You turn to us for voices you won't hear anywhere else.

Sign up for Democracy Now!'s Daily Digest to get our latest headlines and stories delivered to your inbox every day.

Carlyle Deal to Buy Iraqi Debt Dies After Naomi Klein Expose

HeadlineOct 14, 2004

Less than a day after The Nation magazine reported on a secret multi-billion dollar deal involving former Secretary of State James Baker and Madeline Albright negotiating to buy out Iraq’s debt to Kuwait, the deal now appears to be dead. In a major expose, the magazine reported on confidential documents showing that the Carlyle Group, of which Baker is a partner, was part of a consortium along with former Secretary of State Madeline Albright. Under the deal the consortium would use it’s “personal connections to persuade world leaders that Iraq must 'maximize' its debt payments to Kuwait.”

The Consortium’s stated goal directly contradicts the US foreign policy aim of Baker’s mission. He, of course, is President Bush’s special envoy dealing with Iraq’s debt. Nation columnist and author Naomi Klein reports that on January 21, 2004, Baker flew to Kuwait to meet with top government officials, including the Foreign Minister, ostensibly to discuss whether Kuwait would forgive the $57 billion in sovereign debt and war reparations owed by Iraq. On the very same day, the debt restructuring proposal—which asks the government of Kuwait to make a $1 billion investment in Carlyle—was hand-delivered to Kuwait’s Foreign Minister.

Since the story broke yesterday, Carlyle is now trying to completely disown any involvement in the deal. Initially, Carlyle had confirmed to The Nation that it was aware of the proposal and the fact that it stood to gain a billion dollars. But last night, they changed their tune. In a statement to Naomi Klein, Carlyle Vice President Chris Ullman said “Even if there is money to invest, Carlyle will not invest it. We learned today that we did not even join the consortium. When I spoke to you yesterday, I did not know that. We had not actually joined the consortium. We were in discussions with them to join but we declined to sign the memorandum for several reasons, include the fact that Secretary Baker had been named to the [envoy] job.”

Carlyle also wrote a letter to the Consortium, cc’ed to the Kuwaiti government and the Albright group, saying it had nothing to do with the deal. Carlyle’s General Counsel wrote, “We expect the Consortium to cease using Carlyle’s name and to cease stating or implying that Carlyle has any connection, involvement or financial interest in its current or prospective work.”

The original content of this program is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License. Please attribute legal copies of this work to democracynow.org. Some of the work(s) that this program incorporates, however, may be separately licensed. For further information or additional permissions, contact us.

Non-commercial news needs your support

We rely on contributions from our viewers and listeners to do our work.
Please do your part today.
Make a donation
Top