CHALABI, FEITH AND COMPANY: A SORDID TALE

Washington Watch

May 31, 2004

Dr. James J. Zogby ©

President

Arab American Institute

There’s a story behind the story.  And it is a messy tale of deceit, cronyism and corruption.  

Ahmad Chalabi’s apparent falling out with the U.S., and some recent reports indicating that U.S. Undersecretary of Defense, Douglas Feith may be losing influence in the Administration, represent only the latest chapter in their sordid histories and relationship.

Back in 2001, when Feith’s name was first mentioned for the number three position in the Pentagon, I wrote two lengthy articles on his business dealings and his ideology.  Part of the Reagan-era Defense Department neo-conservative group, Feith left government service and trading off of his political contacts, he became a lobbyist and foreign agent, representing Turkey and some Israeli interests as well.  In 1996, Feith, a supporter of the Likud in Israel, co-authored a paper for the Israeli Prime Minister Benjamin Netanyahu advising him to end the Oslo peace process.  When Netanyahu signed the Wye Agreement, Feith broke with him, accusing the Israeli leader of compromising away his values.

Chalabi has a long and well-known history of shady business dealings. His active courting of pro-Israel and neo-conservative groups leading to the passage by Congress of the Iraq Liberation Act of 1998, is also quite well-known.  

So much for their separate histories.

Their relationship blossomed after Feith was confirmed by the Senate and assumed his post at the Pentagon.  Early on, he began, in earnest, to lay out the justification for a war with Iraq.  The funds that Congress mandated in the ILA, had been frozen during the Clinton years.  Early in the Bush term, they were freed up to help finance Chalabi’s activities.  For his part, the Iraqi and his group began to supply Feith’s newly reorganized Defense Department with “intelligence” on Saddam’s weapons of mass destruction progress, and later on, with “information” linking the Baghdad regime to al-Qaeda.

Both men were willing and eager accomplices of each other’s missions.  Both wanted a U.S. war to topple the hated dictator and would, apparently, go to any length to make that happen.

It was Chalabi, among others, who also sold Feith both on the ease with which the regime could be removed and the uprising of support for the U.S. that would immediately follow. It was assessments such as these that provided Feith’s planning office with logic that justified their fatally flawed post-war calculations.

But Chalabi’s fabrications didn’t stop there.  Even during the 1990s, it is now known, he was promising the war’s supporters that his post-Saddam Iraq would establish diplomatic and trade relations with Israel and the U.S.   He and his supporters were, at one point, quoted in the U.S., to the effect that after Saddam, the Russians and French would be out, replaced by U.S. companies who would be contracted to exploit Iraq’s bountiful oil resources.  More quietly, Chalabi was even promising both Israelis and their U.S. supporters that not only would the new Iraq trade with Israel, but it would resurrect the Iraq-Israel pipeline for oil export.  This, of course, was music to their ears.

Shortly after the war began, Chalabi, despite strenuous objection from the State Department and the CIA, was airlifted with his supporters into Iraq.  He immediately began plans to establish a power base in his newly liberated country.

Appointed by the U.S. to a position on the Iraqi Governing Council, Chalabi assumed the role of director of its economics and finance committee.  He was able to place his close relatives and other allies in key ministries and directorships of institutions dealing with Iraq’s banking, finance and oil resources.

The spoils of war were now within his reach.

One of his nephews, Salem Chalabi, chose not to hold a government position.  Instead, he established the Iraq International Law Group (IILG), which describes itself as “your professional gateway to the new Iraq.”  Assisting Salem in setting up the IILG was a partner Marc Zell (the IILG’s website has been registered in Zell’s name).  Zell is an Israeli settler of the Gush Emunim (Bloc of the Faithful) stripe.  Here the plot thickens.

Zell had for many years been Feith’s partner in their Washington-Tel Aviv law firm, Feith and Zell (FANDZ).  FANDZ had been set up when Feith left government to pursue the work of a “foreign agent” representing Turkey and some Israeli interests.

Following the Baghdad opening of the IILG, Zell soon opened, in the U.S., an office for Zell, Goldberg & Co., which promises to assist “American companies in their relations with the U.S. government in connection with Iraq’s reconstruction projects.”  It is interesting to note that Zell, Goldberg still uses the website FANDZ, the site of the old Feith and Zell firm.  So when Zell boasts his connections to government, businesses know exactly what is meant.

In the relatively short period of time since the fall of the Ba`ath Party regime, IILG and Zell, Goldberg have facilitated contracts in the tens, possibly hundreds of millions of dollars.

Salem Chalabi incidentally has also been appointed by the Coalition Provisional Authority to head the Iraqi tribunal that will investigate and prosecute the crimes Saddam and his cohorts committed against the Iraqi people.  His uncle is meanwhile railing against the former regime’s corruption and demanding the right to investigate profiteering and kick-backs he alleges occurred in the UN’s food for oil program.

Surely Saddam should be tried for his crimes and the people of Iraq have a right to have lost revenues restored. But for this effort to have credibility, surely the Iraqi people deserve to be represented by judges and investigators who themselves are credible.

In any case, for reasons unrelated to this sordid web of corruption and cronyism, it appears that Feith and his friend and co-conspirator Ahmad Chalabi have fallen on hard times.

Feith, for example, has been implicated in the Abu Ghraib debacle.  It was his office that had general oversight over post-war planning (and pre-war propaganda).  And it was apparently his office that dismissed the applicability of the Geneva Conventions to the detained of Iraqi prisoners.  Growing displeasure with his work in this regard (Gen. Tommy Franks has been quoted as calling Feith “the. . .stupidest guy on the face of the earth.”) has caused him to be  sidelined. There are also hints he may soon step down from his post.

For his part, Chalabi recently caused some irritation by proudly boasting that it didn’t matter that the intelligence he provided the Pentagon was faulty, because it got the job done. He has also angered his neo-con and pro-Israeli supporters by apparently turning his back on commitments he made to them. He is also now in trouble, having been accused of providing important secrets to Iranian intelligence.  His home was recently raided by U.S. and Iraqi forces.

What is intriguing is that in all the recent U.S. media coverage of the changing fortunes of both Feith and Chalabi, there is very little mention made of the questionable business dealings by those closely connected to them.  Only a handful of reporters have actually dug deeply into this story.

Both Feith and Chalabi may be facing some difficulties, but don’t count them out quite yet.  Feith may leave government, but the last time he left the Pentagon, he turned his departure into business connections and a handsome profit.  And Chalabi, the wily manipulator, also has a record of rebounding from set-backs that have marked his past.

With Zell and Salem in business, both Feith and Ahmad have a place to go.  The final chapter in this sordid tale has yet to be written.

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