Tuesday, September 30, 2008

The Long Con

Aram Roston's recently published biography of Ahmed Chalabi, The Man Who Pushed America to War, tells a strange tale about one aspect of the 'other war' against Iraq, the one that was pursued relentlessly throughout the 1990s in the form of sanctions, regular bombardment and covert action. In part, it is a character portrait of a crooked upper class Iraqi who, following what the Jordanian authorities consider a massive global heist by the Chalabi family which funnelled millions of dollars to secret accounts in the Cayman Islands, is able to reinvent himself as an authority on the newly troublesome Iraqi dictatorship and eventually as the best possible replacement for it. Chalabi emerges as a man with an immense capacity to make others believe in him, even when he is manifestly on the take and manipulating all to his own advantage. It is also a story of Washington's attempt to manage a 'safe' overthrow of the Iraqi government. Drawing on testimony from Chalabi's associates, friends and co-conspirators, it is meticulous in detailing dates, times and places, and richly descriptive. As for the man himself, some consistent themes emerge. For a start, he was always politically engaged, especially from his time as a bright young thing studying mathematics in MIT, where he was a sophomore during the bloody Ba'athist coup in 1963. Secondly, he has always been absolutely stinking rich. This is the reason why the Chalabi family considered the overthrow of the pro-British monarch by the Free Officers in 1958 such a grave crisis that they fled their Baghdad mansion in a convoy of American sedans and fled to the cramped home of an ally in their traditional base in Khadimiya, a largely Shi'ite area then as now. The fact is that Iraq was, under British tutelage, cultivating an extremely opulent ruling class while slums expanded and infant mortality soared. So, the Free Officer coup contained revolutionary elements that could easily lead to a rich family being expropriated and slaughtered. Chalabi would go on to recall the pre-revolutionary utopia - a time of elections, a relatively free press, cross-sectarian solidarity in his father's boardroom, expanding public schools... He declared: "This is how we were, this is how we will be again!" Later: "The bastards set us back 700 years!" And indeed, the revolt had destroyed the Chalabi family's status in Iraq. Thirdly, and relatedly, though Chalabi didn't appear to be particularly concerned about democracy, and displayed an innate distrust of mass politics, his loathing of the Ba'ath Party appears to have been lifelong. Undoubtedly, he saw its accession to power as a continuation and radicalisation of the revolt that had overthrown the old colonial caste. And it was therefore very probably the 'popular' element of Baathist doctrine that he despised: "left-fascists" was the jarring phrase he used to characterise them in 1963.

At any rate, whatever the problems faced by Chalabi's family in the immediate aftermath of the revolution, it restored its position outside Iraq - in Jordan, Lebanon, and England - and retained its wealth. It ran the Middle East Banking Corporation (MEBCO) with interests both in the UK and across the Arab world. And young Chalabi was carted around in a limousine, both at MIT (where he claims, apparently falsely, to have been responsible for creating a revolutionary new type of unbreakable code) and at the American University of Beirut, where he began to work as an assistant professor in 1971. Though apparently a gifted mathematician, his real passion was to utilise his immense resources and connections to help overthrow the Iraqi regime. To that end, he was smuggling guns to Mustafa Barzani's Kurdish forces throughout the period of revolt in the early 1970s (during which time they also had the backing of SAVAK) and formed early contacts with journalists such as Peter Jennings and David Hirst to ensure that the struggle was conveyed adequately in the Western press. He was obliged to terminate these activities when civil war broke out in Lebanon in 1975. The Chalabi elders fled to England, and left MEBCO in young Ahmed's hands. He had to quit teaching to run the bank and said au revoir to mathematics for good.

And, as we know, it was in the business of banking that Chalabi first attained notoriety. Petra Bank, which he built and controlled from 1977, was astonishingly successful, increasing its assets from $40 million to $400 million between 1978 and 1982. Chalabi used his success to form connections not only with the Arab bourgeoisie but also with people like Judith Kipper of the American Enterprise Institute and Peter Galbraith of the Senate Foreign Relations Committee. He cultivated journalists with varying success and seems to have first made a tenuous connection with Judith Miller of the New York Times in this period. Supposedly, the CIA even considered recruiting him in the early 1980s, but gave up on the idea. However nice Chalabi was to his American friends, though, he was openly backing the Iranian side in the Persian Gulf War, and held the US - particularly the CIA - responsible for the Ba'athists even being in power in Iraq. Incidentally, it wasn't exclusively for instrumental reasons that he wanted Iran to defeat Iraq. Though he had been loyal to the Shah, he seems to have switched sides very quickly, and expressed excitement at the idea of Shi'ite self-assertion. On the other hand, there was a banking empire to tend to, and - practicalities being what they were - Chalabi decided to do business with the Iraqi government, a decision which was apparently being formalised in the days before the Iraqi invasion of Kuwait.

The collapse of the Chalabi family's banking interests began in 1989, and Chalabi could well have been brought down by the scandal if it weren't for his discovery of the uses of American power after 1990. The Swiss Federal Banking Commission revoked his banking license on 27 April 1989, a month and a half after the death of the Chalabi patriarch, Abdul Hadi Chalabi. MEBCO Geneva was finished. In August, Petra Bank went down, and was taken over by the state. And then Socofi in Geneva, and then MEBCO in Beirut. And following this, a series of criminal investigations was launched. It seems that Ahmed had a penchant for risky, aggressive banking schemes. That had certainly been the case in Jordan, where he obtained far more leverage over the economy than his capital base would permit. One of his schemes was in league with an American brothel-owner and felon named Wayne Drizin, with whom he set up a financing mechanism for a proposed 300-foot ship called the Nissilios, which raised about $15m from various donors. Petra Bank promised to pay back the donors in the event that Drizin defaulted. Well, trouble is, the money never went to the ship. It seems it never went to Drizin either: in fact, the preponderance of known facts suggests that the Chalabis simply appropriated the cash. Similarly improbable deals with similar crooks such as Taj Hajjar, a Jordanian businessman and Greek financier Spyridon Aspiotis, led to arrests and sometimes charges. Chalabi himself ended up being a fugitive from Jordan as the economy tumbled and the state tried to shore up the banking system. As all banks were ordered to deposit some of their foreign currencies in the depleted Central Bank, only Petra Bank refused, and Chalabi was not able to give a satisfactory explanation. The reason soon became obvious: the books were cooked. Chalabi absconded, leaving others to cop the arrests, even while calling journalists to tell them it was all a misunderstanding or - as he still claims - the result of a political conspiracy by Iraq and Jordan to ruin his family. He set up a banking security company with an office in Knightsbridge known as Card Tech (incorporated in the Cayman Islands), financing the business with profits from Petra Bank.

While in London, Chalabi was once more at liberty to pursue his political goals, forming alliances with Iraqi exiles such as the Shi'ite cleric Muhammad Bahr al-Ulum. The invasion of Kuwait was a gift for him in so many ways. He became a regular feature of the op-ed pages: "A Democratic Future For Iraq", his 1991 Wall Street Journal piece proclaimed, urging that the US could and should overthrow Saddam Hussein. While he had never been known to care particularly about democracy, he now found that the rubric of 'democratic reform' was a useful way to galvanise support. With other opposition groups, he formed the Joint Action Committee, which prevailed on the West to allow them to enter Iraq and overthrow Saddam. Chalabi himself had no grassroots base, but he had networks of contact and influence with circles of power, and had media savvy. He became coordinator of the International Committee for a Free Iraq, which drew in various supporters including the recently shamed Senator John McCain. Also involved was then antiwar left-winger Ann Clwyd MP, who would later form a tight bond with Chalabi, and also Bernard Lewis, Albert Wohlstetter, and Richard Perle. Whatever Chalabi's protestations when the US left Saddam in power and facilitated its crushing of the Kurdish and Shi'ite rebellions, he was to prove that he didn't bear a grudge for long. Unknown to him, the CIA had been tasked to devise a plan for a managed overthrow of Saddam, and in the Spring of 1991, Bush signed a 'finding' authorising covert action against Saddam. They were given a budget of $38 million. In May that year, the CIA moved to recruit Chalabi, sending their agent Whitley Bruner to visit him at his swish residence overlooking Mount Street Gardens. Having sealed the deal, Chalabi was then contacted by Linda Flohr, a veteran of the Counter Terrorism Centre (which acquitted itself so beautifully in Reagan's own 'war on terror', particularly in Nicaragua). He haggled over funding and insisted that he would not sign a single receipt for any of the funds he was given. He also persuaded the CIA to nix a threat of interdiction by Interpol, who had been asked by the Jordanian authorities to nick him in the absence of any interest on the part of the British state in doing so. It was while visiting the State Department to co-ordinate with Iraqi exiles that he first caught the eye of Paul Wolfowitz.

Chalabi was as yet not the Americans' preferred leader of any future Iraqi regime, and resented the fact that he had been employed more as a facilitator for the other exiles. According to diplomat David Mack who dealt with Chalabi, "he bided his time until he could improve his position as an Iraqi national leader". He had become convinced, it seemed, that it was a particular entitlement of his to lead Iraq. Soon, he convinced plenty of others, including the doggedly loyal Kanan Makiya. In the meantime, he set up a front company - IBC Communications - to channel CIA funding, and warded off alarmed queries from some of the more serious exiles by pretending that he was being funded by wealthy Iraqi businessmen. They knew it to be a lie, because no Iraqi businessman would hand Chalabi a dime at that point. Nonetheless, he was gradually able to fix it so that he was the indispensable point man for the US. The front organisation, which received $4m a year, was run by Chalabi and this meant that he had direct and unaccountable control over the money and therefore direct control over the new opposition front, the Iraqi National Congress (the name taken from the African National Congress and the Indian National Congress). In alliance with the John Rendon group (about whom, you really should read this), Chalabi set about building up a hardcore of supporters who would help sell the organisation as a genuine, independent movement of dissenting democrats, while negotiating with Kurdish groups and some Iraqi tribes, to whom he delivered the dollars in person (thus giving himself even more leverage). He knew that he had been effectively promoted when in 1993 he received a personal letter from the new Vice-President Al Gore who conveyed his dedication to the INC cause.

The Clinton administration had some interventions of its own to take care of, however, and it didn't feel like immediately rushing to manage the remainder of Bush Sr.'s war. Chalabi relentlessly proselytised for a 'Three Cities' strategy in which his group would incite rebellions in three major cities north and south, and thus stimulate a mass defection by the Iraqi army. The army would keep order in the conquered cities, while Chalabi's men moved ever forward, ready to strangle the regime's base in Baghdad. Certainly, it was a preposterous idea, but it seems that the ultimate plan was to force the US government's hand, and drive them to invade. By 1995, he was working with Bob Baer, the now ex-CIA agent who is generally given far too much praise in the media. He urged Baer to help him get Washington to approve his plans for inciting a rebellion, although he claims that in fact the plan was all Baer's idea. After a long delay, a response emerged from Anthony Lake, Clinton's National Security Adviser, telling Chalabi in barely veiled terms where to get off. Chalabi's sails were only temporarily punctured, and he planned to launch the insurgency anyway. It didn't work. Barzani didn't go along with it, Talabani's forces melted on the border, and the Iraqi army did not engage in mass defections. This hopeless muddle, combined with revelations that Chalabi was doing business with Iranian intelligence, inclined the CIA to look into Chalabi's books: what was he doing with all this money? It turned out, he wasn't spending much of it on the operations he was supposed to be spending it on, and it also seemed he had been spinning his paymasters a series of lies.

At any rate, Chalabi was far less useful to the American state at this time than Ayad Allawi, and his Iraqi National Accord. Allawi was a longtime asset of MI6 and the CIA. He was a Ba'athist and could recruit among Ba'athists. He was quite prepared to execute a coup that conserved the basic power structure. And, as far as I know, he wasn't a habitual thief. Chalabi, by contrast, was opposed to any future for the Ba'ath Party whatsoever, which is why had to rely on the idea of stimulating a rebellion that would then draw in American troops. The CIA chose to transfer its support to the INA and sponsor a coup that actually turned out to flounder as badly as most of Chalabi's initiatives. Meanwhile, the INC base in northern Iraq was shut down during the civil war between Talabani and Barzani's factions and, when they realised the extent to which Chalabi had been playing one off against the other, the Kurdish leaders said they didn't want him back. By 1996, the CIA had cut him and his organisation off, and he had no base. But he did have his supporters in Washington, including some figures from his earlier operation such as Francis Brooke, a Democratic politico and beer industry lobbyist, Warren Marik, a CIA agent who resigned one year after Chalabi was cut off, and Linda Flohr who introduced him to a man who ought to need no introduction, one Duayne Clarridge, who was then rebounding from his Iran-Contra difficulties. Chalabi and Clarridge were soon as thick as thieves, and Clarridge recruited retired US Army Gen. Wayne Downing to devise a more sophisticated version of Chalabi's 'Three Cities' plan to sell to the administration or its Republican opponents. It revived the old model supplied by Reaganite interventions into Angola and Central America, in which local guerilla movements were created, trained, armed and funded by the US. In this case, the plan was that the US would use its air power to provide 'armour exclusion zones' that Saddam had to keep his tanks out of or risk being devastated. Another part of the revival strategy was to win the news agenda. Thus, Chalabi got ABC News to broadcast his narrative of American betrayal of an authentic national revolution, in a documentary presented by his old acquaintance Peter Jennings. Also featuring in the documentary was a man named 'Ahmed Allawi', the alter ego of an old Chalabi loyalist from the early days of the INC, Aras Habib Kareem, who told viewers that they could easily have defeated the Hussein regime, but the Americans let them down. And finally, there was the business of finding a new political constituency - this was supplied by the neoconservative right, including Paul Wolfowitz, Doug Feith and Richard Perle. He knew how to say the right things to persuade Mey Wurmser, co-founder of MEMRI and wife of David Wurmser, that he wasn't some dreadful antisemite. He was supportive of Israel, and said nice things about democracy too. This was an Arab the neocons could like, even if he could never be fully one of them. He got good play from institutions like JINSA as well, and all of this helped make up for the fact that Mossad wouldn't touch him with a stolen bargepole. Chalabi also had the backing of a number of Democrats at this point, including Joe Lieberman and Bob Kerrey, which suggests that too narrow a focus on the neocons is unsustainable. And then he got back with his old friend Ann Clwyd MP and persuaded her to launch group called INDICT, which was supposedly designed to expose Saddam Hussein's various atrocities. This was an enormously successful move: US Congress devoted "not less than $3,000,000" to the organisation, and the Clinton administration considered it a relatively low-risk way to support the exiles without putting money directly in Chalabi's hands. However, the registered office of the organisation was Chalabi's Mayfair residence, and he himself was registered as corporate secretary and co-director of the organisation. Two old-time Chalabi supporters, Zaab Sethna and Nabeel Musawi, were appointed to senior positions in the organisation. It was championed by GOP Congressmen, especially when the Clinton administration appeared to delay funds. The Senate provided him with a platform to outline his plans for a future Iraq, and to declare himself "an elected representative of the Iraqi people". And when Congress passed the Iraqi Liberation Act in 1998, it was literally designed to help Chalabi's cause, though in fact the money earmarked to help the INC - $2 million - was slow to come, due to State Department reticence. In order to overcome this, the Iraqi National Congress Support Foundation was set up as an incorporated group to channel money to the INC. But the US government insisted that rivals such as Allawi and representatives of the Kurdish parties be included on the board. Chalabi was able to get PR lobbyists BKSH, owned by Burston-Marsteller, to work for his campaign, and the company assigned one of Jonas Savimbi's former PR agents, Riva Levinson, to work with him.

As the 'war on terror' kick-started, the INC's propaganda operations began in earnest. They recruited assets such as Adnan al-Haideri, a man in need of asylum who was prepared to spin appealling fictions for the CIA on behalf of the Congress (though the CIA were not in fact taken in by him). Chalabi himself worked several journalists, most notably David Rose of The Observer, who began to ventriloquise INC propaganda. Among the falsehoods he relayed in this role was the story of mobile laboratories, set up in 1996 to develop biological weapons. The source was Mohammad Harith al-Assef, another INC asset, and the claims were repeated in a DIA report. But Chalabi's main role, as he saw it, was to try to unite the Bushites with the Supreme Council for the Islamic Revolution in Iraq, currently the main occupation partner of the US. Cheney met with a representative of the outfit, facilitated by Chalabi, much to the alarm of liberal exiles - if SCIRI were essential to a post-war state, surely Chalabi would at least insist on fundamentals such as womens' rights, democracy etc? No such luck. Chalabi was also supposedly instrumental in getting the INC's Information Collection Programme to be transferred from the State Department to the Pentagon, who looked upon the information with more welcoming eyes. But the decision was taken by the National Security Council and would presumably not have been had the administration not already opted for war (here, as with much else in Roston's book, too much weight is given to Chalabi's particular input).

When, in 2002, the White House decided to set up the Committee for the Liberation of Iraq, it appointed Bruce Jackson, a former Lockheed Martin lobbyist to assemble the right people to run it. Jackson enquired as to what he might say the reasons for war would be, and was told that the President had not yet decided. Nonetheless, he signed up and contrived his own rationale: Saddam's regime was responsible for grave atrocities and should be replaced by a democratic government. This organisation was able to gain the support not only of politicians of both main parties, but also of Washington intellectuals such as Bob Kagan and Christopher Hitchens. This outfit came to orbit the INC directly. During the years 2000-2, Chalabi's group had been given $33m by the State Department. But the INC wanted more - precisely, $97m which they said had been allotted by the Iraqi Liberation Act. What the Bush administration offered in reply was to build up a trained militia for the INC, to be known as the Free Iraqi Forces, and the Pentagon recruited Vietnam war criminal Senator Bob Kerrey to oversee the process, which was run out of the US Army Training Centre at Fort Jackson. While the Bush administration's plan was to integrate these with the US invasion force, Chalabi had plans to make them an independent "Iraqi military force". It was also during this period that the INC elaborated its plans for de-Baathification, which would help moralise the invasion by assuring liberal opponents that it wasn't just going to result in the same dictatorship with a new pro-American figurehead on top. Further, Chalabi insisted to anyone who would listen that there would be no occupation, that he would oppose such a status as a matter of principle - even so, the INC was clearly recommending an occupation, modelled on the postwar occupation of Japan, in its internal documents. It is perfectly natural, therefore, that Chalabi's front should have been chosen by the administration to help devise its occupation plans. For what the INC wanted was more or less what was intended by the administration, and Chalabi was himself highly adaptible when it came to any matter of principle involved.

And so, Chalabi arrived in Iraq alongside his feckless 'Free Iraqi Forces' militia, and tried to stage a march into Baghdad modelled on De Gaulle's 1944 liberation of Paris. Well, the trouble was that the FIF weren't real killers but poorly trained, undisciplined and desperate men who would have been crushed by the Iraqi army. The US army was the only real killer in this territory. Still, he tried to find some way to obtain more of a role for himself in the occupation, and successfully lobbied his supporters in the administration to discipline General Jay Garner, who was seen as undercutting the INC. The FIF, hopeless as it was, was eventually terminated: it was not the "nucleus" of a new Iraqi army after all. But Chalabi himself ended up on the Interim Governing Council as well as the Higher National Committee for De-Baathification, where it is alleged he tried to shake down Iraqi businessmen under the rubric of 'economic de-Baathification'. (Chalabi's name comes up a lot when missing money in Iraq is mentioned). He got his nephew installed as the head of the multibillion dollar Trade Bank of Iraq, and his cronies made a great deal of money from reconstruction. Even when he didn't fare too well in his 2005 bid to be the candidate for Prime Minister of Iraq as part of the United Iraqi Alliance, he was given the post of Deputy Prime Minister and acting oil minister. Soon, his company Card Tech was given a big contract by the Trade Bank of Iraq, and subsequently sold off for a plum bonus of $54 million. He has manouevred constantly, tilting toward the Americans and away from it, siding with the UIA and then the Sadrists, tacitly accepting occupation and then opposing it.

But what comes through most clearly in Roston's account is precisely the extent to which the underlying heuristic is wrong. Chalabi did not push anyone into war. He has been a useful asset, a clever manipulator, and a world-class fraud. And, being of an old comprador elite, he makes a natural ally for imperial power. But he used the systems of corruption, coercion and blandishments that were available to him because of the way Washington politics works, because of the agendas that are current in the US political elite, because of the gullibility of corporate journalists and of politicians, and because of the endless opportunities that exist for a wealthy, intelligent operator in this system. When it comes to crookedness, lying, and bilking money from taxpayers, I am certain there is a whole class of people who make him look pretty average. What is far more interesting is to see how certain interests gelled, how millions were duped, and how people were directly coopted over prolonged periods of time, sometimes without their knowledge, for a policy that they didn't understand.