Chalabi
I find it … bizarre and irritating this is cast as political issue, that the political cast of pundits enters into the argument, rather than looking at the facts surrounding Chalabi. I suppose this is a textbook case of attacking the messenger.
First, I believe the Guardian articles I have linked provide substantive information. Their story matches what I have heard about the Petra scandal from local banking sources.
Let me note that I had given little thought to the Chalabi connexion with Petra Bank before the recent crisis. However, I had some introduction to Petra Bank before this crisis, in a non-political context.
First, summarizing the scandal since many seem to be too busy to read. Chalabi begins the banking issue in 1977 with royal support. To go beyond the Guardian’s information, from AllRefer.com - Jordan - Banking And Finance | Jordanian Information Resource which gives a fine history of Jordanian banking & finance sector up to 1989. Of note, you will find an explanation of the foreign currency issues that provoked the Petra Bank collapse. You will note that the foreign exchange crisis rose independently from any “Iraq” connection.
Note from the Guardian story:
As noted, I have heard nothing in the banking community here to question this, or to conclude that the call was targeting Petra Bank or Chalabi. My experience tells me if this was truly the case, I would have at least heard something supporting the Chalabi defense. Complaints about the exchange regime and bad policy of the time, yes. The idea that Chalabi was targeted for not being ‘pro-Iraq’ / Sadaam c. 1989 is simply a ‘just so’ story for the gullible.
Now, let me highlight the following:
Now, first the story outlined here is not terribly atypical. Captive banks held by family magnates or wanna be magnates with official connections making tied loans to family controlled or tied firms is a typical story regionally. It strikes me as rather … typical of a bank of the Petra Bank profile of that era.
Second, I find it hard to credit that Andersen c. 1989 would fabricate a bank audit. That is, is seems to be me quite likely, given the nature of business in the region, the poor regulatory environment of the era (it is better now, not good but better) and unstable monetary policies that the Chalabi kieretsu were playing games, floating loans to connected companies and engaging in fraud in regards to its asset position.
The second Guardian article “New bank scandal evidence against family of leader in waiting”
For those who may doubt the Jordanian connexion and convictions, I submit that the correlation with the Swiss accusations, and conviction in Swiss courts is rather damning, at least insofar as painting a picture of the Chalabi network of companies – for all that they have ‘convenient’ explanations for it all.
Now, taking the above as the baseline, where might politics enter? The connexion which might be political, and which I can credit is that the Chalabi group was doing this with some ‘understandings’ in the Palace of the day, and that political reasons played in the Jordanian government not cutting Petra Bank slack – that is overlooking their reserve shortage or giving them leeway in responding to the capital call from the Central Bank. That is credible, although there is no evidence to support it.
However, the fact remains there is good evidence that Petra Bank was indeed engaged in fraud, that even by regional standards (ex-Lebanon, let me give advice here, don’t put your money in a Leb. bank. It is an opaque world and the things I have heard of in re their practices are decidedly un-kosher.) were aggressive.
I submit that in conjunction with CIA and State Department feelings that Chalabi et al were skimming money on INC funding from USG, that we see a disturbing pattern of behaviour, and I see no reason to give credence to the Chalabi political story – other than in a very limited way that perhaps some political carte blanche for dirty activities was pulled.
This is decidedly not the sort of person I want to see heading Iraq. I do not want to see Egypt on the Euphrates. I find it stunning that December… no actually I find it typical, but I find it stunning that others are willing to turn a blind eye, for an argument from ignorance, that is ‘we’ don’t have other good leaders lined up, so…
Now I am the first to tell you, there are no fucking virgin births in this region, and if you want to have the hands of a saint, go do business elsewhere. I am not happy about a number of things I have seen in my career here, and perhaps should have said more about. I have a party in one of our transactions that I frankly think is involved in money laundering for nasty people. I am not happy about it, but it comes with the territory, and so long as our side is clean… However, at the same time, the image I take away from the Guardian report and from conversations I have had (not re Chalabi) about Petra Bank is one of the worst end of things.
Regarding the issues of INC misappropriation of funds, the following story indicates some of the problems, “Iraqi opposition leader suspected of misusing U.S. funds, but may get more” Knight Ridder Washington Bureau, Feb 19, 2002
Quoted in part:
“Earlier this year, the State Department threatened to cut off the INC’s funding for information programs and other nonmilitary activities after an audit turned up expenditures that were deemed questionable or were unaccounted for. The inspector general’s audit of $4.3 million in grants mostly criticized the group’s accounting and payroll procedures. But it also found questionable expenses, including $2,070 for a gym membership, $5,541 for legal fees related to a rental dispute and other money used for first-class plane tickets. The audit also suggests the INC may have used taxpayers’ money to lobby in Washington, which is illegal. In a section that is partly blacked out, the public version of the audit cites a person paid “in excess of the budgeted amount” and suggests the unnamed person had a relationship with the Iraq Liberation Action Committee, a nonprofit group that uses private donations to pay for lobbying. “We could not ascertain whether any violations of the general restrictions on lobbying occurred, because INCSF (the INC Support Foundation) lacked a transparent agreement that documented” the person’s duties, the audit says.”
In the final analysis, this should not be an issue of ideology but good practices.
Liberal, conservative, I fail to see the fucking point. The point is objective evidence suggests Chalabi is corrupt. I know my amigos in the agency think so. So uninformed pundits can make snide remarks about ‘Jordanian justice’ and Molly whomever but the facts are not good. Pretending otherwise or turning a blind eye to this because some of the critics are from the ‘wrong’ end of the political spectrum strikes me as exhibiting the worst of ideology over rational thought.
Now, as to the issue of who else, well again, arguments from ignorance are not fucking arguments. Primo, the need for an interim adminstration, an international one to take away the sting of occupation, is clear to allow some indigenous leadership to emerge. Second, Pachachi and others like him strike me as having cleaner backgrounds that Chalabi.
Perhaps our usual suspects can now come forward to argue that this is all simply some political plot by ‘liberals’ or some such bloody nonsense.
As for the image of the INC inside Iraq: I have never heard anything positive about them from Iraqis. In Arabic source writing, I see two main critiques – Chalabi’s corruption w/ INC incomptence, and the CIA background.
Neither is helpful, together it is not a helpful brew.
