[Congressional Record Volume 144, Number 23 (Monday, March 9, 1998)]
[Senate]
[Pages S1550-S1552]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      ENFORCE OIL EMBARGO ON IRAQ

  Mr. MURKOWSKI. Mr. President, although stories about Iraq have moved 
off page 1, history teaches us that we should be prepared for another 
crisis, and I will tell you why. Most of the previous debate on Iraq 
has focused on military options or support for opposition groups, but I 
am here to call the attention of my colleagues to an issue that seems 
to have been lost. Where is the will of the world to enforce the 
economic sanctions, including the embargo on oil sales, that date back 
to the end of Operation Desert Storm?
  We must go back, I think, to the original purpose of the economic 
sanctions against Iraq and simply shut down Saddam Hussein's ability to 
fund his program for weapons of mass destruction. Because there is a 
significant amount of oil that he is able to sell, and the proceeds are 
not going for humanitarian needs in Iraq; they are going into Saddam 
Hussein's pocket, and, as a consequence, he is fueling his military 
machine.
  In my opinion there is only one way to shut down Saddam's military 
machine. We must effectively cut off the flow of oil from Iraq. I would 
like to share a few facts that my colleagues may not be aware of, but 
that are critical to the issue of how Saddam Hussein maintains his 
current grip on power. He does that by the cash flow generated from 
illegal oil sales.
  Revenue from oil exports have historically represented nearly all of 
Iraq's foreign exchange earnings. In the year preceding Operation 
Desert Storm, Iraq's export earnings totaled $10.5 billion with 95 
percent attributed to oil exports, so that's really his cash flow. 
Iraq's imports during the same year, 1990, totaled only $6.6 billion.
  United Nations Security Council Resolution 687, passed in the 1991 at 
the end of the gulf war, requires that international economic 
sanctions, including an embargo on the sale of oil from Iraq, remain in 
place until Iraq discloses and destroys its weapons of mass destruction 
programs and capabilities and undertakes unconditionally never to 
resume such activities.
  But the teeth in Resolution 687 have effectively been removed with 
the expansion of the so-called ``oil-for-food'' exception to the 
sanctions. The first loosening of the sanctions occurred in 1995, 
when Security Council Resolution 986 allowed Iraq to export $1 billion 
in oil every 90 days--$4 billion over one year.

  And most recently, during the period when Saddam was again violating 
Security Council resolution by refusing to allow international 
inspectors to conduct their work, the United Nations voted to more than 
double the amount of oil Iraq can export per year.
  On February 20, the U.N. Security Council, with the Clinton 
administration's support, adopted Resolution 1153 which will allow Iraq 
to export $10.52 billion in oil per year--$5.256 billion every 180 
days. In other words, Iraq is now authorized to export nearly as much 
oil, in today's dollars, as it did before it invaded Kuwait.
  So we have now given Saddam Hussein the green light to completely 
rebuild his oil export capacity. As Patrick Clawson, from the 
Washington Institute for Near East Policy, observed in a recent 
analysis of Resolution 1153:

       The UN-authorized limit translates into 2.25 million 
     barrels per day (mbd), if the price averages $13 barrel. In 
     addition, Iraq produces .4 mbd for domestic use and .2 mbd 
     for export to Jordan and smuggling out the Gulf or to Turkey. 
     That means Iraq would have to produce 2.85 mbd to make use of 
     the full UN quota. In fact, it is unlikely that Iraq could 
     produce more than 2.5 mbd today and it may take Iraq until 
     the end of 1999 before it could reach a production level that 
     takes full advantage of the UN-authorized export. In short, 
     Iraq faces no effective limit

[[Page S1551]]

     on its oil exports, because it is now permitted to export all 
     the oil it is capable of pumping.

  Mr. President, will the United States force Iraq to wait to rebuild 
its oil production capability until it meets the conditions imposed at 
the end of the gulf war? Quite the contrary. In fact, paragraph 12 of 
Resolution 1153 directs the Secretary General to establish a group of 
experts to determine whether Iraq has the production and transportation 
capacity to export the full amount allowed. The resolution goes on to 
say that the Security Council, ``expresses its readiness'' to authorize 
``the export of necessary equipment to enable Iraq to increase the 
export of petroleum or petroleum products.''
  Analyst Patrick Clawson correctly pointed out the dangers of allowing 
Iraq to resume the import of petroleum equipment:

       Were Iraq to resume large-scale imports of oil field 
     equipment, that would pose serious arms control problems. Not 
     only is some of the equipment dual use (e.g., heavy trucks), 
     but it is important to remember that Iraq disguised its 
     ``super gun'' barrel as an oil pipeline, convincingly enough 
     to mislead some of the ``pipe'' producers.

  Even as President Clinton vowed to ``keep the sanctions on'' Iraq 
until the regime lives up to its commitments, we are creating a giant 
loophole for Iraq's most important commodity--oil.
  Of course, expansion of the food-for-oil program is sold as a 
humanitarian gesture. U.S. Ambassador Peter Burleigh described the 
Security Council action as the ``largest U.N.-sanctioned humanitarian 
program'' in its history. I have no disagreement with finding ways to 
reduce the misery of the Iraqi people, who have suffered greatly under 
Hussein's leadership, but I do have a problem with the oil-for-food 
expansion, because I am not convinced it is controllable under the 
current U.N. proposal.
  The administration has not yet convinced me that the monitoring of 
this program is so airtight that it does not allow kickbacks that 
benefit Saddam Hussein directly.
  But even if the monitoring is airtight, Mr. President, I am convinced 
that the program indirectly benefits Saddam Hussein for several 
reasons.
  First, using this program to feed his people and to provide medicine 
frees up other resources that can be used to finance his factories of 
death.
  Second, the increase in illegal sales of petroleum products coincided 
with implementation of the oil-for-food program in 1995. Part of this 
oil is moving via truck across the Turkey-Iraq border. A more 
significant amount is moving by sea vessel through the Persian Gulf. 
The Multinational Interdiction Force that operates in the gulf reported 
last fall that exports of contraband Iraqi oil through the gulf has 
jumped sevenfold in the past year from $10 million in diesel fuel sales 
in 1996 to $75 million in 1997. Furthermore, Iraq has been steadily 
increasing exports of oil to Jordan, from 60,000 barrels per day at the 
end of Operation Desert Storm to an expected 96,000 barrels per day 
currently.

  An ABC News report in December of 1997 cited the Center for Global 
Energy Studies estimate that Saddam Hussein was generating $300 to $400 
million a year from contraband oil sales.
  Mr. President, these are illegal sales that have generated funds for 
Saddam Hussein's war machine.
  I have absolutely no doubt that allowing Saddam to increase his oil 
production under the new resolution means that contraband oil exports 
will increase proportionately. It is this illegal flow of oil that is 
the lifeline that keeps his Republican Guards well fed and his weapons 
of mass destruction production program on track. A former head of 
Iraq's military intelligence, in an interview with ABC News, said that 
the dollars generated by smuggling ``enable Saddam Hussein to support 
his intelligence services and the military to keep them loyal. That is 
how he stays in power.''
  Finally, Resolution 1153 does more than provide for humanitarian 
imports. It finances almost the full range of imports that Iraq would 
make were it not under the sanctions. Again quoting from Patrick 
Clawson:

       In fact, UNSCR 1153, provides imports at about half the 
     prewar level, putting the lie to the idea that Saddam is 
     stuck in an ever-constricting ``box.''

  He is not stuck in an ever-constricting box; the box is full of 
holes. The resolution provides for infrastructure improvements such as 
sewers and electricity--all activities that would normally be 
undertaken by the Iraqi Government. To the extent this U.N. action 
quells citizen discontent with Iraqi leadership, we are just prolonging 
the life of this horrible regime.
  So why did the U.N. Security Council adopt Resolution 1153? I have a 
few theories about the motivation of the interested parties. For the 
Clinton administration, this may have been viewed as a counterbalance 
to the call for military action. I think it was counterproductive, but 
that was their decision.
  But for other members of the Security Council, particularly those who 
oppose the use of military force--Russia, France and China--the 
motivation is clear. It is an economic motivation. As a recent Wall 
Street Journal article observed:

       For Kremlin envoys, more than $10 billion in contracts and 
     debt is at stake in bringing an end to the United Nations 
     economic sanctions against one of Russia's biggest trading 
     partners. Indeed, even under the U.N. embargo, Russian oil 
     companies such as NK Zarubezhneft and AO Surgutneftegas have 
     been the prime beneficiaries of the ``food for oil'' program 
     . . . Russia signed and delivered 36 contracts to supply 
     pharmaceuticals worth $100 million to Iraq hospitals under 
     the U.N. deal.

  The Wall Street Journal correctly observes that Russia's heavy 
industry would also benefit by supplying oil equipment, such as 
platforms and rigs, to Iraq, as would Russian arms makers. Of course, 
some Russian companies have not waited for the end of sanctions. Iraq 
obtained several Russian gyroscopes used for aiming Scuds in 1995, and 
just last week we became aware that U.N. inspectors accused Russia of 
selling Iraq huge steel drums that could be used to produce biological 
warfare agents.
  In spite of these actions by Russia, it was reported this weekend 
that U.N. Secretary General Kofi Annan was studying a Russian request 
to have a Russian named as codeputy chairman of the U.N. special 
commission overseeing the weapons inspections. I sincerely hope the 
United States will use its veto power to prevent this appointment in 
light of the obvious conflicts of interest.
  I should note, Mr. President, that both China and France have similar 
conflicts of interest in that their close economic ties to Iraq have 
been in existence for some time, and their desire for Iraqi oil is well 
known. These have made them hard set against any military action for 
some time.
  With the United Nations having now negotiated a deal with Saddam 
Hussein that appears in the short term to have sidetracked military 
options--and with members of the Security Council actively working to 
let Saddam Hussein off the hook--what can the United States do 
unilaterally to advance our national security interests?
  I have some suggestions. First, the Congress should hold hearings to 
examine the impact of increased oil sales on Saddam Hussein's ability 
to stay in power. As chairman of the Energy and Natural Resources 
Committee, I would like to conduct these hearings jointly with the 
Senate Foreign Relations Committee and my good friend, Senator Helms.

  Second, the administration should keep our forces in the gulf region 
while we test whether this time Saddam Hussein means what he says.
  Third, Congress should instruct the administration to pursue means to 
tighten the oil-for-food monitoring program and to develop measures 
that would prevent the illegal leakage of oil into the world 
marketplace. I submitted a resolution 2 weeks ago, Senate Concurrent 
Resolution 76, which would send that message to the administration. I 
plan to amend that resolution to reflect what is learned in 
congressional hearings, and I will ask the Senate to take action on 
that in the near future.
  My resolution will call on the administration to consider the 
following options:
  First, expanding the multinational interdiction force, the MIF, in 
the Gulf of Arabia and ensuring that the rules of engagement allow MIF 
forces to effectively interdict vessels containing contraband oil.
  Second, using all diplomatic means available to ensure that other 
countries in the region are not aiding illegal oil exports in violation 
of the U.N. resolutions.

[[Page S1552]]

  Third, inspecting all vessels leaving the Iraqi Port of Basra to 
ensure that the economic sanctions are not being circumvented. This 
type of blockade is justified under existing U.N. resolutions 
implementing economic sanctions. While it may sound like an extreme 
measure to initiate a blockade, I remind my colleagues that we have a 
blockade of the airspace over that part of the country, which we have 
taken the initiative to enforce.
  Fourth, and finally, entering into negotiations with oil-producing 
nations to encourage them to make subsidized oil sales to Jordan so 
that the Iraqi-Jordanian flow of oil can be shut off.
  Taken together, all these measures will serve to increase Iraq's 
economic isolation and provide a deterrence to illegal actions. This is 
an approach we used successfully in confronting the former Soviet 
Union, and I think we should return to it right now.
  Again, oil is the key to controlling the future military capability 
of Iraq. We must control it if we are ever going to contain Saddam 
Hussein.
  Mr. President, that concludes my remarks. I yield the floor and 
suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. NICKLES. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NICKLES. Mr. President, I rise, one, to compliment my colleague, 
Senator Murkowski from Alaska, for his speech in talking about the 
United Nations and their increase of the flow of oil. I want to make a 
couple comments about the administration's handling of the latest 
crisis with Iraq and express my very strong displeasure with the 
administration, because I do not think they were very open with 
Congress.
  I met with Secretary of State Albright, Secretary of Defense Cohen, 
National Security Adviser Sandy Berger, and Chairman of the Joint 
Chiefs of Staff General Shelton on numerous occasions when we were 
debating what our reaction should be to Iraq's noncompliance with the 
U.N. resolutions allowing arms control inspectors to investigate 
whether or not they were building up munitions of mass destruction. I 
know the Senator from Arizona sat in on several of these meetings.
  As you know, we were in the process of building up armed forces. We 
were very close to having a military strike. Some people were 
suggesting different alternatives. The Senator from Alaska said, 
``Well, maybe we should curtail the flow of oil. We have a program that 
is called oil for food that has been going on for years now. Maybe if 
we tighten that up, it would put an economic squeeze on the Iraqis and 
maybe they would change their behavior and maybe we wouldn't need to 
drop bombs to have Saddam Hussein realize the errors of his way and 
that he needs to comply with the U.N. resolutions.''

  I told the Secretary of State that I was upset about the fact that 
our international coalition has dissipated, if not disappeared. The 
only real strong supporter we had in this entire venture was Great 
Britain. We did not have strong, at least visible support, or audible 
support from the Saudis or from Turkey. We did not have access to the 
bases in those countries for bombing purposes if there was an 
airstrike. That bothered me a lot.
  But what bothers me as much now, when we were discussing different 
options in lieu of a military strike, and one of the options was 
curtailing the flow of oil that was discussed in this Capitol with 
leaders of our Government, our leaders did not tell Congress that they 
had already agreed in the Security Council, or they were working on an 
agreement in the Security Council, on February 20, to more than double 
the amount of oil that would be used in this oil-for-food program--more 
than doubled.
  Actually, they go from $2 billion every 6 months to $5.2 billion. 
They did not tell us that. Most people were not aware of the fact that 
before the Secretary General flew to Baghdad for his effort to avert or 
stop the airstrikes and achieve compliance, 2 days before, the U.N. 
Security Council had raised the amount of the oil-for-food program and 
more than doubled it. We had those sanctions on since 1991. We 
restricted the flow of oil to that specific amount of $2 billion for 
every 6 months, and then all of a sudden, just when we are getting 
ready to maybe have airstrikes and the U.N. Secretary General was going 
to go to Baghdad to negotiate a deal--he did not use it for leverage, 
we basically gave them the carrot--we gave him that incentive before he 
went to negotiate.
  It just happens to be a coincidence? I do not think so. And why 
wasn't the administration forthcoming to Members of Congress and say, 
``Well, we've already done this,'' or ``We are now negotiating the U.N. 
Security Council to do this.'' They did not do that. They did not tell 
this Senator, they did not tell other Senators that they were in the 
process of doing it, and that bothers me. It bothers me a lot.
  I for one had serious misgivings, as I know other Members of this 
body did, on how far we should go in response and how much of a blank 
check this Congress should give this administration in dealing with 
Saddam Hussein, but for them to not tell the Congress or the American 
people, and the fact that the increase in this oil-for-food program was 
going forward at this very critical time--just a coincidence, I guess--
is more than an oversight. It is a very serious mistake. A very serious 
mistake in dealing with Congress and a very serious mistake in our 
foreign policy as well.
  So I compliment my colleague from Alaska for bringing this to our 
attention. And I wish to bring it to the administration's attention 
that some of us might have been willing to say, hey, let us use the 
oil-for-food program as an incentive to get him to comply. I do not 
think we would have said, let us give it to him, and then hope that 
maybe he would agree with the Secretary General. Maybe the deal was 
already cut before the Secretary General left. We have not heard that, 
but maybe that was the case. But in any case, I think the 
administration was not very forthcoming with Congress. And that is not 
a very positive sign.
  I yield the floor.
  Mr. MURKOWSKI addressed the Chair.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. Mr. President, seeing no other Senator seeking 
recognition, I ask unanimous consent to speak briefly for 5 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MURKOWSKI. I thank the Chair.

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