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Iraq: Big Business the key to US strategy

Greg Palast | 12.11.2004 11:51

in case you didn't know ...unlikely
Beyond Halliburton, how the country's banks have been bought up, and the installation of a new regime of low taxes on big business and quick sales of “all state enterprises” to foreign operators
(posted courtesy of someone else, not Greg!)

Iraq: Big Business the key to US strategy
By Greg Palast
Taken from The Morning Star (was actually written a while ago).
Tuesday 9th November 2004

Greg Palast reveals the grubby hands of corporate lobbyists at work in the US strategy for selling off post-invasion Iraq

In February 2003, a month before the US invasion of Iraq, a 101-page document came my way from somewhere within the US State Department. Entitled, pleasantly, “Moving the Iraqi Economy From Recovery to Growth”, it was part of a larger under-wraps programme called The Iraq Strategy.

The economy plan goes boldly where no invasion plan has gone before – the complete rewrite, it says, of a conquered state’s “policies, laws and regulations”.

Here’s what you’ll find in the plan. A highly detailed programme, begun years before the tanks rolled, for imposing a new regime of low taxes on big business and quick sales of Iraq’s banks and bridges – in fact, “all state enterprises” – to foreign operators.

There’s more in the plan, part of which became public when the State Department hired a consulting firm to track the progress of the Iraq makeover. Example – this is likely history’s first military assault plan appended to a programme for toughening the target nation’s copyright laws. And when it comes to oil, the plan leaves nothing to chance – or to the Iraqis. Beginning on page 73, the secret drafters emphasised that Iraq would have to “privatise” it’s “oil and supporting industries”.

The plan make it clear that, even if we didn’t go in for the oil, we certainly won’t leave without it. If the economy plan reads like a Christmas wish list drafted by US corporate lobbyists. That’s because it was. From slashing taxes to wiping away Iraq’s tariffs – taxes on imports of US and other foreign goods – the package carries the unmistakable fingerprints of the small, soft hands of Grover Norquist.

Norquist is the capo di capi of the lobbyist army of the right. In Washington every Wednesday, he hosts a pow-wow of big business political operatives and right-wing muscles groups – including the Christian Coalition and National Rifle Association – where Norquist directs their media and legislative offensive for the week.

Once registered as a lobbyist for Microsoft and American Express, Norquist today directs Americans for Tax reform, a kind of trade union for unnamed billionaires, pushing a regressive “flat tax” scheme.

Acting on a tip, I dropped by the super-lobbyist’s L-Street office. Below a huge framed poster of his idol (“Nixon: Now more than ever”). Norquist could not wait to boast of moving freely at the Treasury, Defence and State Departments and, in the White House, shaping the post-conquest economic plans – from taxes to tariffs to the “intellectual property rights” that I pointed to in the plan.

Norquist wasn’t the only corporate front man getting a piece of the Iraq cash cow. He suggested the change in copyright laws after seeking the guidance of the Recording Industry Association of America.

And then there’s the oil. Iraq-born Falah Aljibury was in on the drafting of administration began coveting its Middle East neighbour’s oil within weeks of the Bush-Cheney inauguration, when the White House convened a closed committee under the direction of the State Department’s Pam Wainwright.

The group included banking and chemical industry men and the range of topics over what to do with a post-conquest Iraq was wide. In short order, said Aljibury, “it became an oil group”.

This was not surprising as the membership list had a strong smell of petroleum. Besides Aljibury, an oil industry consultant, the secret team included executives from Royal-Dutch Shell and Chevron Texaco. These and other oil industry bigwigs would, in 2003, direct the drafting of a 300-page addendum to the economy plan solely about Iraq’s oil assets. The oil section of the plan, obtained after a year of wrestling with the administration over the Freedom of Information Act, calls for Iraqis to sell off to “IOCs” (international oil companies), the nation’s “downstream” assets – that is, the refineries, pipelines and ports that, unless under armed occupation, a Middle East nation would be loath to give up.

One thing stood in the way of rewriting Iraq’s laws and selling off Iraq’s assets – the Iraqis. An insider working on the plans put it coldly: “They have (Deputy Defence Secretary Paul) Wolfowitz coming out saying it’s going to be a democratic country – but we’re going to do something that 99% of the people wouldn’t vote for”.

In this looming battle between what Iraqis wanted and what the Bush administration planned for them, the Iraqis had an unexpected ally – General Jay Garner, the man appointed by George W Bush just before the invasion. Garner is an old Iraq hand who performed the benevolent autocratic function in the Kurdish zone after the first Gulf War. But, in March 2003, the general made his first big career mistake. In Kuwait City, fresh off the plane from the US, he promised Iraqis that they would have free and fair elections as soon as Saddam was toppled, preferably within 90 days.

Garner’s 90-days-to-democracy pledge ran into a hard object – the economy plan’s annex D. Disposing of a nation’s oil industry – let alone redrafting trade and tax laws – can’t be done in a weekend, nor in 90 days.

Annex D lays out a strict 360-day schedule for the free-market makeover of Iraq. And there’s the rub – it was simply inconceivable that any popularly elected government would let the US write its laws and auction off the nation’s crown jewel, its petroleum industry. Elections would have to wait. As lobbyist Norquest explained when I asked him about the Annex D timetable, “The right to trade, property rights, these things are not to be determined by some democratic election”.

US troops would simply have to stay in Mesopotamia a bit longer. Garner resisted, which was one of the reasons for his swift sacking by Secretary of State Donald Rumsfeld on the very night he arrived in Baghdad last April. Rummy had a perfect replacement ready to wing it in Iraq to replace the recalcitrant general. Paul Bremer (above) may not have had Garner’s experience on the ground in Iraq, but no-one would question the qualifications of a man who served as managing director of Kissinger Associates.

Pausing only to install himself in Saddam’s old palace – and adding an extra ring of barbed wire – “Jerry” Bremer cancelled Garner’s scheduled meeting of Iraq’s tribal leaders called to plan national elections.

Instead, Bremer appointed the entire government himself. National elections, Bremer pronounced, would have to wait until 2005. The extended occupation would require the US’ forces to linger. The delay would, incidentally, provide time needed to lock in the laws, regulations and irreversible sales of assets in accordance with the economy plan. On that, Bremer wasted no time. Altogether, the leader of the Coalition Provisional Authority, issued exactly 100 orders that remade Iraq in the image of the plan, such as patents and copyrights. For instance, Order no.37, Tax Strategy for 2003, was Norquest’s dream come true, taxes capped at 15% on corporate and individual income – as suggested in the economy plan, page eight – good news for US corporations. The US Congress had rejected a similar flat-tax plan for the US, but, in Iraq, with an electorate of one, Jerry Bremer – the public’s will was not an issue. Not everyone felt the pain of this reckless rush to a free market. Order 12, Trade Liberalisation, permitted the tax-free import of foreign products. One big winner was Cargill, the world’s largest grain merchant, which flooded Iraq with hundreds of thousands of tons of wheat. For Iraqi farmers, already wounded by sanctions and war, this was devastating. They could not compete with the US and Australian surpluses dumped on them. But the import plan carried out the letter of the economy plan.

This trade windfall for the West was enforced by the occupation’s agricultural chief Dan Amstutz, himself an import from the US. Prior to George Bush taking office, Amstutz chaired a company funded by Cargill.

There’s no sense cutting taxes on big business, ordering 20 years of copyright payments for Bill Gates’s operating system or killing off protections for Iraqi farmers if some out-of-control Iraqi government is going to take it away after an election.

The shadow governors of Iraq back in Washington thought of that too. Bremer fled, but he’s left behind him nearly 200 US “experts”, assigned to babysit each new Iraqi minister – functionaries also approved by the US State Department.

The free market paradise in Iraq is not free.

After General Garner was deposed, I met him in Washington. He had little regard for the economy plan handed to him three months before the tanks rolled.

He especially feared its designs on Iraq’s oil assets and the delay in handing Iraq back to the Iraqis. “That’s one fight you don’t want to take on”, he told me.

But they have. After a month in Saddam’s palace, Bremer cancelled municipal elections, including the crucial vote about to take place in Najaf. Denied the ballot, Najaf’s Shi’ites voted with bullets.

This April, insurgent leader Moqtada al-Sadr’s militia killed 21 US soldiers and, for a month, seized the holy city. “They shouldn’t have to follow our plan”, the general said. “It’s their country, their oil”. Maybe, but not according to the plan. And until it does become their country, the 82nd Airborne will have to remain to keep it from them.

The interview with Jay Garner and more details of the economic plan can be found in “Bush Family Fortunes: The Best Democracy Money Can Buy”, which is now out on DVD.


Greg Palast