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Kevin Zeese: Looting By Another Name

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    Looting By Another Name The Corporate Takeover of Iraq s Economy By Kevin Zeese http://www.informationclearinghouse.info/article13006.htm The roots of the
    Message 1 of 1 , Jul 6, 2006
      Looting By Another Name

      The Corporate Takeover of Iraq's Economy
      By Kevin Zeese

      The roots of the economic takeover of Iraq are long and deep. They
      became more aggressive after the strongest U.S. ally in the region,
      the Shah of Iran, was deposed in the 1979. The roots of the quest of
      dominance of the oil-rich region are found in both the Democratic and
      Republican Party, but the most aggressive pursuit has been by George
      W. Bush.

      Former President Jimmy Carter wrote in his memoirs that many Americans
      "deeply resented that the greatest nation on the earth was being
      jerked around by a few desert states." And, when he was president he
      put forward "the Carter Doctrine" in a State of the Union Address in
      1980 that acknowledged "the overwhelming dependence of the Western
      democracies on oil supplies from the Middle East" and promised
      military force would be used to ensure access to Middle East oil: "Any
      attempt by an outside force to gain control of the Persian Gulf will
      be regarded as an assault on the vital interests of the United States
      of America and . . . will be repelled by any means necessary including
      the use of force."

      But, according to a book by Antonia Juhasz, "The Bush Agenda," it was
      the Reagan, Bush I and Bush II administrations that most aggressively
      pursued the Iraq oil economy. Her excellent book tells a story that
      explains the reasons for the invasion and occupation of Iraq. It shows
      how the Reagan and Bush I administrations began by building a friendly
      trade relationship that provided money, arms, intelligence, and
      political protection to Saddam Hussein--despite his brutal record as a
      despotic dictator. And, how the Clinton years led to 'regime change'
      in Iraq becoming the policy of the United States and naturally
      following that was the Bush II's military invasion of the country.

      She highlights the web of corporate interests from the oil, oil
      engineering and military sectors of the U.S. economy that have
      combined with government to the build-up to the invasion of Iraq. Many
      of the corporate players--Chevron, Bechtel, Lockheed Martin and
      Halliburton--have corporate leaders who went into and out of
      government over the years, influencing the direction of U.S. policy
      and then ensuring that their corporations profited mightily from the
      policies they put in place. Juhasz points to Dick Cheney, Donald
      Rumsfeld, L. Paul Bremer, Scooter Libby, Robert Zoellick, Paul
      Wolfowitz, Zalmay Khalilzad and George Shultz, as key players in the
      long term quest to takeover of Iraq's economy.

      The Root of the Problem: Peak Oil in the U.S. and Corporate
      Globalization of Trade

      The story of the invasion of Iraq and theft of the Iraqi economy is
      part of a larger story of multi-national corporations and corporate
      globalization affecting much of the world. Under the guise of "free
      trade" economic policies that make multinational corporations more
      powerful than governments. Laws favoring corporations are put in
      place: less regulation, less commitment to specific locations, and
      restrictions on government preventing the shift of economic benefit
      away from small, local business, workers, consumers and the
      environment. Globalization of trade claims to benefit by trickling
      down the profit, but in reality it continues to funnel wealth to the
      top--making the rich richer, the poor poorer and the middle class
      class smaller.

      In 1970, U.S. domestic oil production hit its peak. The United States
      began to rely on foreign sources of oil, and went deeper into an oil
      addiction that continues to this day. It was also the decade where
      Middle East oil producers began to flex their muscles. OPEC used oil
      as a weapon in response to the 1973 Arab-Israel War, imposing an
      embargo on the United States. The embargo ended in March 1974, but the
      threat was heard.

      President Carter fought back, in 1977 his Defense Secretary, Harold
      Brown, described the insecurity around oil as the most "serious threat
      to the long-term security of the United States." In 1978 the second
      oil shock hit with the Iranian oil embargo, reducing supplies by 5
      percent, increasing oil prices by 150 percent causing inflation and
      interest rates to skyrocket in the U.S. and the debt load of
      developing countries to rapidly rise. Carter threatened military force
      to protect access to oil and turned to the World Bank to find more
      oil--by 1981 the World Bank had 28 oil projects underway.

      President Reagan took the World Bank to another level--forcing
      countries to change their laws so that U.S. corporations would have
      direct access and control of oil. Reagan increased World Bank oil
      projects from 1982 to 1984 to more than 55. Reagan also aggressively
      put forward the trickle down theory--at home and abroad--making the
      wealthy wealthier would, in theory, trickle down resources to all. But
      the facts were the opposite. Juhasz points out that in the thirteen
      years before Reagan the income divide was shrinking--from 1967 to 1980
      the poorest in the U.S. increased their share of total income by 6.5
      percent. Reagan's aggressive redistribution of wealth to the
      wealthiest reversed that trend and from 1980 to 1990 the Census
      reports that the poorest Americans lost more than 10 percent of the
      income pie, while the wealthiest gained almost 20 percent.

      Reagan and Bush I also dramatically increased trade with Iraq. They
      knew of Saddam's human rights atrocities, and that Iraq was on the
      U.S. terrorism list but they supplied money, arms, and commercial
      products to Iraq. They even allowed U.S. corporations to provide the
      ingredients for weapons of mass destruction. See the Arming of Iraq, .

      Reagan removed Iraq from the list of terrorist nations in March 1982
      to open up more trade. There was virtually no trade with Iraq in 1981
      but by 1989 annual trade was up to $3.6 billion and had been expected
      to double in 1990 before Iraq's invasion of Kuwait. When Saddam
      refused U.S. efforts to build an oil pipeline, the strategy changed to
      the removal of Saddam from office. The first effort the Gulf War and
      the aftermath failed to achieve that goal.

      The Blueprint for the Economic Takeover of the Middle East

      The initial blueprint for the takeover of Iraq came in 1992 in the
      final year of the Bush I administration. The 1992 "Defense Planning
      Guidance" (DPG) describes America's overall military strategy and
      represents guidance from the president and secretary of defense. The
      1992 DPG was written by Dick Cheney, Paul Wolfowitz, Zalamy Khalizad,
      Scooter Libby, Eric Edelman and Colin Powell--six men who served Bush
      I and II, most worked in the Reagan administration as well.

      The DPG was written after the success of the 1991 Gulf War, and the
      failure to remove Saddam Hussein from power--two years after the fall
      of the Berlin Wall and the emergence of the U.S. as a sole superpower.
      The document, built on the Carter Doctrine and remained in effect
      through the Clinton years, states the goal clearly--the objective of
      the United States in the Middle East is "to remain the predominant
      outside power in the region and preserve U.S. and Western access to
      the region's oil." The document describes an aggressive, unilateral,
      preemptive military agenda--that includes ad hoc coalitions of
      countries--rather than working through organizations like the U.N.

      Many in this same group reunited in 1997 to establish the Project for
      the New American Century. PNAC restated support for the DNG and sought
      U.S. military dominance in the world. They recognize the importance of
      economic dominance as a compliment to unrivaled military power. They
      proposed an annual increase in military spending of $15 to $20
      billion. Being able to act preemptively in the Middle East gets
      special attention noting that "the United States has for decades
      sought to play a more permanent role in Gulf regional security." They
      describe Saddam Hussein as providing an "immediate justification" for
      a "substantial American force" in the Middle East. In January 1998
      PNAC wrote President Clinton urging the removal of Saddam Hussein from
      power noting that Hussein was a threat to "a significant portion of
      the world's supply of oil."

      Another key group was the Committee for the Liberation of Iraq. The
      group was founded in 2002 by Robert Jackson, a Lockheed Martin
      executive who wrote the Republican Party foreign policy platform in
      2000. He formed the Committee while at Lockheed and advocated
      aggressively for the overthrow of Saddam Hussein. The Chairman of the
      Committee was former Secretary of State and Bechtel executive, George
      Shultz. Shultz wrote a column in The Washington Post in 2002 claiming
      the US must "ACT NOW. The danger is immediate. Saddam must be
      removed." The article argued heavily for an immediate attack because
      of weapons of mass destruction and Saddam's ties to terrorism saying:
      "If there is a rattlesnake in the yard, you don't wait for it to
      strike before you take action in self-defense." Shultz fanned the
      flames of fear saying the risk is "tens or hundreds of thousands
      killed by chemical, biological or nuclear attack." After the
      occupation Lockheed Martin received more than an $11 billion increase
      in sales and contracts including $5.6 million for work with the Air
      Force in Iraq. Bechtel received nearly $3 billion in Iraq
      reconstruction contracts.

      The pro-military dominance advocates worked in other spheres as well.
      Paul Wolfowitz left the Clinton administration and went to Johns
      Hopkins School of Advanced International Studies, where he began to
      advocate for a second Gulf War--this time including the overthrow of
      Saddam Hussein. Zalmay Khalilzad, the current U.S. ambassador to Iraq,
      went to the Rand Corporation and founded the Center for Middle Eastern
      Studies and also served as a paid adviser to Unocal Oil Corporation
      (purchased by Chevron in 2005) where he openly advocated for a close
      relationship with the Taliban in order to build a 890 mile natural gas
      pipeline. In a Washington Post Oped he urged re-engaging the Taliban
      as "The Taliban does not practice the anti-U.S. Style of
      fundamentalism practiced by Iran."

      Bush II united military and corporate globalization into what Juhasz
      calls "one mighty weapon of Empire." She points out that Bush's
      unilateralism became evident before 9/11 with the withdrawal from the
      Anti-Ballistic Missile Treaty, opposition to the Comprehensive Test
      Ban Treaty, rejection of the International Criminal Court and the
      Biological and Toxin Weapons Convention protocols. Instead of a new
      DPG, Bush issued a National Security Strategy which makes U.S. status
      as the only superpower a reason to expand U.S. military spending to
      dissuade others from challenging U.S. dominance. Bush also put forward
      that America "will not hesitate to act alone, if necessary, to
      exercise our right of self defense by acting preemptively."

      Embedding U.S. Corporations in the Iraq Economy

      After George W. Bush became president, those who had planned and
      advocated an attack on Iraq to remove Saddam took power. Dick Cheney
      held meetings under his "Energy Task Force" with corporations
      including Halliburton, Bechtel and Chevron. A draft of the Task
      Force's recommendations came out to the media in April 2001. The first
      recommendation under Strengthening Global Alliances included a graph
      of Iraq oil output to the United States in 2000 and said a goal was to
      "make energy security a priority of our trade and foreign policy." The
      second goal was for the U.S. to "support initiatives by [Mid East]
      suppliers to open up areas of their energy sectors to foreign
      investment." In 1998 Chevron's CEO said: "Iraq possesses huge reserves
      of oil and gas--reserves I'd love Chevron to have access to." His
      dream was about to be realized.

      The well-known drum beat for war with Iraq began and after the success
      of the invasion the economic takeover began. The initial U.S. czar of
      Iraq, Jay Garner headed the Office of Reconstruction and Humanitarian
      Assistance. He advocated for putting Iraqis in charge as soon as
      possible, with elections held quickly. Garner was fired by Rumsfeld on
      the night he arrived in Iraq--fired, he believes because of these
      views. He was replaced by neo-con Paul Bremer and the Coalition
      Provisional Authority.

      Bremer was in charge from May 6, 2003 to June 28, 2004. He had
      complete legislative, executive and judicial authority over Iraq.
      Bremer had four decades of corporate and government experience,
      working with Kissinger as managing director of Kissinger and
      Associates, as well as working in government with George Shultz and
      Donald Rumsfeld.

      Prior to the invasion, Bearing Point received a $250 million contract
      from US AID to develop a blueprint for the remaking of Iraq's economy
      into a 'free-market' economy friendly to U.S. corporate interests.
      Bremer's job was to implement the Bearing Point plan. Juhasz points
      out that while there may have been an inadequate military plan, there
      was in fact a plan for the takeover and remaking of the economy of Iraq.

      Bremer had the power to create laws by issuing "binding instructions
      or directives." Bremer issued 100 Orders, Juhasz in 2005 interview
      describes some of the key orders:

      "Order No. 39 allows for: (1) privatization of Iraq's 200 state-owned
      enterprises; (2) 100% foreign ownership of Iraqi businesses; (3)
      "national treatment" - which means no preferences for local over
      foreign businesses; (4) unrestricted, tax-free remittance of all
      profits and other funds; and (5) 40-year ownership licenses.

      "Thus, it forbids Iraqis from receiving preference in the
      reconstruction while allowing foreign corporations - Halliburton and
      Bechtel, for example - to buy up Iraqi businesses, do all of the work
      and send all of their money home. They cannot be required to hire
      Iraqis or to reinvest their money in the Iraqi economy. They can take
      out their investments at any time and in any amount.

      "Orders No. 57 and No. 77 ensure the implementation of the orders by
      placing U.S.-appointed auditors and inspector generals in every
      government ministry, with five-year terms and with sweeping authority
      over contracts, programs, employees and regulations.

      "Order No. 17 grants foreign contractors, including private security
      firms, full immunity from Iraq's laws. Even if they, say, kill someone
      or cause an environmental disaster, the injured party cannot turn to
      the Iraqi legal system. Rather, the charges must be brought to U.S.

      "Order No. 40 allows foreign banks to purchase up to 50% of Iraqi banks.

      "Order No. 49 drops the tax rate on corporations from a high of 40% to
      a flat 15%. The income tax rate is also capped at 15%.

      "Order No. 12 (renewed on Feb. 24) suspends "all tariffs, customs
      duties, import taxes, licensing fees and similar surcharges for goods
      entering or leaving Iraq." This led to an immediate and dramatic
      inflow of cheap foreign consumer products - devastating local
      producers and sellers who were thoroughly unprepared to meet the
      challenge of their mammoth global competitors."

      Full interview at: http://democracyrising.us/content/view/180/164/.

      The result of these orders was to create an economic environment more
      favorable to U.S. corporations than laws in the United States. As a
      result Iraq corporations, and Iraqi workers have been excluded from
      the rebuilding of Iraq. And, the Iraq reconstruction has failed to
      provide adequate electricity, food, sewage treatment and even
      gasoline--but U.S. corporations have profited handsomely from this
      failed reconstruction.

      Juhasz describes the impact of U.S. policies on the Iraqi economy:

      "The new economic laws have fundamentally transformed Iraq's economy,
      applying some of the most radical, sought-after corporate
      globalization policies in the world and overturning existing laws on
      trade, public services, banking, taxes, agriculture, investment,
      foreign ownership, media, and oil, among others. The new laws lock in
      sweeping advantages to U.S. corporations including greater U.S. access
      to, and corporate control of, Iraq's oil. And the benefits have
      already begun to flow. Between 2003 and 2004 alone, the value of U.S.
      imports of Iraqi oil increased by 86 percent and then increased again
      in the first three quarters of 2005."

      To further embed a U.S. corporate economy in Iraq, the Iraq
      Constitution contained provisions that approve the Bremer Orders. The
      new Iraqi Constitution specifically repealed the Transitional
      Administrative Law, but did no such thing for Bremer's Orders and
      therefore they continue to be the law of the land. Thus, U.S.
      corporations continue their hold on the reconstruction of Iraq, and
      U.S. contractors continue to have full immunity from prosecution in
      Iraq. Beyond that, several articles of the Constitution re-enforce the
      Bremer Orders, e.g. Article 25 requires "modern economic principles
      that insure the full investment of its resources, diversification of
      its sources and the encouragement and development of the private
      sector; Article 26 "guarantees the encouragement of investment in
      various sectors," Article 27 allows for the privatization of state
      property. Juhasz points out that modern economic principles means
      corporate globalization and the market principles of the Bremer
      Orders, and private investment means foreign investment.

      Further, the Iraq Constitution does nothing to end the military
      occupation. Early drafts of the Constitution included provisions that
      forbid Iraq "to be used as a base or corridor for foreign troops" and
      "to have foreign military bases in Iraq." These provisions were
      deleted in the final draft.

      The Future: Oil Takeover, US Economic Dominance of the Middle East and
      the Battle Lines of World War III

      The next stage for Iraq is a national oil law that will allow for oil
      companies to sign contracts with Iraq that gives them access and
      control over Iraqi oil. Juhasz points out that U.S. oil companies were
      brought into to advise the Bush administration on Iraq oil policy six
      months before the invasion. Further, the State Department's "Future of
      Iraq Project's Oil and Energy Group," which included Ibrahim Bahr
      al-Ulou,, a U.S. educated oil industry who served as Iraqi Minister of
      Oil from September 2003 and again beginning in May 2005, agreed that
      Iraq "should be opened to international oil companies as quickly as
      possible after the war."

      The method being used for U.S. control of Iraq's oil is Production
      Sharing Agreements. PSA's favor private companies at the expense of
      exporting governments as the entire exploration, drilling and
      infrastructure-building process are turned over to private companies
      in contracts that last twenty-five to forty years. These contracts
      lock in the laws at the time the contract is signed. Thus contracts
      signed now would have the Bremer Orders as their law no matter what a
      future Iraqi government did.

      Interim Prime Minister Allawi submitted guidelines for Iraq's new
      petroleum law in September 2004. The guidelines put "an end to the
      centrally planned and state-dominated Iraq economy" and urged the
      "Iraqi government to disengage from running the oil sector." Further,
      he recommended privatization stating the industry "should be
      exclusively based in the private sector, that domestic wholesale and
      retail marketing of petroleum products should be gradually transferred
      to the private sector, and that major refinery expansions or
      grassroots refineries should be built by the local and foreign private
      sectors." Finally, Allawi called for all undeveloped oil and gas
      fields to be turned over to private international oil companies. This,
      at a time when only seventeen of Iraq's eighty known oil fields have
      been developed. Article 109 of the Iraq Constitution re-enforces this
      goal stating that the federal government only administers existing oil
      and gas fields. The plans for a new Iraq petroleum law were made
      public at a press conference in Washington, DC by Adel Abdul Mahdi,
      formerly the Finance Minister, and now a Deputy President of Iraq.

      Thus, the goal is about to be realized, control of Iraq's oil and the
      Iraqi economy. Iraq will be dominated by U.S. corporations, supported
      by the U.S. military. Ending the economic occupation of Iraq may be
      more difficult than ending the military occupation. The embedding of
      laws favoring foreign investment through the Bremer Orders and the
      Iraq Constitution will make it difficult to give Iraq back to the Iraqis.

      The U.S. is already moving to gain control of the broader Middle East
      economy. The U.S. is aggressively pushing the U.S.-Middle East Free
      Trade Area. MEFTA is modeled after NAFTA and seeks to economically tie
      the region--where 54 percent of the world's oil reserves exist--to the
      United States. MEFTA seeks to cover 20 countries in the Middle East
      and North Africa. MEFTA is being developed through bi-lateral
      negotiations with each country, leading to a region-wide agreement.
      The U.S. is using the "us against them" strategy--those that oppose us
      will be viewed as against us. Part of the negotiation includes
      Generalized System of Preferences (GSP) which provide for duty free
      import into the United States. Unique in the Middle East is the
      trilateral nature of these agreements--the U.S. and another country
      plus Israel. To get duty free entry to U.S. markets a certain
      percentage of goods must go through Israel allowing Israel to take a
      piece of the profit.

      Iraq is the first economy to fall. The massive U.S. Embassy in Baghdad
      shows it will be the base of U.S. operations in the region. Juhasz
      subtitles her book "Invading the World, One Economy at a Time." This
      is consistent with the views of PNAC, the 1992 DPG, and the 'access of
      evil' speech. As John Gibson, the founder of Committee for the
      Liberation of Iraq and a Lockheed Martin executive, said in 2003 "We
      hope Iraq will be the first domino and that Libya and Iran will
      follow. We don't like being kept out of markets because it gives our
      competitors an unfair advantage." PNAC labeled the countries of
      greatest concern 2000 as Iraq, Iran and North Korea--the future 'axis
      of evil' of George W. Bush. They placed Iran as the second target
      saying "Over the long-term, Iran may well prove as large a threat to
      U.S. interests in the Gulf as Iraq has."

      President Bush has declared that we are now in World War III. While
      this World War is framed in terms of good vs. evil--terrorism against
      the United States--what it may really be about is U.S.-corporate and
      military dominance of the world. As Juhasz says--the U.S. taking over
      one economy at a time.

      For more information on "The Bush Agenda: Invading the World One
      Economy at a Time," by Antonia Juhasz, Harper Collins, 2006 visit
      www.TheBushAgenda.net. Juhasz is a leading expert on corporate
      globalization, formerly the Project Director of the International
      Forum on Globalization and currently a visiting scholar at the
      Institute of Policy Studies. This is a must read book for those who
      want to understand how we have gotten where we are in Iraq, and where
      the next phase of 'World War III' will take the U.S.

      Kevin Zeese is Director of Democracy Rising and a candidate for U.S.
      Senate in Maryland.



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