Baker Key to Dubai Ports Mess
by Anacher Forester
Thu Feb 23, 2006 at 12:09:34 PM PDT
Former Reagan Chief-of-Staff, ex-Treasury Secretary,
ex-Secretary of State, ex-NSC Council Member, ex-GWB
chief legal advisor, etc, and recent US Special Envoy
for Iraq debt is the invisible man in the middle of
this mess.
James A. Baker is Senior Partner of Baker Botts, a
legal firm very active in Middle East affairs perhaps
never more visibly than as legal representation for
the Saudi Royal family in the lawsuits brought by the
families of 9/11 victims. Baker Botts happens to
include Halliburton among its many clients and is
active in Egypt, Kuwait and Dubai, too.
More below the fold
Anacher Forester's diary :: ::
According to Baker Botts, on April 15, 2005: "the firm
expanded its presence in the region by opening a
Middle East regional office in Dubai to complement our
existing office in Riyadh, Saudi Arabia." Why? "Baker
Botts' Dubai office provides service to clients in a
number of sectors in the energy industry, including
oil and gas exploration and development, oil field
services, electric power, LNG, petrochemicals,
pipelines, and gas-to-liquids." I bet they do. Clearly
Baker Botts has a vested interest in the Bush
Administration's push toward a "free" trade agreement
with the UAE. I'll return to the Dubai office later.
We've only just glimpsed the tip of the proverbial
Bakerberg. James A. Baker also serves as Senior
Counsel to the secretive Carlyle Group where The
Guardian has reported his equity stake at an estimated
$180 million US. The Carlyle Group has made hundreds
of millions of dollars in the "war on terror" as owner
or part owner of defense contractors: The
Aerostructures Corporation, Combined Tactical Systems,
Inc., DHS Technologies, Landmark Aviation, Stellex
Aerostructures, Inc., Vought Aircraft Industries,
Inc., Canada's Standard Aero Holdings, Inc., Italy's
Avio SpA, US/Brit split Firth Rixson Limited and
Britain's NP Aerospace & recently privatized QinetiQ.
Due to increased scrutiny of their war profiteering
(brought on primarily due to Baker's role as Iraq debt
envoy), Carlyle has within the past two years "exited"
their long-time investments in United Defense (CG's
very first defense contractor acquisition in 1997) as
well as United States Marine Repair, Aviall and Indigo
Systems.
The Carlyle Group's sway over US policies both foreign
and domestic doesn't end with the military-industrial
complex. They have their grubby fingers in a whole
lotta pies. A good primer on Carlyle including how
they gave GWB a job in 1991 and how they influence
U.S.-Korean policy can be found here: Carlyle's Way.
Suffice to say that when Baker and Daddy both say
"frog", W jumps.
On December 12, 2003 President Bush called on Russia,
Germany, and France to forgive Iraq's debts.
Embarrassingly this was just a day after the Pentagon
announced The White House-approved policy excluding
those nations from bidding for Iraqi reconstruction
projects. A secretive "committee of officials" agreed
that the most lucrative contracts must be reserved for
political or military supporters such as Baker Botts
client Halliburton and those within the Carlyle Group
portfolio.
Shortly thereafter Baker acted as US Special Envoy for
Iraq debt toured debtor countries eventually winning
agreements from Great Britain, Germany, France, etc.
to forgive billions of dollars. At the same time, Iraq
has paid out to Kuwait 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. Hmm, how could that
happen? One word: Baker.
via The Nation: James Baker's Double Life (a must-read
if you haven't already):
"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 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. [debt relief] effort.'"
Brandishing a mighty "lever" indeed in Baker as envoy,
this deal is structured so that Baker & co. get $1
billion up front regardless of the outcome. Nice work
if you can get it. It's worth noting also that while
the Europeans have been extremely generous in this
debt forgiveness process (up to .90 on the dollar),
there is precious little info on how much, if any,
Iraq debt the U.S. has forgiven. It is crystal clear
that the Bush administration does not hold the US or
their Arab economic allies to the same standards that
they do the rest of the world including our #1
military ally, Great Britain.
Back to Dubai...Carlyle bought CSX World Terminals in
2003 for $300 million and just two year's later
flipped it to the company now known as Dubai Ports
World for a near 400% profit at a cool $1.12 billion.
Again nice work, and a sweet price. Especially since
John Snow had all but ran CSX into the ground. Since
1991 CSX's profits have shrunk drastically with its
stock underperforming its rivals' by more than 65%.
CFIUS Chair John Snow was head of CSX for some 20
years before "retiring" from his post to become
Treasury Secretary. Under Snow's leadership, CSX paid
no federal income taxes in three of the past four
years. He also presided over the CSX sale to Baker's
Carlyle Group. In addition to the many extravagant
perks of his contract (including a $2.47 million
lifetime yearly pension), Snow will score $33 million+
more due to a clause triggered upon the transfer of
CSX to D P World (or any other buyer for that matter).
The crony circle closes even tighter with the
nomination of DP former Head of European and Latin
American Operations, David Sanborn, who has been
handpicked by President Bush as his nominee for the
Administrator of the Maritime Administration. Sanborn
is a graduate of The United States Merchant Maritime
Academy. According to DP World, he "previously held
senior roles with shipping lines CMA-CGM (Americas),
APL Ltd and Sea-Land and has been based, besides the
US, in Brazil, Europe, Hong Kong and Dubai during his
career. He has also served in the US Naval Reserve.
Sanborn was hired by DP in 2005." That one year with
Dubai Ports was all he needed to broker the Dubai
Ports deal to purchase CSX. Sanborn left that post to
oversee our ports (subject to Congressional approval)
three weeks before the D P World deal is approved by
the secretive John Snow-chaired Committee on Foreign
Investment in the United States. I'm sure Mr. Sanborn
is a very capable executive but somehow his past year
spent flitting around makes me more anxious rather
than more comfortable.
Those are the facts as I see 'em. They have left me
pondering two things:
1. Carlyle bought CSX World Terminals for $300 million
in 2003 and sold it to UAE/DP World just two years
later for $1.12 billion. By all accounts, CSX is a
financial mess. If I read it correctly its 2003 net
profit was down 42% to $246,000 which is not even half
the salary of their #5 executive
(yahoo.com: CSX annual). Obviously, UAE/DP World
massively overpaid for CSX. What exactly were they
buying? Baker's and others' influence on behalf of the
proposed free" trade agreement with Dubai? An eventual
entree into the management of US ports? And/or
something else?
2. Putting aside the various documented 9/11, bin
Laden & other UAE terrorism connections and their I
remain greatly concerned that the UAE
Government-controlled Dubai Ports World would have any
influence at all on managing our country's major
ports. It has everything to do with the UAE as a
unparalleled hub of criminal activity yet nothing to
do with its Arab ethnicity.
By all accounts UAE is a fine place to live or to
visit or what have you. It sure looked snazzy when I
saw it on PBS' Globetrekker program. Bu it is also
historically and currently the worldwide
money-laundering capital -- it wouldn't be a surprise
if any or all of the "missing" $9 billion+ from Iraq
passed through Dubai. It has the most lax financial
regulations going. Hell, until 2004 at the strong
urging of the US government, Dubai's stock exchange
had no written instructions whatsoever concerning
money laundering.
Additionally, Dubai is historically and currently not
only a major worldwide transshipment portal for
illegal drugs (mostly heroin), but also the sale of
nuclear technologies (even prior to Bush prezzy debate
fave Pakistan's "the A Q Khan"'s use of Dubai as a
conduit to fulfill the nuke ambitions of Iran, North
Korea and Libya), and prostitution, too. The $20
billion+ 1991 Bank of Credit and Commerce
International collapse and subsequent scandal managed
to combine money-laundering, drug smuggling, child &
adult prostitution, the sale of nuclear technologies,
terrorism, arms trafficking, the Mujahideen, bribery,
training of Medellin Cartel death squads, etc.,
(Kerry/Brown BCCI Report. pt. 4) all with the active
participation of the UAE's emir of Abu Dhabi and quite
likely the CIA. BCCI was the world's worst ever
financial scandal (see: wikipedia BCCI).
Even if the government of the UAE no longer actively
participates in the wide variety of major crimes still
committed via their ports and through their banking
system, they don't seem to be terribly committed to
preventing them. Since the UAE fails to stop such
illegal activities in their backyard and they continue
to show at best a luke-warm interest in enforcement,
why should we believe that the UAE would in any way
serve as a deterrent in preventing them from reaching
us in some catastrophic way here? If in fact the UAE
government continues to actively participate in these
illegal activities, we're really fucked. If the
integrity of one various individual government
departments involved in either DP World or UAE
security is compromised, we're well fucked. This is
where the threat to our National security lies not
with the ethnicity of the principals involved given
that our ports are the exhaustively well-documented
weakest link in the brittle chain that is Homeland
Security.
I'll leave it to the conspiracy theorists to speculate
as to what the level of White House Chief of Staff
(1981-1985)/Treasury Secretary (1985-1989)/Secretary
of State (1989-1992) James A. Baker's involvement in
and/or knowledge of BCCI's shenanigans. Nor will I
postulate as to what dubious Dubai dealings former CIA
Director/Vice President/President Poppa Bush may have
had from 1976-1991 and beyond.
Regardless, it did occur to me that Baker Botts had a
slew of choices (i.e. Cairo, Damascus, Amman, Kuwait
City, etc.) as to where to open a second Middle East
office to "complement" the Riyadh office. Instead they
chose the money laundering/drug smuggling/prostitution
capital of Dubai. Note that Dubai is one of the
closest major non-Iraqi/non-Saudi cities to Riyadh and
at just 537 miles distant is less than a two-hour
flight away. Yep, Dubai. Not Cairo where Baker Botts
has considerable business and a location would give
them ideal regional coverage. Not Kuwait City where
they could keep a close eye on any developments in
Baker's $1 billion+ Carlyle Group deal. Dubai. I have
no idea how much of Baker Botts decision to open an
office in Dubai has to do with D P World, "free"
trade, Dubai's struggling stock market, etc. I do know
that there has to be a whole lot more money coming
down that UAE pipeline to Baker & Friends for the
foreseeable future.
There's much more here than meets the eye and most of
it leads back to the Baker man.
Tags: Dubai, Homeland Security, Carlyle Group (all
tags)