The Alternative Dossier 6: Sanctioning Murder

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'In 1990...the world imposed economic sanctions on Iraq. Those sanctions were maintained after the war to compel the regime's compliance with security council resolutions... Saddam Hussain has [worked] around the sanctions to buy missile technology and military materials.' George Bush in his speech to the UN, 12 September 2002

The United Nations Security Council imposed economic sanctions on Iraq on 6 August 1990, in response to its invasion of Kuwait. Under these sanctions, all imports into Iraq (except medical supplies) and all exports from Iraq were prohibited, unless the Security Council permitted exceptions. A spokesman from the US State Department later referred to these sanctions as 'the toughest, most comprehensive sanctions in history'. Similarly, a Select Committee of the House of Commons said that the Iraqi sanctions regime 'is unprecedented in terms of longevity and its comprehensive nature'.

What Bush didn't tell the UN in his speech recently was that a number of US companies managed to find loopholes in the sanctions. The one that concerns us here is Halliburton. This major US energy company was able to profit from big time deals with the Iraqi government, all done during the five-year tenure when Dick Cheney, the current US vice-president, was Halliburton's chief executive.

According to the 'Financial Times', between 1988 and 1999 Halliburton had $23.8 million of business contracts for the sale of oil industry equipment and services to Iraq through two of its subsidiaries, Dresser Rand and Ingersoll-Dresser Pump. This helped rebuild Iraq's war-damaged oil production infrastructure. Cheney became president and chief executive officer of Halliburton in 1995, although he had close links with the company before then. Halliburton was among more than a dozen US firms that supplied Iraq's petroleum industry with spare parts when UN sanctions were eased in 1998. Cheney's company utilised subsidiaries in France, Italy, Germany and Austria so as not to draw attention to controversial business arrangements that might embarrass Washington.

Halliburton quickly grew into the US's number one oil services company, the fifth largest military contractor, and the biggest non-union employer in the US. In 1999 the Oil and Gas journal listed Halliburton the 24th energy company by market value at $18.2 billion, its consolidated revenues were $14.9 billion and it had a workforce of about 100,000 in 120 countries.

Cheney left the company in August 2000 to be Bush's running mate. At the time the oil company was swelling with profits approaching a two-year high. Cheney was quick to cash in--he made $18.5 million profit selling his shares for $52 each in August 2000. Yet 60 days later the company surprised investors with a warning that it was doing a lot worse than expected. As Dana Milbank of the Washington Post (16 July 2002) explains: 'In the months that followed, it became clear that Halliburton's liability for asbestos claims, stemming from a company Cheney acquired in 1998, were far greater than Halliburton realised. Then in May of this year, the company announced it was under investigation by the Securities and Exchange Commission for controversial accounting under Cheney's leadership that inflated profits... The highflying company Cheney hailed as a "great success story" during the 2000 campaign is now a troubled behemoth fighting for its life.'

Cashing in on Iraq

If Halliburton was one of the companies that managed to cash in on the isolation of the Iraqi government during the 1990s, the other company that looks set to do well from the coming war is the Carlyle Group. Carlyle is the eleventh largest US defence contractor and is involved in nearly every aspect of military production. Under the leadership of Frank Carlucci, the former US secretary of defence and deputy director of the CIA, Carlyle doesn't need to lobby the White House or Bush administration, because it already has direct contact and influence with them. Carlyle lists former president George Bush, former secretary of state James Baker and former prime minister John Major as part of its team to secure influence. President Bush himself once served as an executive with Cateriar, one of the hundreds of companies Carlyle has bought and sold over the past 15 years. If you are wondering how these circles of influence work, a report in the 'New York Times' (5 March 2001) explains: 'During the presidential campaign last year, former president George Bush took time off from his son's race to call on Crown Prince Abdullah of Saudi Arabia at a luxurious desert compound outside Riyadh to talk about American-Saudi business affairs. Mr Bush went as an ambassador of sorts, but not for his government. In the same way, Mr Bush's secretary of state, James A Baker III, recently met with a group of wealthy people at the elegant Lansborough Hotel in London to explain the Florida vote count. Travelling with the fanfare of dignitaries, Mr Bush and Mr Baker were using their extensive government contacts to further their business interests as representatives of the Carlyle Group, a $12 billion private equity firm based in Washington.

'The steady flow of politicians to lucrative private sector jobs based on their government contacts is a familiar Washington tale. But in this case, it is being played out for more dollars, on a global stage, and in the world of private finance, where the minimal government rules prohibiting lobbying by former officials for a given period are not a factor. These rules say nothing about potential conflicts when former government officials use their connections and insights for financial gain, and they may attract more notice now that George W Bush is president.

' "Carlyle is as deeply wired into the current administration as they can possibly be," said Charles Lewis, executive director of the Centre for Public Integrity, a non-profit public interest group based in Washington. "George Bush is getting money from private interests that have business before the government, while his son is president. And, in a really peculiar way, George W Bush could, some day, benefit financially from his own administration's decisions, through his father's investments. The average American doesn't know that and, to me, that's a jaw-dropper."

'One of the people who put Carlyle on the map--developing its riches and its image--is Mr Carlucci, who joined the firm in 1989. He sits beneath an Oval Office picture of himself and Mr Reagan. Mr Carlucci makes it clear that his extensive government and global ties are as fresh as ever. "I know Rumsfeld extremely well," Mr Carlucci said in an interview. "We've been close friends throughout the years. We were college classmates".'

The old schools network is working very well for the rich in the US and Britain. As the drive to war hots up the scramble for contracts and profits will accelerate as the fat cats rush to cash in on Bush and Blair's latest military adventure.

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The plight of ordinary Iraqis over the last decade has been detailed most clearly in two reports written in 1999. Firstly, the UN Security Council itself set up a 'humanitarian panel' to investigate the effects of sanctions. This panel produced a report on 30 March 1999. This is a summary of its findings: 'In marked contrast to the prevailing situation prior to the events of 1990-91, the infant mortality rates in Iraq today are among the highest in the world, low infant birth weight affects at least 23 percent of all births, chronic malnutrition affects every fourth child under five years of age, only 41 percent of the population have regular access to clean water, 83 percent of all schools need substantial repairs. The... Iraqi healthcare system is today in a decrepit state. UNDP calculates that it would take $7 billion to rehabilitate the power sector countrywide to its 1990 capacity.'

The second report was produced by the United Nations Children's Fund (Unicef) in August 1999. This is summary of their findings: 'The first surveys since 1991 of child and maternal mortality in Iraq reveal that in the heavily populated southern and central parts of the country, children under five are dying at more than twice the rate they were ten years ago. Unicef Executive Director Carol Bellamy said the findings reveal an ongoing humanitarian emergency.

'The surveys reveal that in the south and centre of Iraq--home to 85 percent of the country's population--under-five mortality more than doubled from 56 deaths per 1,000 live births (1984-89) to 131 deaths per 1,000 live births (1994-99). Likewise infant mortality--defined as the death of children in their first year--increased from 47 per 1,000 live births to 108 per 1,000 live births within the same time frame. The surveys indicate a maternal mortality ratio in the south and centre of 294 deaths per 100,000 live births over the ten year period 1989 to 1999.

'Ms Bellamy noted that if the substantial reduction in child mortality throughout Iraq during the 1980s had continued through the 1990s, there would have been half a million fewer deaths of children under-five in the country as a whole during the eight year period 1991-98.'

Denis Halliday, the former UN humanitarian coordinator in Iraq, said after resigning his post in protest at the sanctions regime: 'We are in the process of destroying an entire society. It is as simple as that. It is illegal and immoral.' If Bush and Blair launch a war then that process will be almost complete.

This article is part of the alternative dossier:

Intro - War, weapons and Iraq

1 - Arms and the Man

2 - Countdown to War

3 - An Inspector Calls

4 - Interview with Rolf Ekeus

5 - Chemical Reaction

6 - Sanctioning Murder

7 - With Friends Like These

A number of people helped in compiling this dossier. Thanks to Andrew Stone, David Shonfield, Lindsey German, Glen Rangwala and the Labour Against the War briefing paper, Sandy Nicoll, Colin Wilson and Martin Empson.