The Men Who Sold the World

FROM TODAY'S GWB PRESS CONFERENCE:


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The president also said that the strategy he is now following includes many of the recommendations issued last December by the bipartisan Iraq Study Group headed by former Secretary of State James A. Baker III and former Rep. Lee Hamilton of Indiana - recommendations at first generally ignored by the administration.


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Video: James Baker and Lee Hamilton join David Frost on Al Jazeera December 8, 2006




Video: Bill Kristol on the ISG




James Baker's Double Life

by NAOMI KLEIN [from the November 1, 2004 issue]

When President Bush appointed former Secretary of State James Baker III as his envoy on Iraq's debt on December 5, 2003, he called Baker's job "a noble mission." At the time, there was widespread concern about whether Baker's extensive business dealings in the Middle East would compromise that mission, which is to meet with heads of state and persuade them to forgive the debts owed to them by Iraq. Of particular concern was his relationship with merchant bank and defense contractor the Carlyle Group, where Baker is senior counselor and an equity partner with an estimated $180 million stake.



Until now, there has been no concrete evidence that Baker's loyalties are split, or that his power as Special Presidential Envoy--an unpaid position--has been used to benefit any of his corporate clients or employers. But according to documents obtained by The Nation, that is precisely what has happened. Carlyle has sought to secure an extraordinary $1 billion investment from the Kuwaiti government, with Baker's influence as debt envoy being used as a crucial lever. The secret deal involves a complex transaction to transfer ownership of as much as $57 billion in unpaid Iraqi debts.



The debts, now owed to the government of Kuwait, would be assigned to a foundation created and controlled by a consortium in which the key players are the Carlyle Group, the Albright Group (headed by another former Secretary of State, Madeleine Albright) and several other well-connected firms. Under the deal, the government of Kuwait would also give the consortium $2 billion up front to invest in a private equity fund devised by the consortium, with half of it going to Carlyle. The Nation has obtained a copy of the confidential sixty-five-page "Proposal to Assist the Government of Kuwait in Protecting and Realizing Claims Against Iraq," sent in January from the consortium to Kuwait's foreign ministry, as well as letters back and forth between the two parties.



In a letter dated August 6, 2004, the consortium informed Kuwait's foreign ministry that the country's unpaid debts from Iraq "are in imminent jeopardy." World opinion is turning in favor of debt forgiveness, another letter warned, as evidenced by "President Bush's appointment...of former Secretary of State James Baker as his envoy to negotiate Iraqi debt relief." The consortium's proposal spells out the threat: Not only is Kuwait unlikely to see any of its $30 billion from Iraq in sovereign debt, but the $27 billion in war reparations that Iraq owes to Kuwait from Saddam Hussein's 1990 invasion "may well be a casualty of this U.S. [debt relief] effort."



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BAKER WANTS ISRAEL EXCLUDED FROM REGIONAL CONFERENCE 12/5/2006




FACTS ABOUT JAMES BAKER




THE JAMES BAKER INSTITUTE FOR PUBLIC POLICY





Also, be sure to read yesterday's Baker Street post