, January 17, 2007

An odious man for odious jobs: whither James A. Baker III?

There is a 'kindly ol' gentleman' quality to James A. Baker III. In fact, given his history, you really can get the impression that he's simply doing the jobs that others just can't stomach themselves. It's just business, really. Nothing personal.

The former Sec. State has been inordinately busy, these last few years. While he's gained the most attention for his work with the Lead Balloon Group (er...Iraq Study Group), the gentle fellow has also served as head of the panel tasked with investigating the March 23, 2005 explosion at a Texas City oil refinery--an explosion that killed 15 and injured >100 people. Of course, given his track record, you wouldn't expect any panel headed by Baker to actually come to any conclusions or anything (most ungentlemanly!):
Baker noted the panel did not set out to investigate the causes of the March 23, 2005, explosion at its Texas City refinery, nor did it seek to lay blame.
Instead, it set out to provide [British Petroleum] with specific and extensive recommendations to improve the company's corporate safety oversight and culture. [...] [BP PLC Chief Executive John Browne] also denied charges the company has placed profits above safety and said the company had never forgone spending on safety resources when necessary. However, some BP workers told panel members that safety wasn't a spending priority and recommendations for repairs were often met with resistance.
[...] Baker and [Sen. Slade Gorton] both said the panel found no evidence that BP ever withheld resources for safety practices. "Clearly, there were times when BP didn't recognize the urgent need for process safety improvements," Gorton said. "But we didn't find any deliberate and conscious efforts on their part to short-circuit safety."

Why does this sound so familiar? We've grown weary of reports of corporate neglect for worker safety? Oil companies are evil? Maybe...but there's just something about Baker and his involvement that smells familiar. You know it, too. Like that moment before you go rifling through your refrigerator, in search of the thing that's gone bad. You play guessing games: is it the tomatoes? the milk? Oh god, it's the cauliflower! Only cauliflower can make that stink!
No need to politely ignore my tinfoil hat. I wear it with pride and scream from the rooftops: "James A. Baker III has left a trail of putrefying cauliflower!"

Ok. Think back to 2004. Do you remember when Shrub sent Baker as his Presidential Envoy to the Gulf States? Baker was tasked with approaching Iraq's erstwhile creditors for debt forgiveness. Particularly Kuwait and Saudi Arabia. Conflict of interest? Oh nothing really...just a $180 M stake in the Carlyle Group--a huge merchant bank & defence contractor. Although the Group later denied its participation, Carlyle was involved in a Consortium to retrieve most of Iraq's debt to Kuwait and other Gulf states. Naomi Klein caught this 'conflict' back in October 2004:
According to the documents, Carlyle is seeking to secure as part of the deal an extraordinary $1bn investment from the Kuwaiti government.
The main proposal would transfer ownership of $57bn in unpaid Iraqi debts. The debts would be assigned to a foundation created and controlled by a consortium in which the key players are the Carlyle Group, the Albright Group (headed by another former secretary of state, Madeleine Albright) and several other well-connected firms. Under the deal, Kuwait would also give the consortium $2bn to invest in a private equity fund devised by the consortium, with half of that going to Carlyle.

Smelled pretty bad, eh? So what happened next? Well, the day after Klein's article was published online, The Carlyle Group issued a letter denying its involvement in any such Consortium. Naomi Klein received "congratulatory" calls suggesting her "success" at squashing Carlyle's chances at a whopping $1 Billion fee from the government of Kuwait. Klein would have been proud, were it not for the side-effect of completely obliterating the Baker-Carlyle-Kuwait conflict from the collective memory of the American media. And what of Iraq's debts?
And why should the people of Iraq have to repay Saddam-era loans? Weren't these 'odious' debts? House Democrat Carolyn Maloney (14th NY) thought so:
Repudiating Iraq’s debts under the concept of odious debts was raised by some Members of Congress in 2003 in H.R. 2482, The Iraq Freedom From Debt Act, introduced by Representative Carolyn Maloney. The bill, which was not enacted, called on the IMF and the World Bank to cancel Iraq’s odious debt and called on Congress and the President to urge fellow Iraqi creditors to cancel their owed debt as well.
Well hmmm... if I'm BushCo., I'm gonna start looking for useful stooges to help me out. Hey! Look! There's a bona fide Iraqi who agrees with us! Let's listen to him:
Iraqi officials have steadfastly claimed that they would not seek repudiation under the odious debt concept. In an interview with Euromoney in September 2004, Iraq’s Minister of Finance, Adil Abdul Mahdi said:
"Iraq’s need for very substantial debt relief derives from the economic realities facing a post-conflict country that has endured decades of financial corruption and mismanagement under the Saddam regime. Principles of public international law such as the odious debt doctrine, whatever their legal vitality, are not the reason why Iraq is seeking this relief."
Ok, very good start, Mr. Iraqi Finance Minister. Now, what about Mr. World Bank? Awww crap, we're gonna need another stooge over there, too, aren't we?! Quick! Appoint Paul Wolfowitz to the World Bank!
But we're still none the wiser about Iraq's debts. I had the worst time finding recent updates on this issue, but here's a little tidbit from the Kuwaiti news. Condoleezza Rice is approaching Gulf states about forgiving Iraq's debt. This is part of her current Middle-East "charm offensive":
"The debt relief. We have negotiated for the Iraqis 80 percent debt relief from most of the Paris Club debtors and 100 percent from ourselves and several others. We are trying to get the Gulf States to do the same," she said.
Ah yes. Wasn't that Baker's Job?! Well, lest you worry that Baker didn't finish his work, let me hasten to remind you of his other job: head of the Iraq Study Group. You see, it is here where the smell of cauliflower is most pungent. I sincerely believe that Baker was never really tasked with securing debt forgiveness for Iraq, for Iraq's sake. No. Baker was tasked with prepping Iraq for a Big Ol' American Oil takeover. Here's Antonia Juhasz, speaking on Democracy Now, December 7, 2006:
It’s a completely radical proposal made straightforward in the Iraq Study Group report that the Iraqi national oil industry should be reorganized as a commercial enterprise. The proposal also says that, as you say, Iraq’s oil should be opened up to private foreign energy and companies. Also, another radical proposal: that all of Iraq’s oil revenues should be centralized in the central government. And the report calls for a US advisor to ensure that a new national oil law is passed in Iraq to make all of this possible and that the constitution of Iraq is amended to ensure that the central government gains control of Iraq’s oil revenues.
[...] Baker has his own private interest. His family is heavily invested in the oil industry, and also Baker Botts, his law firm, is one of the key law firms representing oil companies across the United States and their activities in the Middle East.
[...] The Iraq Study Group report, page 1, chapter one, says that the reason why Iraq is a critical country in the Middle East, in the world and for the United States, is because it has the second-largest reserves of oil in the world.
And really, if you're going to promise yourself a country's-worth of oil, you really oughta make it nice & legal. Spiegel Online, Dec 25, 2006 (h/t Galloping Beaver):
The Iraqi government is working on a new hydrocarbons law that will set the course for the country's oil sector and determine where its vast revenues will flow. [...] the draft law lays the ground work for private oil companies to take large stakes in Iraq's oil. The new law would allow the controversial partnerships known as 'production sharing agreements' (PSA). Oil companies favor PSAs, because they limit the risk of cost overruns while giving greater potential for profit. [...] some fear Iraq is setting its course too hastily and in too much secrecy. Greg Muttitt of social and environmental NGO Platform London told SPIEGEL ONLINE: "I was recently at a meeting of Iraqi MPs (members of parliament) and asked them how many of them had seen the law. Out of twenty, only one MP had seen it."
Last week, the Iraqi Labor Union Leadership suggested the same. "The Iraqi people refuse to allow the future of their oil to be decided behind closed doors," their statement reads. "(T)he occupier seeks and wishes to secure themselves energy resources at a time when the Iraqi people are seeking to determine their own future while still under conditions of occupation."
Many worry instability would only get worse if the public feels cheated by the government and multinationals -- the Iraqi constitution says the oil belongs to the Iraqi people. The Labor Union Leadership warned: "We strongly reject the privatization of our oil wealth, as well as production sharing agreements, and there is no room for discussing the matter. This is the demand of the Iraqi street, and the privatization of oil is a red line that may not be crossed."
The Spiegel article reiterates Antonia Juhasz's observations about Baker's Iraq Study Group:
The recent Iraq Study Group report recommended the US help Iraq "prepare a draft oil law" to hasten investment. The report estimates Iraq could raise oil production from 2 million to 3 or 3.5 million barrels per day over the next three to five years.
Critics say the US is leaning on the IMF and World Bank to push Iraq into signing oil contracts fast, so western firms can secure the oil before Chinese, Indian and Russian firms do. An IMF official told SPIEGEL ONLINE that "passage of a hydrocarbon law is not a condition for financial support from the IMF." Nevertheless, Iraqi authorities found it necessary to promise the IMF a draft petroleum law by the end of this year -- this in the same letter that says "we will take whatever steps are necessary to ensure that the program remains on track."
And then we come full-circle. The Iraqi Debt problem (Baker's "Special Envoy" role circa 2004):
The IMF sets the conditions for Iraq's debt relief from the so-called Paris Club countries. Eighty percent of that debt has been wiped clean, and the final 20 percent depends on certain economic reforms. With the final reduction, Iraq's debt would come to 33 percent of its GDP -- but if the reforms are not made, debt would climb to 57 percent of GDP, according to an IMF report.
Odious debt? Nahhh...just an odious job. But someone's gotta do it.

Footnote: for more details on Iraq's new petroleum law and corporate interference, see also Antonia Juhasz's latest piece, "Spoils of War" (In These Times Magazine) & The Galloping Beaver's series "Iraq: it was always about the Oil" Pts. 1, 2, & 3.

2 Comments:

Anonymous skdadl said...

Holy galloping hope and onions, GDKitty! Fantastic post, now bookmarked.

1/17/2007 8:28 AM  
Blogger Godammitkitty said...

Thx, skdadl :)

1/17/2007 8:29 AM  

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