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December 08, 2003

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Last week, President Bush appointed former Secretary of State James Baker as his envoy for restructuring Iraq’s more than $120 billion in foreign debt. Baker will be dispatched in his own U.S. government plane as a special presidential envoy to deal with heads of state in Asia, Europe and the Persian Gulf. He will report directly to President Bush.

Baker is a lawyer-politician who is a former White House Chief of Staff, Treasury Secretary, Secretary of State and various other things. He is a trusted friend of the Bush family and has been called up before in times of political need. He ran Bush Senior’s presidential campaigns and was President George W Bush’s man in Florida during the recount in 2000.

Baker is now a senior partner in the law firm of Baker Botts, which is deeply involved in the fight for the oil and gas of the Caspian Sea and is senior counselor to the powerful investment firm the Carlyle Group. On the morning of September 11th, 2001, Baker was reportedly at a Carlyle investor conference with members of the bin Laden family in the Ritz Carlton in Washington D.C. And his law firm Baker Botts is defending the Saudi government in a lawsuit filed by the families of the victims of the 9/11 attacks.

This past July, Baker was sent out to Georgia to lecture its President, Eduard Shevardnadze, about the need to ensure that the upcoming parliamentary elections were "free and fair." Fast forward four months and Shevardnadze has been overthrown in a so-called "Velvet Revolution."

Today we take a look at the many faces of James Baker.

• * Greg Palast*, investigative reporter with the BBC and author of the books The Best Democracy Money can Buy and Democracy and Regulation.
• Dan Briody, author of The Iron Triangle: Inside the Secret World of the Carlyle Group.
• Mark Ames, editor of the Moscow alternative newspaper _ The eXile_. He wrote an article from Tiblisi, Georgia called "Georgia in the Crunch."

TRANSCRIPT

AMY GOODMAN Today we take a look at the many faces of James Baker. We will be joined by Dan Briody, author of "The Iron Triangle: Inside the Secret World of the Carlyle Group." Mark Ames from Moscow, editor of the Moscow alternative newspaper "The eXile." He wrote a piece about Georgia called "Georgia in the Crunch," but we will begin with Greg Palast. He is a BBC correspondent and author of "The Best Democracy Money can Buy." We welcome you all to Democracy Now!. Welcome, Greg. GREG PALAST: Good morning, Amy.

AMY GOODMAN Well, can you talk about James Baker in Iraq? You’re doing a piece on the subject for "Rolling Stone."

GREG PALAST: Well, it’s disturbing. It’s weird, It’s strange. We’ve got shades of Henry Kissinger being appointed to the September 11th committee. This is called, what we are talking about here is called sovereign debt, 120 or $130 billion of debt owed that piled up by Saddam Hussein, sovereign debt. George Bush, and James Baker, are not the sovereigns of Iraq. There is a real question whether the money is not owed to them or to the United States or from the United States. That might even come from us. What the heck is the president of the United States telling the Iraqi government what to do with its Saudi — with its debt? I just said Saudi debts. That’s a big issue here. James Baker has not been approved by the United States senate. This seems to be some type of a rump appointment. In fact, it looks like he may be actually an appointee of the puppet government we have set up in Iraq. The government there is not legitimate, either, and they will be making a decision with James Baker about enough debt that will lock up the assets of the Iraqi people for the next two generations. It’s not an elected government in Iraq. This is astonishing. You have to understand that this is preempting the World Bank.

James Wolfenson, who is president of the World Bank, has not called for the restructuring of Iraqi debt and that’s by the way the job of the World Bank, which is officially called the bank for reconstruction and development, post-war reconstruction bank. The bank in charge has said no, the debt should not be restructured. It should be eliminated, $120 billion should be forgiven, but that’s a problem for Mr. Bush and Mr. Baker, because $27 billion is owed to Mr. Baker’s client, the Saudi government. So, now you have got a problem here. You have got the lawyer for the creditor being put in charge by a president of a conquering nation to make sure that his friends, the Saudis and Baker’s clients, the Saudis get their money. This is clearly a violation of international law by any measure. It horrifies the World Bank and it horrifies the world community. It’s a type of conflict of interest-laden appointments that President Bush can’t seem to get enough of.

AMY GOODMAN Many are saying that the James Baker appointment is far more than being there to restructure the Iraqi debt, that he is being called in a pinch. Bush is in deep trouble in Iraq right now, so he has turned to the man who helped get him selected in 2000, James Baker.

GREG PALAST: Right, James Baker is a serious fixer. Do you remember during the Florida race in 2000, he was the mouthpiece for the Bush campaign saying, the votes have been counted in Florida six times, when in fact by my last count, 180,000 ballots were never looked at by the state. So, he did a good job of bamboozeling the public, but that is for his campaign client. He is now here supposedly working for the benefit of the Iraqis. I think that the panic for George Bush is that he is going to have to, whether he likes it or not, turn over the control of Iraq to Iraqis. When that happens there is no elected government of Iraq which is going to accept the debts incurred by Saddam Hussein. For example, in the case of the Saudi debt, James Baker’s client, $27 billion, this was — i know that $7 billion of that money was given to Saddam Hussein to build atomic bomb. So, should the Iraqis be paying that money back? Should the United States be guaranteeing that money to Saudi Arabia for helping Saddam Hussein attempt to build a weapon of mass destruction. The other money was given by Saudi Arabia to Iraq to run in effect a proxy war against Iran. Is that a legitimate debt or not? According to the World Bank and sources in the international financial community this is exactly the type of debt, which the Iraqi people themselves don’t owe. What’s he very disconcerting here is that we know the only way for Iraqis to pay off that debt as they’re obligated by Mr. Baker is to basically give up their oilfields in order to pay off the Saudis and other creditors. So this is the problem. Rearranging this debt determines the future of Iraq for the next two generations.

AMY GOODMAN It’s also interesting to see Newt Gingrich yesterday on "Meet the Press," Newt Gingrich, who was basically going ballistic over what’s happening in Iraq. And with a little research, we find that Newt Gingrich himself was recommended by Steve Forbes several months ago to be the person in charge of dealing with Iraq. Maybe he was just disappointed.

GREG PALAST: Well conflict of interest, this is the entire Bush administration process. Remember that Bush Sr. is still on the payroll of Carlyle group, the big defense contractor. You had a perfectly good song, "wind beneath my wings, " because Carlyle group was the owner of United Technologies, which makes fighter jets. Bush Sr.’s being on Carlyle, as part of Carlyle group…

AMY GOODMAN although he has left.

GREG PALAST: …he has left. James Baker has been senior counsel to Carlyle group and apparently got Bush Sr. into the group and Bush W., our current president, was also on the payroll of Carlyle group, apparently also arranged by James Baker. So you have this kind of what I call the Bush cycle: The Bush family uses political connections to make business connections. The business connections get political appointments. This is a very troubling thing to the rest of the world and suddenly, the Bush family, which has nothing to do with debts owed to or from Iraq is now seizing that debt to basically reorganize the finances of that nation.

AMY GOODMAN We’re going to move from the Florida elections to James Baker flying recently to Tbilisi, Georgia, to call for "free and fair elections" there in just a minute. We’re talking to Greg Palast, the author of, "The Best Democracy Money can Buy." … Also on the line, Dan Briody, author of "The Iron Triangle: Inside the Secret World of the Carlyle Group," and Mark Ames, editor of the moscow alternative newspaper, "The eXile." He wrote an article from Tbilisi, Georgia, called, "Georgia in the Crunch." Welcome to Democracy Now!, Mark Ames, can you talk about the role that James Baker played in the overthrow of Eduard Shevardnadze, what others are calling the "Velvet Revolution", the regime change without violence.

MARK AMES: Well, good morning. His appearance in Tbilisi in mid July to warn Shevardnadze, his good friend, as he said, to make sure that the elections were "free and fair" seemed extremely bizarre give the American support of other extremely undemocratic regimes in the area. It was bizarre that he singled out that particular country. For example, since we put troops in Uzbekistan and Kyrgyzstan to extremely authoritarian regimes. In fact, Uzbekistan is known for boiling its dissidents alive. We have never complained about, or to this extent, we have not complained about massively rigged elections and democratic processes there. And then in mid October, there was an election in Azerbaijan, which is a neighboring country to Georgia, a big oil country, and power was essentially handed from the father to the son there, the first dynastic regime change or regime passing down from Heydar Aliyev to his son Ilham Aliyev, again no James Baker, no major complaints, even though there was enormous amount of violence, opposition rebelled. There were massive arrests. It was brutal. And in Georgia, what’s going on there for about the last ten years, Shevardnadze since he came to power in '93, we per capita have given more aid to Georgia than to any country in the world except for Israel in the last ten years. But Shevardnadze in the last year, I think, sensed that we were grooming the next generation. We were preparing to replace him, and backing a new generation of leaders, including, you know, Burdzhanadze and Mikhail Saakashvili. So, he switched sides to the Russians, who are also playing a rough game in there. So, Shevardnadze started to switch sides. I think we got a sense of that back in June. Bush sent one of his energy advisers, Steven Mann, to Tbilisi, to warn Shevardnadze not so sell out the energy interests there to the Russians. In July, it was announced that the Georgians had in fact sold out part of the power plant system and essentially handed over a large chunk of their energy grid and system to the Russians. That was when James Baker appeared. The interesting thing is that Baker's law firm, as you mentioned earlier, Baker Botts, it even on its website, announces that it is the leading law firm in the Caspian Sea region. As we know, the Caspian Sea oil is the last large untapped oil region in the world. So, again we have the same conflict of interest. Baker arrives essentially to give — to present Shevardnadze with the dictat, we have supported you these last ten years now you have to go cause you switched sides. And at the same time Baker represents the oil interests who have a very strong interest in seeing Georgia stay pro-American because the Caspian Sea oil pipeline, which is being built to transfer oil from Azerbaijan to the port of Ceyhan in Turkey passes through Georgia.

AMY GOODMAN We’re talking to Mark Ames, who has written several pieces on James Baker, and on what happened in Tbilisi, Georgia. I’m looking at the talking points memo, an interesting log online that talks about James Baker, now with his own U.S. government plane and Iraq portfolio heading to New Delhi with an offer, the "Telegraph of Calcutta" says that Indians may not be able to refuse and then pointing out Mark Matthew’s Saturday piece in the "Baltimore Sun," to place Baker’s appointment in proper perspective and the matter of Robert Jordan, Texas’s oil lawyer and Americas Ambassador to Saudi Arabia since September of 2001. Jordan, Baker are both partners in the Houston law firm, Baker Botts and both were down in Florida in late 2000 organizing the recount effort. Jordan represents President Bush in the Harkin matter, and then the Baker Botts middle east region pay saying as Saudi Arabia and neighbors countries in the middle east continue to encourage private sector investment opportunities for U.S., European, and regional companies are growing, Baker Botts is able to assist clients with the opportunities through our depth in the experience in the region and broad base expertise in energy, technology, telecommunication, project development and finance. This position is further strengthened by the recent acquisition of an existing law office in Riad, Saudi Arabia, which operates and talks about the law office it operating in. Very interesting connections here.

MARK AMES: Yeah it’s — again, the thing that was so strange and ridiculous was James Baker going to lecture — choosing one of the wildly undemocratic countries the region, in fact, Georgia is by far the most democratic country, choosing that particular one saying that you have got to hold "free and fair elections" and nobody holds anything close to free and fair elections in that region. It was just that we were losing Shevardnadze to the Russians. We have known that Shevardnadze has been massively unpopular, but we supported him anyway and he is incredibly corrupt. Georgia under Shevardnadze’s leadership, Georgia is now ranked just about the most corrupt country in the world right up there with Nigeria. And we have supported him all along until literally this June and July when we realized that the Russians sort of undercut our influence with him and then bam, suddenly, we found religion in terms of "free and fair elections" just in this one particular country. When baker comes out there, yes, it’s like the prince of darkness. He came out there and told them, you’re going to go. What’s also interesting is that the ambassador that was named last year to Georgia, Richard Miles, he was the Chief of Mission, we didn’t actually have an ambassador then, the Chief of Mission from the U.S. to Yugoslavia from 1996 to 1999 and was key in trying to organize the so-called democratic revolution that didn’t succeed in 97, but that did eventually succeed in 2000. Miles is now — Miles actually was also — what’s also interesting is he was the ambassador to Azerbaijan in 93 when Aliyev first came to power and helped established his very undemocratic dynasty there. Miles was named ambassador to Georgia last spring just after we introduced Green Beret to Georgia, ostensibly because of an Al Qaeda presence in the north of Georgia, which a lot of people questioned, to say the least. He again oversaw another sort of democratic revolution, which wound up installing very pro-American interests.

AMY GOODMAN We’re talking to Mark Ames, editor of the Moscow alternative newspaper, "The eXile." He is based in Moscow. Jordan, the man who is the ambassador to Saudi Arabia, stepped down just six weeks ago, citing personal reasons, and is back in the Texas law business with Baker Botts in Texas. The issue of George Soros, and what we’re seeing happening in Tbilisi, in Georgia, Mark.

MARK AMES: Yeah. I didn’t touch on this too much, but the one thing that I can — the most obvious sort of sign of his influence there would have to be the use — the youth resistance organization. I was in Kosovo and Serbia when Milosevic was overthrown. And there was a famous youth resistance organization called "Otpor" which means resistance. They have certain insignia, they are well funded. They had stickers, t-shirt, great PR and so on. It turned out, Milosevic all along accused them of being backed by Soros and the Americans. Eventually they admitted after the revolution that yes, they were, backed by the Americans and Soros. And when I was in Tbilisi a few weeks ago, this was just when the protests were first starting to really build up steam, much along the lines of what happened against Milosevic, I noticed the exact same insignia, the same sort of clenched fist. They didn’t even bother changing it or modifying it. It was the same sort of stickers and labels and t-shirts and everything that I saw in Serbia a few years before, and it turned out the organization, the youth organization here is called "Comerra", in Georgian, which means "enough." And the "Otpor" organization’s slogan was "Gotowije" which in Serbian means "enough already." I personally haven’t investigated this much, but I am told by a lot of people that Soros, backed "Comerra," the youth organization, which — and you have got to understand that in these — in Serbia and particularly in the Georgian revolution as well, the youths are — were really key. These were the guys who stormed the parliament, who put their bodies on the line against fairly frightening security forces. Without these youth organizations, there’s no way they would have been able to overthrow Shevardnadze. So, I would think that Soros was very deeply involved in this, certainly he was involved in the youth organization.

AMY GOODMAN It was the foreign minister, Ivanov, who accused George Soros, the billionaire, financier, also the former chair of the joint chiefs of staff, Shalikashvili, as well as Baker of all being involved in this, and now the most recent news is that, Defense Secretary Donald Rumsfeld has pledged full support for Georgia and said, Russia is obliged to withdraw its troop as promised. Rumsfeld met with Georgia’s interim leadership on Friday. I want to bring Dan Briody into the conversation, author of "The Iron Triangle: Inside the Secret World of the Carlyle Group," as we look at the powerful role of James Baker. Can you talk about his role in the Carlyle group and the connection to the Bushes?

DAN BRIODY: He has had a similar role in the Carlyle group as George Bush Sr. had when he was working with them and that is to be in some ways an envoy for the company, someone to meet with foreign leaders, and both political and business leaders in order to cut deals and open up wallets overseas, encourage people to invest in the company. Obviously, he has a lot of contacts overseas, including the Middle East. He has been able to parlay those contacts into great deals for the Carlyle group. The most interesting thing about this appointment by president Bush, I think, is that the way that the appointment is structured, he’s not an official employee of the government. I think he’s only allowed to work 130 day as year or something like that, which gives him a status that enables him to keep his job at the Carlyle group, and at Baker Botts so he doesn’t have to worry about certain conflicts of interest. But at the same time, you know, a position like this will give him access to the investment community and a firsthand knowledge of dollar flow overseas, that no one else would be able to see. That’s pretty much the Carlyle MO. So, the Carlyle group has got to be very happy with this appointment?

GREG PALAST: Well this is Greg Palast, one of the things about the Carlyle group, and the — it’s just one of the entanglements of James Baker, who is now going into Iraq to deal with a debt which is neither owed to or from the United States, it’s not only the Carlyle group, but he does represent the Saudi government, which is the main — one of the biggest creditors. We also don’t know his other clients’ entanglements, cause while Baker Botts boasts of its control and the legal profession in the Caspian Sea and the oil business in the Middle East etc., they are little bit mum about their entire client list. The question becomes, will Baker be forced to divulge his client list as Henry Kissinger was forced to do. Kissinger then backed down when he was appointed by Bush’s head of the September 11th committee. It looks like the gimmick that they are going to use to get around Baker divulging his extraordinary conflicts of interest in this case is by actually having him appointed by this puppet government we have set newspaper Iraq, which is the only proper way to describe a government appointed by a foreign military power. This debt by — again, by the statements of the World Bank should not be touched by anyone but the Iraqis themselves, an elected government, which is sovereign and deals with what is called sovereign debt. It’s not even clear by the way, how much is really owed. It’s not like they keep bank records here and it’s not clear that some of the money wasn’t in fact lent in effect to Saddam Hussein, which of course, leaves with him and should not be paid back. So, what we have to worry about here is, is Baker being sent in as a collection agent of friends of the Bush family, or is he being sent in to help out the Iraqi people. Either way, we’re probably never going to get a clear answer because there will be neither approval by our government of this appointment, nor approval of a real Iraqi government of this appointment.

DAN BRIODY: Meanwhile, James Baker will be officing in the White House and have his own White House designated transportation and things like that, but he’s not an official employee of the U.S. government. And, Greg raises a great point, the same goes for Carlyle group as Baker Botts. The Carlyle group is under no obligation to divulge its client list or its investor lists. In a situation like this, I would think that the American people would deserve to be able to have a look at that list, and see what conflicts of interest may exist there, but I doubt very much that that will ever happen.

GREG PALAST: We look like — it looks like we have here is a payoff to a political crony, who did very well for the Bush family, and now they’re going to do very well for him. It’s a real question of whether either the American public or the Iraqi people are going to benefit by this appointment.

DAN BRIODY: And frankly, I’m surprised it took them this long to get James Baker into the Iraqi mix.

AMY GOODMAN I want to thank you all for starting this conversation about James Baker, now been appointed to restructure the Iraqi debt of some $120 billion. we will continue to follow his journeys there, and around Washington. Greg Palast, author of, "The Best Democracy Money can Buy." your website?

GREG PALAST: www.gregpalast.com where I will be putting out the latest on the Baker Botts story.

AMY GOODMAN Greg Palast writing for "Rolling Stone" on this issue. Dan Briody, author of "The Iron Triangle: Inside the Secret World of the Carlyle Group," and Mark Ames, editor of the Moscow alternative newspaper, "The eXile." Where can people see your work on the web, Mark?

MARK AMES: www.exile.ru. We’ll be having stuff on the new — the results of the Russian elections as well by the end of this week.

AMY GOODMAN And our quick comment on what has happened in Russian right now? The Russian election is certainly boosting Putin?

MARK AMES: If things could get more awful it’s happened. Yeah. Bad. But not completely unexpected, I suppose you could say.

AMY GOODMAN And for an audience in the United States that doesn’t follow Russian politics very closely, can you summarize in a nutshell what has taken place?

MARK AMES: It’s essentially the combination of the bureaucracy or those who — the bureaucratic interests and — roughly far right, slash left nationalist extremists sort of took over the Duma, the Russian parliament, with the consent or rather at the behest of Kremlin insiders, in other words, by Kremlin rigging. They have now created a new Duma, which is pretty extremist, pretty nationalist.

AMY GOODMAN Thank you all for being with us