[Congressional Record Volume 150, Number 31 (Thursday, March 11, 2004)]
[House]
[Pages H1042-H1044]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       PRESIDENT'S GRAND STRATEGY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Florida (Mr. Foley) is recognized for 5 minutes.
  Mr. FOLEY. Mr. Speaker, as Paul Harvey says on his radio show, now 
for the rest of the story.
  It is interesting, many of the Democrats have talked about job loss 
in America, but they do not mention the fact that trade has actually 
brought jobs into America. In Ohio, the Honda plant now paying high 
wages for its employees assembling Honda automobiles. In South 
Carolina, I know the Democratic governor was very instrumental in 
getting BMW and other companies to come to their State to create jobs 
for their citizens, high-wage, high-paying jobs.
  You can look at one-half of the spectrum and say we have real 
problems. We are trying to find employment for every American. But they 
seem to ignore, they seem to ignore the fact that trade has brought 
jobs to this country, good jobs to communities that were desperately in 
need of those jobs.
  This morning in a 1-minute, I was extraordinarily critical, 
rightfully so, of the Democratic candidate for the presidency. I am not 
allowed under House rules, I was admonished today, for using the name 
of a Senator, so most of us know who I am talking about.
  But the word and phrase used yesterday on an open mike was that this 
administration is corrupt and is lying. That is the charge by the 
Democratic nominee for President about the sitting President of the 
United States of America. I called it this morning despicable and 
disgraceful, and I stick by that terminology, because that is the 
truth.
  Now, look at who they are talking about. We are talking really about 
Iraq, because they keep using that as the reason they are calling this 
President a liar. They are saying Iraq is the reason he should be 
called these derisive terms, which I believe are disrespectful for any 
sitting chief executive President of the United States.
  So what does that say ultimately, that we should not have done 
anything in Iraq, we should not have gone to Iraq, we should not have 
dealt with Iraq? That is their conclusion.
  Well, today in the New York Times, ``Saddam team skimmed billions in 
aid projects. Cash in suitcase.''
  In its final years in power, Saddam Hussein's government systemically 
extracted billions of dollars in kickbacks from companies doing 
business with Iraq, funneling most of the illicit funds through a 
network of foreign bank accounts in violation of the UN treaties.

[[Page H1043]]

Millions of Iraqis were struggling to survive on rations of food and 
medicine, yet the government's hidden slush funds were being fed by 
suppliers and oil traders from around the world, who sometimes lugged 
suitcases full of cash to ministry offices.''
  That is who they are defending. Saddam Hussein, who killed hundreds 
of thousands of his own citizens, we should not have gone there and 
interrupted his killing spree. We should not have done anything to stop 
the demonic leadership of Saddam Hussein.
  I reject the comments, and I am entering the entirety in the Record, 
because I want people to be able to read in the Record what the New 
York Times discovered about the cash-skimming operations of this ugly 
regime.
  Now, another article that I will enter in its entirety in the Record, 
because it talks again about an outside observer's view of this 
President, an outside observer. It happens to be Bill Sammon of the 
Washington Times. The headline, ``Bush's Grand Strategy Overlooked by 
Liberal Historians.''
  ``An influential Democratic historian has credited President Bush 
with instituting one of only three grand strategies in the history of 
the U.S. foreign policy, by trading in the doctrine of containment for 
preemption. John Lewis Gaddis of Yale said his fellow historians have 
not paid sufficient attention to the importance of Mr. Bush's sweeping 
overhaul of U.S. foreign policy because they are blinded by their 
liberal bias. He also accused former President Bill Clinton of failing 
to adequately address global threats that gathered on his watch,'' the 
World Trade Center first bombing, Khobar Towers, the two embassies, all 
during the watch of Clinton.
  ``The Bush team really did, in a moment of crisis, come up with a 
very important statement on grand strategy, which has not been taken as 
seriously as it should have been taken, particularly within the 
academic community.
  ``Mr. Gaddis writes that America's three grand strategies were 
instituted by Mr. Bush,'' this President Bush, ``John Quincy Adams and 
Franklin Delano Roosevelt. All three strategies were prompted by rare, 
catastrophic attacks on America by foreign enemies.''
  He goes on to quote, ``The Clinton administration was somewhat like 
the Harding and Coolidge administrations after World War I, Mr. Gaddis 
said. There was the sense that the war had been won, the fundamental 
processes in world politics were favorable to us, and therefore we 
could sit back and let them run. But these processes of globalization 
and self-determination during the Clinton administration did nothing to 
stop terrorists from using minimal resources to inflict massive death 
and destruction against the United States and its interests. The former 
President did not act decisively to head off a gathering threat.''
  I bring you to September 11. I bring you to the carnage of September 
11 as a result of our not being willing to take on any enemy.

                              {time}  1415

  Look at what has happened because of his leadership: Iraq. Look at 
North Korea turning over nuclear documents. Look at Libya surrendering 
nuclear hardware. Look at Pakistan and India, finally talking over 
Kashmir. These are the results of a determination by this President to 
root out terrorism.
  I conclude by saying this, and this is important in context to this 
article. Mr. Gaddis, who describes himself as a very long-term 
disillusioned Democrat who still has hopes for the Democratic Party, 
disputed the liberal stereotype of the President as a lightweight. 
There certainly have been tendencies to underestimate President Bush 
himself and to view him in the way that Reagan was viewed when he first 
came in, as being a cipher, manipulated by his own advisers. That 
turned out not to be true of Reagan, and it is turning out not to be 
true of George Bush.
  Mr. Speaker, I will at this time enter the entirety of this article 
into the Record, along with other documentation referred to earlier. I 
salute our President. I am proud of our President and proud to stand 
with him in Florida in the coming months.

                [From the New York Times, Mar. 1, 2004]

   Saddam Team Skimmed Billions in Aid Project Cash in Suitcases/UN 
                           Sanctions Violated

                            (By Susan Sachs)

       Baghdad.--In its final years in power, Saddam Hussein's 
     government systematically extracted billions of dollars in 
     kickbacks from companies doing business with Iraq, funneling 
     most of the illicit funds through a network of foreign bank 
     accounts in violation of United Nations sanctions.
       Millions of Iraqis were struggling to survive on rations of 
     food and medicine. Yet the government's hidden slush funds 
     were being fed by suppliers and oil traders from around the 
     world who sometimes lugged suitcases full of cash to ministry 
     offices, said Iraqi officials who supervised the skimming 
     operation.
       The officials' accounts were enhanced by a trove of 
     internal Iraqi government documents and financial records 
     provided to The New York Times by members of the Iraqi 
     Governing Council. Among the papers was secret correspondence 
     from Saddam's top lieutenants setting up a formal mechanism 
     to siphon cash from Iraq's business deals, an arrangement 
     that went unnoticed by UN monitors.
       Under a UN program begun in 1997, Iraq was permitted to 
     sell its oil only to buy food and other humanitarian goods. 
     The kickback order went out from Saddam's inner circle three 
     years later, when limits on the amount of oil sales were 
     lifted and Iraq's oil revenues reached $10 billion a year.
       In an Aug. 3, 2000, letter marked urgent and confidential, 
     the Iraqi vice president, Taha Yassin Ramadan, informed 
     government ministers that a high-command committee wanted 
     extra revenues from the oil-for-food program. To that end, he 
     wrote, all suppliers must be told to inflate their contracts 
     by the biggest percentage possible and secretly transfer 
     those amounts to Iraq's bank accounts in Jordan and the 
     United Arab Emirates.
       Iraq's sanctions-busting has long been an open secret. Two 
     years ago, the U.S. General Accounting Office estimated that 
     oil smuggling had generated nearly $900 million a year for 
     Iraq. Oil companies had complained that Iraq was squeezing 
     them for illegal surcharges, and Saddam's lavish spending on 
     palaces and monuments provided more evidence of his access to 
     unrestricted cash.
       But the dimensions of the corruption have only lately 
     become clear, from the newly available documents and from 
     revelations by government officials who say they were too 
     fearful to speak out before. They show the magnitude and 
     organization of the payoff system, the complicity of the 
     companies involved and the way Saddam bestowed contracts and 
     gifts on those who praised him.
       Perhaps the best measure of the corruption comes from a 
     review of the $8.7 billion in outstanding oil for food 
     contracts by the provisional Iraqi government with UN help. 
     It found that 70 percent of the suppliers had inflated their 
     prices and agreed to pay a 10 percent kickback, in cash or by 
     transfer to accounts in Jordanian, Lebanese and Syrian banks.
       At that rate, Iraq would have collected as much as $2.3 
     billion out of the $32.6 billion worth of contracts it signed 
     since mid-2000, when the kickback system began. And some 
     companies were willing to pay even more than the standard 10 
     percent, according to Trade and Oil Ministry employees.
       Iraq's suppliers included Russian factories, Arab trade 
     brokers, European manufacturers and state-owned companies 
     from China and the Middle East. Iraq generally refused to buy 
     directly from U.S. companies, which in any case needed 
     special licenses to trade legally with Iraq.
       Iraq also created a variety of other, less lucrative, 
     methods of extorting money from its oil customers. It raised 
     more than $228 million from illegal surcharges it imposed on 
     companies that shipped Iraqi crude oil by sea after September 
     2000, according to an accounting prepared by the Iraqi Oil 
     Ministry late last year. An additional $540 million was 
     collected in under-the-table surcharges on oil shipped across 
     Iraq's land borders, the documents show.
       A lot of it came in cash, recalled Shamkhi Faraj, who 
     managed the Oil Ministry's finance department under the old 
     government and is now general manager of the ministry's oil-
     marketing arm. I used to see people carrying it in briefcases 
     and bringing it to the ministry.
       UN overseers say they were unaware of the systematic 
     skimming of oil-for-food revenues. In any case, they add, 
     they were focused on running aid programs.
       The director of the Office of Iraq Programs, Benon Sevan, 
     declined to be interviewed about the oil-for-food program. In 
     written responses to questions sent by e-mail, his office 
     said he learned of the 10 percent kickback scheme from the 
     occupation authority only after the end of major combat 
     operations.
       As the details of the corruption have recently emerged, law 
     enforcement authorities in several countries said they had 
     opened criminal and civil investigations into whether 
     companies violated laws against transferring money to Iraq. 
     Treasury Department Investigators have also been helping the 
     Iraqi authorities recover an estimated $2 billion believed to 
     be left in foreign accounts. So far, more than $750 million 
     has been found in foreign accounts and transferred back to 
     Iraq, said Juan Zarate, a deputy assistant Treasury 
     secretary.
       To some officials of Iraq's provisional government, what is 
     perhaps most insulting is how little their country got for 
     its oil money. Taking stock of what was bought before the 
     U.S.-led invasion toppled Saddam last spring, they have found 
     piles of nonessential drugs, mismatched equipment and 
     defective hospital machines.

[[Page H1044]]

       You had cartels that were willing to pay kickbacks but 
     would also bid up the price of goods, said Ali Allawai, a 
     former World Bank official who is now interim Iraqi trade 
     minister. You had rings involved in supplying shoddy goods. 
     You had a system of payoffs to the bourgeoisie and royalty of 
     nearby countries.
       Everybody was feeding off the carcass of what was Iraq.
       The UN Security Council first imposed a trade embargo on 
     Iraq on Aug. 9, 1990, one week after Saddam's invasion of 
     Kuwait. It has kept in place after the Gulf war in 1991, with 
     the provision that sanctions would be lifted after Iraq 
     destroyed its unconventional weapons and ended its weapons 
     program.
       But as living conditions deteriorated, the council made 
     several offers to let Iraq export limited quantities of oil 
     to buy food and medicine. The two sides agreed on a mechanism 
     only in 1966.
       In 1999, Iraq was permitted to sell as much oil as it 
     wanted, with the proceeds going into an escrow account at 
     Banque Nationale de Paris, supervised by the United Nations. 
     The new rules also allowed Iraq to sign its own contracts for 
     billions of dollars in imported goods.
       As ministry officials and government documents portrayed 
     it, the oil-for-food program quickly evolved into an open 
     bazaar of payoffs, favoritism and kickbacks.
       The kickback scheme worked, they said, because the payoffs 
     could be included in otherwise legitimate supply contracts 
     negotiated directly by the former government and then 
     transferred to Iraq once the United Nations released funds to 
     pay the suppliers.
       We'd accept the low bid and say to the supplier, ``Give us 
     another 10 percent'' said Faleh Khawaji, an Oil Ministry 
     official who used to supervise the contracting for spare 
     parts and maintenance equipment. ``So that was added to the 
     contract. If the bid was for $1 million, for example, we 
     would tell the supplier to make it $1.1 million.''
       The contract would then be sent to the U.N. sanctions 
     committee, which was supposed to review contracts with an eye 
     only to preventing Iraq from acquiring items that might have 
     military uses. The kickbacks were paid into Iraq's accounts, 
     and designated ministry employees withdrew the cash and 
     brought it to Baghdad on a regular basis, according to 
     Khawaji and Iraqi financial records.
       U.S. and European investigators said they were trying to 
     determine whether the banks knew they were being used for 
     illegal financial dealings with Iraq.
       Under the oil-for-food program rules, the United Nations' 
     oil overseers had to certify that Iraq was selling its crude 
     oil at fair value. Until the overseers changed the pricing 
     formula in late 2001, Iraq's oil sold at a discount compared 
     with similar oil from other producers.
       At the same time, Oil Ministry officials said, purchasers 
     of Iraqi oil were required to pay a surcharge, either in cash 
     or by transferring money into Iraqi accounts in foreign 
     banks.
       When oil companies complained to the United Nations about 
     the per- barrel surcharges, Iraq levied higher charges on 
     ships loading at its port.
       When Dr. Khidr Abbas became Iraq's Interim minister of 
     health 6 months ago, he discovered some of the effects of 
     Saddam's political manipulation of the oil-for-food program.
       After a review of the ministry's spending, he said, he 
     canceled $250 million worth of contracts with companies he 
     believed were fronts for the former government or got 
     contracts only because they were from countries friendly to 
     Saddam.
                                  ____


               [From the Washington Times, Mar. 11 2004]

      Bush's ``Grand Strategy''--Overlooked by Liberal Historians

                            (By Bill Sammon)

       An influential Democratic historian has credited President 
     Bush with instituting one of only three ``grand strategies'' 
     in the history of U.S. foreign policy by trading in the 
     doctrine of containment for pre-emption.
       John Lewis Gaddis of Yale said his fellow historians have 
     not paid sufficient attention to the importance of Mr. Bush's 
     sweeping overhaul of U.S. foreign policy because they are 
     blinded by their liberal bias.
       He also accused former President Bill Clinton of failing to 
     adequately address global threats that gathered on his watch.
       ``The Bush team really did, in a moment of crisis, come up 
     with a very important statement on grand strategy, which has 
     not been taken as seriously as it should have been taken, 
     particularly within the academic community,'' Mr. Gaddis said 
     in an interview.
       The eminent Cold War historian makes his argument in the 
     new book called ``Surprise, Security and the American 
     Experience,'' published by Harvard University Press, which 
     has caught the attention of National Security Adviser 
     Condoleezza Rice and other White House advisers.
       It also has earned the derision of Sen. John Kerry's 
     presidential campaign.
       ``There's nothing visionary about a reckless, arrogant and 
     rigidly ideological foreign policy that's lost America 
     influence and cooperation in the world to win the war on 
     terror,'' said David Wade, a spokesman for the Massachusetts 
     Democrat.
       Mr. Gaddis writes that America's three grand strategies 
     were instituted by Mr. Bush, John Quincy Adams and Franklin 
     Delano Roosevelt. All three strategies were prompted by rare, 
     catastrophic attacks on America by foreign enemies.
       In 1814, after the British burned the White House, Adams, 
     then secretary of state, resolved to secure America through 
     pre-emptive continental expansion, a grand strategy that 
     endured for a century.
       After the Japanese attack on Pearl Harbor prompted the 
     United States to lead the Allies to victory in World War II, 
     Roosevelt and his successors as president went about securing 
     America through a grand strategy that came to be known as 
     containment of communism. But that strategy became obsolete 
     when the Cold War ended shortly before Mr. Clinton took 
     office.
       ``The Clinton administration was somewhat like the Harding 
     and Coolidge administration after World War I,'' Mr. Gaddis 
     said. ``There was the sense that the war had been won, the 
     fundamental processes in world politics were favorable to us, 
     and therefore you could just kind of sit back and let them 
     run.''
       But these processes of globalization and self-determination 
     during the Clinton administration did nothing to stop 
     terrorists from using minimal resources to inflict massive 
     death and destruction against the United States and its 
     interests.
       The former president did not act decisively to head off 
     this gathering threat, Mr. Gaddis said.
       ``It just seems to me that any good strategist would be 
     unwise to sit back and assume that things are going our 
     way,'' he said. ``You ought to be thinking through how what 
     appear to be favorable trends can produce backlashes.''
       Such a backlash occurred on September 11, 2001, 
     necessitating a new grand strategy, which was implemented by 
     Mr. Bush.
       The strategy included pre-emptive attacks on enemies such 
     as Iraq that had the potential to use weapons of mass 
     destruction, an aggressive push to democratize the Middle 
     East and an unwillingness to be constrained by international 
     organizations such as the United Nations.
       Although Mr. Gaddis faults the president for not gathering 
     sufficient international support before the invasion of Iraq 
     and underestimating the challenges of postwar Iraq, the 
     professor supported Operation Iraqi Freedom.
       Many other academics opposed the war, making them reluctant 
     to credit the president for a change in U.S. foreign policy 
     that could very well endure for the next half-century, Mr. 
     Gaddis said.
       ``The academic world is of course predominantly liberal, 
     predominately Democratic, so there is a predisposition to be 
     less critical of a Democratic administration than there is a 
     Republican administration,'' he said.
       Mr. Gaddis, who described himself as a ``very long-term, 
     disillusioned Democrat who still has hope for the Democratic 
     Party,'' disputed the liberal stereotype of the president as 
     a lightweight.
       ``There certainly has been a tendency to underestimate Bush 
     himself and to view him in the way that Reagan was viewed 
     when he first came in--as being a cipher, manipulated by his 
     own advisers,'' he added. `` That turned out not to be true 
     of Reagan, and it's turning out not to be true of Bush as 
     well.''

                          ____________________