Whoa - Naomi Klein's Article Forces Carlyle Pulls Out of Iraq Debt Recover

[otohara]

Carlyle Pulls Out of Iraq Debt Recovery Consortium
by David Leigh

The Carlyle Group, a large investment firm linked to US and British politicians, has pulled out of a scheme to recover billions of dollars from Iraq, following the publication in the Guardian this week of documents detailing the secret proposals of a consortium with which it was involved.

Carlyle published a withdrawal letter yesterday sent to other members of its consortium.

The consortium offered a confidential deal to use its political influence to collect a $27bn (£15bn) debt owed by Iraq to Kuwait, despite US pleas for debt forgiveness from other countries.

A Carlyle partner, former US secretary of state James Baker, has been accused of a conflict of interest, because he has been touring the world demanding debt relief on behalf of President Bush, while his firm had a private interest in doing a special deal with Kuwait.

http://www.guardian.co.uk/international/story/0,3604,1327956,00.html


See also Naomi Klein -
James Baker's Double Life


When 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. effort."


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

[no_hypocrisy]

1. *'s father, a/k/a 41, a/k/a George H.W. Bush is also a partner in Carlyle.

P.S. Iraq also owed big bucks (or Euros) to both France and Germany. Didn't see Carlyle stepping up on their behalf . . .

[KoKo]

2. This is great news...but where's the OUTRAGE! Why isn't he in jail for

being an "Unelected Independent Contractor." I'm so sick of the BFEE getting away with everything...They are always above the LAW...and the media just reports and you judge...and it goes "down the memory hole."

:-( I'm worn down with this stuff. Average Americans have no idea how Powerful Baker is..that he's Lawyer for the Saudi's working against the 9/11 Families who lost loved ones and caused our nation to invade two countries and put us into debt forever.

But, it's good he and Madeline and Carlyle gave up their quest to line their bank accounts (already bigger than any of us will ever see) and all is okay with the world. It's not JUSTICE which I was brought up to believe happened in America...but it's what we now expect for the powerful and connected to do..

[Kenneth ken]

3. many kudos to Ms Klein

and The Nation, but mostly to the unidentified person or persons who leaked the documents in the first place.

:yourock:

I hope the same thing happens if any of these nefarious groups try to resurrect any similar kinds of shady deals vis a vis reparations from Iraq.

Ms Klein has written another article regarding Iraqi reparations that are currently impeding the rebuilding of Iraq.

here (Common Dreams)

this is probably posted somewhere else on DU, but since I'm not starting a thread, it should be ok to mention it in this post. :D

:hi:

[George_S]

4. But what about Mary?