Saturday, June 14, 2003

Organized crime can extract money out of a business by running up its trade debts while simultaneously stripping its assets and selling them for cash. When all the assets are sold and the creditors start to obtain enforceable judgments, the criminals simply abandon the shell of the business leaving the creditors with no assets against which to enforce their judgments. The neo-cons have a similar plan for Iraq:

  1. The first step is to force the international community to forgive the sovereign debts of Iraq. This is appealing to the neo-cons only because these debts aren't owed to American banks. Their argument is that the debt was run up on behalf of a criminal leader in Saddam, and the lenders shouldn't benefit from dealing with such a man (international moralist Richard Perle called it the ". . . moral hazard . . . of lend[ing] to a vicious dictatorship"). The problem, of course, is that there is no reason to differentiate the debts owed by Iraq from the debts owed by any third-world country, almost all of which had debts run up by unjust rulers, and the neo-cons have absolutely no interest in advocating a general forgiveness of the debts of poor countries. Why do the neo-cons want the debts of Iraq to be forgiven? It will stop any of the precious proceeds from oil from going to pay interest or principal on the sovereign debt, and thus not where God intended these proceeds to go, into the pockets of Hallibuton and Bechtel. The forgiveness will also allow Iraq to more easily run up more debts, as we shall see.

  2. The second step is to appropriate as much of the oil revenues of Iraq as possible for the corporate crony friends of the Bush Administration. This will be done through the use of untendered 'cost-plus' contracts for the reconstruction of Iraq. The reconstruction will track the amount of money available from the proceeds of the oil wells, and will continue as long and as far as this money holds out.

  3. The third step is to ensure that Iraq gets no democratic government until as many contracts are signed as possible that will permanently result in all the oil monies going to Bush's pals. A democratic government that obtains power too soon might try to upset these arrangements before all the oil money is liberated.

  4. The fourth, and most important step, is to make sure that even if the country is plunged into anarchy, or a democratic government is elected that doesn't agree with the stealing of all the present and future oil profits, the stealing of the money can't be reversed. The plan, and it is a diabolical one, is to have Britain and the United States and Australia, together with big banks, lend the Iraqi people all the money required for the reconstruction on the security of the oil production facilities and the future revenue stream from the oil wells. The lent money can thus be placed in a pool which can be drawn on by the reconstruction companies without having to worry about future decisions of the Iraqi people (no doubt the reconstruction contracts will have massive penalty clauses should Iraq want to get out of them later). The Bush administration has anticipated that a judicial order might be made against the oil of Iraq, and has made it impossible for such oil to be subject to judicial attachment, thus ensuring that the assets will be free and clear to be the security for the loans. Iraq's wealth will be permanently mortgaged to the hilt for the benefit of Bush's pals, and there will be nothing that any future Iraqi leaders can do about it.


The fly in the ointment is the sabotage that has begun against the oil facilities of Iraq. No lender will lend if the collateral can't be insured, and no insurer will insure collateral that can't be protected from destruction. The sabotage of electrical lines going to the Basra Refinery, other instances of sabotage, and now the explosion on the pipeline going to Turkey, are just the beginning of the war of liberation of the Iraqi people. The Americans, with almost 200,000 troops, can't keep charge of Iraq. How are they going to secure thousands of miles of oil pipelines, electrical wires, and water pipelines needed to pump the oil? How are they going to prevent sabotage in the refineries themselves? Unless the Americans can prove that the collateral is safe, much of the plan to liberate the wealth of the Iraqi people will have to be delayed.

0 comments: