Tuesday, October 12, 2004

The Carlyle Group's Tom Hagen

Naomi Klein has a devastating article in next month’s The Nation about James Baker’s dual roles: on the one hand, as public emissary arguing around the world for forgiveness of Iraq’s debt. On the other hand, as a partner in the Carlyle Group, which just happened to cut a deal with Kuwait to help it recover moneys owed from… wait for it… Iraq.

Makes no sense, right? There’s James Baker, out convincing countries around the world they should let bygones be bygones, let Iraqis start anew without the crushing debt burden left them by Saddam Hussein. (Makes sense, actually.)

Yet there’s this interesting nugget:

In the eighteen months since the US invasion, Iraq has paid out a staggering $1.8 billion in reparations—substantially more than the battered country’s 2004 health and education budgets combined, and more than the United States has so far managed to spend in Iraq on reconstruction.

(By my calculation, that means the Carlyle Group, which stood to collect 5% of whatever Kuwait collects, has netted something like $90m. In 18 months.)

From Klein’s article:

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.”

In fairness, this isn’t just a Republican cabal. Madeleine Albright (of the eponymous Albright Group) is in on the deal as well, peddling her influence with the UN, connections to heads of state and familiarity with the situation in Iraq for personal gain.

Incredible. (Found via Atrios.)

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