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would step into the lobby of the modern granite office building at 1801
K Street in Washington--the heart of the nation's lobbying corridor. He
would walk past the security guard and ride the elevator up to the ninth
floor. The ride was, in some sense, one small vertical leg of Chalabi's
journey back to Iraq. This particular way point was the office belonging
to Black, Kelly, Scruggs & Healey (BKSH), one of the most powerful
lobbying firms in the United States, owned by public relations
efforts in Washington. Few people knew who "eoconservatives" were, and
even those who did could not have grasped their remarkable affection for
and loyalty to Chalabi, a shrewd Iraqi Arab from a family of Shiite
bankers. No one could have predicted that Chalabi's group, the Iraqi
National Congress (INC), would go on to push false stories about terror
and weapons of mass destruction with such great success as the group
campaigned against Saddam Hussein's quite sadistic regime. Nor,
certainly, was it possible to foresee that the massive propaganda
campaign run by Chalabi to encourage the United States to invade Iraq
would be fully paid for with US taxpayer funds.
thickly accented English seemed only to enhance his charisma, had lots
and lots of friends on Capitol Hill. Congress had passed the Iraq
Liberation Act in 1998, written largely to achieve Chalabi's vision for
toppling Saddam. And every year Congress was earmarking money for him.
But he had opponents, too, in the government: American diplomats who
were skeptical of him, despite his charm and his claims of inside
knowledge about Iraq. These Americans knew all about his murky past: a
bank embezzlement conviction in absentia in the Kingdom of Jordan years
earlier. They knew that the Central Intelligence Agency considered him a
phony and a liability and, after working with him for years, had cut all
ties with him.
to ponder that this elite firm was hired in part as a result of a feud
in the American government. It was in the late 1990s, when Congress was
earmarking funds for Chalabi's INC and charging the State Department
with spending all the cash, that State enlisted BKSH's services. The
State Department diplomats, under veteran Frank Ricciardone, were among
the skeptics on the subject of Ahmad Chalabi and were concerned about
the accounting challenges posed by their obligation to dole out the
earmarked funds. They figured that through BKSH, they could funnel
support to the INC while complying with Congressional intentions and
normal accounting procedures, and moreover that an American firm could
be controlled and monitored and would have the expertise in PR and
organizing that was necessary. They put a contract out for bid; PR giant
Burson-Marsteller won the award and quickly handed the work over to its
Charles Black Jr., one of "America's foremost Republican political
strategists," according to BKSH. Black, a former adviser to Presidents
Ronald Reagan and George H.W. Bush, is now a senior adviser to GOP
presidential candidate John McCain, who was himself an early Chalabi
backer with ties to the Iraqi going all the way back to 1991. BKSH,
which represented major defense contractors, governments and
international corporations, was perfectly situated to leverage its
expertise on behalf of the Iraqi National Congress.
to $300,000 per year from the US government "to promote the INC." Black,
in his pleasant Texas drawl, says the firm did "standard kinds of public
relations and public affairs, setting up seminars, helping them get
speeches covered by the press, press conferences." Black said he
believes his company can take a lot of pride in a strong campaign. "The
whole thing was very successful. The INC became not only well-known, but
I think the message got out there strongly."
Capitol Hill lobbyist who quickly became passionate about Chalabi's
cause. "Riva would spend her weekend thinking about, How can I get press
coverage for the INC next week?" Black explained, "and then come in on
Monday morning and schedule a speech or call reporters to get a speech
covered or get Chalabi or the other leaders out to get the message out."
Levinson even spoke out overtly as the INC's spokeswoman, giving
interviews on its behalf.
Burson-Marsteller ultimately backfired. In the course of his power
struggle with his State Department patrons over who would control the
Iraqi opposition and the stream of American funding, Chalabi would
frequently criticize both US policy and his Iraqi competitors. The
government would complain to BKSH. "We'd tell him.... And he'd say,
'Fine,' and go say the same thing over again," said Black. "Basically
the US government couldn't make Chalabi do anything he didn't want to
do." So while US taxpayers paid for BKSH's services, the company, from
all appearances, worked for Ahmad Chalabi.
after all, was what Chalabi was), the agent would register under the
Justice Department's Foreign Agents Registration Act. That's required
whenever someone represents a foreign interest in a "political or
quasi-political" way.Examples include groups that at times had been
allied with Chalabi, like Jalal Talabani's Patriotic Union of Kurdistan
and Masoud Barzani's Kurdish Democratic Party. But since BKSH was paid
by taxpayer funds through the State Department, it never registered as a
foreign agent. Since it was not technically a "lobbyist" for Chalabi,
even though that is exactly how it was functioning, it never registered
on Capitol Hill either, which would be the norm for a lobbyist. Although
the transaction was not classified or secret, journalists, legislators
and the American public weren't told about it.
Rockets tore into the Al-Rashid Hotel, where Paul Wolfowitz lay sleeping
on a rare visit. Terrorists destroyed the International Red Cross
compound, and then, on Wednesday, October 29, a land mine gutted a US
Army Abrams tank outside Baghdad, killing two soldiers. That was the day
BKSH and the Iraqi National Congress were honored for their work in the
run-up to the war.
in London, where more than 1,000 of the public relations industry elite
assembled in a ballroom at the luxurious Grosvenor House Hotel. /PR
Week/ hosted the event, its annual awards dinner for public relations
companies. Burson-Marsteller, whose subsidiary BKSH had carried out the
work, was named the winner in the public affairs category. The "Awards
Supplement" of /PR Week/ called BKSH's work a "solid, disciplined
campaign that is totally deserving of this award." "Of particular
importance," said the citation, "was positioning INC founder Dr. Ahmad
Chalabi and other Iraqi opposition spokespeople as authoritative
political leaders." BKSH "compiled intelligence reports, defector
briefings, conferences and seminars.... The PR team also ran a
contact-building programme, focusing on the European Union, Downing
Street, the Foreign Office and MPs in the UK, matched to a US programme
aimed at the White House, the Senate, Congress and the Pentagon."
from the US government, let alone that many of the campaign's claims
turned out to be erroneous. But by the time BKSH won the award, the
State Department's funding for the program had stopped, with the
American troops surging through the desert. That did not mean that
BKSH's Iraq work would end. Instead, having eased Chalabi's path to
Baghdad, BKSH would now use its ties to Chalabi to get into the business
of Iraqi reconstruction.
executives flocked to conferences, corporations set up divisions to work
on developing business in Iraq, consultancies thrived and newsletters
proliferated to detail legal niceties and dispense advice. BKSH was
going to get in on the ground floor of the industry. Charles Black said
it was a busy time. "After the overthrow of Saddam Hussein a lot of US
companies, some of our long-term clients as well as some people who
weren't our clients, came to us and were looking to do business in
Iraq," he explained. The problem, he said, was that BKSH was not "going
to be over there. We didn't have an office over there or have full-time
been hired by the State Department to sort out the INC's books and
stayed on to become a key member of the organization's staff, was taking
in Defense Intelligence Agency funds and delivering them to Chalabi's
intelligence operation. Zaab Sethna, Chalabi's press aide, was also in
Iraq. As Black explains it, "Peg was there and Zaab was there, so we
just referred business to them." Bartel and BKSH reached an agreement:
in exchange for a referral fee, BKSH would send clients to Bartel's
consulting company, which would set them up with contacts, influence,
housing, security and everything else they would need to get themselves
started on Iraqi reconstruction. In the gold rush of 1849, they say, it
was not the miners who got rich but the operators who sold the picks and
the shovels and the wagons and the denim. So it was in Iraq, with the
likes of Bartel, the INC and BKSH. The American businessmen would be the
miners taking their chances, and the PR operatives and INC loyalists
were selling the picks and shovels.
previous efforts. BKSH and Chalabi simply pivoted their operation. They
realized that with Chalabi on the ground, they could sell access to him
using the same sophisticated lobbying regime they already had in place.
He had the sort of influence that corporate executives could use in
their search for contracts.
Huddleston, an old BKSH customer. "Albert is a longtime client," Black
explained. Huddleston, a Texas oilman and staunch supporter of George W.
Bush, was a Bush "Minor League Pioneer" in the 2000 election, raising
close to $100,000. In the 2004 election he contributed $100,000 to the
Swift Boat Veterans for Truth, the group that targeted Senator John
Kerry's campaign by publicizing discredited allegations about his
military service. Huddleston's daughter even worked in the White House
for First Lady Laura Bush.
oil deals, and his company, Hyperion Resources, wanted to be in a good
position when the oil valves finally opened. So it was only natural that
BKSH would refer him to the Chalabi allies who were offering to help
American businessmen. "He was definitely interested in Iraq," Black
recalled, "and we definitely hooked him up with that organization." The
veterans of the PR and lobbying efforts of the INC went to work for
Huddleston. They had focused for years on human rights, democracy and
freedom. Now that the regime of Saddam Hussein was gone, they were
dedicating more and more time to oil and business.
Albert wanted," recalled one associate, "it was Zaab's mission to go get
it done." In the years after the Iraq invasion, Huddleston did his best
to forge ties in Iraq. What he found at first was that there was no
legitimate government to deal with under the occupation. Paul Bremer had
no authority to negotiate oil deals, because occupying powers can't
legally make decisions about a country's natural resources. And later,
after Bremer left Iraq, the Iraqi government couldn't pass an oil law to
regulate the industry. Nabeel Musawi, a former close Chalabi associate
who later became a member of the temporary National Assembly, remembers
Chalabi, Sethna, Bartel and their guest Huddleston coming to dinner to
petition for help. They wanted to see if Musawi could set up a meeting
between Huddleston and the oil minister. Musawi says he wanted to help
but had to shrug them off because the oil minister was out of town.
House, and he fawned over the Texan, taking him out and offering him
gifts. Chalabi presented him with a lavish crystal sculpture of an Iraqi
reed house, which had to be shipped back to Texas. But for Huddleston,
the pre-war promise of rosy prospects for American oilmen like himself
was turning out to be an illusion. Chalabi and others had talked about
Iraq's oil and the gushers to come, but despite all the oil under Iraq's
desert, it was unobtainable. Deals made during the occupation would be
shredded later. Huddleston never did make his huge oil strike in Iraq,
despite the money he paid to Chalabi's people there.
itself spent on the services of Chalabi and his INC. One former member
of the INC put it at about $90 million, but a safer and more
conservative estimate of the total American taxpayer subsidy to Chalabi
and his organization is $59 million over the course of eleven years.
This includes an estimated $20 million from the CIA secret budget in the
early 1990s (although it may be far more); add to this $33 million from
the State Department in the years leading up to the war in Iraq and $6
million from the Defense Intelligence Agency starting in 2002.
appeared that he had lost any prominent political role in Iraq, although
he held on to his title as chairman of the de-Baathification commission.
A new Iraqi government had finally taken shape, presumably a permanent
one, and Chalabi seemed unsteady as he scrambled for new allies.
day in late October, dressed in one of his dark suits, he climbed into a
US Army Black Hawk helicopter in Baghdad. As the rotors of the
helicopter thumped, Chalabi was surrounded by American military men. His
host was Gen. David Petraeus, commander of the multinational force in Iraq.
Senate Intelligence Committee had found that Chalabi's INC had
"attempted to influence United States policy on Iraq" before the US
invasion "by providing false information."
an American helicopter. The new Iraqi government had appointed him to a
committee to oversee Baghdad's municipal "services." The hope was that
Chalabi, with his organizational skills and his charm, could cut his way
through the Iraqi government's red tape and spur on the efforts of the
beleaguered Health, Electricity, Communications and Transportation
ministries. And the Americans, once again, thought they had found a man
they could work with.