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French Version

Neocons at work : Israel gets its 1st slice of Iraqi pie

some US political playmakers seem keen to help jewish state penetrate arab world
Saddam Hussein’s ouster offers way around obstacles, via business deals if necessary,for Israeli interests to be promoted


Long before the American neoconservatives led by Richard Perle, Douglas Feith, Dick Cheney and others became the ideological soul of the Bush administration, their intention was to make Israel unassailable.

The cataclysm of Sept. 11, 2001, allowed them to put that plan into action. Overthrowing Saddam Hussein and eliminating one of Israel’s most implacable foes was a key objective. Once that was achieved, the new, US-controlled Iraq could be used to help Israel penetrate the Arab world, if not by diplomatic recognition then by other means.

So it did not come as a surprise last week when the Israeli media reported that Israel’s Sonol fuel company is supplying US forces in Iraq with 25 million liters of refined fuel a month under a $70 million-$80 million contract. The contract was awarded by Kellogg Brown & Root (KBR), a subsidiary of Halliburton, whose dealings in Iraq under the Bush administration have stirred great controversy, not least because Cheney is its former CEO.

Iraq has the world’s second largest oil reserves after Saudi Arabia, but occupation forces have to import refined fuel because of the constant sabotage of oil installations and pipelines and because of poor maintenance of refineries over the years, particularly during the 12 years of UN sanctions that ended once Saddam was overthrown.

The deal with Sonol, one of Israel’s largest oil-product marketing firms, is the first known commercial link between Israel and Iraq since US-led forces toppled Saddam in April 2003. But there may well be others, because Israeli companies have been trying to find a way around political roadblocks that prevent them from operating in Iraq under US cover.

There is a more far-reaching element involved in Israeli efforts to build ties with Iraq, which under Saddam was one of its most vociferous enemies: reaching out to the wider Arab world as it started to do after the 1993 Oslo Accords with the Palestinians.

The Sonol deal has emerged following months of backroom lobbying by Israeli business interests in Washington with the Bush administration for access to Iraq’s multi-billion-dollar reconstruction program. For political reasons, the administration and the Coalition Provisional Authority (CPA) in Baghdad have excluded Israeli firms as main contractors in the vast array of projects under way in Iraq. The Israelis have accepted that. But they have been pressing hard for subcontractor deals, and the Sonol contract could be the first.

Richard Boucher, the State Department spokesman, recently gave an indication that this was the Israelis’ way in. There were, he said, “very few restrictions on subcontractors.”

The State Department oversees the reconstruction program, but Boucher added that the International Monetary Fund (IMF) and World Bank have their own rules for tenders in Iraq that might involve companies with Israeli connections. Still, Israel was absent from a December 2003 list of countries eligible to participate in tenders. Israel’s exclusion was to avoid antagonizing the Arab world, which is already hostile to US policy in the Middle East.

Israel’s desire to exploit US control of Iraq became abundantly clear in early 2003, when Israel’s finance minister, Benjamin Netanyahu, annulled a long-standing prohibition on Israeli companies trading with Iraq, opening the door for possible business following Saddam’s removal.

Dozens of companies began procedures to export to Iraq. In August 2003, Israel’s Export Institute organized a one-day conference in Tel Aviv on how to do business in Iraq.

Since then the Israelis have been looking for loopholes. One route is to join up with foreign companies that are acceptable to both the Americans and the US-appointed Iraqi Governing Council.

Jordanian and Turkish companies that have experience doing business with Iraq are favored, but firms from other countries which supported the US invasion of Iraq, such as Australia, Britain and Spain, are also being targeted.

Israeli companies, particularly in the field of agriculture, have made significant, albeit discreet, inroads into the Muslim republics of Central Asia since the Cold War ended in 1991. The corporate structures they have built there, particularly in relation to Caspian Sea oil, could also be useful when it comes to getting into Iraq by the back door. Turkmenistan and Azerbaijan in particular are closely allied with Israeli commercial interests and Israeli military intelligence.

Some time before the 2003 invasion of Iraq, Jewish lobby groups in Washington, seeing the possibility of strengthening Israel’s relations with the Arab world, initiated contacts with the Iraqi National Congress (INC), the umbrella organization for a variety of groups opposed to Saddam and which was backed by the Pentagon. These contacts were encouraged by the administration’s neocons.

Among the key INC people they dealt with were the organization’s leader, Ahmed Chalabi, and the director of the INC’s Washington office, Entifadah Qanbar. They encouraged the Jewish groups to believe that once Saddam had been eliminated, good relations with Israel were possible. In that, they were recklessly optimistic.

Iraqi hostility toward Israel pre-dated Saddam by several decades and anyway it became clear once Saddam had been ousted that Chalabi and his cohorts, most of whom had lived in exile for decades, were not popular in postwar Iraq and were unlikely to hold high office. Intelligence they provided to the Americans before, and even after, the invasion proved to be deeply flawed and often dangerously misleading.

In the meantime, Israel is more tightly involved in Iraq on the security front. A delegation from Israel’s foreign intelligence service, Mossad, reportedly visited Baghdad in August 2003 to coordinate anti-terrorist efforts with the Americans.

US forces have consulted the Israelis on counterinsurgency strategies and urban warfare, and the results of this have been that US military operations have begun to look increasingly like Israeli operations in the West Bank and Gaza Strip ­ hardly likely to encourage Iraqis to deal with Israel.

There have been suggestions in Israel that an old oil pipeline built during the British Mandate in Palestine, from the Kirkuk oil fields in northern Iraq to the port of Haifa on the Mediterranean, could be rebuilt, opening a new export route from Iraq to Western Europe and the US as well as providing Israel with its fuel requirements. The pipeline, which ran through Jordan, was closed in 1948 when Israel became a state. The Jordanian section was sold for scrap years ago.

Politically, reviving that oil route seems to be non-starter. It would antagonize most Iraqis and the Arab world at large. It would also become a target for saboteurs, just as Iraq’s other pipelines are now. But the idea continues to be kicked around in Washington and Jerusalem.

The Middle East Economic Survey, a highly respected Cyprus-based oil industry newsletter, reported as recently as July 3, 2003, that an Israeli oil delegation had held secret talks with Kurdish leaders in northern Iraq to examine the possibility of reactivating the pipeline ­ presumably if the Kurds establish an independent state that incorporates the Kirkuk oil fields which the Kurds have long claimed as theirs.

In the early 1970s, the Israelis, with CIA backing, supported Iraq’s Kurds in their separatist war against the Baghdad regime, but abandoned them in 1975 when the Shah of Iran made peace with Iraq and the Kurds became a political liability. No doubt the Kurds have not forgotten that betrayal, but in the final analysis, getting a new state off the ground requires pragmatism rather than passion.

Ed Blanche, a member of the International Institute for Strategic Studies in London, is a Beirut-based journalist who has covered Middle Eastern affairs for three decades. He is a regular contributor to The Daily Star

Beirut,03 29 2004
Ed Blanche
The Daily Star
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