The New Nation - Internet Edition

The secret deal for Iraq's oil

Jason Leopold

Four months before the United States invaded Iraq, the Department of Defense was secretly working with Vice Pesident Dick Cheney's old company, Halliburton Corp. on a secret deal that would give the world's second largest oil services company total control over Iraq's oil fields, according to interviews with Halliburton' s most senior executives.

Previously undisclosed Halliburton documents obtained by The Public Record confirm that controlling the world's second largest oil reserves was a top priority for the Bush administration. Additionally, the deal between the Department of Defense and Halliburton unit Kellogg, Brown & Root to operate Iraq's oil industry saved Halliburton from imminent bankruptcy.

In October of 2002, Halliburton was saddled with a multibillion- dollar asbestos liability as well as a serious slowdown in domestic oil production. The company's stock plummeted on the news falling to a low of $12.62 in October 2002 from a high of $22 the year before.

A month later, in November 2002, Halliburton's financial troubles seemingly disappeared. At the urging of unnamed officials in the Office of the Vice President, according to the documents, the Department of Defense recommended The Army Corps of Engineers award a contract to Kellogg, Brown & Root to extinguish Iraqi oil well fires in addition to "assessing the condition of oil-related infrastructure; cleaning up oil spills or other environmental damage at oil facilities; engineering design and repair or reconstruction of damaged infrastructure; assisting in making facilities operational; distribution of petroleum products; and assisting the Iraqis in resuming Iraqi oil company operations."

That was a deal hatched five months before the start of the Iraq war, when the Bush administration said publicly that it had not been working on war plans.

"The fact that the Department was planning for the possibility that it would need to repair and provide for continuity of operations of the Iraqi oil infrastructure was classified until March 2003," the Army Corps of Engineers said on its web site. "This prevented earlier acknowledgement or announcement of potential requirements to the business community."

Halliburton spun off KBR into a separate company last year. The Army Corps of Engineers has declassified portions of some documents related to its deal with Kellogg, Brown & Root.

"The U.S. considered such contingency planning necessary because of Saddam Hussein's actions in Kuwait in 1991, when Iraqi forces damaged 750 wells," states documents released by the Army Corps of Engineers. "That destruction resulted in an environmental disaster as well as a tremendous blow to Kuwait's oil production capability. The U.S. had grounds to believe Saddam was planning to destroy Iraq's own oil infrastructure in the event of hostilities. Such destruction, especially if it extended beyond oil wells to pipelines, pumping stations, or other elements of the infrastructure, could have drastically reduced the Iraqi oil industry's capability to produce income on which the Iraqi people depend. Destruction of the oil fields would result in potential loss of $20 to $30 billion a year in oil revenues for Iraq, as well as an estimated cost of between $30 and $40 billion to recreate the infrastructure.

When news of the deal surfaced five years ago, the Army Corps of Engineers was criticized by Washington lawmakers for awarding the no-bid contract to Brown & Root because of the company's strong ties to Cheney. The Army Corps of Engineers told lawmakers that Kellogg, Brown & Root would do nothing more than extinguish oil well fires. Brown & Root was chosen, according to the Army Corps of Engineers, because the company could be "deployed" on short notice.

However, according to a report in the magazine Fortune, Halliburton employees were working out of a hotel room in Kuwait City as far back as November 2002 assessing Iraq's oil infrastructure and mapping out plans for operating Iraq's oil industry.

"From behind the obsidian mirrors of his wraparound sunglasses, Ray Rodon surveys the vast desert landscape of southern Iraq's Rumailah oilfield. A project manager with Halliburton' s engineering and construction division, Kellogg Brown & Root, Rodon has spent months preparing for the daunting task of repairing Iraq's oil industry. Working first at headquarters in Houston and then out of a hotel room in Kuwait City, he has studied the intricacies of the Iraqi national oil company, even reviewing the firm's organizational charts so that Halliburton and the Army can ascertain which Iraqis are reliable technocrats and which are Saddam loyalists," states the April 2003 report published in Fortune.

"Rodon represents the vanguard of what is expected to be a growing army of Halliburton employees in Iraq, where the U.S. is preparing to embark on the grandest exercise in nation building since its occupation of Japan after World War II. At the center of that undertaking will be U.S. companies, with Halliburton probably chief among them," Fortune reported. "Indeed, Texans wearing KBR baseball caps are arriving by the planeload at Kuwait's airport. Some will support the military directly--KBR employees already handle the meal service, laundry, and garbage pickup for several military camps in Kuwait and will do the same as U.S. units establish bases in Iraq. But after the war most hope to be involved in the multibillion- dollar task of rebuilding Iraq: its roads, electrical grid, water supply, ports, airports, and, most important, oil facilities.

"The liberation of Iraq couldn't come at a better time for Halliburton, whose business has been dogged by a host of troubles--from a slowdown in domestic oil production to nightmare asbestos litigation. Last year revenues declined 6%, to $12.6 billion, and the company reported a net loss of $984 million. But CEO Dave Lesar, who took over when his predecessor Dick Cheney went to Washington, is starting to put Halliburton' s problems behind it. He has cut costs, sold unproductive assets, curtailed money-losing overseas operations, and devised a bold plan to settle asbestos-related lawsuits."

In a March 2003 news release, Halliburton said it first began working on a plan to repair Iraq's oil infrastructure at the request of the Defense Department.

"The DoD, through its US Army Logistics Civil Augmentation Program (LOGCAP) III contract with KBR, tapped the company in November 2002 to develop the contingency plan. Implementation of the plan is being executed through a separate contract [Kellogg, Brown & Root] now holds with the US Army Corps of Engineers," the news release says.

Perhaps what has been troubling about the lucrative contracts Halliburton has been awarded is the company's history of overcharging the federal government by millions of dollars. On at least one occasion, overbilling took place while Cheney was chief executive of the company.

In 2002, KBR agreed to pay the U.S. government $2 million to settle allegations it defrauded the military during Cheney's tenure. KBR was accused of inflating contract prices for maintenance and repairs at Fort Ord, a now-shuttered military installation near Monterey, Calif. The lawsuit, filed in Sacramento, alleged KBR submitted false claims and made false statements in connection with 224 delivery orders between April 1994 and September 1998. KBR and Halliburton has also paid out settlements to end investigations and lawsuits on half-a-dozen other occasions.

So how does the company continue to win such lucrative contracts with the federal government in spite of its shady record?

"KBR was selected for the [Iraq contract] based on the fact that KBR is the only contractor that could commence implementing the complex contingency plan on extremely short notice," Halliburton said in a March news release.

Army Corps of Engineers spokeswoman Carol Sanders said Iraqi people urgently needed cooking oil and gasoline as they began rebuilding their country. Given the need to boil water to prevent disease, it was not feasible to competitively bid the work. She rejected claims that Cheney's role as Halliburton's former chief executive in the 1990s had an impact on the contract.

"We made the contract broad enough so we could handle issues just like this," she said.

(Source: Agencies)

Scholars question Palin credentials

David Mark

John McCain was aiming to make history with his pick of Alaska Gov. Sarah Palin, and historians say he succeeded.

Presidential scholars say she appears to be the least experienced, least credentialed person to join a major-party ticket in the modern era.

So unconventional was McCain's choice that it left students of the presidency literally "stunned," in the words of Joel Goldstein, a St. Louis University law professor and scholar of the vice presidency. "Being governor of a small state for less than two years is not consistent with the normal criteria for determining who's of presidential caliber," said Goldstein.

"I think she is the most inexperienced person on a major party ticket in modern history," said presidential historian Matthew Dallek.

That includes Spiro T. Agnew, Richard Nixon's first vice president, who was governor of a medium-sized state, Maryland, for two years, and before that, executive of suburban Baltimore County, the expansive jurisdiction that borders and exceeds in population the city of Baltimore.

It also includes George H.W. Bush's vice president, Indiana Sen. Dan Quayle, who had served in the House and Senate for 12 years before taking office. And it also includes New York Rep. Geraldine Ferraro, who served three terms in the House before Walter Mondale chose her in 1984 as the first woman candidate on a major party ticket.

"It would be one thing if she had only been governor for a year and a half, but prior to that she had not had major experience in public life," said Dallek of Palin. "The fact that he would have to go to somebody who is clearly unqualified to be president makes Obama look like an elder statesman."

And Alaska is a much smaller state than Illinois, the political base of Barack Obama, whom Republicans have repeatedly criticized for being inexperienced, having served nearly four years in the U.S. Senate after eight in the Illinois state Senate.

"Not to belittle Alaska, but it's different than the basket of issues you deal with in big, dynamic states." Dallek said.

Palin has no experience in national office. Before becoming governor in December 2006, she served as a council member and mayor of Wasilla, Alaska, which had a population of slightly more than 5,000 during her time in office.

Brad Blakeman, who ran the 1988 Republican convention for GOP nominee George H.W. Bush, turned the experience question on its head, suggesting accomplishments in office mean more than time accrued.

"Here's a governor who may have served two years, but her accomplishments are worth eight," said Blakeman, citing Palin's work as governor on ethics reform and an Alaska oil pipeline. "She's got as much experience for being vice president as Barack does to be president."

But other students of presidential history said that In choosing Palin as his running mate, McCain has reached back to a time when few actually seriously contended that the vice president should be demonstrably prepared to assume the presidency from day one.

If elected vice president, Palin would appear to have the least amount of experience in federal office or as a governor since John W. Kern, Democrat William Jennings Bryan's 1908 running mate, who had served for four years in the Indiana state Senate and then four more as city solicitor of Indianapolis. The Democratic ticket lost to Republican standard bearer William Howard Taft and running mate James S. Sherman by an Electoral College spread of 321-162.

More conventionally in modern times, running mates could boast decades of experience in Washington, from ballot box winners like Dick Cheney, Al Gore, the elder Bush and Mondale to also-rans such as Jack Kemp, Lloyd Bentsen and Joseph I. Lieberman.

These super-credentialed candidates were sometimes chosen, like Joe Biden, to shore up the resumes of candidates with little or no time in Washington, such as Jimmy Carter (Mondale) Bill Clinton (Gore) and Michael Dukakis (Bentsen.)

Palin, on the other hand, is a total "wild card," said Stanford historian David Kennedy.

"If she had been around for two terms as governor - or been a senator - it would have been an incredible choice," said historian Doris Kearns Goodwin. "Who else could he have found who appealed to the conservative base … and as someone who was a reformer?"

That's not to say Palin will be a dud on the campaign trail.

But out-of-the-box picks in recent years have not usually worked out too well for the top of the ticket. Consider independent candidate Ross Perot's 1992 running mate, former Navy Adm. James Stockdale, who famously asked at the vice presidential debate with Gore and Quayle, "Who am I, why am I here?"

"He took the wind out of Perot's sails, and Perot could have done even better" than the 19 percent he garnered, Dallek said.

A bad running mate pick can even put a successful presidential ticket in question. The 1988 Bush-Quayle victory over Dukakis and Bentsen came in spite of Quayle's frequent campaign trail gaffes and questions about his military service in the Vietnam era and other controversies. Bush handlers largely relegated Quayle to small town audiences that would attract little media attention.

"Quayle - it threw off the momentum for some weeks," said Goodwin. "One has to hope for McCain's sake that [Palin] has been fully vetted."

"The first thing that hits me," said Stephen Hess of the Brookings Institution, " is that it suggests that John McCain is a gambler. This is a high roller decision."

"The next thing you have to ask yourself: Is it worrisome to have a gambler in the Oval Office? That's an important question," he said, "perhaps more important than anything else today."

Update: After reading this article, the McCain campaign issued the following statement: "The authors quote four scholars attacking Gov. Palin's fitness for the office of Vice President. Among them, David Kennedy is a maxed out Obama donor, Joel Goldstein is also an Obama donor, and Doris Kearns Goodwin has donated exclusively to Democrats this cycle. Finally, Matthew Dallek is a former speech writer for Dick Gephardt. This is not a story about scholars questioning Governor Palin's credentials so much as partisan Democrats who would find a reason to disqualify or discount any nominee put forward by Senator McCain."

Confessions of a British Spy - XI

Having enjoyed the first secret, I was looking forward to knowing the second secret. Eventually one day the secretary explained the second secret he had promised. The second secret was a fifty page scheme prepared for the high ranking officials working in the Ministry for annihilating Islam altogether within a century's time. The scheme was comprised of fourteen articles. The scheme was closely guarded for fear that it might be obtained by Muslims. The following are the articles of the scheme:

1- We have to form a well-established alliance and an agreement of mutual help with the Russian Tsar in order to invade Bukhara, Tajikistan, Armenia, Khorasan and its neighbourhood. Again, a sound agreement must be established with Russians in order to invade their neighbour, Turkey.

2- We must establish cooperation with France in demolishing the Islamic world both from within and from without.

3- We must sow very ardent rows and controversies between the Turkish and Iranian governments and emphasize nationalistic and racist feelings in both parties. In addition, all the Muslim tribes, nations and countries neighbouring one another must be set against one another. All the religious sects, including the extinct ones, must be recovered and set against one another.

4- Parts from Muslim countries must be handed over to non-Muslim communities. For example, Medina must be given to the Jews, Alexandria to the Christians, Imara to the Saiba, Kermanshah to the Nusayriya group, who have divinized 'Ali, Mousul to the Yazidis, the Iranian gulf to Hindus, Tripoli to the Druzis, Kars to the Alawis, and Masqat to the Khariji group. The next step should be to arm these groups so that each of them will be a thorn on the body of Islam. Their areas must be widened till Islam has collapsed and perished.

5- A schedule must be concocted to divide the Muslim and Ottoman States into, as small as possible, local states that are always at loggerheads with one another. An example of this is today's India. For the following theory is common: "Break, and you will dominate," and "Break, and you will destroy."

6- It is necessary to adulterate Islam's essence by adding interpolated religions and sects into it, and this we must devise in such a subtle manner that the religions we are to invent should be compatible with the sensuous tastes and aspirations of the people among whom we are going to spread them. We shall invent four different religions in the Shi'ite countries: 1- A religion that divinizes hadrat Husain; 2- A religion that divinizes Jafar Sadiq; 3- A religion divinizing Mahdi; 4- A religion divinizing Ali Rida. The first one is suitable for Karbala, the second one for Isfahan, the third one for Samarra, and the fourth one for Khorasan. In the meantime, we must degenerate the existing four Sunnite Madhhabs into four self-standing religions. After doing this, we shall establish an altogether new Islamic sect in Najd, and then instigate bloody rows among all these groups. We shall annihilate the books belonging to the four Madhhabs, so that each of these groups will consider themselves to be the only Muslim group and will look on the other groups as heretics that are to be killed.

7- Seeds of mischief and malice, such as fornication, pederasty, alcoholic spirits and gambling, will be scattered among Muslims. Non-Muslims living in the countries concerned will be used for this purpose. A tremendous army of people of this sort is on requisition for the realization of this goal.

8- We should spare no effort to train and educate vicious leaders and cruel commanders in Muslim countries, to bring them into power and thus to pass laws prohibiting obedience to the Shariat (religious injunctions). We should put them to use, to the extent that they should be subservient enough to do whatever the Ministry (of the Commonwealth) asks them to do, and vice versa. Through them we should be able to impose our wishes on Muslims and Muslim countries by using laws as an enforcement. We should establish a social way of life, an atmosphere wherein obeying the Shariat will be looked on as a guilt and worshipping as an act of regression. We should trick Muslims into electing their leaders from among non-Muslims. For doing this, we should disguise some of our agents as Islamic authorities and bring them into high positions so that they may execute our wishes (74).

9- Do your best to prevent the learning of Arabic. Popularize languages other than Arabic, such as Persian, Kurdish, and Pushtu (Pashto). Resuscitate foreign languages in the Arabic countries and popularize the local dialects in order to annihilate literary, eloquent Arabic, which is the language of the Qur'an and the Sunnat.

10- Placing our men around statesmen, we should gradually make them secretaries of these statesmen and through them we should carry out the desires of the Ministry. The easiest way of doing this is the slave trade: First of all we must adequately train the spies we are to send forth in the guise of slaves and concubines. Then we must sell them to the close relatives of Muslim statesmen, for instance, to their children or wives, or to other people liked or respected by them. These slaves, after we have sold them, will gradually approach the statesmen. Becoming their mothers and governesses, they will encircle Muslim statesmen like a bracelet girding a wrist.

11- Missionary areas must be widened so as to penetrate into all social classes and vocations, especially into such professions as medicine, engineering, and book-keeping. We must open centres of propaganda and publication under such names as churches, schools, hospitals, libraries and charity institutions in the Islamic countries and spread them far and near. We must distribute millions of Christian book free of charge. We must publish the Christian history and intergovernmental law alongside the Islamic history. We must disguise our spies as monks and nuns and place them in churches and monasteries. We must use them as leaders of Christian movements. These people will at the same time detect all the movements and trends in the Islamic world and report to us instantaneously. We must institute an army of Christians who will, under such names as 'professor', 'scientist', and 'researcher', distort and defile the Islamic history, learn all the facts about Muslims' ways, behaviour, and religious principles, and then destroy all their books and eradicate the Islamic teachings.

12- We must confuse the minds of the Islamic youth, boys and girls alike, and arouse doubts and hesitations in their minds as to Islam. We must completely strip them of their moral values by means of schools, books, magazines [sports clubs, publications, motion pictures, television], and our own agents trained for this job. It is a prerequisite to open clandestine societies to educate and train Jewish, Christian and other non-Muslim youngsters and use them as decoys to trap the Muslim youngsters.

13- Civil wars and insurrections must be provoked; Muslims must always be struggling with one another as well as against non-Muslims so that their energies will be wasted and improvement and unity will be impossible for them. Their mental dynamisms and financial sources must be annihilated. Young and active ones must be done away with. Their orders must be rendered into terror and anarchy.

14- Their economy must be razed in all areas, their sources of income and agricultural areas must be spoilt, their irrigation channels and lines must be devastated and rivers dried up, the people must be made to hate the performance of namaz and working, and sloth must be made as widespread as possible. Playgrounds must be opened for lazy people. Narcotics and alcoholic spirits must be made common.

[The articles we have cited above were explained very clearly with such aids as maps, pictures and charts]. I thanked the secretary for giving me a copy of this magnificent document.

After a month's stay in London, I received a message from the Ministry ordering me to go to Iraq to see Muhammad of Najd again. As I was leaving for my mission, the secretary said to me, "Never be negligent about Muhammad of Najd! As it is understood from the reports sent by our spies up until now, Muhammad of Najd is a typical fool very convenient for the realization of our purposes.

"Talk frankly with Muhammad of Najd. Our agents talked with him frankly in Isfahan, and he accepted our wishes on terms.

The terms he stipulated are: He would be supported with adequate property and weaponry to protect himself against states and scholars who would certainly attack him upon his announcing his ideas and views. A principality would be established in his country, be it a small one. The Ministry accepted these terms."

(Source: Waqf Ikhlas, Istanbul)