James Baker

[CheesalaIsGood 0]

article | Posted October 12, 2004

James Baker's Double Life

A Special Investigation

by Naomi Klein

 

 

Print this article

E-mail this article

Write to the editors

Take Action Now!

 

 

Click here to read documents detailing James Baker's conflict of interest.

 

Research support for this article was provided by the Investigative Fund of The Nation Institute.

hen 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."

 

In the face of this threat, the consortium offers its services. Its roster of former high-level US and European politicians have "personal rapport with the stakeholders in the anticipated negotiations" and are able to "reach key decision-makers in the United Nations and in key capitals," the proposal states. If Kuwait agrees to transfer the debts to the consortium's foundation, the consortium will use these personal connections to persuade world leaders that Iraq must "maximize" its debt payments to Kuwait, which would be able to collect the money after ten to fifteen years. And the more the consortium gets Iraq to pay during that period, the more Kuwait collects, with the consortium taking a 5 percent commission or more.

 

The goal of maximizing Iraq's debt payments directly contradicts the US foreign policy aim of drastically reducing Iraq's debt burden. According to Kathleen Clark, a law professor at Washington University and a leading expert on government ethics and regulations, this means that Baker is in a "classic conflict of interest. Baker is on two sides of this transaction: He is supposed to be representing the interests of the United States, but he is also a senior counselor at Carlyle, and Carlyle wants to get paid to help Kuwait recover its debts from Iraq." After examining the documents, Clark called them "extraordinary." She said, "Carlyle and the other companies are exploiting Baker's current position to try to land a deal with Kuwait that would undermine the interests of the US government."

 

The Nation also showed the documents to Jerome Levinson, an international lawyer and expert on political and corporate corruption at American University. He called it "one of the greatest cons of all time. The consortium is saying to the Kuwaiti government, 'Through us, you have the only chance to realize a substantial part of the debt. Why? Because of who we are and who we know.' It's influence peddling of the crassest kind."

 

In the confidential documents, the consortium appears acutely aware of the sensitivity of Baker's position as Carlyle partner and debt envoy. Immediately after listing the powerful players associated with Carlyle--including former President George H.W. Bush, former British prime minister John Major and Baker himself--the document states: "The extent to which these individuals can play an instrumental role in fashioning strategies is now more limited...due to the recent appointment of Secretary Baker as the President's envoy on international debt, and the need to avoid an apparent conflict of interest." [Emphasis in original.] Yet it goes on to state that this will soon change: "We believe that with Secretary Baker's retirement from his temporary position [as debt envoy], that Carlyle and those leading individuals associated with Carlyle will then once again be free to play a more decisive role..."

 

Chris Ullman, vice president and spokesperson for Carlyle, said that "neither the Carlyle Group nor James Baker wrote, edited or authorized this proposal to the Kuwait government." But he acknowledged that Carlyle knew a proposal was being made to the government of Kuwait and that Carlyle stood to land a $1 billion investment. "We were aware of that. But we played no role in procuring that investment."

 

Asked if Carlyle was "willing to take the billion but not to try to get it," Ullman answered, "Correct."

 

 

http://www.thenation.com/doc.mhtml?i=20041101&s=klein

 

 

 

-------------------------------------------------------------------

 

Same old story. Still, he should have plenty of money saved in time for the rapture.

[Guest MikeSC]

Ah, more Carlyle conspiracy theories? Joy.

 

Too bad the Nation is so clueless as to the Carlyle Group.

-=Mike

...Hint: Soros is far more tied into them...

[CheesalaIsGood 0]

Ah, more Carlyle conspiracy theories? Joy.

 

Too bad the Nation is so clueless as to the Carlyle Group.

-=Mike

...Hint: Soros is far more tied into them...

Hint: CONFLICT OF INTEREST!

[Guest MikeSC]

Ah, more Carlyle conspiracy theories? Joy.

 

Too bad the Nation is so clueless as to the Carlyle Group.

    -=Mike

...Hint: Soros is far more tied into them...

Hint: CONFLICT OF INTEREST!

They've not even approached actually making a case here. It's laughable that you take the Carlyle bullshit seriously.

-=Mike

[CheesalaIsGood 0]

Ah, more Carlyle conspiracy theories? Joy.

 

Too bad the Nation is so clueless as to the Carlyle Group.

    -=Mike

...Hint: Soros is far more tied into them...

Hint: CONFLICT OF INTEREST!

They've not even approached actually making a case here. It's laughable that you take the Carlyle bullshit seriously.

-=Mike

It's equally laughable that you lack the ethical barometer to see that this isn't kosher. Sorry streetmeat, this guy is an asshole not worth defending. I might as well lump Greatone in here too since he will no doubt add his "thoughts".

[Guest MikeSC]

Ah, more Carlyle conspiracy theories? Joy.

 

Too bad the Nation is so clueless as to the Carlyle Group.

    -=Mike

...Hint: Soros is far more tied into them...

Hint: CONFLICT OF INTEREST!

They've not even approached actually making a case here. It's laughable that you take the Carlyle bullshit seriously.

-=Mike

It's equally laughable that you lack the ethical barometer to see that this isn't kosher. Sorry streetmeat, this guy is an asshole not worth defending. I might as well lump Greatone in here too since he will no doubt add his "thoughts".

It's nothing. If they, you know, revealed a PROBLEM with the deal --- then they'd actually have the first kernel of a case here.

 

They didn't.

-=Mike

[CheesalaIsGood 0]

The goal of maximizing Iraq's debt payments directly contradicts the US foreign policy aim of drastically reducing Iraq's debt burden. According to Kathleen Clark, a law professor at Washington University and a leading expert on government ethics and regulations, this means that Baker is in a "classic conflict of interest. Baker is on two sides of this transaction: He is supposed to be representing the interests of the United States, but he is also a senior counselor at Carlyle, and Carlyle wants to get paid to help Kuwait recover its debts from Iraq." After examining the documents, Clark called them "extraordinary." She said, "Carlyle and the other companies are exploiting Baker's current position to try to land a deal with Kuwait that would undermine the interests of the US government."

 

 

 

 

 

 

undermine the interests of the US government.

 

 

 

Money. Money. Money.

[Guest MikeSC]

The goal of maximizing Iraq's debt payments directly contradicts the US foreign policy aim of drastically reducing Iraq's debt burden. According to Kathleen Clark, a law professor at Washington University and a leading expert on government ethics and regulations, this means that Baker is in a "classic conflict of interest. Baker is on two sides of this transaction: He is supposed to be representing the interests of the United States, but he is also a senior counselor at Carlyle, and Carlyle wants to get paid to help Kuwait recover its debts from Iraq." After examining the documents, Clark called them "extraordinary." She said, "Carlyle and the other companies are exploiting Baker's current position to try to land a deal with Kuwait that would undermine the interests of the US government."

 

 

 

 

 

 

undermine the interests of the US government.

 

 

 

Money. Money. Money.

And they have not pointed to ACTUAL PROBLEMS with the agreement. The lawyer's hyperbole does not actually MAKE the case that the article so horribly failed to do.

-=Mike

[CheesalaIsGood 0]

So there is no problem with somebody exploiting their appointment as a way to make his bank account fatter?

 

 

Baker is on two sides of this transaction: He is supposed to be representing the interests of the United States, but he is also a senior counselor at Carlyle, and Carlyle wants to get paid to help Kuwait recover its debts from Iraq."

 

 

 

THIS IS a problem. Wake up. Conflict of Interest. War Profiteering. These guys are SUPPOSED to be working in the interests of you and me. Which it seems you don't care.

 

You know Mike, if shit like this didn't happen no one would have a leg to stand on or even question that Bush and co. were disingenuous when they paint themselves as liberaters. Yet they do and say so much stupid shit and it only digs their hole even deeper.

 

 

So please, feel free to respond with whatever it was that John Kerry did that pissed you off today.

[Guest GreatOne]

So please, feel free to respond with whatever it was that John Kerry did that pissed you off today.

You should talk. I mean did something actually HAPPEN of note here or are you just randomly whining again?

 

Haliburton+Carlyle=WAAAAAAAAAAAAAAAA.....................anything else?

[Guest MikeSC]

So there is no problem with somebody exploiting their appointment as a way to make his bank account fatter?

Provided nothing illegal happened, no.

 

I could mention a junior Senator from NY who had an even bigger conflict of interest in the past that was no big deal, apparently.

Baker is on two sides of this transaction: He is supposed to be representing the interests of the United States, but he is also a senior counselor at Carlyle, and Carlyle wants to get paid to help Kuwait recover its debts from Iraq."

And they've yet to point what he did WRONG. They've yet to prove that his negotiation on behalf of the US gov't was unfairly beneficial to Carlyle. They're trying to paint a cospiracy theory without any demonstrable wrong-doing.

THIS IS a problem. Wake up. Conflict of Interest. War Profiteering. These guys are SUPPOSED to be working in the interests of you and me. Which it seems you don't care.

If you could point to what Baker did wrong, how the deal was bad --- then I'd be willing to be a little outraged.

You know Mike, if shit like this didn't happen no one would have a leg to stand on or even question that Bush and co. were disingenuous when they paint themselves as liberaters. Yet they do and say so much stupid shit and it only digs their hole even deeper.

No, this is just more shit from conspiracy theorists who want to assume that Bush did something wrong with this war without once demonstrating an actual act of wrong-doing.

 

People who have been bitching HAVE no leg to stand on. They never have had a leg.

So please, feel free to respond with whatever it was that John Kerry did that pissed you off today.

As opposed to this?

-=Mike

[Guest INXS]

I don't think you have to be Michael Moore or a left wing nut to realize that this invasion was really about the money that could be made from it.

[Rob E Dangerously 0]

It wouldn't surprise me if James Baker was an asshole.

 

[Rob E Dangerously 0]

EDIT: James Baker probably knows the difference between a thread on him and an EV thread

 

oops

[Guest SP-1]

I don't think you have to be Michael Moore or a left wing nut to realize that this invasion was really about the money that could be made from it.

Do you even try and tailor your posts to the subject at hand anymore?

[Guest SP-1]

I don't think you have to be Michael Moore or a left wing nut to realize that this invasion was really about the money that could be made from it.

Do you even try and tailor your posts to the subject at hand anymore?

[Guest SP-1]

EDIT: Double

Edited October 18, 2004 by SP-1

[kkktookmybabyaway 0]

What's all this Halliburton talk about? It's not like anyone from the Bush adminstration actually WORKED there before coming to office. And if someone did, Big Media has done a poor job of letting us know about it...

[Guest INXS]

I don't think you have to be Michael Moore or a left wing nut to realize that this invasion was really about the money that could be made from it.

Do you even try and tailor your posts to the subject at hand anymore?

Uh? My post WAS about the subject at hand.

 

Do you even try and tailor YOUR posts to the subject at hand? Do you have anything to contribute to this thread besides posting nonsense about my post? Any thoughts on the subject at hand? Or are you just here to have a go at me?

[Guest MikeSC]

I don't think you have to be Michael Moore or a left wing nut to realize that this invasion was really about the money that could be made from it.

Because God knows we've made a killing thus far.

 

And the political benefits at home have been amazing.

 

And internationally, it's not caused us headaches.

 

Do your synapses, you know, fire ever?

-=Mike

[Guest SP-1]

I don't think you have to be Michael Moore or a left wing nut to realize that this invasion was really about the money that could be made from it.

Do you even try and tailor your posts to the subject at hand anymore?

Uh? My post WAS about the subject at hand.

 

Do you even try and tailor YOUR posts to the subject at hand? Do you have anything to contribute to this thread besides posting nonsense about my post? Any thoughts on the subject at hand? Or are you just here to have a go at me?

Haha.

 

Criticism from you about my posting habits is pretty funny. Halliburton nonsense is so retarded in the public perception that it's not really worth posting on anymore. I never claimed to post about the subject at hand. You did. I posted about how aimless your post seemed to be.

 

Oh well. I'm not going to get into a flame war with you.

 

kthxbye.