Toney Yellow

In its inimitable affectation of magisterium, the Times has pronounced that it is disappointed and unhappy with Mexico’s President Fox who has -- tsk tsk -- failed in the high hopes he led others to have of him. Mexico remains mired in unaccountability and lawlessness, supporting tyrants like Castro, while potential statesmen like Carlos Castañeda are shunted to the side. When will Mexico ever join the ranks of civilized nations? -- It may be toney, it may be the Times, but the drumbeat of misleading and misinformative yellow journalism is unmistakable.

The ostensible point of the editorial is deferred to its concluding sentence in which the Times intones that : “If Mexico's people are to have a decent chance to prosper in the 21st century, they badly need the far-reaching economic, political and legal changes [Fox] promised but has yet to deliver.” That is predictably good enough as far as neo-liberal blandishments go, and anyone vaguely familiar with issues and events in Mexico would understand the editorial as calling for a reinvigorated push toward privatization and free trade. A person more particularly acquainted with current hot-button issues in Mexico might read the conclusion as code for opening up Mexico’s state-run energy sector to private investment and for quashing talk in Mexico about modifying NAFTA free-trade schedules until the U.S. ends its state-subsidized agricultural system.

Well, it’s a free world and anyone, even the Times, can trumpet its nostrums of choice. What was discreditable was how the Times digressed and meandered through a thicket of falsehoods and equivocations to get there.

Had the conclusion been stated up front as a thesis, one would expect the editorial to explain or at least touch upon what “far reaching economic” changes were necessary in order to bring about a decent chance at prosperity. The article might then go on to tie in what political and legal changes were needed to bring about, if not prosperity then at least an improved pursuit of happiness... or just more restless busy-ness without purpose, as for instance in California.

Instead the article began by decrying “seven decades of highhanded one-party rule.” Were this Wagner, the phrase would be known as the PRI -leitmotif. Or perhaps one should say, leidmotif ....because the import of the theme is always that the PRI was heavy-handed bordering on oppressive. Indeed, the Times’s devotees of this emotive figure can’t contain themselves and do in fact burst forth into yabber about decades of repressive iron handed one party domination....thus conjuring up images of a Stalinist Mexico.

But what exactly does “high-handedness” refer to? The sullen arrogance of a low level bureaucrat? Like a French post office perhaps? The epithet seems to imply that the PRI did what it wanted and ignored the Will of the People. -- another stock-in-trade from the propagandist’s barrel. But that is precisely what the PRI did not do, throughout at least 50 years of its rule. It is perfectly true that, for the greater part of the period in question, the duly cast and reported election results were a laughable fraud. But if they were laughable -- if people said with broad smiles that “You know, it was reported the PRI won 96.78.....” -- it was because the fraud was irrelevant. In actual social fact, beneath the forms of politics, the PRI did represent the will of the vast majority of Mexicans.

It did so because as of the late ‘20’s and early ‘30’s the party represented the emergent or, perhaps better put, the exhausted net compromise between the conflicting class and ideological interests that had convulsed the country during the multi-sided “Revolution” that began in 1910. Precisely because it was a compromise, it could never satisfy all of the people all of the time; rather it trimmed and tacked between the tugs and pulls of irreconcilables, at different times “emphasizing” industrialization, or land distribution, or monetary stability or labor rights. That hardly seems “high-handed;” rather it would seem to be what most successful political systems do irrespective of whether they follow a two-party format.

It was rumored back in the early ‘60’s that the PRI had foot the bill for the opposition PAN to run a candidate. The National Action Party was as broke as it was disillusioned. Given the overwhelming and repetitive will of the people, it never won an election anyways, so what was the point? The PRI would have none of it. The word went out from the presidential palace: Thou shall front a candidate. Cheque under the table. The story may be apocryphal, but the sense of it is nonetheless true; and, when one considers the matter, it belies the falseness of the images worked up by the smear of “one party rule”

The PRI, as the one-man Porfiriato that ruled from 1875 to 1910, was a great respecter of formalities. Before resorting to high-toned huffiness, the Times would do well to take a glance at the substance of the matter. It can be conveniently forgotten what a disaster the so-called “Revolution” was. While portions of the country went unscathed, vast productive parts were left in ruins. Near 2 million out of a population of 12 were killed in a decade of warfare. The leaders of the Revolution: President Madero, Zapata, President Carranza, Pancho Villa, President Obregon were each of them shot in their turn, the last assassination serving as the opening salvo to a post-revolution conflict over land and religion in which 30,000 “priests and nuns” and an equal number of “atheist government operatives” were mutually murdered. There was ample reason the vast majority of people supported what the Times calls “high-handed one party rule.” What was needed was stability and recuperation with due regard for the formalities of that sort of two-party fol de rol that is America’s fetishistic obsession.

For all that, the PRI was open to all and afforded avenues of action for those who were seriously interested in politics. As in all parties, anywhere, there were groupings, alliances, cloakrooms and clubs; but the PRI was never the rule of a family or clan or Officer’s Club. It’s ideology was essentially European style social-democracy -- what, during the ‘50’s led likes of the Chicago Tribune to scream that “reds” had taken over south of the border.

Was it “high-handedness” that President Cardenas took control of Mexico’s gas and oil, the proceeds of which -- despite corruption -- are a major source of funds for the country’s social programs? What would one call the attitude of American oil companies that furiously lobbied FDR to invade Mexico because they were not satisfied with the amount or schedule for compensation offered?

Was it high handedness that presidents Cortinez and Mateos likewise nationalized telephones and electricity, as was policy in most social democracies at the time? Was it high handedness to distributes millions upon millions of hectares of land to dispossed peasants? Or to create a nation-wide grid of primary and secondary schools which together with night-class programs turned a country that was 80% illiterate in the 1940’s to being 95% literate by 1960? Was it high-handedness to bring maternity care, child care medical care and old age pensions to millions?

No one in Mexico would assert that all the PRI’s policies were infallibly well conceived or well implemented or unqualified successes. No one would claim that Mexico has not faced daunting problems not least of which is the catastrophic demographic explosion which threatens to cancel out the PRI’s successes even as it renders them more astonishing.

Neither would anyone claim that President Fox was not elected on a tide of disgust. But what the Times, along with virtually all the American media, studiously omit to report is that the revulsion was directed at the other PRI.

Other? Yes, other, because following the first 50 years of the “seven decades of one party rule” and beginning with the administration of president de la Madrid in the 1980’s the PRI was taken over neo-liberals who received their impulse and nihil obstat from the anti-regulationist, free-market, monetarist crowd in the United States. The coup within the PRI culminated and was consolidated with the presidency of Salinas, a devotee of privatization who had been cultured at Harvard Business School.

What with their penchant for privatisation, it is a mystery why the Reagan-Bush neo-liberals aren’t simply called privateers because grabbing it all up is what it’s all about once one puts aside the ideological pap served up as excuse. Be that as it may, it is hardly surprising that under privateur Salinas corruption in Mexico reached all time highs, as he sold off state assets to the lowest bidders among his buddies, while his brother cut deals with drug lords.

As the Salinas administration came to a close, social-democrat elements within the party sought to engineer a come back with the candidacy of Donaldo Colosio, who had hoodwinked Salinas into supporting him. The full story has yet to be told but what is known is that Salinas was furious and withdrew his support. Colosio was assassinated by the proverbial “deranged, lone gunman” and Erenesto Zedillo, a neo liberal technocrat assumed the mantel of office.

Zedillo was not as corrupt as Salinas, but the difficulty with neo-liberalism is that if your only economic plan is to let the invisible hand work miracles, there really isn’t much you can do when the invisible hand doesn’t. It also doesn’t help matters when the other hand is at work invisibly pilfering and “privatising”. The upward momentum that had begun in the 30’s and that had perdured up to the ‘80’s had levelled off and was spiralling down. Mexicans were indeed demoralized and disgusted. Taken in by a glitzy propaganda that misdirected attention away from economic realities and on to political forms -- the crying need for vigorous two party follies -- Mexicans voted for a change by electing a man whose free-privateer economic program was basically just more of the same.

Without doubt, the PRI came to reflect de la Madrid’s policy and the Salinas Brothers acted under the PRI name and used the party apparatus for their own ends; but to equate that with the party that had ruled for since the Revolution is pure sophistry. And it is a sophistry which allows one to talk spuriously about Fox’s “new” economic program when it has in fact been in place for 20 years.

But the Times editorial doesn’t talk about economics at all. In fact, it brushes away a hornets nest of cross-border trade, tariff, environmental, work-condition, safety regulation and migration issues under the rubric of “Washington's post 9/11 immigration fears.” Save it for Oprah.

But not to be outdone by tabloid journalism, the Times intones that harder to excuse than Fox’s failure to deal with Washi-fobias is his “diminished effort to follow through on crucially needed reforms.” As for instance? As for instance “establishing accountability and the rule of law” and investigating “serious human rights abuses” as well as “an army massacre of student protesters before the 1968 Mexico City Olympics.”

It is as if a Mexican newspaper were to sniff and huff that before tackling its health care crisis, or social security crisis, or infrastructural decay and faltering economy, the United States “urgently” needed to investigate the “army massacre” at Kent State. What were one to make of such studious and serious journalism? The only people who are in need of a clarifying investigation into the Tlatelolco massacre are those imbeciles who need to be un-lied to by the same subservient press that lied to them in the first place.

To add insult to inanity, the Times wraps up its reformist nostrums in one of the mainstays of Anglo-Saxon affectation and hypocrisy -- the notion that the natives need to be taught about accountability and the rule of law; or, as Wilson sniffed the need to “teach Latin Americans to elect good men”. Ah yes, as Harding’s ambassador sniffed, Mexicans needed “to be taken over and civilized by the sons of Mother Yale.”

Such righteous condescension all but begs to countered by a dollop of the shameful reality, the sum and substance of which is that the U.S. has plen’y of law, most of which serves as an elaborate Potemkin Village covering up endemic police bullying, brutality and lying, government bribery (aka “lobbying”) and corporate pilfering, pollution and every imaginable form of irresponsibility.

But even on the merits, the Times seems woefully ignorant of the investigations that have in fact taken place. Most importantly, Pemex and the PRI have both been the subject of intense judicial scrutiny and the PRI was fined millions upon millions of pesos for having engaged in illegal campaign financing.

Equally a-begging is the astonishing ignorance which spills into fitfull print, with: “Mr. Fox began boldly, ... [his] first foreign minister, Jorge Castañeda, turned Mexico into a champion of international human rights, challenging the behavior of tyrants it had long excused, like Fidel Castro.” Where does one begin in order to rectify the historical illiteracy which spawns such pontifications? With the refuge given my Mexico in the 1920’s to poets and dissidents who fled U.S. backed henchmen in Cuba? With the refuge given to the fleeing Spanish Republicans after their defeat and betrayal in that civil war? With, alone among the Western nations, Mexico’s absolute and unaltering refusal to recognize a fascist government imposed with the help of such paladins of human rights as the Hitler, Mussolini, the Condor Legion and the bombing of Guernica? With (if 1938 is too far back) Mexico’s condemnation of the assassination of a duly elected Salvador Allende and the imposition of a US backed ..... well, what exactly would the Times call Pinochet?

Mexico stands in no need of lessons on human rights from either the United States or its semi-official mouthpiece, the Times. Is it really necessary to remind the Times of multiple US invasions of Mexico, of discrimination against its citizens, of the fact that in this nation of “accountability” and “the rule of law” armed vigilantes are this moment “hunting down” (their words) impoverished Mexicans who come here to do work no one else in this country will do?

Mexico’s foreign policy is based on the principle of non-intervention. It recognized Fidel Castro’s Cuba because, for better or worse, his government was the result of an internal conflict in Cuba. It recognized Castro because it does not admit that the U.S. has the right to invade and topple whatever it doesn’t like anywhere in the hemisphere or in the world. It was and remains as simple as that. And the U.S. might do better if it renounced its imperious unilateralism and espoused a similar policy.

President Fox was the “man of the hour” for those fools and connivers who believed that political reform and “true democracy” consists in emulating the wretched dysfunctional circus that is U.S. two-party politics. Assuming, for the sake of argument, that such a game is worth the candle, Fox was not the man to bring it about. That his “high-hopes” election should have fallen flat within two years of his election can be of no surprise to anyone who has as much as a pea for a brain. He had virtually no political experience, he had no apparatus, no network of political alliances. He was quite literally a lone rider. The opposition PAN, which sort of backed him up, was itself more of a club than a true political party. The PRI had indeed “institutionalized” itself and what was required was a decade more of grassroots building, gaining control of local offices and building up a shadow government. For anyone who knows anything about how states are actually run, Fox could only be a candidate for those who wanted to bring about political chaos.

Now that the Times decides that it has been let down by its man of the hour, it apparently seeks to peddle its latest fair haired adoptee of Yale.... a hippie litterateur turned yuppie functionaire. Where did this Lohengrin come from? The splash of clinking martini glasses in some uptown townhouse? It is no secret that Castañeda wants to be president; but it is a fool’s reverie. He will never be president of Mexico. It would take another US led democracy crusade cum coup to seat Castañeda anywhere but at the café table where he belongs.

None of this is to deny the serious and multi-faceted shortcomings that imperil Mexico. What it is to say, is that the Times serves up no half serious considerations on any of them. From the start, it sweeps any complex issue to side while it spews forth a string of diversionary trivialities and sophistical ad hominems mired in ignorance. Of course, this being the Times, it is all very toney, but toney as it may be it remains yellow.

©Barfo, 2003

And the Whirlwind Swept the Land

©Barfo, 2003
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Turning Talibans into Turnips

Following upon twenty suicide attempts by prisoners at the naval detention center in Guantánamo, military authorities have decided to set up a psychiatric ward for detainees suffering from mental problems.

The decision was taken after one of the prioners tried to kill himself by bashing his head against the wall of his cell. “He’s lost his ability to function,” said Captain Alber Shimkus, Chief Medical Officer at the base, “we don’t anticipate he will get better.”

In addition to the Taliban Turnip, the ward will lodge approximately 70 other detainees who suffer from various mental problems. Some are being treated with drugs; others are simply kept shackled.

Military authorities deny that their methods of intererogation had anything to do with causing these conditions. “The majority of these psychiatric cases arrived here already suffering from mental problems,” Shimkus said.

It’s hardly surprising considering that they arrived at Guantánamo after being locked up for a month in fetid metal shipping containers without light, fresh air, water, sanitation or adequate food.

It is hardly surprising considering that the “containees” were threatened, immobilized, beaten and in some cases simply or simply randomly shot.

It is hardly is hardly surprising considering that they were shipped to Guantánamo shackled, blindfolded, gagged, earplugged, immobilized, and drugged “so that” -- according to Donald Scumsfeld -- that they could not disable the transport plane by “chewing” through its electrical cables.

Yeah, Shimkus was right... many of the detainees arrived half crazy.

©Barfo, 2003

A War for Bananas? - Part VIII, ThugPolitik -- Full Spectrum Dominance

Following the election of President Clinton, Dick Cheney and his cohorts in the Reaganite bureaucratic infrastructure went to work preparing for the day of the eventual resumption of power. As previously reported (Fear and Loathing in the New American Century) the doctrine was given an initial airing in a “white paper” put out by the New American Century Org., a think tank rustled up {ie. founded} by conservative publisher William Kristol, (with defense industry money), for the specific purpose of promoting the Cheney/ Rumsfeld/ Wolfowitz doctrine of "full-spectrum dominance".

Stated simply the doctrine hold s that the US should control military, economic and political development worldwide by whatever means necessary and convenient, from cyber to nuclear war and all methods in between. In other words, “I’m the boss around here, and no that’s that.” In the words of the white paper, the United States "must maintain the mechanisms for deterring potential competitors from even aspiring to a larger regional or global role." In other words, the doctrine regards any “potential” rivalry as an “actual” threat and calls for the use a full spectrum military response as needed, from secret infiltrations, dirty wars, to nuclear blasts to keep other nations humble. It also calls for disinformation and the use of the internet as a weapon, presumably to keep everyone ignorant.

Published in September 2000, two years before Bush’s first State of the Union Address, it branded Iran, Iraq and North Korea as an “axis of evil.” Its authors recommended that the Pentagon take preemptive measures to prevent the proliferation of weapons of mass destruction in such countries as North Korea, Iraq, and some of the former Soviet republics. The document made no mention of collective action through the UN, stating that "we should expect future coalitions to be ad hoc assemblies, often not lasting beyond the crisis being confronted...."

But the paper was not even principally concerned with the Axis of Evil, hidden in the text of ThugPolitik was a concern for resurgent Russian and Chinese power. It described Russia and China as “potential” threats and warned that Germany, Japan, and other industrial powers might be tempted to rearm and acquire nuclear weapons if their security was threatened, and this might start them on the way to competition with the United States.

In September 2002, the Kristol “white paper” was put on White House paper and became official U.S. Policy under the title “The National Security Strategy of the United States of America”. Although the paper added some rhetorical embellishments about promoting democracy and finding the fountain of youth, its principle premise and objective was simply to maintain the United States in a position of sole global power.

Uri Avneri and Israeli leftists in the peace movement complain that the U.S. is using Israel for its own geo-political purposes. Neo-nazi right wingers in the U.S. and elsewhere complain that the new Youngers of Zion are using the U.S. to advance Jewish aims. Whatever the case, there is an undeniable parallelism between Israeli/ Likud policy in the smaller universe of the Middle East and the US/Bush policy in the greater universe of the world. As Israel must be the sole power in the Middle East, so the U.S. must be the sole global super-power, including the Middle East. The authors of America’s New Century would not deny the parallelism, they would only dispute that it presents any problem. To them, What’s good for Israel is good for the U.S. and vice versa. In a curious way, they speak the same talk as Saddam Hussein or the most fervently anti- Zionist Arab.

This was hardly Bush senior's view of America's role in the world.

Qui Bono?

Is the looming war a “war for oil” as the placards say? The existence of oil fields in the area, the deals that have been made with respect them thus far, the undeniable importance of oil in the modern world and the evident interests various parties have in gaining access and or control to it -- all these factors render it absurd to answer anything but “yes”. But there is little evidence so far that American oil companies (Big Oil) are pushing the Administration to seize Iraqi oil production facilities, in the way they once were pushing Franklin Delano Roosevelt to invade Mexico in order to seize-back nationalised oil.

On the other hand there is ample evidence that circles within the U.S. political establishment have elaborated Israeli security interests (as perceived by the Likudists) into a more General Theory of Hegemony, that resonates with American jingoists while providing an ideological “security umbrella” to Israel.

But while that may well be the case, it also has to be said that it takes many tugboats to push a big liner. Rarely is policy in the mass imperial state the result of any one qui or any one bono. It is usually the result of a confluence of forces, in which various players succeed in cajoling and co-opting one another. More important that asking which singular who is benefited is understanding who the who’s are, what interests and weaknesses they have and how they stand to use or be used.

©Barfo, 2003

A War for Bananas? - Part VII, Oil and Water - The Israeli Factor

No story on the Middle East can be complete without taking Israel into account. While peace groups in Israel favor compromise and coexistence with moderates in the Arab world willing to do the same, Israeli government policy for the past 20 years has been dominated by the irredentist Likud, the successor to so called Revisionist Zionism with its frankly racialist and colonialist ideas. Given this premise, Israeli security is based on a stark equation: Israel must be strong and the surrounding countries must be kept weak.

When one recalls the to-Heaven shrieking furore that surrounded the American sale of AWACS to Saudi Arabia in the 1970’s it is easy to see how Iraq would be the bete noire in Israeli strategizing. Keeping Iraq weak is not simply a matter of reducing its army or constraining its armaments. More fundamentally it is a question of depriving it of its major geo-political asset. A petro-servient Iraq is not a threat to anyone.

One does not need to be a rocket scientist to understand Israeli interests in the situation. According to the Asia Times, an active promoter of Israeli interests is a so-called "former" Israeli intelligence agent, Yousef Maiman, president of the Mehrav Group Maiman is a "Special Ambassador", to Turkenistan as well as a citizen [!] of the same gas republic by presidential decree. According to the Times, nobody knows where Mehrav's money comes from; but the Times quotes the Wall Street Journal, as reporting that it is actively involved in advancing the "geopolitical goals of both the US and Israel" in Central Asia.

What are those goals? Maiman is quoted as saying: "Controlling the transport route is controlling the product." That certainly dovetails with statements by the EIA. The Mehrav Group itself has accordingly joined in promoting the Baku-Ceyhan oil pipeline, which provides the further advantage of being easily extended to bring oil directly to “thirsty” Israel. Magal Security Systems, an Israeli company, is also set to provide the security for the 2,000 km long

Baku-Ceyhan oil pipeline Picking up a story disclosed by Israel peace groups, the Times also reports that Mehrav is involved in a “murderous project” to reduce the flow of water to Iraq by diverting water from the Tigris and the Euphrates rivers to southeastern Turkey.

In an article in the New York Review of Books, Frances FitzGerald (9/02) argued that Israel and its lobbyists in the United States want the destruction of Iraq on pure geo-political grounds independent of oil issues. He points out that “years before the Bush administration took office Rumsfeld and [Deputy Defense Secretary Paul] Wolfowitz were calling for [Hussein’s] overthrow on the grounds that he posed a danger to the region, and in particular to Israel”

In January 1998 they, along with the neo-conservative William Kristol and others associated with Kristol's Project for a New Century, wrote President Clinton that if Saddam acquired the means to deliver weapons of mass destruction, he would pose a threat to American troops in the region, to Israel, to the moderate Arab states, and to the supply of oil. Four months later they went to capitol hill to beat this drum before congress.

In June 1999 Wolfowitz complained that “the containment of Iraq is failing. The United States needs to accelerate Saddam's demise if it truly wants to help the peace process." Wolfowitz was implying that with Saddam Hussein eliminated, Israel could choose the peace it wanted with the Palestinians. The cabal kept it up past the elections. Since September 11, William Kristol and associates have been urging Bush to see Israel's fight against terrorism as America's battle to make war on Saddam Hussein, as both Sharon and Peres have urged.

On April 15 2002 Kristol and Robert Kagan wrote that Bush should not play any role as Middle East peace negotiator. "The road that leads to real security and peace—the road runs through Baghdad." One week later, a senior Israeli official confirmed that “Pentagon officials” [i.e Rumsfeld and Wolfowitz] were pushing the White House to bring down Hussein before anything else. With Hussein out of the picture, they argued, Israel could solve the Palestinian problem on its own terms.

As documented in an article in Counterpunch e-zine, Wolfowitz, Douglas Feith, John Bolton have strong affiliations with the Likud. Feith and Richard Perle collaborated in authoring a 1996 study for then Prime Minister Benjamin Netanyahu in which Hussein’s overthrow (aka “regime change”) was described as “an important Israel strategic objective in it own right -- [and] as a means of foiling Syria’s regional ambitions.” The study urged a preemptive strike. (See. A Clean Break: A New Strategy for Securing the Realm (http:// www. israeleconomy. org/strat1.htm).)

Nothing has changed since. In August 2002, Israeli Deputy Interior Minister Gideon Ezra told the Christian Science Monitor that a U.S. attack on Iraq would help Israel impose a new order without Arafat. “The more aggressive the attack is, the more it will help Israel against the Palestinians.” he said.

According to Independent columnist Robert Fisk, Jewish American leaders talk about the advantages of an Iraqi war with enthusiasm, although Bush and Blair keep this aspect of the issue carefully under wraps. According to Fisk, Rumsfeld’s allusions to the “old” Europe were a thinly veiled reference to French antisemitism and collaboration with the Nazis.

Whether they were or not, it was hardly surprising that in a Wall Street Journal article, following Powell’s UN speech, Professor Eliot Cohen, of Johns Hopkins University, suggested that European nations' objections to the war might – yet again – be ascribed to "anti-semitism of a type long thought dead in the West, a loathing that ascribes to Jews a malignant intent.” What kind of intent is it that would seek to divert Iraq’s water to the Levant? “The France and Germany that oppose this war,” Fisk says, “are the "new" Europe, the continent which refuses, ever again, to slaughter the innocent.”

©Barfo, 2003

A War for Bananas? - Part VI, When First You Fail, Try.... What?

The question raised by the foregoing denouement is whether the crisis in Iraq is simply an oil-grab. The evidence points to an affirmative answer; but it is by no means a question of “simply” since private prospects -- to the extent they are actually urged by the oil companies -- must be pieced into and justified by an over-arching national strategy and it is not entirely clear that a national strategyhas been coherently resolved upon.

At the end of 2002, leading oilmen, exiled Iraqis and lawyers met behind the closed doors of the Royal Institute of International Affairs, in London. The meeting was entitled "Invading Iraq: dangers and opportunities for the energy sector".

According to the Guardian which ran the story, “One delegate said the entire day could be summarized with: "Who gets the oil?" If America changes the regime you might expect US companies to get it.” But, as the Guardian noted, “it maybe more complicated than that.”

The Iraqi oil industry was built up by Iraq Petroleum Co. (IPC) a consortium owned by BP, Exxon/Standard Oil, Mobil, Shell, and Partex. In 1972, IPC was nationalized by the revolutionary Iraqi regime. Negotiations over nationalization were fierce. Negotiators for IPC team had some extraordinary clashes with Saddam Hussein and Iraq's vice-president, wh0 threatened “any battle with the companies that was necessary" The Iraqis also threatened IPC with loss of Saudi Arabian and Kuwaiti oil due to Arab solidarity. In February 1973, the IPC finally signed the nationalization agreement. IPC was compensated for its lost oil-fields, and by 1975 operations were taken over by the Iraq National Oil Co and the Northern Petroleum Organization.

Normally, IPC’s compensation would be deemed to terminate its rights. It is also a rule of international law that valid contracts survive regime changes. "The majority opinion is that if a government creates a [legal] title, it survives a change of government," Prof. Thomas Wäld told the Guardian. Doak Bishop, vice-chair of the Institute of Trans-national Arbitration agreed: "Regime change does not change the acquired rights companies have in the area. If the Russians and the French have legal rights in those fields, then a regime change would not oust them of those rights, but it could well get pretty messy."

The Americans, apparently, are of another view. Former CIA director James Woolsey, who is close to the Iraqi opposition groups, recently told the Washington Post: "It's pretty straightforward. France and Russia have oil companies and interests in Iraq. They should be told that if they are of assistance in moving Iraq towards decent government, we'll do the best we can to ensure the new government and American companies work closely with them. If they throw in their lot with Saddam, it will be difficult, to the point of impossible, to persuade the new Iraqi government to work with them."

In light of such belligerence, French complaints about “unilateralism” acquire a new accent.

No one, not even an upstanding oil company, could be expected to toss away manna from heaven (or from the bowels of the planet, as the case may be.) But it seems to be a characteristic of corporate culture that companies are as cautious as they are avaricious. American oil companies certainly understand that a destructive war would make it more expensive to rebuild Iraq’s oil facilities. They also understand that an unstable peace would make it more problematic to pump and transport it. Lastly, oil companies are not adverse to dealing with whatever regime it happens to be easiest to deal with be it Maoist Chinese, Fascist Chileans, Fundamentalist Muslims or Saddam Hussein. That unspecified “oilmen” might have met in London to discuss hypotheticals does not prove that oil companies are pushing the present policy.

Part of the difficulty in figuring out qui bono, is figuring out how to contextualize President Bush’s thuggish pronouncements. The one group to whom Bush’s public tantrums (“I’ve had it” “The Game is Up” “Saddam is finished” etc.) will not sound shocking is that class of American lawyer that deals in what is known as “settlement negotiations”. The claims of super-human patience, the feigned exasperation, the two-hour ultimatum coupled with an angry threat -- these are all the sorts of antics that go on behind the highly polished brass on front doors of “blue chip” law firms. The half of the conversation which the public hears sounds like some kind of “settlement negotiation” is taking place.... But with whom? The difficulty in assessing Bush’s ridiculous antics is that one does not know what offers and counter-offers have been made and rejected. It is a near certainty that the conversation we hear has nothing to do with weapons inspections which is little more than a noisy side-show, employing many, urged with earnestness and signifying nothing. That leaves us in the unenviable Thomist position of “knowing God by saying what he is not.”

While the anecdotal and symptomatic evidence points to the conclusion that the Bush Administration is resolved on war for the sake of oil, that same evidence also points to the bizarre fact that the Administration is at something of a loss as to what to do with the oil once it gets it. Complicating matters is the curious backward way the Administration as well as the Press speak about things.

In mid December 2002, about the same time oilmen and lawyers were meeting behind the closed doors of the Royal Institute, the U.S. State Department issued a communique stating that, the first session of the “Future of Iraq project working group on Oil and Energy” would convene on December 20-21, 2002 in Washington, DC. At this session, the State Department’s Bureau of Near Eastern Affairs would be hosting approximately 15 “Free Iraqis” for discussions regarding the current state of Iraq’s oil and energy sectors, scenarios for the restoration and modernization of Iraq's oil fields and other essential energy infrastructure; and management of the energy sector to meet the needs of the Iraqi people in the post-Saddam era. The meeting would be closed to the press.

A month later, at the beginning of January, the Houston Chronicle circulated a New York Times article on the Administration’s plans for the occupation of Iraq which, it said, “would amount to the most ambitious American effort to administer a country since the occupations of Japan and Germany at the end of World War II.” Although many elements of the plans were classified or still being debated, the occupation had two objectives: "preserve Iraq as a unitary state, with its territorial integrity intact," and "prevent unhelpful outside interference, military or nonmilitary.”

Buried in the middle of the long report, dealing with a pot-pourri of military and social issues, the article noted: "There is no more delicate question for the administration than how to deal with Iraq's oil reserves ... and how to raise money from oil sales for rebuilding without prompting charges that control of oil, not disarming Iraq, is Bush's true aim.”

One would think that the primary “story” was whether one should make war for oil not how the administration has to deal with a “delicate” appearance Nevertheless, in this oblique and almost buried way, the article went on to disclose that “Administration officials have been careful always to talk about Iraqi oil as the property of the Iraqi people.” At the same time, the White House was haunted by the nightmare that Saddam Hussein might deprive them of the desired prize, by destroying the fields. Administration officials were quoted as saying, “It's a big source of concern, and we are trying to take account of it as we plan how to use our military forces.”

Indeed. Speaking on 29 December, Secretary of State Collin L. Powell stated, "If coalition forces go into those oil fields, we would want to protect those fields and make sure that they are used to benefit the people of Iraq, and are not destroyed or damaged by a failing regime on the way out the door."

Once again, as almost every day, one has to pause to make sense out of the Administration’s extremely bizarre way of speaking. “If coalition [i.e. predominantly American] forces go into the oil fields” would they want to blow them up? Hardly. But if one “would want to protect those fields” going into them would not be a matter of possibly happening to be there (“if”). Why does Powell speak as if American forces might stumble into custody of oil fields and then have to do their fair and honest best to be good custodians? He speaks that way in order to avoid speaking truthfully, that the “true aim” of the Administration is to make a bee-line to those oil fields and seize possession of them. Hussein, apparently understood it that way, because in January the Iraqi government stated publicly it had plans to blow the fields up. Of course it was “a big source of concern.”

Once it is seen that the administration (and its echoes in the press) speak backwards, it is understood that seizing the oil fields is not the result of happening to have occupied Iraq, which is the result of going to war; rather, seizing the oil fields is the reason for occupying Iraq which is why the U.S. would go to war. Nevertheless, still talking as if control of oil is one of those collateral “effects” of war which would have to be managed somehow, as best one could, the Houston Chronicle/New York Times article continued “it is unclear how the administration plans to finesse the question of Iraq's role in the OPEC countries and who would represent occupied Iraq at the organization's meetings. [¶] The administration is already anticipating that neighboring Arab nations may accuse occupied Iraq of pumping oil beyond OPEC quotas. One official said Washington "fully expects" that the United States will be suspected of undermining the oil organization, and it is working on strategies, which he would not describe, to allay those fears.

One reason the official might not have described these strategies is that the administration is again deadlocked by a split that has plagued it since it took office. According to a 22 December 2002 story by the Los Angeles Times,the administration’s hawks want the United States to militarily seize, possess and control the oil fields whereas its doves “believe that it should be up to the Iraqis to decide how to rebuild their battered industry -- and which foreign oil companies will get to take part.”

It will hardly come as a surprise that the “hawks” are led by Deputy Secretary of Defense, Paul Wolfowitz, along with Richard Perle, among the chief protagonists of unilateral pro-consularity of American foreign policy. A report prepared by the Center for Strategic and Budgetary Assessments, in December 2002, and delivered to Wolfowitz’s office, concluded that “the cost of the occupation, the cost for the military administration and providing for a provisional [civilian] administration, all of that would come out of Iraqi oil.” Another source told the press that a number of officials in Cheney’s officer were also urging that Iraq's oil funds be used to defray the cost of occupation. Yet another unnamed source stated that many senior administration officials were of the view that "It [the oil] is going to fund the U.S. military presence there. .... They will charge the Iraqis for the U.S. cost of operating in Iraq. I don't think they're planning as far as I know to use Iraqi oil to pay for the invasion, but they are going to use it to pay for the occupation."

Nor will it surprise that the doves are headed by Collin Powell who reflects the views of the Council on Foreign Relations and Rice University's Baker Institute which, the Los Angeles Times states, “is believed to represent the thinking of many U.S. officials.” One of said “officials” is Baker Institute energy analyst Amy Myers Jaffe, who told the Times that "A lot of us have confidence in people who were professionals in the Iraqi oil industry and left the country, and in people who are still there." In other words, these so-called “U.S. officials” are really the oil-company folks who want to be left alone to their own free-market devices dealing with “capable” neo-liberal Iraqi “counterparts”.

Also arrayed against the hawks are bureaucrats in the National Security Council, Justice Department and Federal Reserve banking system. Mike Anton, a National Security Council spokesman denied the existence of any plan to use oil funds to pay for occupation stating that the oil revenues would be used “not so much to fund the operation and maintaining American forces but for humanitarian aid, refugees, possibly for infrastructure rebuilding, that kind of thing.”

Justice Department lawyers are unsure whether any of the oil funds could legally be used to defray occupation costs or whether, on the contrary, they had to be held in trust for the people of Iraq. Laurence Meyer, a former Federal Reserve Board governor, who chaired a Center for Strategic and International Studies conference in November on the economic consequences of a war with Iraq, said that conference participants deliberately avoided the question of whether Iraq should help pay occupation or other costs. "It's a very politically sensitive issue," he said. Meyer did say however, that those officials who believed Iraq's oil could defer some of the occupation costs may be "too optimistic about how much you could increase [oil production] and how long it would take to reinvest in the infrastructure and reinvest in additional oil."

Indeed, a CFR-Baker report estimated that even if Iraq emerged from war with no additional damage to its oil infrastructure, its annual oil revenues probably wouldn't exceed $12 billion a year whereas the Congressional Budget Office estimates that the cost of an occupation would range from $12 billion to $48 billion a year, lasting for one and half years or more. In other words while the bureaucratic infighting continues, Bush continues to speak publicly of administering Iraqi oil “in trust” for the Iraqi people.

It is astonishing to think that at this late date the increasingly belligerent pronouncements of the administration doves might in fact mask a continuing split over what to do with the oil once it is seized -- in other words, what the objective of an invasion is in the first place. And yet it the public symptoms bespeak an internal confusion. It will be remembered that, last Summer and Fall, along with Jim Baker and other former Bush I advisors, Brent Scowfcroft took the unusual step of publicly criticizing Bush Jr.’s reckless unilateralism. In August 2002, Scowcroft weighed in against the war whoops of the Rumsfeld-Kristol- Wolfowitz-Perle crowd arguing that a unilateralist attack would “turn the whole region into a cauldron” and that, with nothing left to lose, Saddam might unleash his weapons of mass destruction and attack Israel. Since this latter option was somewhat far fetched, Scowcroft might have meant to say that Saddam that a unilateral attack might result in Hussein blowing up his own fields. Whatever the case, Scowcroft was adamant that the Administration’s policy should be built on a multilateral focus on terrorism ...not a unilateral war with Iraq

The Administration heeded at least half the advice and, as a result, it administration deviated back to the Security Council chamber where it labored to achieve Resolution 1441. In a joint interview this Friday (2/14), with former Secretary of State Madeleine Albright, on Public Television, Scowcroft was asked whether, in view of the unprecedented applause which greeted the French Foreign Minister’s remarks to the Council, he was “receiving any heat from within the administration”. What was interesting was not Scowcroft reply (he refused any)but rather the little squeak-like “Ha!” that involuntarily emitted from Albright.

©Barfo, 2003

A War for Bananas? - Part V, Politics on the Stump and the Politics of the Pump

Like the sun and the moon, the politics and the economics of the Iraq situation stand in an inverse but reflective relation. The geo-political face of the conflict is simple and fairly constant. Saddam Hussein is a brutal, belligerent dictator who must be got rid of or at least disarmed and “neutralized”. The geo-economic face of the conflict is complex and extremely fluid. The general premise here is that Saddam can be negotiated with and that the stability he affords is better than the chaos. The political face is characterized by periodic and much publicized “crises” followed by long intervals of quiescence in what is supposedly a steady effort to get rid of Saddam. The economic face is ever silent covering steady attempts to trade with Saddam while surfacing from time to time in order to deny doing any such thing. An example of these dual constellations is that, in 1996, while director of Central Intelligence, John M. Deutch headed up American efforts to overthrow Iraqi President Saddam Hussein; but as of February 2000, Deutch sat on the board of Schlumberger Ltd., a multinational “shell” for US companies that was helping Baghdad service its oil rigs.

A brief and somewhat superficial summary of the past six years will give an idea of the curious dynamics surrounding Iraqi oil.

In 1996, the United Nations initiated the so-called oil-for-food program, which allowed limited and monitored sales of Iraqi oil in exchange for non-military and non dual-use goods. As of 1997, the Security Council removed any ceiling on the amount of oil Iraq could sell. However, it maintained a limit on the amount of spare parts Iraq could buy. As of June 1998 Iraq was allowed to buy only $300 million in spare parts every six months.

Complicating the situation, the United State government imposed sanctions on Iraq, which meant, in effect, that it prohibited American companies from doing business with the outlaw regime. But whereas Iraq could sell oil to anyone, it could only get the spare parts in needed from American sources which had built the original infrastructure. And if it could not get spare parts, it’s ability to pump and sell would be reduced. And so it stood; at least officially. According to U.S. government figures, American firms accounted for only a tiny share (about $400 million) of the nearly $10 billion in trade that has been conducted under the oil-for-food exemption. In reality, diplomats, industry officials and UN documents indicate that, between the summer of 1998 and Spring of 2000, American companies, operating through subsidiaries and affiliates, were buying oil and selling parts furiously, although they denied it in order to “comply” with the law.

One such company was Halliburton, the Dallas-based maker of oil equipment of which Dick Cheney was chairman and CEO until his election as vice-president. While the United States and Britain waged almost daily air strikes against military installations in northern and southern Iraq, Halliburton and other U.S. companies, were doing business with Saddam Hussein's government and helping to rebuild Iraq’s battered oil industry. Two such other companies were Dresser-Rand and Ingersoll-Dresser Pump Co., in which Cheney had major stock interests.

Prior to his election Dick Cheney was a long time critic of United States’ sanctions against Iraq which, he said, “penalized” American companies. They did not, however, greatly penalize Halliburton & Co. Although Cheney denied that Halliburton had business dealings “with” Baghdad, UN records showed that Halliburton held stakes in two “affiliates” that signed contracts to sell more than $73 million in oil production equipment and spare parts to Iraq.

Much the same obtains on the oil-buying side of the equation. In a speech to San Francisco’s Commonwealth Club, in November 1998 ,Chairman of the Board and Chief Executive Officer of Chevron Corporation , Kenneth T. Derr, criticized US imposed unilateral sanctions against various countries. Derr went on at length belaboring the obvious fact that (unless there is only one source) unilateral sanctions “don’t work”. On the other hand, Derr said “It might surprise you to learn that even though Iraq possesses huge reserves of oil and gas -- reserves I'd love Chevron to have access to -- I fully agree with the sanctions we have imposed on Iraq. Why? Because .Iraq’s conduct has been so egregious that ... other countries have been willing to join the United States by adding sanctions of their own.” What he did not say was that at the very time, without “access to” the reserves themselves Chevron was purchasing oil from the reserves” via middlemen.

A month later, the United States initiated Operation Desert Fox and bombed Iraq. Baghdad retaliated by prohibiting U.S. oil companies from directly purchasing Iraqi crude. " Any company found supplying Iraqi crude to a country in a state of war with Iraq will be put on the blacklist and there will be a partial or full ban in dealing with it," said Iraqi Trade Minister Mohammed Mehdi Saleh.

Yet despite multi-lateral sanctions imposed against Iraq and despite unilateral sanctions imposed by Iraq, Chevron and Exxon managed to increase their purchases of Iraqi crude in 1999. According to Larry Goldstein, president of the Petroleum Industry Research Foundation, Iraqi crude was the fastest growing source of imported crude amount to about 700,000 of the 2 million barrels of oil exported daily by Iraq or nine per cent of total U.S. oil imports. "The Chevrons and the Exxons of this world have to buy from the Russians, the French and the Chinese traders," said Goldstein. But, he added, "the U.S. spare parts industry is too dominant to ignore."

“Where does Iraq think its oil is going to go if it doesn't go to the U.S.?” asked one trader with a U.S. major oil company. Saudi Arabia, vowed to fill any disruption from Iraq, Iraq’s sanctions failed and Baghdad's penetration of the U.S. oil market soon surpassed pre-Gulf War levels.

In September 1999, more than 50 foreign companies attended an oil and natural gas technology exhibition in Baghdad, the first such gathering in 10 years. Most of the firms were from Canada, France, Italy, and the United Kingdom. No U.S. firms attended, although a high-level Iraqi oil official stated that Iraq was ready to deal with U.S. oil companies.

How Iraq was prepared to deal with foreign companies was another matter. A U.N. “Expert Report,” issued in March 2000, obliquely indicated that someone had floated the idea of foreign companies entering into “production sharing agreements” and/or “participating” in Iraq’s oil production. The Report states that the expert group “was advised, at Ministerial level, that in the current political environment...there would be no discussion on the matter of options for involving foreign oil companies in Iraq’s oil sector.”

The Report went on: “To sustain and increase oil production and export capacity it is the view of the experts that involvement of foreign companies would be helpful and, in principle, the Ministry of Oil welcomes this. .... However,... the Ministry of Oil declined to take part in discussions on this matter and was only willing to discuss the involvement of foreign companies through the use of short-term technical service contracts (“TSC’s”), such as well logging, pipeline pigging, and the drilling and work over of wells.” It would appear, however, that by the end of the following year the Ministry had modified its position at least to a point satisfactory to the companies, although getting there was a tad bumpy.

In October 2000, the Iraqi Oil Ministry expressed frustration with the slow pace of progress by Russian and Chinese firms; and, in January 2001, Shell announced that it had held talks with the Iraqi Oil Ministry regarding "potential opportunities". In March 2001, the Deputy Oil Minister announced that Iraq might terminate contracts with the Chinese and Russian companies. In July 2001, angered by France's perceived support for the U.S. "smart sanctions" plan, Iraq announced that it would no longer give French companies priority in awarding oil contracts, and would reconsider existing contracts as well. Iraq also announced that it was inclined to favor Russia, which has been supporting Iraq at the U.N. Security Council.

In October 2001 a joint Russian-Belarus oil company signed a service contract and Lukoil was granted its concession to spend $4 billion to develop a "super" oil field in southern Iraq In December 2001, the Turkish Petroleum International Corporation won a U.N.-approved contract to drill for oil in northern Iraq. It would appear that Iraq and France also resolved their difference as a recent (Fall 2002) report by the Royal Institute of International Affairs states that France Russia and China all have “potentially massive oil pacts” with Iraq and that “Saddam [Hussein] is believed to have offered the French company Total Elf Fina exclusive rights to the largest of Iraq's oil fields.”

In short, twists, turns, bumps and bombs, by the end of 2001 Iraq appeared poised to solve its oil problems and U.S. companies were not part of the solution. As of March 2000, the U.N. Expert Report had concluded in the direst of terms that Iraq was wasting its assets in order to sell them. “Although the effort of the Iraq oil industry has been enormous, and is notable for its effort to reinstate production after severe damage in a very short time, the lack of means to keep this industry in good shape in terms of capital, equipment and material, and also from the point of view of human resources, is very apparent. .... The oil industry is degrading, safety is below conventionally accepted standards, the environment is endangered, and the ultimate recovery potential of oil and gas in the fields is jeopardized. The current situation, if left unchanged, will lead inexorably to the demise of the oil industry.” In short, Iraq was engaged in the petro-equivalent of slash and burn agriculture.

But by the end of the following year the issues were resolved. Although nothing prevented U.S. companies from continuing to be passive end-buyers of crude, they were not in on the big deals. Moreover, it would appear that U.S. companies also stood to loose on the spare parts business because new infrastructure developed by France, Russia or China would not typically use American machinery.

Little is known of the negotiations in Baghdad, but it much of the blame for the last place showing by American companies can be laid at Washington’s door. As Cheney complained throughout the Nineties, U.S. regulations had hobbled American companies. These policies did not prevent end-runs, but neither did put wind in anyone’s sails. Diplomats interviewed for the Washington Post in February 2000 said Washington had been a greater obstacle for American businesses than Baghdad. The United States had placed "holds" on more than 1,000 contracts valued at $1.5 billion under the oil-for-food program, including some held by American companies. The March 2000 Expert Report Appendix likewise showed that over and over again repairs and construction were blocked by US objections that a screw or an adhesive had “dual use” capacity.

© Barfo, 2003