The inevitability of corruption (repost)

by John Q on November 18, 2004

Scandals surrounding the Oil-for-Food program and postwar reconstruction in supply contracts, particularly with respect to Halliburton just keep on going. So I thought I’d repost this piece from six months ago, pointing out that it’s silly to try and score political points out of either of these.

Over the course of the Iraq war, a lot of opponents of the war have made a big noise about corruption among US contractors, the most common target being Halliburton. More recently, the pro-war blogosphere has been in an uproar over the ‘discovery’ that Saddam bribed a range of officials, including some in the UN, so that he could get kickbacks from the sale of oil, which was supposed to be used solely for the purchase of food and other essential imports. There has been a sense of baffled rage that no-one is much interested in pursuing these ‘discoveries’.

The scare quotes around ‘discovery’ reflect the fact that everyone who was paying any attention knew about this all along, and, indeed could deduce it from first principles. For example, in a piece on financing the reconstruction of Iraq written in May 2003, I observed

A return to normal output would yield gross income of around $US 20 billion per year at current prices, but most of this money was already being spent under the Food-for-oil program and most of it be needed for the same purpose in future. About 25 per cent of the money was taken to pay interest on debts associated with reparations for the 1991 War. If these were forgiven, some additional money would become available. In addition, it appears that Saddam managed to cream off $1 billion to $2 billion per year. If this were returned to the Iraqi people in general, it would make a small but positive contribution.

I didn’t bother to point it out, but it was obvious that Saddam could only get his cut by bribing those on the other side of the deal, that is, employees of the UN, the oil companies and the governments involved.

In the same piece, I made the point that the US contractors doing the work in Iraq were bound to charge a lot and deliver little, so that the cost of reconstruction would be far beyond the minuscule amounts that had then been budgeted. The appropriate response was not to complain about corruption but to accept reality and the need to spend a lot more money.

Iin both cases, it was, or ought to have been, obvious that the policy in question would produce corruption. That was why the US and UK initially tried to keep sanctions much tighter, with the result that thousands of Iraqi children died of starvation or inadequate medical treatment. Those who supported the Oil-for-Food program, knew, or ought to have known, that Saddam would take a large cut, and supported it anyway. Those who supported large-scale expenditure on reconstruction after the war knew, or ought to have known, that unscrupulous contractors would make a fortune, and supported it anywar. I’m happy to admit to supporting both policies, and to accepting corruption as one of the inevitable costs.

Having said all that, corruption is a crime and those guilty of it should be punished. But, unless you favor starving Iraqi children or doing nothing about reconstruction, trying to use either Halliburton or ‘UNSCAM’ to score points regarding the desirability or otherwise of the war is just silly.

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1

yabonn 11.18.04 at 12:50 pm

the policy in question would produce corruption. That was why the US and UK initially tried to keep sanctions much tighter,

I’m not sure i understand. Do you mean that the harsh us and uk stances on the embargo are explained by the fact they knew there was corruption going on?

If so what about the simpler “embargo as a political tool against saddam” explanation?

2

Rob 11.18.04 at 12:55 pm

I’m not sure neither are legitimate points because, even if some corruption is inevitable, the degree of corruption is not. To take the reconstruction projects, there are presumably different ways of designing the bidding process so as to make the outcome more or less corrupt. The degree to which the process allows corruptin presumably then stands as some kind of indicator of the concern for the wellbeing of the Iraqi people, on the assumption that corruption harms them. If the design of the process shows little or no concern for reducing corruption, then it is therefore showing little or no concern (in this respect) for the Iraqi people. That surely reflects badly on the war and its desirability. I’m sure that similar points can be made about the construction of the sanctions regime.

3

John Quiggin 11.18.04 at 12:57 pm

Supposing that the Oil-for-Food program could have been implemented perfectly, that is, with all the money going to food and medicine, the ‘political tool to Saddam’ impact of the remaining sanctions would have been unaffected. It was obvious that the program would allow some money to be diverted to more general expenditure goals, as in fact happened.

4

jet 11.18.04 at 12:59 pm

So you are saying that the excessive amounts of corruption in the UNSCAM did not effect the goals of the sanctions and could not have been avoided by the UN?

Because I’m gonna go out on a limb here and say that 1-2 billion a year would have fed a lot of starving children. And if UNSCAM wouldn’t have happened, Saddam would have been forced to take payment in foodstuffs, medicine and the like. Thus feeding a lot of starving children.

Maybe low level barely accountable UN flunkies are inevitability corrupt, but the people at the top indicate a much larger and abnormal problem.

And given that most of the corruption happened in the last 6 years, it is empirical evidence that sanctions were slipping. Thus the argument that UNSCAM was part of the reason to resume conflict with Iraq.

5

John Quiggin 11.18.04 at 1:13 pm

“So you are saying that the excessive amounts of corruption in the UNSCAM did not effect the goals of the sanctions and could not have been avoided by the UN?”

Spot-on. Saddam had the oil and there was no way of forcing him to sell it while stopping him taking a cut. (Except of course, by going to war, taking the oil off him, and killing 100 000 or so of the people you were supposed to be saving).

“Because I’m gonna go out on a limb here and say that 1-2 billion a year would have fed a lot of starving children. And if UNSCAM wouldn’t have happened, Saddam would have been forced to take payment in foodstuffs, medicine and the like.”

And if wishes were horses ponies, beggars would ride.

6

jet 11.18.04 at 1:23 pm

“Saddam had the oil and there was no way of forcing him to sell it while stopping him taking a cut.”

What do we care if he sold it? Let him make palaces out of full oil barrels. Think of his PR nightmare with him claiming children are dieing in his streets while he has more oil than he can store.

Yeah, try again.

7

Dan Hardie 11.18.04 at 1:37 pm

Given the number of qualified professionals Iraq possesses, I for one am at a loss to find any good reason why more of the reconstruction of Iraq should not have been taken away from US contractors and given to local people, selected and budgeted by either Coalition military officers and or civil servants on temporary duty in Iraq. I don’t think ‘institutional corruption’ or the sinister influence of Cheney were the prime causes- I suspect rather that this was an addiction to established procedures and, in particular, to audit trails. Halliburton or Bechtel may charge more to get a power station up and running than a military officer giving a bunch of dollar bills to the local Iraqi engineers and technicians, but at least Halliburton and Bechtel can process the paper that the Pentagon or Whitehall accountants will demand. The obvious comeback to this is that there would certainly have been corruption among the Iraqi subcontractors- yes, but unless they all had access to Swiss bank accounts, which one takes leave to doubt, most or all of the money siphoned off would have stayed in the Iraqi economy and gone some way to creating the demand necessary to reduce the current unemployment levels. Whatever process was chosen to rebuild Iraq, there were going to be an awful lot of imperfections: this was a war-damaged country that had been run by a totalitarian murderer. But I don’t accept that because all options were bad, the Halliburton/Bechtel option was actually the least bad.

A sidelight on this: Riverbend, early in her blogging career, said that a US contractor had won the contract to rebuild a bridge on the basis of an eight figure price (I think $17 million). A team of local Iraqis had been confident they could do it for a few hundred thousand dollars. The American contractors have been relying on American skilled professionals plus manual workers largely drawn from India, the Phillippines or the Gulf States (press reports here very numerous- I will search them out if anyone is silly enough to argue the point); the Iraqis would have used Iraqi labour, which would have had economic and political advantages too obvious to need pointing out.

Another sidelight, on the more general point of First World contractors quoting for jobs in the underdeveloped world: one of the most interesting parts of the Suskind book on Paul O’Neill follows O’Neill’s trip to Africa. He becomes increasingly horrified by the lack of clean water, and asks Ugandan President Yoweri Museveni why clean water hasn’t been provided. Oh, says Museveni, we commissioned a study, and unfortunately it would have cost several billion dollars to provide all Ugandans with clean drinking water. Can I have a look at this study? asks O’Neill. It is brought to him, and it’s the work of a US engineering consultancy, who have estimated that using US engineers, and providing a US standard water and sanitation infrastructure will indeed cost several billion dollars. Says O’Neill: but all you need is a simple system which provides one reliable well near each village – it wouldn’t cost Uganda anything like a billion dollars- especially if you used local engineers. I think the rough figure O’Neill worked out was in the tens of millions of dollars- not an unfeasible amount if you remember what was spent on the Polio immunization campaigns.

Sorry, John, but unless I’m missing something I think your reasoning here is complacent and lazy.

8

yabonn 11.18.04 at 1:41 pm

John,

I agree with you that corruption is in certain circumstances, a given, and a bad argument regarding the irak war. I am still puzzled about the specific point of (ii understand correctly) the us/uk tightening of the sanctions _because_ of the corruption.

I can imagine for that a general desire to hurt a nation perceived as hostile, some hope something happens and saddam is ousted (i maybe fuzzily called that a political tool higher), and no incentive into relieving the pressure, as saddam avoided when he could to trade with us/uk, yes. But against corruption?

9

Tom T. 11.18.04 at 2:34 pm

Purely as a rhetorical matter, arguing that “these events should not be used to score political points, and those who think otherwise are in favor of starving children” is a bit unwieldy. (But that’s just teasing, and I understand your point).

Substantively, I think you’re absolutely right about the inevitability of corruption, and you’re right to chastise those who resort to rage and name-calling, but I think you’re coming down too hard on those who would draw political lessons therefrom.

As a procedural matter, I think it’s legitimate to ask for greater political and financial accountability, in both the awarding of US contracts (and the decision to use a no-bid award) and the disbursement of UN funds. Corruption may be inevitable, but we should still be doing all we can to police it.

As a policy matter, I think these events, while perhaps unsurprising, are nevertheless quite valuable lessons. Before the war, many opponents argued that that the US war policy was untrustworthy, because it was motivated by commercial interests. Those people were often dismissed as anti-capitalist zealots. Conversely, many war proponents argued that UN opposition to the war was untrustworthy, because it was motivated by commercial interests. Those people were often dismissed as reflexive anti-internationalists. Why isn’t it legitimate for each side to contend that their respective concerns have been validated by events and thus should be accorded greater weight in the policy process in future decisions regarding war and sanctions? Saying that we should have expected these events all along strikes me as too cynical. The reason that Halliburton and the UN are provoking outrage now is because now there is a paper trail emerging by which one can document those intuitions regarding the inevitability of corruption. It’s a stronger argument to say “they ripped you off in the past, and they’ll do it again,” than to say, “they’ll rip you off; I just know they will.”

Ideally, these events could provide support for even larger policy re-examinations intended to prevent us from getting into situations where corruption is inevitable; i.e., whether the outsourcing of public tasks to private contractors should be curtailed, or whether economic sanctions can ever be designed to be effective against a hostile government without disproportionately burdening innocent citizens. But that’s probably wishful.

10

Joshua W. Burton 11.18.04 at 2:48 pm

_That was why the US and UK initially tried to keep sanctions much tighter, with the result that thousands of Iraqi children died of starvation or inadequate medical treatment._

Died in what years? As I observed in the _Lancet_ thread, there is a reasonable interpretation of the published data that gives an Iraqi infant mortality rate of about 65 per thousand live births in 1990, falling slowly but steadily to about 55 today, with no detectable contribution from war, sanctions, or war again. (Iraq remains a literate country with a large cadre of Western-educated healthcare workers; the experience of postwar Germany and of Yugoslavia suggests that past infant mortality gains are “sticky” even in the face of appalling privation. People will dig deep into hidden reserves when baby is running a 41 fever and there was once a working hospital.)

Against this null hypothesis, we have outlier data from UNICEF, suggesting a much higher death rate in the late 1990s under sanctions, and outlier data from the _Lancet_, suggesting a much lower death rate in the early 2000s under sanctions. Both of these are epidemiologically interesting. Widespread attempts to believe first one, and then the other, as the political winds shift are sociologically interesting.

What will be even more interesting is if _both_ outliers become conversational tropes _simultaneously_. That is, if it becomes possible to continue alluding vaguely to (excess) Iraqi infant mortality under the sanctions regime _while_ expressing concern about the _Lancet_ numbers for 2004 infant mortality, which show a rise back to the historical baseline from below.

11

Dan Hardie 11.18.04 at 2:53 pm

I’ll disagree with Tom T.: in an immediately post-war situation, I am all for lower rather than ‘greater political and financial accountability’, since producing ‘political and financial accountability’ means an English language audit trail, and indigenous contractors just ain’t gonna be able to compete on that with big US or other foreign companies. ‘Not being good at the paperwork’ is not an intelligent reason to disqualify an Iraqi engineer competing for a contract to rebuild Iraq, but I will lay dollars to dimes that that is one reason why the big contractors have elbowed the locals aside.

My policy: give a stack of dollar bills to no-nonsense Officers and NCOs from the US Army (or Royal) Engineers, tell them to get things up and running with as much help from the locals as possible, and let them get on with it. I’d back ‘political accountability’ in the sense of ‘not funding something really egregious, like enabling a local militia to buy guns’, but that would be my one real limit. This does seem (sorry I sound like a broken record) to have been the procedure followed in British-run locations like Basra.

Some money will end up in the wallets of thugs, but is there a building industry anywhere in the world where money doesn’t grease a few wheels? Tell me the name of this Shangri-La, and I shall voyage there and live off milk and honey.

12

Luc 11.18.04 at 2:56 pm

The funny thing with the ‘UNSCAM’ thing that it features the same actors and motives of the ‘WMD in Iraq’ story.

Try reading this by the notorious Judith Miller in the NYT,

Senator Coleman said the huge scale of fraud and theft while United Nations penalties were in effect had created a “dark stain” over the world organization that raised questions about whether it could put in place and monitor any sanctions.

But then to compensate that nonsense,

Senator Carl Levin, Democrat of Michigan, the panel’s ranking minority member, said three-quarters of Iraq’s illicit income came from trade protocols with Jordan and Turkey that the Clinton and Bush administrations had known about and “winked at” because support from those countries was vital.

I wouldn’t trust anything about the UN coming from the US senate and reported by Miller, but this shows that at least Senator Levin knows who is to blame for the 3/4 of the illicit income.

But then if the US accepted 3/4 of the corruption, why all the fuss about the other 1/4?

I think it is politics combined with a grudge against the UN.

Duelfer’s ISG reporting both about the absence of WMD and about corruption in the UN oil for food program makes for a real credible story. Add Chalabi’s secret documents that are the only proof of Sevon’s involvement, a bit of Judith Miller reporting, a US senate’s ‘investigation’, and you’ve got yourself a real nice mess. And this mess has already made various parties weary of cooperating with the Volcker investigation, so even that one is now tainted.

13

Sam Chevre 11.18.04 at 3:13 pm

I believe that there are two different issues in looking at corruption: one is an issue, and one isn’t.

Saddam Hussein skimming from Oil-for-Food contracts, or Halliburton skimming from reconstruction contracts, is predictable and inevitable, and shouldn’t be used in making political arguments. So far I agree with you.

The problem that is an issue is when the corruption affects the decision-making process. If the war in Iraq was motivated by VP Cheney’s desire to provide profitable work for Halliburton, that is a problem. Similarly, if the UN Security Counsel wouldn’t agree to enforce its resolutions because some of the members were bribed by Saddam, that is a problem. These possibilities are legitimate political issues because they directly affect the legitimacy of the US or the UN as decision-makers.

14

Sebastian Holsclaw 11.18.04 at 4:45 pm

$21 Billion for Saddam isn’t exactly ‘skimming’. There is inevitable low-level corruption, and then there is a program which makes huge amounts of money for a vicious tyrant, while perhaps providing some small amount of food for a small percentage of the people it was meant to help.

It would be far more efficient policy-wise to just buy the food and distribute it. If Saddam doesn’t let you distribute it, the onus is clearly on him as a leader. (Not that I personally understand how it ever wasn’t). Dismissing $21 billion out of $63 billion as ‘skimming’ seems to be very casual about corruption. One third of the total to Saddam? I don’t think that is justifiable. And that isn’t even counting the 25% the UN took in overhead expenses. That means that almost 60% of the money was spent on non-aid functions.

Worse, the program didn’t even significantly aid the people in question, nor did it relieve the political pressure of sanctions causing hardship to the Iraqi people.

15

No Preference 11.18.04 at 5:19 pm

Regarding corruption in the Oil for Food program, I second luc’s observation that the Senate Finance Committee’s report should not be regarded as conclusive. Senators find it all too easy to score cheap political points by bashing Arabs and the UN. I’d rather wait for the Volcker Commission.

Sebastian, as luc pointed out, three quarters of that alleged $21 billion was from oil smuggled through Jordan and Turkey, not money skimmed from the Oil for Food program. The US knew about that smuggling at the time but did nothing about it, mainly because Jordan’s economy depended on it. Also, that 25% off the top from the Oil for Food revenues didn’t go to UN “overhead expenses”, but in compensation payments to Kuwait and the (mainly Western) companies that claimed damages from Saddam’s invasion of Kuwait.

16

jet 11.18.04 at 5:28 pm

no preference,

Then what was the UN’s “fee” for handling the account?

But getting back to the point of the post, why doesn’t UNSCAM pertain to the arguement for war? Negate the facts and we have the sanctions working well, with Saddam getting zero extra money, and children getting fed. That certainly hurts the case for war. So why isn’t the inverse true?

17

Giles 11.18.04 at 7:55 pm

I think there’s a simple reason why Halibruton gets a premium – risk of death to contractors.

As Nikc Berg illustrates, there is a relatively free market in reconstruction contracts – but if you’re putting your life on the line, you probably want some sort of compensation.

As to why Iraqi’s dont get more of the contracts, again Risk of death is the likely explanation.

18

No Preference 11.18.04 at 7:59 pm

FYI, Jet, by 2003 the Iraqi children were getting fed. Food and basic medical supplies were the only imports that wasn’t hampered by sanctions. The maintenance and reconstruction of the infrastructure (including electricity, telecommunications, and oil) were crippled by holds put on imports by the US in the sanctions committee. So were agriculture and advanced medical equipment. The US had Iraq on a kind of welfare state existence, where people were allowed to eat but not work and rebuild the economy. That’s why the place was such a wreck when we arrived.

I don’t think your argument for war makes any sense at all.

19

abb1 11.18.04 at 8:23 pm

The UN’s overhead was 2.2% plus they were taking 0.8% to finance the weapon inspections. Here

20

Giles 11.18.04 at 8:59 pm

The UN’s current annual budget is 2.4 Billion.

It recieved about 2 billion in fees from the Oil prgram – in other words iraq accounted for about 10-20% of the UN’s income over ther period. So was it significant – I think so.

http://www.un.org/News/Press/docs/2002/gaab3545.doc.htm

21

John Quiggin 11.18.04 at 9:04 pm

Dan, I agree with what you say about the excessive reliance on foreigners, which has been a disastrous aspect of the occupation. In fact, I posted on this point over a year ago.

And I don’t see how the point you’re making differs from what I’ve said. I’d endorse more use of Iraqi contractors, and accept more corruption and less accountability as part of the price.

22

Dan Simon 11.18.04 at 9:11 pm

I’m happy to admit to supporting both policies, and to accepting corruption as one of the inevitable costs.

So much for the idealism of the left, I guess. Has it really come to that? Are today’s advocates of political intervention into economic and commercial life–in the interests of fairness and justice, no less–really simply content to accept massive corruption as an inevitable consequence?

The real difference between these two cases, it seems to me (other than the apparently non-overlapping set of people who believe the accusers in each), is that any corruption in the Iraq reconstruction effort is purely a domestic American issue. After all, the US government handed out US taxpayers’ money to US contractors, and whether they got a good deal or were ripped off seems to me to be a matter for Americans and their politicians to wrangle over. (If, indeed, they were ripped off, then I’d certainly hope that the American polity would hold the responsible government officials and commercial concerns accountable.)

The “oil for food” scandal, on the other hand, is an international matter, involving the UN, numerous financial institutions and businesses in numerous countries, and the heads of state of several nations whose policies with respect to the program may have been influenced by its corruption. To the extent that American politicians might make political hay of it, it would be by calling for changes in US foreign policy (towards the UN and the other countries involved in “oil for food”), not domestic policy (regarding, say, oversight of defense department contracting).

As it happens, the opposition party in the US seems to have failed–so far, at least–to exploit allegations of corruption in the awarding of reconstruction contracts to firms working in postwar Iraq. That may be because there were no serious improprieties to exploit, or because the public was unconcerned about them, or because the opposition party was ineffective at exploiting the issue. In any event, though, the public at least had an opportunity, through the democratic process, to address the problem to the extent that they considered it a priority.

In the case of “oil for food”, we don’t know yet whether any of the parties positioned to make political hay of the scandal will succeed. The scandal itself may turn out to be insufficiently egregious, or other foreign policy concerns may trump the desire to root out corruption in the UN or other international arrangements. But the parties involved will be international, not domestic, and the playing field will be diplomatic, not democratic. That alone should make us less confident in the ability of the “system” to come to an honest conclusion and take appropriate action.

23

jet 11.18.04 at 10:10 pm

Oxblog has a good post today making the point that we are chasing our tails worring about foreign vs domestic contractors, corruption, insurgents, etc. Those are issues that need to be addressed, but as Oxblog states, the only piece of the magic formula for putting down a rebellion is to implement a liberal democracy.

24

Dan Simon 11.18.04 at 10:25 pm

I’m happy to admit to supporting both policies, and to accepting corruption as one of the inevitable costs.

I could understand a paleoconservative neo-realist making this statement sincerely, or a Randian libertarian making it sarcastically. But an idealistic leftist, on Crooked Timber? Is this what the left has come to?

In fact, there is a reason why John Quiggin need not worry about corruption in Iraqi reconstruction contracts–it’s a purely domestic American matter, with the US government handing out US taxpayers’ money to US corporations. If there was corruption involved, then opposition participants in the US political process are quite entitled–indeed, arguably morally obligated–to make a stink about it, and encourage the public to hold the government and corporations involved accountable. And if the misdeeds were severe enough, then we can confidently expect that such a political (and, if necessary, legal) accounting will occur.

The “oil for food” case is quite different. The UN is beholden only to its member nations, most of which aren’t even remotely respectful of human rights, let alone democratically accountable, let alone careful about avoiding corruption. If billions of dollars were siphoned out of the mouths of hungry Iraqis and into the bank accounts of financial institutions, corporations, politicians and diplomats around the world, then it’s not at all clear what process can be expected even to determine the facts, let alone to hold any of the malefactors accountable. (Both the Secretary-General and the US Senate have committees looking at the question in a purely ad hoc manner, but the investigators’ interests are far from clear, as none of them is responsible to any of the parties who would have been most seriously wronged by such corruption.)

Thus the “oil for food” program’s alleged corruption highlights fundamental weaknesses in the accountability structure of the UN, in a way that any complaints about the management of the Iraqi reconstruction contracts do not.

25

Dan Simon 11.18.04 at 10:31 pm

Sorry for the de facto repost–my first one appeared at first to have been obliterated by a server error, only to reappear some hours later, as soon as I had posted a revised version.

26

msk08 11.18.04 at 11:22 pm

dan Hardie:

Shangri-La may be here soon. I think they still had to climb trees to get the coconuts and fruit, though.

And litter boxes will probably still have to be cleaned out. And dogs walked while you are taking a “doggie bag” with.

But I agree with you totally, it sometimes takes as much effort and time to account for money as the effort and time it took to actually do the work. Way to go British! I didn’t know they were doing that super effective under the table type stuff.

27

yabonn 11.19.04 at 12:50 am

and the heads of state of several nations whose policies with respect to the program may have been influenced by its corruption.

Ah yes. The russian, french and chinese bought by saddam’s oil money starving iraki babies. It’s a “may” then? I mean it has spread outside the loony right after all?

28

Tom T. 11.19.04 at 1:06 am

Dan Hardie, I’m not sure we’re that far apart.

To me, the scandal is not that contractors cheat, or that Saddam is corrupt. In my view, the scandal is that US procuring authorities cheat and that the UN is corrupt, and I see greater accountability on that side as a means of constraining that side of the equation.

Throwing more contracts to Iraqi contractors seems to me to be a net positive. It could result in more skimming due to murkier accounting, but it would seem to present fewer opportunities for quid pro quo corruption on the part of the procuring authorities, since Iraqi contractors would not be able to offer the same political benefits (or threaten the same political reprisals) that a connected company like Halliburton might be able to do.

29

Dan Simon 11.19.04 at 5:22 am

Ah yes. The russian, french and chinese bought by saddam’s oil money starving iraki babies. It’s a “may” then? I mean it has spread outside the loony right after all?

Wait a second–you’re saying it’s “loony” to hypothesize that the multi-billion-dollar financial interests of domestic corporations might occasionally influence the French, Russian or Chinese (or for that matter, any other) government, more than mass starvation in some faraway country? Presumably you’d not think twice about attributing such coldly self-interested behavior to the US government. (Neither would I, for that matter.) Are you seriously suggesting that the French, Russian and Chinese governments are somehow more principled? Or merely that they had enough other reasons for pursuing their Iraq policies that domestic profiteers didn’t need to lobby on their own behalf?

30

yabonn 11.19.04 at 10:41 am

Wait a second—you’re saying it’s “loony” to hypothesize that the multi-billion-dollar financial interests of domestic corporations might occasionally influence the French, Russian or Chinese (or for that matter, any other) government

But i don’t need to say that. I just nees to say thinking that the decisions to engage the military or damage its diplomatic relationship with the u.s., derives from saddam-evil-oil-money is simply loony.

Limiting myself to france, that i know a bit :

If corruption from third world countries representing 0.0something of the foreign trade could influence the country’s decisions to go to war or not, is suppose right now we’d be fighting the sahraouis or the tamil tigers.

Then, there’s occam, and the fact that in a democracy, it is usually unwise to to against a huge majority of the electors.

Then, because it just doesn’t match the facts. Chirac was originally undecided about irak, and began to plan going along (very little articles mentioned it, as it doesn’t fit well with the history in making). Only after seeing the u.s. insistence to go without waiting for the inspectors, and seeing its domestic opinion on it did he oppose it.

Then because the very making of the story. Its one third half baked chalabi proofs (oxymoron, i know), one third duelfer concluding that he can’t prove any french government role into this mess, but hint, wink, nudge, and one third the usual stupids at lgf, murdoch or moon that are shocked, shocked, to discover there is corruption out there. This alone should earn it a place of choice, along with the french bomb parts, passports, intelligence, missiles, also “found” in irak.

What i find not loony, on the contrary is to think that, as a democracy in a war of choice, the u.s. need to build a narrative of irak the righteous’ war. For that, it is a matter of survival that an uncorrupted (or more realistically “not more corrupt that usual”) opposition to this war must not exist.

“France didn’t go to irak because french people – as the rest of the world – thought it was a stupid idea”, if glarignly obvious, is an explanation which is, in these conditions, absolutely unpalatable.

31

Dan Harfdie 11.19.04 at 11:14 am

John, I think we do disagree on this point: ‘… the US contractors doing the work in Iraq were bound to charge a lot and deliver little, so that the cost of reconstruction would be far beyond the minuscule amounts that had then been budgeted. The appropriate response was not to complain about corruption but to accept reality and the need to spend a lot more money.’

The appropriate response, in my view, was to use outside contractors where and only where it could be proved that they had capabilities that were vital to reconstruction that were unique to them and weren’t shared by Iraqi professionals and/or the military. As to ‘spending a lot more money’, I don’t think that’s the issue, so much as the under-use of budgeted funds. The amount budgeted late in FY03 is ‘spent’ in the sense that it has been allocated from US Federal funds and shows up in the deficit figures, but not ‘spent’, in the sense that most of it has not paid for anything in Iraq or elsewhere. The news pages of the Wall Street Journal have been running story after story documenting how little of that money has been spent: the most recent one I saw estimated that 98% of it was unspent, which is ludicrous. I don’t know why more media outlets haven’t picked this story up.

32

Dan Hardie 11.19.04 at 11:23 am

Tom T, again, we are certainly far apart on one point: your first post praised the existence of an ‘audit trail’, whereas mine explicitly criticised the need for an ‘audit trail’ in postwar conditions, since as far as I can see the one sure effect of requiring such documentation is to elbow domestic contractors aside, if they come from an underdeveloped nation, in favour of US or other developed world contractors. Basically a requirement for an ‘audit trail’ is a Non Tarriff Barrier in reverse: uses bureaucratic means to limit competition to foreign companies only.

33

John Quiggin 11.19.04 at 12:00 pm

“As to ‘spending a lot more money’, I don’t think that’s the issue, so much as the under-use of budgeted funds. The amount budgeted late in FY03 is ‘spent’ in the sense that it has been allocated from US Federal funds and shows up in the deficit figures, but not ‘spent’, in the sense that most of it has not paid for anything in Iraq or elsewhere. ”

True – this hadn’t come out when I wrote the original post. In fact, virtually everything that’s been spent has been the Iraqis’ own money, which I think was the original plan, but with the premise that this would be enough to finance some substantial achievements.

34

Dan Hardie 11.19.04 at 12:00 pm

While lesser minds worry about the reconstruction of Iraq, Dan Simon sees that the real issue is making feeble points against something called ‘The Left’: ‘I could understand a paleoconservative neo-realist making this statement sincerely, or a Randian libertarian making it sarcastically. But an idealistic leftist, on Crooked Timber? Is this what the left has come to?’

Dan, if you think that it is only leftists who are saying that turning a blind eye to possible corruption is a price worth paying for a bit of postwar reconstruction, let me know when you’re next in England and I’ll introduce you to friends of mine who were in Iraq with the military or (in one case) the Foreign Office, and who were party to deals in which money was doled out to local Iraqis to get things started again, without too much (or any) notice paid to auditing. It’s not what ‘the Left has come to’; it’s what the FCO and the Royal Engineers, among other lefty organisations call ‘getting the job done’. Call the average RE Staff Sergeant a morally twisted leftwinger or ‘a paleoconservative neo-realist’and you may not enjoy his response. (Also, try not to thank him for having been ‘flypaper’, and avoid the phrase ‘bring it on’.)

Dan then descends beyond the reach of ridicule with this cretinous and objectionable nonsense:
‘any corruption in the Iraq reconstruction effort is purely a domestic American issue.’
No, it is not ‘purely a domestic American issue’- not unless the twenty-five million inhabitants of Iraq are either a) American citizens or b)magically unaffected by the effects, intended and otherwise, of the occupation and the reconstruction effort.

35

Tom T. 11.19.04 at 12:52 pm

Dan Hardie,

When I mentioned a “paper trail” (not an audit trail), I simply meant that there is now hard evidence that the UN or the US military procurement authorities are capable of corruption. Prior to these episodes, one could conceivably dismiss warnings of corruption by scoffing that it would be impossible for UN officials to steal a billion dollars, or for US procurement people to give in to political pressure. Now there’s proof that indeed that can happen; that’s all I meant.

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No Preference 11.19.04 at 12:59 pm

When I mentioned a “paper trail” (not an audit trail), I simply meant that there is now hard evidence that the UN or the US military procurement authorities are capable of corruption.

Tom, what’s the “hard evidence” that UN officials were involved in corruption? The last I heard the only “evidence” for that came from Ahmed Chalabi, who was refusing to show it to the Volcker commission. Do you have a link?

37

Dan Hardie 11.19.04 at 1:00 pm

Tom- fair enough. As you say, I don’t think we’re disagreeing on anything major. Dan Simon, for the reasons stated above, you are an ultra-nationalist and a fool, if that isn’t a tautology.

38

jet 11.19.04 at 1:13 pm

“you are an ultra-nationalist and a fool, if that isn’t a tautology”, oh yeah, that’s scoring you points with the readers. After going through these posts of reasonable arguements, ol Hardie’s is the only one that looks foolish.

While your use of the word “foolish” was a sad ad hominem, your use of “ultra-nationalist” was slanderous and based on nothing in this thread. Saying that other countries or the UN can be tempted by large unaccountable sums of money is just fucking being in tune with reality, not being “…opposed to international cooperation”.

Simon, you’re also a bit dense or so narrow minded you can’t budge and inch to see a different point of view.

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Dan Hardie 11.19.04 at 1:32 pm

If anybody functionally literate wants to take issue with me, they’re welcome.

Back to the remedial reading class for you, Jet, and try to get your teacher to explain why I’m not called ‘Simon’ even though I do actually criticise somebody whose surname is ‘Simon’. Oooh, tricky, because we do actually have the same first name.

It would, alas, be beyond even the most patient teacher’s resources to explain to a cretin like you that you should actually read what someone has said before disagreeing with them. Hint: I never disagreed with Dan Simon because he was ‘Saying that other countries or the UN can be tempted by large unaccountable sums of money is just fucking being in tune with reality, not being “…opposed to international cooperation”.’ Further hint- I neither wrote nor quoted those words. You would be able to tell this if you had read my posts.

I disagreed with him because he said ‘any corruption in the Iraq reconstruction effort is purely a domestic American issue.’- which remark is indeed both foolish and ultranationalist. But to realise that, you’d have to actually read what I wrote, and which part of Dan Simon’s post I actually quoted. Back to ‘The Very Hungry Caterpillar’ for ‘Jet’, and a gold star for you if you finish it today.

40

jet 11.19.04 at 3:56 pm

I guess I got you all fired up :P

“I disagreed with him because he said ‘any corruption in the Iraq reconstruction effort is purely a domestic American issue.’-” That’s the part I called you narrow minded about. Because in a functional sense, there is only a net gain for the Iraqis reguardless of corruption (unless it reached UN proportions).

So because someone takes the view that corruption or no corruption in Iraq is really a US issue, or least that is one point of view, that hardly is ultra-nationalistic.

And you really hurt my feelings with all those mean things you said about my reading abilities. And maybe you should reread your own posts and point out exactly which part of Dan’s post you were referring to when you called it “ultra-nationalists”. Upon your rereading, you might find it a bit…vague.

But anyone who uses “foolish” and “ultra-nationalist” is hardly attempting to change anyone’s mind ;) Good luck with all that and maybe you and your buddies can have a little chuckle. I live but to serve.

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Dan Hardie 11.19.04 at 4:14 pm

Shorter Jet: Sure, I can’t spot quotations because Teacher hasn’t told me what inverted commas are used for, can’t spell, can’t argue, can’t write and can’t read, especially people’s names. I’m a functional illiterate, although frankly I would not be able to type that sentence unaided myself. And your point is…?

42

Sebastian Holsclaw 11.19.04 at 5:22 pm

“Dan, if you think that it is only leftists who are saying that turning a blind eye to possible corruption is a price worth paying for a bit of postwar reconstruction, let me know when you’re next in England and I’ll introduce you to friends of mine who were in Iraq with the military or (in one case) the Foreign Office, and who were party to deals in which money was doled out to local Iraqis to get things started again, without too much (or any) notice paid to auditing.”

What was ‘getting the job done’ in food-for-oil?

43

Dan Simon 11.19.04 at 5:23 pm

Dan Hardie: I really don’t think I’m an ultra-nationalist–at least I’ve never heard any of my fellow Canadians accuse me of being one. As for being a fool–well, I suppose we all are, to some extent. Right?

When I say that corruption in the Iraqi reconstruction effort is purely an American domestic concern, my point is that those who are paying the bills are the American taxpayers, and they have an avenue–the American domestic political process–via which to express their outrage at (or acquiescence in) the siphoning off of their money to corrupt participants in the reconstruction effort. That same avenue is much more convoluted–if it exists at all–in the case of UN programs like “oil for food”. (As I understand it, other international bodies, such as the EU, suffer from similar problems.) That should be of concern to UN supporters in general, because any organization that lacks the means by which the funders can monitor and credibly object to corruption is simply going to increase its corruption levels without bound.

I can certainly understand the argument that in some cases, corruption may be the lesser of two evils. But the complacency shown in this thread misses the very real danger that corruption tolerated for this reason–especially in the absence of serious discussion of its costs and victims, leading to a consensus as to the maximum tolerance level–will quickly spiral out of control, completely undermining the effectiveness of any program suffering from it. I believe that is essentially what happened in the case of “oil for food”.

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Dan Hardie 11.19.04 at 6:09 pm

Sebastian asks me: ‘What was ‘getting the job done’ in food-for-oil?’

I didn’t say anything was, and if you read my posts you won’t see a single mention of food-for-oil, which are all solely concerned with reconstruction spending. Next, please. Oh, God, Dan Simon -another Canadian with superpower envy.

Dan, the most dishonestly chauvinistic pro-USA writer I can think of is Mark Steyn, a Canadian subject. And David Frum is pretty close. I suppose you’ve read George Orwell’s writing on ‘transferred nationalists’. If not, do so, because you are one.

And since you are seriously defending the proposition that the effects of the expenditure of billions of dollars of US money in Iraq- even considered apart from the presence of tens of thousands of US troops, if that were possible- is ‘purely an American domestic concern’, you are a fool. There are twenty-five million Iraqis who may also be said to be legitimately ‘concerned’ by this expenditure, which- given its impact on such matters as food supply, health care and the defeat of the insurgency- is quite literally a matter of life and death for at least some Iraqis. And to you it’s ‘purely an American domestic concern’- you offer no qualification, you do not say it’s ‘an Iraqi and an American concern’.

You said this, so accept that it was a fool’s remark, and spare me this ‘we are all equally foolish’ stuff. (What happened to conservatives and personal responsibility?) If you catch me out saying something as cretinous about Iraq, let me know. Until then, the dunce’s cap fits you, so you can wear it.

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Dan Simon 11.19.04 at 6:11 pm

I just nees to say thinking that the decisions to engage the military or damage its diplomatic relationship with the u.s., derives from saddam-evil-oil-money is simply loony.

Are you serious? France’s diplomatic relationship with the US was rocky long before Iraq–there wasn’t much damage to do, really. Of course there’s always a baseline of goodwill between relatively prosperous Western democracies that needs to be maintained, but France’s betrayal of the US with respect to Iraq never seriously jeopardized that. And that baseline aside, countries like the US and France risk each other’s diplomatic wrath over relatively small amounts of money all the time. Have you never heard, for example, of trade disputes?

If corruption from third world countries representing 0.0something of the foreign trade could influence the country’s decisions to go to war or not, is suppose right now we’d be fighting the sahraouis or the tamil tigers.

That’s a strawman. Nobody seriously expected the French to send a single soldier to Iraq. Non-obstructionism was the most anyone really hoped for–and even that was not forthcoming.

Then, because it just doesn’t match the facts. Chirac was originally undecided about irak, and began to plan going along (very little articles mentioned it, as it doesn’t fit well with the history in making). Only after seeing the u.s. insistence to go without waiting for the inspectors, and seeing its domestic opinion on it did he oppose it.

Well, I heard a different account, but I suppose we’ll never really know. The real point is that Jacques Chirac is accountable to the French people, who were probably, on the whole, net beneficiaries of the “oil for food” corruption, rather than net victims of it. That says all that needs to be said, really, about the kind of accountability problems that caused “oil for food” corruption to run rampant.

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jet 11.19.04 at 6:28 pm

Dan,
As you probably understand, I am devastated by your words. I shall always remember the kind an gentle soul who set me straight. Please accept my sincere gratitude for the abundant amount of entertainment you have provided.

Button-Pusher

47

Matt McGrattan 11.19.04 at 6:37 pm

Dan Simon:

Do you seriously think that the amount of money allegedly siphoned out of the Oil-for-Food scheme by France was enough to make them oppose the Iraq war?

[as opposed to all kinds of other reasons.. some to do with cynical posturing, some to do with general opposition to the war, some to do with pandering to domestic political consumption, etc. etc. some good, some bad…]

And in what sense did France BETRAY the US? How can one sovereign country betray another by planning to vote against a measure proposed by that country in an international forum like the UN?

In what screwed up sense of betrayal does that count as a betrayal?

Be very careful about your answer. Given the US’s current willingness to blatantly break binding agreements and treaties whenever it suits it better be a good one or it will be a pretty severe instance of the pot calling the kettle black…

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Dan Simon 11.19.04 at 7:00 pm

Do you seriously think that the amount of money allegedly siphoned out of the Oil-for-Food scheme by France was enough to make them oppose the Iraq war?

Of course it was. Foreign policy positions, in general, are bought pretty cheap. I doubt you’d hesitate for a second in attributing this or that American position to the odd billion-dollar financial interest by a major contributor to the party in the White House. Are you suggesting France is somehow above all that?

Of course, whether French companies’ financial interest in “oil for food” actually was the deciding factor determining France’s position on the Iraq war is a different question. To be honest, I have no idea.

And in what sense did France BETRAY the US?

Only in the mildest sense of the kind of screwing-over that countries–including mutually quite friendly ones–administer to each other all the time, when there’s a buck to be made, a point to be scored, or a domestic constituency to be placated. (EU countries pull this kind of thing all the time on each other, for instance.) Don’t worry–I’m not working myself into a big, morally self-righteous lather over it. My main point is not to lambaste France, but rather to call attention to the inherent lack of accountability that made the massive corruption of the “oil for food” program possible.

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Dan Simon 11.19.04 at 7:17 pm

Dan Hardie: Since you seem unable to address any of the points I raised, I will confine myself to one comment in response: you know less than nothing about me, my overall political alignment, or my opinions regarding the US or Canada. It will most likely reflect less negatively on you if you can manage to limit your public comments to subjects with which you are at least passingly familiar.

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Dan Hardie 11.19.04 at 7:24 pm

Shorter Dan Simon: Since even I have realised that I was being indefensibly foolish when I said’any corruption in the Iraq reconstruction effort is purely a domestic American issue’, I shall retreat behind a smokescreen of self-pitying and pompous phrases.

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Giles 11.19.04 at 8:18 pm

“And in what sense did France BETRAY the US?”

Specifically De Villpain betrayed Powell – he said France wouldnt oppose a resoultion but then he did. Of course it may just have been a misunderstanding. But I expect that half the reason Powell left was in order to be able to write his memoirs and set the record straight.

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abb1 11.19.04 at 8:41 pm

…the amount of money allegedly siphoned out of the Oil-for-Food scheme by France…

I thought those billions were allegedly siphoned by the Iraqi government, which maybe regrettable because it was a violation of the sanctions, but not particularly outrageous because the Iraqi government was still penalized by getting only -what? – 5-10% of what would be 100% theirs without the sanctions.

I also understand that some individuals in France, Russia and other countries recieved some kick-backs (allegedly) in the process; probably a lot of money for an individual but hardly something noticeable on a scale of a national economy.

Is there any evidence or allegation that France as a whole or the French business community or, for that matter, any French entity that might’ve affected the foreign policy there received any significant benefits?

Thanks.

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abb1 11.19.04 at 8:49 pm

Moreover, it appears that the Iraqi government in fact had not had any WMD or WMD programs after 1991, which means (unless you want to bring up the ‘WMD-program-related-activities’ and intentions) that the sanctions were illegitimate. So, what’s this whole fuss about, anyway?

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Rob 11.19.04 at 9:03 pm

I seem to remember something being mentioned about ELF benefiting to no little degree from the oil-for-food programme. That doesn’t mean it’s true, but if it were, then given that ELF is a fairly large French company, there would be a pretty significant “French entity” which recieved benefits. Frankly, though, whether the French government opposed the war for the most self-serving reasons possible is irrelevant to me (or indeed anyone other than the French government): I have my reasons, which could only be self-serving in the very limited sense of providing schaudenfraude when it all goes predictably belly-up.

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No Preference 11.19.04 at 9:04 pm

I really don’t think I’m an ultra-nationalist—at least I’ve never heard any of my fellow Canadians accuse me of being one.

An ultra-nationalist Canadian. There’s a thought to stop your mind.

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Giles 11.19.04 at 9:15 pm

abb1 – ELF is the main connection – The pending corruption charges against Chirac involve ELF and so thats where the paper trail starts. But of course the matter isnt going to be proved untill he leaves office and looses his immunity.

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abb1 11.19.04 at 9:21 pm

I seem to remember something being mentioned about ELF benefiting to no little degree from the oil-for-food programme.

How could it be that everybody benefited so much? The oil was sold at a market price or very close to it, the buyer (let’s say the ELF) paid 10% over that price to Saddam and on the top of that the buyer benefited to no little degree – to the extent that it, supposedly, lobbied the government to screw the Americans when it was pretty clear that the Americans will do it anyway and will then punish the detractors by refusing to share the loot with them.

Anything is possible, of course, but I don’t think it adds up, really.

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yabonn 11.19.04 at 9:51 pm


Are you serious? France’s diplomatic relationship with the US was rocky long before Iraq—there wasn’t much damage to do, really.

I’m sure you can add by yourself here the examples of recent francophobia of your choice, proving there is a diplomatic damage due to the irak war.

France’s betrayal of the US with respect to Iraq

Are you aware that sentences mixing so well candor, assertiveness, arrogance, and self-righteousness are, ah, um, er, _categorizing_ for who utters them?

Have you never heard, for example, of trade disputes?

Really planning to go along the “irak didn’t damage the u.s.-france diplomatic relationships, are you?

Non-obstructionism was the most anyone really hoped for—and even that was not forthcoming.

Obstructionism my foot. Not one day in the u.s. planning of irak war was changed because of france. This is all about the u.s. becoming all red in the face because it didn’t have the icing on the cake of the u.n. rubberstamping the invasion.


Then, because it just doesn’t match the facts. Chirac was originally undecided about irak

Well, I heard a different account, but I suppose we’ll never really know.

May i advise you to file your account along with the wmd claims?


The real point is that Jacques Chirac is accountable to the French people, who were probably, on the whole, net beneficiaries of the “oil for food” corruption, rather than net victims of it. That says all that needs to be said, really, about the kind of accountability problems that caused “oil for food” corruption to run rampant.

Or : “I need france to be corrupt. Opposition to war in france was popular. Ergo, each french people was corrupted by saddam.” Simply weird.

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Dan Simon 11.20.04 at 2:27 am

Yabonn: If you’d just calm down and understand that (as I’ve already made clear) my point is not to bash France, maybe we could return this discussion to (a) the original topic and (b) some semblance of coherence.

To summarize: John Quiggin’s original claim was that both the “oil for food” program and the postwar reconstruction of Iraq were inevitably prone to corruption, and yet worth supporting regardless. My point was that the mechanisms for minimizing corruption in the latter–that is, those within the domestic American political system that are meant to prevent taxpayer funds from being squandered–were already in place, and empowered to do their job. The “oil for food” program was different, in that the money that was meant to be used to help the Iraqi people was being assigned by Saddam Hussein, under a UN bureaucracy loosely controlled by many countries, some of whom stood to benefit from Saddam Hussein’s diversion of the money away from those it was meant to help. Such an arrangement, I assert, virtually guarantees a high level of corruption, and it therefore clearly should never have been set up that way.

As it happens, one of the countries that has been mentioned on this thread (originally, it turns out, by none other than you, Yabonn) as a possible beneficiary of the corruption is France. There’s reason to believe that France might indeed have benefited from this corruption, but saying so doesn’t turn my point into some kind of vile calumny against France. After all, every country in the world has done such things, and the vast majority (including France) have done much worse, at one time or another.

All of this focus on whether France is culpable for this or that misdeed has distracted from my original point: that the “oil for food” program was completely devoid of serious, accountable oversight, and hence was doomed to be rife with corruption, in a way that the Iraqi reconstruction was not. If France, French corporations, or French individuals had not profited from it, then other countries, corporations and individuals would have–and, indeed, they most certainly did, in large numbers and on a large scale. So please stop acting like the French version of the American superpatriot so many people seem to have mistaken me for being, and turn your attention instead to the issue at hand: the fundamentally flawed structure of the “oil for food” program.

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abb1 11.20.04 at 9:50 am

BTW,
a typical wingnut anti-French post (there aren’t any on this site) accuses France of both
– benefiting from the oil-for-food
and
– trying to end the sanctions altogether.

Isn’t it true that they led the effort in the UN to lift the sanctions? If it’s true, doesn’t it contradict the above theory describing Chirac’s motivations in opposing the Iraq war?

61

No Preference 11.20.04 at 12:12 pm

dan simon, your characterization France’s behavior prior to the Iraq invasion as a “betrayal” of the US was silly and offensive. I don’t blame yabonn for objecting.

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yabonn 11.20.04 at 4:28 pm

_As it happens, one of the countries that has been mentioned on this thread (originally, it turns out, by none other than you, Yabonn) as a possible beneficiary of the corruption is *France*._

Bold mine.

There is corruption everywhere, everytime from eveybody in these types of deals. Focussing on the few french individuals in the lot and implying it explains something about france’s position about irak, as you do in your posts above, is simply raving wingnuttery.

So please stop acting like the French version of the American superpatriot

I saw the republican convention. There’s no french version of the american superpatriot. It’s not sophistication, it’s fear of ridicule.

You have half a point, though, and i can imagine john quiggin moaning about another thread drowned into franco-flames. I think it’s your bit about policies on irak of “some nations” explained by corruption in u.n. as a mere aside, as a given, that did the trick.

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