by Sally Denton
CHAPTER TWENTY-ONE
Ultimate Insiders
Brash and striving, wealthy and connected, Donald H. Rumsfeld would be the latest incarnation of the well-oiled revolving door, moving seamlessly among the worlds of government, business, politics, and intelligence. As a “young pup,” he had worshipped at the “feet” of economist Milton Friedman and the “cluster of geniuses” that surrounded him. By that winter of 1983, Rumsfeld had risen to power from well-heeled beginnings in a Chicago suburb, of solid German stock and with a Princeton education, a stint as a navy pilot, and four terms in Congress beginning when he was just thirty years old. Short and sturdy, he had elbowed his way into the highest corridors of power, becoming Nixon’s ambassador to NATO and Ford’s secretary of defense, where he indulged a “preference for uniformed right-wing tyrants” throughout the world, according to former national security advisor Roger Morris. He had then parlayed those government sinecures into a multimillion-dollar corporate career as head of a worldwide pharmaceutical empire. When Shultz tapped him to do Bechtel’s bidding in Iraq, Rumsfeld was installed in the private sector as president, chairman, and CEO of the Illinois-based G. D. Searle & Company, the manufacturer of oral contraceptives, the artificial sweetener Aspartame, and nuclear medicine imaging equipment.
In 1983 Iraq and Iran were still embroiled in a brutal armed conflict that had begun three years earlier when Iraq invaded Iran in a ground assault. The two countries had a long history of border disputes, but the current war was fueled by Iran’s Islamic revolution that had spurred the ousting of the Shah—a proxy for US interests in the Middle East—and his replacement by the anti-American radical cleric Ayatollah Ruholla Khomeini. The vicious war, in which Saddam Hussein was using chemical weapons against Khomeini in violation of international law, had jeopardized the flow of oil out of the region. “After the Iranian revolution, Bechtel had been booted from Iran by the Ayatollah,” as one account described the geopolitical conflict of the region. “To counter this ungracious exile, Bechtel warmed once again to its old friends in Iraq.”
Reportedly sent to the Middle East in December 1983 in response to the recent terrorist bombing of an American military facility in Lebanon, Rumsfeld’s top secret detour to visit Saddam in Iraq would remain classified for the next twenty years. He was the highest-ranking US official to visit Iraq since 1967, when Iraq and other Arab nations severed ties with the United States over American support of Israel in its successful Six-Day War against Egypt, Jordan, and Syria. The third Middle East envoy in three years—succeeding Bechtel consultant Habib—Rumsfeld, as an “unpaid government employee,” told a skeptical press that he “simply wanted to be helpful.” Despite Shultz’s receiving intelligence reports of “almost daily use of CW [chemical weapons]” by Iraq, he gave Rumsfeld the authority to convey to the “Butcher of Baghdad” US willingness to help his regime and restore full diplomatic relations. “We believed the Iraqis were using mustard gas all through the war, but that was not as sinister as nerve gas,” an ex-army intelligence officer told the British newspaper the Guardian. “They started using tabun”—a nerve gas. Still, Reagan signed a secret order instructing the administration to do “whatever was necessary and legal” to prevent Iraq from losing the war even though Israel maintained a vital interest in preventing its belligerent enemy Iraq from defeating Iran.
Shultz beckoned his old buddy Donald Rumsfeld for a sensitive and covert State Department assignment. While the ostensible goal of Rumsfeld’s visit to Baghdad was to improve relations with Iraq, the primary impetus was to entice Saddam to allow Bechtel to build an oil pipeline across Iraq, from Kirkuk to the port of Aqaba on the Red Sea—in a clandestine mission that would remain secret for years. Bechtel’s $2 billion project had the full support of the US government, and Rumsfeld’s ninety-minute meeting in Saddam’s palace was focused on convincing the Iraqi dictator to allow an American company access to Iraq’s gigantic oil fields—the second-largest reserve in the world. “Acting as a special White House ‘peace envoy,’ allegedly to discuss with Hussein and then–foreign minister Tariq Aziz the bloody war between Iran and Iraq, Rumsfeld turns out . . . to have been talking not about that war, but about Bechtel’s proposed Aqaba pipeline,” according to an account of a State Department memo declassified in 2003.
Wearing military fatigues and with a pistol on his hip, Hussein expressed his concerns to Rumsfeld about the proximity of the pipeline to Israel, and the possibility that Israel would bomb it as it had Iraq’s nuclear reactor. “I said I could understand that there would need to be some sort of arrangement that would give those involved confidence that it would not be easily vulnerable,” Rumsfeld wrote in the memo.
In fact, it was “the revolving door between Bechtel and the Reagan administration that drove US-Iraq interactions,” a report based on declassified government documents and internal Bechtel memoranda concluded twenty years later. That Institute for Policy Studies (IPS) report, titled Crude Vision: How Oil Interests Obscured U.S. Government Focus on Chemical Weapons Use by Saddam Hussein, exposed how the Bechtel-influenced Reagan administration “shaped and implemented a strategy that has everything to do with securing Iraqi oil exports” . . . and “bent many rules to convince Saddam Hussein to open up a pipeline.” Jim Vallette, one of the authors, called it a “sordid tale” in which the highest levels of the US government “focused on getting a pipeline built from Iraq to Jordan on behalf of the extremely well-connected corporation Bechtel.” At the same time, “Hussein’s troops were dropping thousands of chemical bombs on the Iranians in the midst of the Iran-Iraq war.” But Rumsfeld—called “a bagman for Bechtel” by Vallette and a “ruthless little bastard” by Nixon—made no mention of Iraq’s use of chemical warfare, instead impressing upon Saddam the US desire to help Iraq increase its oil exports.
“As Saddam was gassing the Kurds, Rumsfeld, acting as a special envoy for Reagan, turned up on the dictator’s doorstep,” reported the Village Voice. He met with Hussein and “went on to talk glowingly about great opportunities for the future”—and Bechtel’s proposed pipeline, wrote an investigative television producer. Rumsfeld did not chastise Hussein for his illegal use of chemical weapons or for his pursuit of a nuclear bomb. “He was there to beg the dictator’s indulgence on behalf of Bechtel’s dream pipeline to Aqaba.”
Shultz’s department orchestrated the initial discussions with Iraq, inviting Bechtel executive Parker Hart to Washington to meet with the State Department’s policy planning council. Hart told his Bechtel colleagues that the meeting took place “at State’s invitation” to discuss Bechtel’s pursuit of the pipeline project. “Out of public view, State Department officials pushed the pipeline project on behalf of their boss’s former company, Bechtel,” according to the report.
Behind the scenes, Shultz’s closest advisors “composed Donald Rumsfeld’s pipeline pitch to Saddam.” Shultz would maintain that he was shielded from the pipeline negotiations, writing in his memoir that all reports on the project “were withheld from me at the time, as it appeared that the Bechtel Corporation might have a role in such a project, and I had totally removed myself from knowledge of any matter that involved Bechtel.” The same cannot be said of the department he headed. A secret State Department cable entitled “Briefing Notes for Rumsfeld Visit to Baghdad” reveals that Shultz’s State Department essentially provided assurance that US financing of the Aqaba pipeline was a fait accompli. “The problem now is for Iraq, Jordan, and the company [Bechtel] to settle the technical issues so that the company can make a formal presentation [to Ex-Im Bank],” it reported. The cable also makes reference to Saddam’s “support and sanctuary for the Abu Nidhal [sic] terrorists” and his use of chemical weapons. Nidal founded the Palestinian terrorist group Fatah and was responsible for a string of terrorist acts, including atrocities in Europe. Still, Shultz directed Rumsfeld to convince the Iraqis that “U.S. interests in improving U.S.-Iraq ties ‘remain undiminished’ despite [those] revelations.”
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nbsp; Shultz “may not have directly promoted the Aqaba pipeline, but his pursuit of diplomatic relations with Saddam Hussein clearly paved the way for Bechtel to do business in Iraq,” as one account described his role. For its part, Bechtel published a denial of Shultz’s participation in the pipeline on its company website. Dated April 29, 2003: “Contrary to mistaken critics, he played no role as secretary of state in promoting a Bechtel pipeline project in the 1980s.” Bechtel wrote further: “Aiming to safeguard U.S. economic security, the administration backed several alternative pipelines, not just the Aqaba proposal. Secretary of State George Shultz, former president of Bechtel, properly recused himself from the matter and at no time promoted the Aqaba pipeline, contrary to recent reports based on a demonstrably mistaken reading of the documentary record.”
Intended to carry a million barrels per day of Iraqi oil exports, the Bechtel pipeline financing would include $500 million of US-taxpayer-backed loan guarantees. Weinberger and others in the Reagan White House lobbied the Export-Import Bank to finance the pipeline. “Stocked as it was with Bechtel loyalists,” as one reporter described it, “the Ex-Im Bank didn’t need much prodding from above,” but the State Department’s intervention on behalf of Saddam and Bechtel “put the project on the fast track.” Even Vice President George H. W. Bush interceded personally, calling a former Yale University classmate—Ex-Im Bank chairman William Draper III—to tell him it was imperative that Ex-Im finance the Bechtel-built pipeline.
Meanwhile, Bechtel applied for $85 million in political risk insurance from the Overseas Private Investment Corporation (OPIC)—what Republican senator Wayne Allard called contemptuously “an insurance company run by the U.S. federal government for corporations who want to invest in risky political situations”—and Reagan’s National Security Council pressured OPIC to back Bechtel’s pipeline with guarantees. “Bechtel, U.S. government officials, and their well-connected agents shuttled between Washington, Jerusalem, Baghdad, and Amman for dozens of meetings aimed at cementing the pipeline deal,” according to one account.
“I cannot emphasize enough the need for maximum Bechtel management effort at all levels of the U.S. government and industry to support this project,” a Bechtel executive pressed his colleagues in an internal company memo when it appeared that Rumsfeld’s diplomacy efforts were bearing fruit. “It has significant political overtones. The time may be ripe for this project to move promptly, with very significant rewards to Bechtel for having made it possible.” Bechtel had ramped up its pressure on Saddam, recruiting two more high-level US intelligence officials: former CIA director James Schlesinger and former national security advisor William Clark.
Corporate and government documents that were later released revealed “the ways in which oil interests . . . became entwined with ‘national security’ objectives under Reagan.” Reagan and Bechtel officials “worked hand-in-glove to gain access to Iraq’s massive oil reserves, even in the face of conclusive evidence that Saddam’s forces were unleashing weapons of mass destruction.” Thanks to the symbiotic relationship between Bechtel and the government, the “company was virtually an unofficial expediter of U.S. policy, so close to Washington’s thinking were its executives,” wrote Alan Friedman, the global correspondent for the International Herald Tribune.
For his part, Rumsfeld justified the machinations and took credit for the reestablishment of US-Iraq diplomatic relations that occurred shortly after his Baghdad meetings. “Whatever misgivings we had about reaching out to Saddam Hussein, the alternative of Iranian hegemony in the Middle East was decidedly worse.” The success of his efforts was seemingly confirmed when, less than a month after Rumsfeld’s second trip to Baghdad, Reagan issued a top secret national security directive ordering Shultz, Weinberger, and Casey to “prepare a plan of action designed to avert an Iraqi collapse.” If still overtly “neutral” in the Iran-Iraq war, US foreign policy had officially, covertly, shifted. “I hope they kill each other,” Kissinger quipped. “Too bad they both can’t lose.”
Rumsfeld’s role as Bechtel’s chief lobbyist in Iraq was secret for twenty years, until the Washington Post published declassified government documents detailing his mission. The 2002 revelations were met with extensive criticism. Rumsfeld dismissed the condemnation as absurd. “My meeting with Saddam . . . has been the subject of gossip, rumors, and crackpot conspiracy theories for more than a quarter century,” he wrote in his memoir. “Supposedly I had been sent to see Saddam by President Reagan either to negotiate a secret oil deal, to help arm Iraq, or to make Iraq an American client state. The truth is that our encounter was more straightforward and less dramatic.” Although Rumsfeld would claim that he cautioned the Iraqi leader against using chemical weapons, there was “no mention of such a warning in the state department notes of the meeting,” according to the Guardian.
Rumsfeld’s ambassador-at-large petitioning on behalf of Bechtel’s pipeline would not be the end of the Aqaba pipeline intrigues, which would ultimately become the focus of an independent counsel’s bribery investigation. But many more maneuverings would occur first. “No one seemed concerned about weaving these obvious conflicts of interest into the peace process in the most volatile region of the world,” a New York Times columnist would observe about what he described as the “ultimate insiders.”
CHAPTER TWENTY-TWO
A Witch’s Brew
“Jews were overly sensitive about gas due to their experiences during World War II,” Jonathan “Jay” Pollard’s superior officer laughed when Pollard asked why the Defense Department was withholding intelligence information from Israel about Saddam Hussein’s development of a nerve gas factory. The remark spurred the US Navy analyst to action. “To Pollard, that comment was akin to stabbing his heart with a dagger,” wrote an author who followed the Pollard spy case. “The US Navy, like many other naval establishments around the world, was the last refuge of the patrician bigot,” Pollard would write.
Pollard’s “short but intensive espionage career,” as the CIA described it, began officially in late June 1984. Over the next eighteen months, he passed classified material to Israel concerning military developments in several Arab countries. Israel was facing a “technological Pearl Harbor,” his handler told him, as it was being surrounded by enemy states armed with chemical, biological, conventional, and nuclear weapons. Among the first documents that Pollard provided Israel were “the details of Iraq’s chemical warfare factories,” according to Wolf Blitzer who, as a reporter with the Jerusalem Post, conducted an exclusive interview with Pollard.
The spy who would become Weinberger’s antagonist thought that the defense secretary suffered from an “Amalek complex,” in which, because of his Jewish ancestry, he has a “pathological need for self-denial” leading to a hatred of Jews and Israel. Whatever the provenance of Weinberger’s fervent and unabashed hostility toward the Jewish state, it was that enmity that incited Pollard, a devout Jew, to become a spy for Israel. Ever mindful of his Jewish roots, Pollard was alarmed when Weinberger initiated a tacit intelligence embargo against Israel after Israel bombed Iraq’s nuclear facility in June 1981, in the world’s first air strike against a nuclear reactor.
The CIA, under the direction of William Casey—who was the first CIA director to attend White House meetings as a full Cabinet member—had overseen the covert transfer to Iraq of US-manufactured weapons in violation of international conventions (and despite Iraq’s official status as a terrorist state). Like Casey, Weinberger, as Pollard saw it, was obsessed with redirecting “the focus of American strategic concern and commitment away from Israel and toward Saudi Arabia and the various Persian Gulf sheikdoms.” While Shultz and Weinberger led the secret foreign policy shift toward Iraq, the bloody war escalated, with Israel watching America’s changing foreign policy with trepidation.
When, in November 1983, a classified presidential directive removed Iraq from its list of countries that sponsored terrorism, private American suppliers began exporting what one account de
scribed as “a witch’s brew of biological and chemical materials to Iraq”—all licensed by the Reagan administration’s Commerce Department. “It wasn’t just a tilt toward Iraq,” ABC News reporter Ted Koppel observed, “it was an opening of the floodgates.”
Pollard saw this new foreign policy as a betrayal of Israel by the United States. In his position as a naval intelligence specialist with a “higher-than-secret clearance, he was aware of information collected by various United States intelligence branches that he believed was critical to Israel’s survival,” a family member wrote later. But the most shocking and terrifying information of all—the intelligence that clinched his decision to offer Israel his services as a spy—was the evidence that Bechtel was in the planning stages to build a giant petrochemicals complex in Iraq called PC2. Located about forty-four miles south of Baghdad, near the natural gas feeder lines running from the southern oil fields, the project was estimated to cost over $2 billion and “was to be the pride of the Iraqi military establishment,” wrote Alan Friedman. However, it had been delayed because of the Iran-Iraq war. “Western intelligence agents knew although PC2 would manufacture normal petrochemicals, upon completion, like many of Saddam’s disguised operations, it would be dual-use. This meant it would be able to generate chemical compounds needed to make mustard gas and nerve gas as well.”
