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Saddam's Cash

From the May 5, 2003 issue: And the journalists and politicians he bought with it.

May 5, 2003, Vol. 8, No. 33 • By STEPHEN F. HAYES
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Editor's note, 1/30/04: On January 25, 2004, a daily newspaper in Iraq called al Mada published a list of individuals and organizations who it says received oil from the now-deposed regime. Among those listed is Shakir al Khafaji, an Iraqi-American from Detroit, who ran "Expatriate Conferences" for the regime in Baghdad. Al Khafaji also contributed $400,000 to the production of Scott Ritter's film "In Shifting Sands." Finally, al Khafaji arranged travel and financing for the "Baghdad Democrats"--Jim McDermott, Mike Thompson and David Bonior--last fall. Following the trip, al Khafaji contributed $5,000 to McDermott's Legal Defense Fund. THE WEEKLY STANDARD has contacted McDermott's office about returning the contribution. McDermott spokesman Mike Decesare said this morning that he had not yet spoken with McDermott, since it's three hours earlier on the West Coast. Asked about the contribution and the subsequent allegations about al Khafaji and oil, Decesare said, "I don't know anything about it." THE WEEKLY STANDARD will post a response from McDermott's office as soon as we get one. In the meantime, it's worth taking a second look at "Saddam's Cash."

SCATTERED AMONG the loose papers and bound files unearthed last week at the Iraqi Foreign Ministry in Baghdad was "letter no. 140/4/5," labeled "Confidential and Personal" and addressed to "The President's Office--Secretariat." The letter concerns George Galloway, a pro-Saddam member of the British Parliament, who founded a charity known as the Mariam Appeal, ostensibly to aid Iraqi children suffering under U.N. sanctions. The missive, from the Iraqi Intelligence Service, is a request that money be funneled directly to Galloway. It reads in part:

His projects and future plans for the benefit of [Iraq] need financial support to become a motive for him to do more work. And because of the sensitivity of getting money directly from Iraq, it is necessary to grant him oil contracts and special and necessary commercial opportunities to provide him with a financial income under commercial cover without being connected to him directly.

The letter further conveys Galloway's demand that "the name of Mr. Galloway or his wife should not be mentioned."

It also describes a meeting between Galloway and an Iraqi intelligence officer and states that Galloway sought to "ensure confidentiality in his financial and commercial relations with the country and reassure his personal security." Galloway, the letter went on, "needs continuous financial support from Iraq." He got it. Galloway "obtained through Mr. Tariq Aziz three million barrels of oil every six months, according to the oil-for-food programme. His share would be only between 10 and 15 cents per barrel. He also obtained a limited number of food contracts with the Ministry of Trade."

The letter, discovered by David Blair, a Baghdad-based reporter for the London Daily Telegraph, and his Iraqi translator, was revealed early last week. The next day, the Telegraph reported that Galloway had asked for more money, something the regime initially said it couldn't provide.

Galloway denies everything. He says the documents were forged--perhaps by foreign intelligence or by the Daily Telegraph. In a move sure to galvanize his critics, Galloway issued his denials from his vacation home--worth $400,000--on the coast of Portugal.

The Galloway revelations surely help explain the ravings of a fringe British politician. But they are more important for what they reveal--or more precisely, remind us--about the Iraqi regime.

Saddam Hussein has a long history of bribing anyone who could help his regime--businessmen, diplomats, politicians, and journalists. Throughout the Iran-Iraq war, which lasted from 1980 to 1988, Saddam lavished Arab leaders with gifts and contracts in exchange for their support. Shortly before his 1990 invasion of Kuwait, he shipped 100 new Mercedes 200 Series cars to top editors in Egypt and Jordan. Two days before the first attack, he offered Egyptian president Hosni Mubarak $50 million in cash, ostensibly for grain. After the invasion, he sought to buy neutrality or at least complacency by promising Mubarak and other Arab leaders that he would forgive all Kuwaiti debts once Iraq annexed the tiny nation as its nineteenth province.

As the Galloway affair makes clear, these practices continued throughout the 1990s, despite the increased scrutiny of Iraq's financial dealings by the United Nations. Before the recent conflict, says Tareq al-Mezrem from the Kuwaiti Information Office, the Iraqi regime gave journalists luxury "villas in Jordan, Tunisia, and even Lebanon."

Some of the transactions were straightforward cash payments, often in U.S. dollars, handed out from Iraqi embassies in Arab capitals--luxury cars delivered to top editors, Toyotas for less influential journalists. "This was not secret," says Salama Nimat, a Jordanian journalist who was jailed briefly in 1995 in that nation for highlighting the corruption. "Most of it was done out in the open."

Other transactions were surreptitious or deliberately complex--coveted Iraqi export licenses for family members of politicians, oil kickbacks through third parties, elaborate "scholarship" arrangements. In a region where leaders count their fortunes by the billion and workers by the penny, such payoffs are common. The Saudis, of course, have financed public works throughout the Middle East and Africa. But no one played the game like Saddam Hussein.

The Galloway affair was triggered when a reporter happened upon a slim, blue folder at one of the 23 Iraqi ministries--a snowflake in the avalanche of information loosed by the removal of Saddam Hussein from power. Some of the regime's records no longer exist. Iraqi officials destroyed some before the war began. Coalition bombs wiped out others. Looters made off with more. Still, Bush administration sources say they have recovered enough Iraqi government and Baath party documents to fill 100 semi-trailers. "We're overwhelmed with information," says one Pentagon official. "It's going to take a long time to go through it all."

That process is just now beginning--a fact that is surely rattling nerves around the world.

IRAQ IS WINNING the battles in the propaganda war with a modest media strategy, despite a multi-million dollar U.S. campaign featuring painstakingly choreographed briefings and Hollywood-style sets. Undeterred by America's elaborate media plan, Iraq is making its mark on the airwaves with its decidedly basic approach, media pundits say.

From a crude Baghdad set, Iraqi ministers each day knock down Western media reports and list their latest claims of conquest, sometimes wielding chrome-plated Kalashnikovs. Unlike America and its allies, theirs is a simple message delivered directly: "We will defeat the infidel invaders."

Despite poorly-lit surroundings and a sea of microphones often crowding the view, Iraqi Information Minister Mohammed Saeed al-Sahaf has become something of a global television star . . .

Those words came from Reuters' European media reporter Merissa Marr on April 1, 2003, in a news report that despite the dateline apparently was not a parody. Marr either did not know or chose to ignore a crucial fact: Scores of journalists throughout the Arab world and Europe were on Saddam Hussein's payroll.

"For years, the Iraqi leader has been waging an intensive, sometimes clandestine, and by most accounts highly effective image war in the Arab world," wrote Wall Street Journal reporters Jane Mayer and Geraldine Brooks in an exposé published February 15, 1991. "His strategy has ranged from financing friendly publications and columnists as far away as Paris to doling out gifts as big as new Mercedes-Benzes."

That campaign continued until days before the regime was deposed. "If they're not bought and paid for, they're at least rented," says a top national security official, who adds that the administration has intelligence implicating big-name journalists throughout the Arab world and Europe.

"I could give you lots of names," says Tareq al-Mezrem. "Everyone knows them on the street. Everyone knows this information."

In a series of interviews conducted in Kuwait City and Washington in recent weeks, Arab journalists and media experts said the same thing. Several of those interviewed, with assurances of confidentiality, provided names, lots of them. If their reports are accurate, the Iraqi regime's "modest media strategy" so appealing to Reuters' Marr was actually an elaborate scheme to buy victory in the propaganda war with the United States.

"To lots of people, Saddam Hussein and his regime was a godsend," says a Washington-based columnist for a prominent Arabic-language newspaper. "Only a few journalists [in the Arab world] didn't take money from him."

Estimates of Saddam Hussein's personal fortune range from $2 billion to $40 billion. Over the past two weeks, coalition soldiers found nearly $800 million in U.S. cash stashed in a high-rent Baghdad neighborhood. With that kind of money at his disposal, it's no wonder Saddam Hussein could buy journalists in countries like Jordan, where the average per capita income is $1,630.

The boxes of money found in Baghdad last week were tied with ribbon stamped "Bank of Jordan," which doesn't surprise Salama Nimat, who spent much of his career exploring the shady financial ties between Saddam and the Jordanian elite.

At the beginning of the Iran-Iraq War, Nimat explains, Saddam Hussein began cultivating the political and business establishment in Jordan. Encouraged by Washington's support of the Iraqi government, Jordan increased trade and diplomatic relations with Saddam. Fifty percent of Jordan's exports went to Iraq, trade facilitated by sweetheart deals between the regime and family members of leading Jordanian politicians and journalists.

At the same time, Saddam began to realize the importance of good press. "Media people were paid monthly by the Iraqi embassy in Amman," says Nimat, "in cash. They were also given presents, like cars and expensive watches." And Saddam built a "housing complex for the Jordanian Press Association" in Amman, according to Nimat, at a cost of $3 million.

Saddam bought good press in less obvious ways, too. "He would award big contracts to newspapers in Jordan to publish all sorts of stuff, like Iraqi schoolbooks and other things," says Nimat. "The contracts were worth millions, and no one ever found out if they ever printed the books. No one cared."

Saddam got what he wanted. His atrocities mounted, but newspapers in Jordan--even those that offered pointed critiques of Jordan's King Hussein--would print nothing critical of Saddam Hussein.

"It's been going on for almost a quarter century," says Nimat. "In the newspapers in Jordan, you wouldn't have seen anything negative about Saddam Hussein. I don't want to generalize too much, but many of the editors were bought by the regime."

"What Saddam did in Jordan, he did in other poor countries in the region like Egypt and Yemen and Mauritania," says Nimat.

One "top Egyptian editor" told the Wall Street Journal back in 1991 about a conversation he had with Saddam. "I remember his saying, 'Compared to tanks, journalists are cheap--and you get more for your money.'"

MANY OF THESE CORRUPT PRACTICES are confirmed in a CIA report entitled "Baghdad's Propaganda Apparatus" obtained by THE WEEKLY STANDARD. The report indicates that the Iraqi regime redoubled its information efforts in 1998.

"Iraqi propaganda themes are delivered effectively and resonate with many worldwide audiences and with those in the region predisposed to anti-US messages," the report says. Saddam Hussein personally supervised the effort, keeping "close control over the messages and delivery mechanisms."

The Iraqi Intelligence Service, in coordination with the Ministry of Information, ran the propaganda operation, according to the report. Written before the regime fell, the report claims the Ministry of Information was "focused on determining the stories to be pushed, and assigning Iraqi resources overseas to conduct media operations," while "the IIS participates in the internal decision-making process, recruits media and other assets, delivers propaganda material and instructions to them, and provides payoffs. A variety of reporting indicates that journalists in the Middle East and Europe have been recruited to assist Iraq."

In July 1998, "a committee was formed to improve Iraqi propaganda in the region. It would establish relationships and provide financial support to Arab journalists . . . as well as other Arab journalists in Europe. The Iraqi Intelligence Service, which sat on the committee, was instructed to increase financial support to journalists controlled by Iraq."

Two years later, apparently not satisfied with the work of the existing propaganda mechanism,

Saddam created another committee under [Tariq] Aziz, to expand and improve media operations worldwide . . . by financing . . . friendly newspapers and other media outlets, giving the owners and workers awards and monthly salaries, and bringing them to Baghdad to coordinate. The Ministry of Culture and Information, IIS, Baath Party and the Iraqi Press Association, which is headed by Uday Husayn, were represented on the committee.

In early 2001, Uday Hussein dispatched the editor of his newspaper Babil to Lebanon, on orders to recruit additional propagandists. The editor was to invite Lebanese journalists to Baghdad, where they would receive instructions on story content and their payoffs. Uday, the CIA report concluded, "was trying to rebuild relations with Lebanese media and convince them to create propaganda for Iraq in return for large sums of money. He also wanted to encourage some to work for his new satellite channel."

The Iraqi Ministry of Information, according to a report on an unnamed Arab nation, "pays substantial sums of money to the principle daily newspapers . . . and gives expensive gifts, such as costly cars and special printing contracts, to their editors."

In an April 2, 2003, speech in New York City, British home secretary David Blunkett complained about Arab journalism. "It's hard to get the true facts if the reporters of Al Jazeera are actually linked into, and are only there because they are provided with facilities and support from the regime." The accusation caused a minor stir in Britain, with several scathing editorials in left-wing newspapers calling for Blunkett's head.

In fact, he may have simply revealed something that wasn't meant for public consumption. According to the CIA report, "Saddam's son Uday . . . assigned a writer, closely associated to him, Rahim Mizyad, as the correspondent to the al-Jazirah satellite television channel. Mizyad also is head of several weekly newspapers in Iraq and General Press Coordinator of all Iraqi governates, but Uday oversees his work."

SALAMA NIMAT, the Jordanian journalist, says it's not just Arab journalists who took money. "The Western media has been playing the game, too, including Americans."

In Dearborn, Michigan, one radio station has for years broadcast a weekly, two-hour pro-Saddam program. According to Iraqi Americans who monitored the broadcasts, each program began with the Baath party anthem.

Ismail Mansour, a Pentagon-trained Iraqi American working with coalition forces in Iraq, says the regime's money reached well inside the United States, going to journalists and others. "In America, Saddam friends give money and they make protest," he says. "In the Arab world, it's the same thing. They pay money to do that."

One of those "Saddam friends" is Shakir al-Khafaji, an Iraqi-American businessman from Detroit. Since 1992, al-Khafaji has served as president of the regime-backed Expatriate Conferences, held in Baghdad every other year. The government provided subsidized travel for Iraqis living outside of the country.

On October 17, 1992, the official Iraqi News Agency reported on the activities of that year's session, "Our Roots Remain in Iraq Wherever We Are." Iraqi prime minister Muhammed Hamza al-Zubaydi spoke of the United States and its coalition partners in Operation Desert Storm as Iraq's "enemies" and "referred to the U.S.-led aggression, saying it meant to hamper the country's progress by trying to overthrow the government, destroying Iraq's infrastructure and harming its national and historical unity."

The news report continues, "In their final statement, the participants pledged to exert efforts to lift the embargo imposed on Iraq and to foil the enemies' attempts to divide Iraq and interfere in its internal affairs." The participants sent Saddam Hussein a telegram of support, promising "to do their utmost to defend justice, peace and freedom, especially at this time when the Iraqis are suffering from sanctions. The expatriates said they lived days of love, work and true dialogue to reach means of serving the motherland, and convey its message of civilization sincerely to [their] countries of residence." Al-Khafaji called the gathering "a sincere and faithful response to our motherland."

At the 2000 Expatriate Conference, according to a report in the Jewish newspaper Forward, Al-Khafaji appeared on stage with Tariq Aziz, who was then foreign minister. The pair railed about economic sanctions, which they said were starving the Iraqi people. The official conference website accuses the United States of "terrorism and genocide" in Iraq.

A group of Iraqi opposition figures, alarmed by the rise of the regime-sponsored expatriate organizations, published a letter in London's Al Zaman newspaper on June 13, 2000. They warned that the expatriate groups existed "to throw dust in people's eyes . . . and convince Iraqis abroad that their actions are purely humanitarian and that their only objective is to remove the blockade imposed on our people. In time, however, they revealed themselves to be offshoots of the regime's intelligence services." The opposition warned that "these associations pose a threat to Iraqis abroad and particularly to the dissidents among them, since they spy on their activities and gather information about them which is sent to Iraq and used to threaten their families that are still in the homeland."

Al-Khafaji first came to public notice after revelations that he gave former U.N. weapons inspector Scott Ritter $400,000 to produce a film that criticized the United States for its role in the inspection process. Al-Khafaji, who is listed as a "senior executive producer" of the film, arranged meetings for Ritter with high-level officials in Saddam's government, a feat New York Times magazine writer Barry Bearak found "impressive." Ritter had previously been an outspoken critic of Saddam Hussein, and issued dire warnings about the status of the Iraqi dictator's weapons of mass destruction. His sudden flip--he is now a leading apologist for Saddam's regime--and revelations about Ritter's 2001 arrest for soliciting sex with minors have fueled speculation about the nature of his relationship with al-Khafaji.

Al-Khafaji has long claimed that he cares only about the Iraqi people, an assertion too preposterous even for Ritter, who told THE WEEKLY STANDARD in 2001 that his patron was "openly sympathetic with the regime in Baghdad." That stands to reason. The Falcon Trading Group, a company that al-Khafaji founded in 1993 in Johannesburg, South Africa, has done nearly $70 million of business with Saddam's regime.

Al-Khafaji told Baghdad Radio on June 14, 2000, that he hoped to arrange a delegation so that members of the U.S. Congress could "get acquainted with the Iraqi people's suffering as a result of the unjust embargo clamped on it." He got his wish two years later, when he accompanied Reps. Jim McDermott, Jim Thompson, and David Bonior to Baghdad last fall.

McDermott, in particular, caused quite a fuss when in a September 29 appearance on ABC's "This Week" from Baghdad, he claimed, "The president of the United States will lie to the American people in order to get us into this war." Moments later, despite 12 years of evidence that the Iraqi regime had lied about its weapons program, McDermott said, "I think you have to take the Iraqis on their face value."

The same day, Babil ran a brief item in its local news section. "Saddam Hussein received cable of support from Shakir al-Khafaji, president of the 17th Iraqi Expatriate Conference, on behalf of Iraqis who are living abroad."

The members of Congress returned to the United States facing intense criticism, and quickly sought to reassure an angry public that the objective of their mission was, in Bonior's words, "to impress upon the Iraqi government and the people of Iraq how important it was for them to allow unconditional, unfettered, unrestricted access to the inspectors." He reiterated the point at an October 2 press conference, telling reporters, "The purpose of our trip was to make it very clear, as I said in my opening statement, to the officials in Iraq how serious we--the United States is about going to war and that they will have war unless these inspections are allowed to go unconditionally and unfettered and open. And that was our point."

Of course, no one can say what the congressmen's motives were for their trip. But judging from a press release the trio issued before they left, on September 25, it's clear it wasn't to secure unfettered inspections. Although the congressmen warned about the "dangerous implications of a unilateral, preemptive strike," they didn't mention inspections once.

On October 25, McDermott received a check for $5,000 from Shakir al-Khafaji. The money, first reported by Amy Keller in Roll Call, had been deposited in an account for the McDermott Legal Expense Trust, a fund the congressman set up to pay legal bills in a lawsuit brought against him by Rep. John Boehner. (In 1996, McDermott had released to the media the transcript of a phone conversation between Boehner and Newt Gingrich, taped by a Florida couple.)

No one has accused McDermott of being a mouthpiece for Saddam Hussein simply for financial reasons. Indeed, McDermott has been saying stupid things for years with no evidence anyone has paid him to do so. A spokesman for McDermott says he "doesn't know off the top of [his] head" whether McDermott has plans to return the money.

The formidable task of sifting through the mountains of documents Saddam's regime left behind is only beginning. Many of the answers at this point are obscured by more questions.

But George Galloway most assuredly wasn't the only person lining his pockets by defending Saddam Hussein. Journalists and diplomats and businessmen have been doing it for years. Their stories will be told.

Stephen F. Hayes is a staff writer at The Weekly Standard.

Correction: This is a corrected version of the original piece. For further explanation, click here.