Backstabbing for Beginners:

by Michael Soussan

  The French government often downplayed the importance of its trade with Iraq. But its companies didn’t. A spokesman at Alcatel, the French telecom firm that clinched a $75 million deal to rebuild Iraq’s phone lines, said it plainly: “These kinds of contracts are our raison d’être.”

  The greatest contract France got out of the Oil-for-Food program was the one nobody paid attention to at first. It was so big, and so central to the entire operation, that few people realized its importance. It was the very first contract that we awarded—the one that would decide which bank was to hold the account into which Iraq’s oil revenues were to be deposited. The bank was chosen by the United Nations, in “consultation” with the government of Iraq, but it was clear to all that if the Iraqis didn’t like the choice, all they had to do was stop exporting oil and create havoc in the oil market until a new one was chosen.

  Surprise, surprise, the Banque Nationale de Paris (BNP) was chosen; $64 billion would travel through its coffers over the span of seven years. Of course, BNP did not get to touch the money, except for the fee it was paid, but for any bank a steady multibillion-dollar yearly stream of cash can do a lot. It can increase the bank’s credit rating (which it did), and it can allow the bank to leverage that to merge with other banks. In 2000, BNP merged with Paribas to become the largest financial institution in continental Europe. One of the bank’s largest shareholders was Iraqi-born billionaire Nadhmi Auchi, who had extensive dealings with Saddam Hussein’s government over the years.

  The UN soon worried about the financial risk involved in depositing all of Iraq’s oil revenues in a single bank. But when it tried to get Iraq to “diversify” its account, it met a wall of resistance.

  By 1998, Suzanne Bishopric, the cheerful UN treasurer, had gotten it into her head that there was a better way to manage Iraq’s money. She thought it would be safer for Iraq to spread its accounts across multiple banks. She also wanted to look into how the UN brought cash into the country to pay its staff and whether we were getting a fair exchange rate on our money when we converted it to Iraqi dinars.

  Suzanne seemed to be completely oblivious to the notion that some issues were big political no-no’s. When one of my colleagues tried to tell her it might not be such a good idea to go nosing around in the financial gutter of the UN’s relationship with Baghdad, she simply replied, “Why not? I’m the treasurer. That’s my job!”

  When Suzanne wanted something done, she simply did it. So she donned a traditional English summer dress and a colonial straw hat and tagged along with Pasha and me on one of our trips to Baghdad. She looked like a character out of an Agatha Christie novel, except for her wide 1970s sunglasses, which were more on the Pink Panther side. The first thing she did in Iraq was visit the “black market” for currency exchange. This caused an electroshock to ripple through the Iraqi secret service chain of command, since senior government officials were personally involved in skimming money off the top of the “special” exchange rate that was offered to the UN. Everyone knew where to exchange dollars for Saddam bills, and the UN got some of the worst rates on the market, from local money changers who had the government’s permission to do business. Suzanne, like all of us, was in way over her head. But she had such enthusiasm that nobody at the UN could have stopped her with a subtle hint.

  We left her alone for a few days in Baghdad, during which she managed to freak out the Mukhabarat (Iraqi secret service) by asking them highly sensitive questions point-blank. By the time we went to meet with officials from the Iraqi Central Bank, they had been ordered not to say anything in her presence, which made for a very bizarre meeting. We basically sat and looked at one another in the sweltering heat, talking about how good the coffee was at the Iraqi Central Bank. When we insisted on raising the issue of the diversification of Iraqi funds, the sweaty Iraqi Central Bank official simply pointed his finger at the ceiling, signaling that decisions on this matter were made so far above his head that even a wince from him could get him in trouble.

  Several years of UN insistence on the subject eventually convinced the Iraqi government that it was in its own best interest to diversify its monetary holdings. Besides, by 2002, the very smart Mr. Auchi had gotten out of the game. He no longer held a stake in BNP Paribas. And as pressure for war mounted in the second half of 2002, Iraq became eager to secure additional political support for its cause from other European countries. The UN suggested Deutsche Bank, which seemed agreeable to the Iraqis, but no deal was ever finalized. Though the management of Iraq’s money was generally sub-par given the limitations of the program, the Iraqi dictator did manage to make one financially prophetic call. As of 2002, he insisted on being paid in euros. Even Paul Volcker, the chief investigator of the Oil-for-Food scandal, had to give it to the Iraqi dictator. Saddam’s switch to euros was very profitable—and it represented another historical first in the history of oil trading.

  France was not the only country to invest heavily in the Iraqi dictator’s long-term survival. Russia’s efforts dwarfed those of France, and China and Germany were heavily involved in the Oil-for-Food program as well. Russia alone bought about $19.3 billion (or some 30 percent) of Iraq’s oil exports and, like France, signed unquantifiable contracts for post-sanctions oil exploration in Iraq’s northern and southern regions.

  The correlation between Iraq’s trade favors and the political protection it received was mathematically unchallengeable.

  That said, the correlation could not explain everything. If French officials had acted based purely on economic considerations, the smart thing would have been to imitate Australia: dump Saddam the moment they were sure America was going to attack, and join the coalition. If France had been part of the coalition, it would have been in a much better position to safeguard the contracts it had already signed with Iraq, secure the best possible terms for the repayment of its debt, and get a decent place in line for future contracts with the next Iraqi regime. From an economic standpoint, it only made sense to keep up support for Saddam as long as he had a future. Once he became a losing stock, why expend further political capital to support him?

  Yet France went further than any of Iraq’s other major trading partners in opposing the United States—so far, in fact, that it jeopardized relations not only with the Bush administration but also with an overwhelming majority of the American public, including many people who were personally opposed to America’s “war of choice.” It was one thing for France not to support America’s war. But it was another thing for France to lure the United States into a diplomatic trap just as it prepared to send its soldiers into battle.

  “We are ready!” President Bush had exclaimed in a dramatic address to U.S. troops preparing to leave for the Persian Gulf in early January 2003. His message was not meant for the troops themselves. They were obviously not ready yet, since they were still at their base in Fort Hood, Texas. The message was meant for the American public and the rest of the world: the Bush administration was ready, politically, to go to war with Iraq.

  Three days later, Gerard Araud, director of strategic affairs at the Quai d’Orsay (France’s foreign ministry), took it on himself to clarify the situation for his foreign minister: “We seem to be acting as though we believe the train has not left the station,” he bluntly told Dominique de Villepin. “In fact,” he continued, “it has already departed. All we are doing is lying down on the tracks in front of it!”

  Araud understood the realities involved in launching a major military invasion of another country—you don’t get 400,000 men and women all dressed up for nothing. Accordingly, he explained to de Villepin that France had to choose between two options: it could either find a diplomatic way of supporting the war or prepare for outright opposition.

  Neither option appealed to the flamboyant de Villepin. Supporting the war would mean toeing the American line and backtracking on twelve years of French foreign policy, which had banked on Saddam Hussein’s revival. On the other hand, if France lay down on the tracks right aw
ay, the United States would simply switch away from the UN track and roll into Baghdad unilaterally, leaving France behind in a histrionic but anticlimactic pose.

  The only way France could retain any level of influence was if the United States remained on the UN track. And therefore, rather than lay down in protest right away, France opted to lure the United States further down the UN route and organize for acts of sabotage to be committed along the way, in the hope that these could derail or delay the U.S. war effort.

  A few days after Araud’s poignant briefing, Dominique de Villepin hit the phones to organize a high-level ministerial meeting at the Security Council. In his conversations with other foreign ministers, he said the meeting would not be about Iraq because the issue was “too divisive.” As Council president for the month of January, he said France was looking to have a meeting that would strengthen the “fragile unity of the Council,” and it should therefore focus exclusively on “terrorism.”

  The meeting, which much of the media subsequently described as a “diplomatic ambush,” was scheduled for January 20, Martin Luther King Day. Colin Powell had a string of speaking engagements planned for that day, all of which he had to cancel in order to go to New York. At the end of the meeting, de Villepin spoke to the media and declared that France would not associate itself “with military action that was not supported by the international community,” adding that “military intervention would be the worst possible solution.”

  The choice of words was interesting. On the one hand, de Villepin did not entirely rule out the possibility that France would support a war if that war had the support of the international community, and on the other hand, he was urging the international community not to support the war by calling it the worst possible solution. It was a circular argument: the international community should not support the war because it does not have the support of the international community, which should not support war. A beautiful act of diplomatic sabotage—launched at the end of a meeting that was not even supposed to be on the subject of Iraq. Colin Powell was taken completely off guard.

  U.S. Deputy Secretary of State Richard Armitage described Powell’s reaction upon hearing de Villepin’s statement: “He was very amused. . . . When he’s amused, he gets pretty cold. . . . He puts the eyes on you and there is no doubt when his jaws are jacked. It’s not a pretty sight.”

  It got worse. On February 5 Powell was sent to the UN Security Council with a multimedia presentation that included a vial of white powder, which he waved around threateningly; computer graphics of trucks he claimed were biological weapons labs; and sound recordings of Iraqi military officers talking about “getting rid of” WMDs before UN inspectors arrived. De Villepin simply shrugged off Powell’s presentation, saying it only made the case for giving the inspectors “more time.” On February 14, at yet another Security Council meeting, the French foreign minister threw the gauntlet to Powell once more when he declared, emotionally, “We are trying to give peace a chance.”

  It was positively Lennon-esque, a rallying cry to thousands of people throughout the world who were planning a big peace march the next day.

  In a historical first, the public clapped at the end of the French foreign minister’s speech. De Villepin was on fire. Powell was jaw-jacked. The humiliation was complete.

  In retrospect, and after speaking with French intelligence officials who were active at the time, it became clear to me that France was extremely confident that Saddam had gotten rid of all his WMD programs. How could France be so sure, given the uncertain reports from its own plants inside the UN weapons inspection office? No French (or American or Russian) national working for UNSCOM, then UNMOVIC, could have gotten the job without approval from these countries’ respective defense ministries. The UN inspection chiefs (Richard Butler, then Hans Blix) remained uncertain until the very end of this process about what Saddam might have hidden. They had not found anything in 2003 (though they had on many previous occasions, up until 1998, when the inspectors were kicked out); but they knew, from Iraqi records seized after the Gulf War, that some critical WMD-related items that had been imported by Saddam Hussein in the past were still unaccounted for.

  So how could France be so sure there was nothing left? It had better contacts with Saddam and his inner circle than the United States did. And some members of the French intelligence community say they made a real effort to share the information they had with their counterparts in the United States. But based on thirteen years of a cat-and-mouse chase that seemed always to prove Saddam a liar, America could no longer be convinced. Saddam’s continued pursuit of WMDs had become more than a fact. It had become a policy premise, without which the United States could no longer argue that Iraq was in breach of the 1991 cease-fire (a key component of America’s legal argument at the Security Council).

  History will recall that Powell’s presentation was factually flawed. The vial of white powder he waved before his colleagues would haunt him for a long time to come. No evidence of weapons-grade anthrax production would be found in Iraq after the war. Yet given the information available to Powell at the time, the French foreign minister’s unexpected provocation was unpardonable. Following in de Villepin’s footsteps, Igor Ivanov of Russia got inspired: “Today is Valentine’s Day,” he said, “and we should be speaking of love and engagement.”

  With Saddam Hussein? It didn’t work so well for the Iraqi dictator’s ex-wife, who had fled Iraq and was now hiding from would-be assassins in Lebanon.

  On February 14 Powell had delivered a straightforward speech that had drawn zero applause. Adding insult to injury, de Villepin had gone out for a victory lap with the press outside the Security Council chambers. The meeting was not yet over when journalists were already dictating their headlines into their mobile phones: “Powell’s Bad Day.”

  It had indeed been a very bad day for the U.S. secretary of state. He had been sent to the UN to gather international support, and he was met with humiliation.

  Kofi Annan knew better than to get caught in this dispute between France and the United States. His staff overwhelmingly supported France’s position, and Annan would not be able to avoid getting cornered on the issue of whether America’s planned invasion of Iraq was “legal or not.” The secretary general would try his best to say there were several points of view on the question, but when pressed by the BBC, he would have to say that a war that began without Security Council approval was considered illegal by the United Nations. Annan did his best to avoid getting in the way of the United States, despite vocal and persistent pressure from his staff. He knew that with Bush in power and a Republican-controlled Congress, he could not afford to repeat his ill-fated 1998 peace exploit. There would be no eleventh-hour peace initiative this time around. Annan, and the UN system as a whole, could do little more than observe what looked like a pre-twentieth-century classic conflict between the world’s great powers.

  At stake in the highly dramatic meeting of February 14, 2003, was whether the Security Council should pass “a second resolution” authorizing the use of force against Iraq. The issue of the “second resolution” confused a great many people—including recently assigned reporters who did not have the time to read up on twelve years of bickering in the Security Council over Iraq.

  There were opponents of the resolution on both sides of the debate. France thought it was “not yet time” to talk about a new resolution because the UN inspectors needed more time to do their work. It was the same argument France had made before the Gulf War, thirteen years earlier, when President Mitterrand had argued that the sanctions needed more time to persuade Saddam to withdraw from Kuwait.

  Back in Washington, the hawks were saying they didn’t need a second resolution before they could attack Iraq. There were seventeen resolutions already on the books against Saddam, and the so-called second resolution would in fact be the eighteenth. The twenty-four-hour newspeople were confused, and they, in turn, confused their audience. If Washington didn’t feel it
needed a second/eighteenth/new resolution, and if France didn’t want to pass one, what was the problem? All they had to do was not pass a resolution!

  The problem, by then, was that Colin Powell and Tony Blair had staked their entire diplomatic strategy on getting explicit UN authorization for going to war. Of course, while Powell made his case for another resolution to the Security Council, his boss, President Bush, was giving interviews from the golf course saying he didn’t need UN permission to go to war.

  This did little to clarify the issue for ordinary Americans. The message coming out of the White House was: the UN really needs to pass a second resolution, even though we don’t really need it.

  Thankfully, America was not entirely devoid of people who could explain the issue to the public: Senator Joseph Biden, the ranking Democrat on the Senate Foreign Relations Committee, was one of them. Writing on March 10 in the Washington Post, he clarified that

  for the United States, a second resolution is not a legal requirement, but it is a strategic one. It would give political cover to key allies such as Tony Blair and Spanish Prime Minister José María Aznar. And it would greatly increase the number of countries willing to join our coalition. This would help spread the risks of military action and the massive burden of putting Iraq back together—something President Bush does not like to talk about.

  Those were the reasons Powell and Blair felt it was important for them to do everything they could to win UN authorization before going to war. The only thing they did not understand was that they had already lost the battle at the UN in November 2002, when they signed on to Resolution 1441.