Baker Wins Iraq Debt Relief From France & Germany As U.S. Remains Noncommittal

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As Presidential envoy James Baker wins agreements from Germany and France to forgive billions of dollars in debt to Iraq, we take a look at the former secretary of state’s talks in Germany, his 1991 meeting with then-Iraqi foreign minister Tariq Aziz and how continued sanctions could have led to Iraq’s withdrawal from Kuwait. [includes transcript]

Presidential envoy James Baker won agreement yesterday from Germany and France to forgive billions of dollars in debt to Iraq. The agreement came after a meeting with German Chancellor Gerhard Schroeder where Baker overcame what is described as “serious German misgivings” about the exclusion of German firms from Iraqi reconstruction. A day earlier France announced it would forgive about 3 billion dollars in debt. The White House has given no indication that debt forgiveness could result in a slice of the reconstruction deals.

According to a senior Bush administration official, the three nations have agreed that having a new government in place is not a precondition for moving forward on debt forgiveness.

At the White House, spokesman Scott McClellan was noncommittal about U.S. forgiveness of Iraqi debt: “That process is just beginning. We are looking at restructuring and reducing the debt.”

The former Secretary of State will continue on his five-day trip with stops in Rome, Moscow and London. This marks Baker’s first official trip since he joined the Bush administration two weeks ago. Baker remains 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. Baker Botts includes Halliburton among its list of clients as well as the Saudi government in the suit filed by family members who lost relatives on 9/11. Baker is also a senior counselor to the powerful investment firm the Carlyle Group.

  • Andreas Zumach, Geneva-based UN correspondent with the German newspaper Die Tageszeitung. Last year Zumach obtained an unedited copy of Iraq’s 12,000-page report to the United Nations, including portions on how Iraq acquired its weapon capability from Germany, the U.S. and others.

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We now go to, Andreas Zumach. Welcome to Democracy Now!

ANDREAS ZUMACH: Yes. Thank you, Amy. This was actually just a year ago to this day when we published it, and I think that was the last time the two of us talked together.

AMY GOODMAN: That’s right. That was the 12,000-page report Iraq had given to the U.N. if you could just remind listeners what happened to that report before the majority of the security council got it.

ANDREAS ZUMACH: Well, the U.S. stole it after its arrival in New York. They took it down to Washington under the pretension that only in Washington you had decent copy machines to make copies for the other members of the council but what came back to New York a few days later was only a 3,000 page version. This is all what the 10 non-permanent members of the council ever got, only the five permanent members, U.S., Russia, Great Britain, France and China here today have the many 12,000 pages. In the short version you have no mentioning of all of the complicity of the U.S., Germany and France, Britain, Soviet Union and to a lesser degree China are guilty of during the last 30 years. Complicity approving the of the regime of Saddam Hussein, the point as Francis Boyle already pointed out.

AMY GOODMAN: Well, can we start by talking about James Baker’s trip to Germany?


AMY GOODMAN: How did it go, what did he say?

ANDREAS ZUMACH: I was a little bit surprised when you just quoted the U.S. government spokesman and his characterization and maybe Baker’s own characterization of his talks with chancellor Gerhard Schroeder when he said, “he overcame serious problems regarding the fact that so far the Bush administration is still only giving lucrative reconstruction orders to German companies.” As far as the way it’s been portrayed here in Germany by the spokesman of Schroeder, it sounds different. He said, “this issue is still unresolved, and we do expect the Bush administration to change.” Secondly, there is only a basic declaration of intention on the side of the German government to come to, let me quote, “some substantial debt relief in the context of the Paris club.” There are no figures, no numbers. When we ask the government spokesman earlier today, he said “this all has to be worked out in the second tier among the member countries of the Paris club.” The Paris club is mainly a club of rich, western or northern industrial countries embracing all of your western European countries, certainly, the U.S., Canada, and Japan. And to the members of this club, Iraq is owing between $30 billion to $40 billion accumulated in the past 30 years. Which is only a smaller portion of the overall international debt. The overall international debt, Iraq accumulated is $120 billion. So, even if there would be some measures of debt relief —- within the members of the Paris club, this might not mean very much for the reality in Iraq. Germany, out of these $30 billion to $40 billion is owed $4.4 billion. And France–$3 billion, Russia— $8 billion, Italy–$1.7 billion. This is the ranking order. I don’t know the figure for Great Britain. It remains to be open how much money actually should be in this debt relief package and when it will actually happen. Certainly not before sometime in the middle of next year, the minimum political condition. At least as far as the Germans are concerned is that at least this provisional government must be in place, which is being foreseen in the latest schedule Bremer worked out for the transition of power, which would be after June 30 next year.

AMY GOODMAN: Interestingly, at the White House spokesperson Scott McClelland was non-committal when a reporter asked whether the United States would forgive the Iraqi debt as James Baker goes around asking other countries to do so. McClelland said, “that process is just beginning. We’re looking at restructuring and reducing the debt”. He said, “we will keep you posted as this moves forward.” It’s not an issue that’s raised by the U.S. press.

ANDREAS ZUMACH: Well, I hope it will be more and more because even conservative voices in the German political arena, members of the Christian Democratic Opposition who more or less 100% back the war against Iraq now come out rather critical vis-à-vis the Bush administration. We have a permanent member of the Christian Democratic Party this morning saying, “I don’t accept that now the reconstruction of Iraq should be paid out of debt relief. There is enough–there are enough oil revenues there, that before the Bush administration started the war, they have always declared that the reconstruction after the war could be financed totally with Iraqi oil revenues”, this is a Christian Democratic member of German parliament. And there are others, again all politicians who have backed the war against Iraq, who now don’t accept that the U.S. is trying to finance the reconstruction, at least partially out of debt relief.

AMY GOODMAN: Can you talk about James Baker himself? I mean, just in introducing you, talking about who he is, at Baker Botts, which is the law firm he is a part of in Texas, which actually represents Saudi Arabia against a lawsuit filed by 9-11 families. In Saudi Arabia, there is also serious Iraq debt there. That hasn’t been a part of the discussion.

ANDREAS ZUMACH: Well, I read all of that, Amy, and let me add some other elements to it, which go a little further back but also have to do with the Middle East. Number one, if you remember the immediate pretext to Iraq’s invasion in Kuwait on August 2, 1990 where we had this famous or infamous meeting to the then U.S. ambassador, April Gillespie to Baghdad with Saddam Hussein on the 25th of July, 1990. At which they discussed the whole issue, the dispute Iraq had with Kuwait at the time concerning the border, the oil fields, and the desert sand. Saddam Hussein asked Gillespie what the U.S. government’s opinion on all of that would be, meaning the Bush Sr. presidency at that time where Baker was the Secretary of State, and Gillespie said, “well, this is not of our national interests.” We know this because of the records at the meeting, both U.S records and Iraqi records, and they are identical to the point. Many observers at the time when this emerged made the observation that maybe Saddam Hussein took this answer by Gillespie as somewhat of a green light to invade Kuwait, which would certainly not excuse this illegal war that he fought against Kuwait, but still, it would be, I think, politically a very remarkable fact. When this all came out after the first Gulf war in March 1991, Baker and his staff first tried to blame Gillespie and said she messed it all up. It was her fault. soon after that, a telex emerged from Baker to Gillespie which proved that Baker instructed her to say exactly what she did say to Hussein at this meeting. And unfortunately, we still probably don’t have the whole truth as to what Gillespie said. Baker was a very instrumental player at that time. Also remember he was after the first Gulf war probably the one who put the most pressure on the Israeli government at the time to come to some kind of talks with the Palestinian side, which led to the Madrid conference. Yes, I do feel he is still a very hefty and a very influential figure in U.S. foreign policy, especially in the Middle East region and in — vis-à-vis Iraq.

AMY GOODMAN: It’s very interesting how well James Baker is served by this position because he can maintain his other jobs, a senior adviser at the Carlyle group where really what he brings or what George Bush senior brought to that company is their ability to go meet with foreign leaders, which opens foreign access. And now he is doing it on taxpayer dollars. In addition to he does not have to leave his jobs. When Henry Kissinger was appointed to the 9-11 commission, everyone said, — the pressure was that he should have to release his client list. Well, they have worked it out that Baker would only have to work a certain number of days a year which means he does not have to give up -well, you could say, his “day job” either at Carlyle or at Baker Botts, which also represents Halliburton.

ANDREAS ZUMACH: Yes. I heard that. Let me just remind listeners about what — two other — well, anecdotes from 12 years ago, which I think still are somewhat important. The one is after the Iraqi invasion of Kuwait, the U.N. security council, two days later voted on the most comprehensive economic sanctions that have been handed down during the whole history of the United Nations, the league of nations in the last century. The problem was that the U.N. at the time did not have any instruments to control it or to monitor whether or not these economic sanctions were successful, whether they might at some point force Saddam Hussein to withdraw his occupation forces from Kuwait. The only ones who have the means to control this were the U.S. government at the time. This has changed. They were the only ones who had the satellite systems in place controlling whatever was moving underground there. They had at this time at least enough spies on the ground, but they wouldn’t share any of the information with either the U.N. or with anybody else.

It was Bush and Baker, especially, who starting mid September, less than six weeks after the Iraqi invasion, and the vote on the sanctions in the Security Council, they started to argue that the sanctions were a total failure and therefore, one needed to take military action against Iraq. The military build up of U.S. forces actually started by the second half of September. Nobody was, at this time, in a position to contradict this claim that the economic sanctions were a failure. And later after the war was over, they had done an analysis which was given to Bush and Baker in mid December, four-and-a-half months after the Iraqi invasion, and according to this analysis, the economic sanction against Iraq were the most successful economic sanctions ever in the whole history of the last century. It brought down the Iraqi exports by 97%, the imports by 90% and what is most important, the gross national product by 45%.

This in the short period of four-and-a-half months. Baker and Bush decided to keep this analysis another secret, probably because this analysis ended with the recommendation by the C.I.A., if we continue this kind of sanctions for another two or three months, Saddam Hussein will have to withdraw his troops from Kuwait because he won’t be able to sustain them, to feed them anymore. I make every bet if this C.I.A. Analysis would have been known to the U.S. Congress when the congress voted on January 12, 1991, to give the war power to the president, the Congress would have voted against it. You might remember that it was not a big majority only 52-42 in the Senate.

This is the other one — there was a meeting, the last chance, which was a meeting between Baker and then foreign minister Tariq Aziz here in Geneva on January 9, 1991. Everybody expected it to last maybe a half hour, maybe an hour, then it lasted six, seven, eight, finally 11 hours. And worldwide the hope was growing they found some kind of a political solution. And then at the evening when Baker gave his press conference, his first sentences became clear, no it, was a failure. He never answered the question why his meeting with Tariq Aziz failed? We still don’t know at which point this meeting failed, who got up first from the table, and ended the negotiations. I hope at some point he might be forced to answer those questions.

AMY GOODMAN: Andreas Zumach , I want to thank you for being with us. He is the Geneva based correspondent for the German newspaper- Die Tageszeitung, speaking to us from Geneva.

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