Wednesday :: Oct 13, 2004

James Baker, the Fixer Man

by Mary

Remember when James Baker, AKA Bush's Fixer, went on his tour of the world to help the Iraqis by requesting other countries to forgive the Iraqi debt so the poor struggling country could get on its feet after the evil Saddam? Well, it looks like Mr. Baker had a bit of a conflict of interest. The Nation has gotten ahold of some documents that show when Baker was going around asking other nations to forgive the debt owed by the Iraqis, his company, the Carlyle Group, was also involved in making sure that Kuwati would not only not have to forgive the debt owed by Iraq, but would have the right contacts to "maximize" its repayments from Iraq.

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."

The Nation also showed the documents to Jerome Levinson, an international lawyer and expert on political and corporate corruption at American University. He called it "one of the greatest cons of all time. The consortium is saying to the Kuwaiti government, 'Through us, you have the only chance to realize a substantial part of the debt. Why? Because of who we are and who we know.' It's influence peddling of the crassest kind."

In the confidential documents, the consortium appears acutely aware of the sensitivity of Baker's position as Carlyle partner and debt envoy. Immediately after listing the powerful players associated with Carlyle--including former President George H.W. Bush, former British prime minister John Major and Baker himself--the document states: "The extent to which these individuals can play an instrumental role in fashioning strategies is now more limited...due to the recent appointment of Secretary Baker as the President's envoy on international debt, and the need to avoid an apparent conflict of interest." [Emphasis in original.] Yet it goes on to state that this will soon change: "We believe that with Secretary Baker's retirement from his temporary position [as debt envoy], that Carlyle and those leading individuals associated with Carlyle will then once again be free to play a more decisive role..."

Chris Ullman, vice president and spokesperson for Carlyle, said that "neither the Carlyle Group nor James Baker wrote, edited or authorized this proposal to the Kuwait government." But he acknowledged that Carlyle knew a proposal was being made to the government of Kuwait and that Carlyle stood to land a $1 billion investment. "We were aware of that. But we played no role in procuring that investment."

When President Bush sent Mr Baker as his representative, the NY Times editorialized that Baker should resign from the Carlyle Group if he was to be credible with this initiative. What was Bush's reaction? He didn't read that editorial so didn't see an need to comment on it.

Perhaps an inquiring reporter or debate moderator could ask about this tonight in the debates?

Mary :: 2:11 PM :: Comments (5) :: Digg It!