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Iraq: Lawless by Fiat? November 11, 2003

Posted by worldspectacle in Uncategorized.
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WASTE, FRAUD AND ABUSE

“American companies are barred by law from paying bribes or taking kickbacks abroad. But Iraq is still largely a lawless place. And one company director for a British firm doing business in Baghdad says that makes all the difference. ‘I’ve never seen corruption like this by expatriate businessmen. It�s like a feeding frenzy,’ he says. One prominent Iraqi businessman said he was told he’d have to raise his bid by $750,000 to get a major contract, so long as he kicked back that amount to the contractor’s rep. The businessman refused to identify the contractor, but did say, ‘No Iraqi would ask for a bribe that big.’ NEWSWEEK witnessed such behavior directly: An Iraqi-Anglo joint venture did a relatively small job in the magazine’s Baghdad bureau. When a final price had been agreed, the company’s Iraqi manager said, ‘Shall we add a commission of 10 percent?’ Commission? ‘Well, you would keep that of course,’ he said. In other words, a kickback. When NEWSWEEK declined, he said, ‘You’re the first one who didn’t want a commission.’ … “- Newsweek, November 3, 2003.

The “feeding frenzy” of corruption that Newsweek describes may be due, in large part or in its entirety, to Executive Order 13303, “Protecting the Development Fund and Certain Other Property in Which Iraq Has an Interest,” which was signed by President Bush on May 22, 2003.

On August 8, 2003, Ruth Rosen of the San Francisco Chronicle summarized this order as follows:

“[T]he president’s order appears to place U.S. corporations above the law for any activities related to Iraq oil, either in that country or in the United States. It also declared a national emergency as the justification for sweeping aside all federal statues, including the Alien Tort Claims Act, and appears to provide immunity against contractual disputes, discrimination suits, violations of labor practices, international treaties, environmental disasters and human rights violations. Even more, it doesn’t limit immunity to the production of oil, but also protects individuals, companies and corporations involved in selling and marketing the oil as well.”

To criticism of the order from the Government Accountability Project and other watchdog organizations, the Administration has countered that the intent of the executive order would become clear once regulations being drafted by the Treasury Department were issued. However, I was unable to find on the Treasury Department website any mention that regulations have ever been considered or issued.

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