In what has been called their final audit report, the Office of the Special Inspector General for Iraq Reconstruction Funds pinpointed a number of accounting weaknesses that put “billions of American taxpayer dollars at risk of waste and misappropriation” in the largest reconstruction project of its kind in U.S. history.
The report concluded the precise amount lost to fraud and waste can never be known.
While much of Iraq is still struggling to recover from the 2003 invasion and occupation, the country’s oil sector is quickly expanding with the help of foreign investors including Exxon Mobil and BP.
We’re joined by Greg Muttitt, whose new book, “Fuel on the Fire: Oil and Politics in Occupied Iraq,” takes a close look at how energy interests played a crucial role in the U.S. invasion. “They created a disaster because there were constantly U.S. interests behind it,” Muttitt says.
AMY GOODMAN: We begin today’s broadcast in Iraq. A new U.S. government report has found much of the U.S. taxpayer money used for Iraq’s reconstruction has likely been squandered. In what has been called their final audit report, the Office of the Special Inspector General for Iraq Reconstruction Funds pinpointed a number of accounting weaknesses that “put billions of American taxpayer dollars at risk of waste and misappropriation in the largest reconstruction project of its kind in U.S. history.” The report concluded the precise amount lost to fraud and waste can never be known. While much of Iraq is still struggling to recover from the 2003 invasion and occupation, the country’s oil sector is quickly expanding. In June, Iraq’s crude production overtook Iran for the first time in more than two decades. Iraq produced just under 3 million barrels of oil a day during the month, second only to Saudi Arabia. The Bloomberg News Agency reports the rising rate of Iraqi oil production comes as foreign investors such as Exxon Mobil and BP are developing new fields and reworking older deposits. We’re joined now by Greg Muttitt, author of the new book, “Fuel on the Fire: Oil and Politics in Occupied Iraq.” The book takes a close look at how energy interests played a crucial role in the U.S. invasion. Greg Muttitt is the former co-director of the British group Platform that exposed the environmental and human impacts of the oil industry. Greg Muttitt, welcome to Democracy Now!. Talk about “Fuel on the fire,” Your, what, almost 10-year investigation of the reasons behind the Iraq war.
GREG MUTTITT: Well, if we start with those two bits of news you mentioned, the U.S. Special Inspector General’s report finding enormous corruption and Iraqi oil production increasing and catching up with Iran, actually those two are connected. What we’ve seen, is since the multinationals have been in Iraq, which is about two years, corruption has blossomed in the oil sector. Far from bringing transparency and ethical way of doing business, as we were told, they have created the conditions for much greater corruption. What I have done, is since 2003, since the war began, I’ve closely followed what has happened in the oil sector. I’ve worked closely with Iraqi trade unions in particular, and other civil society groups. As you would imagine, the story that I tell in the book is rather different from the one the government wanted us to know about.
AMY GOODMAN: You talk about the oil industry actually promoting the corruption, how does it?
GREG MUTTITT: What’s happened is that since 2010, vast quantities of cash had been injected into Iraq by the likes of BP and Exxon Mobil, in an almost complete absence of oversight by government agencies. There are two bribery investigations going on into western oil companies operating in Iraq. One is against Eni, the Italian company, there’s an investigation in Italy. Another is against Leighton Holdings, which is an Australian company building the oil export facilities in Basra. I think an example of this, an example of the problem is that BP, which won the first contract in Iraq in 2009, they subsequently renegotiated the contract after it was awarded. They set a time limit on the Iraqi society ability to approve or not approve subcontracts. When it came to awarding drilling contracts, $500 million worth of drilling contracts, they were overpriced. They awarded drilling contracts at $10 million, not $3 million, which is the normal going rate. Because they put into their contract a time limit on the Iraqi participants in the contract’s ability to object, that time limit passed and these overpriced contracts were awarded. You look a bit more closely, you find that one of the contractors doing the drilling is a subsidiary of BP’s partner in the field.
AMY GOODMAN: Let’s go back to the beginning, right before the war and look at the difference between the privatized oil fields today and the nationalized oil fields that, Greg Muttitt, then you were marching in one of the largest mass protests in British history against the war in Iraq. And talk about how you then decided to embark on this investigation.
GREG MUTTITT: It was fairly obvious to me as a was to many at the time in 2003 that oil was very centrally involved. In spite of the government’s insistancies that it was not thinking about oil at all. You only had to look at the fact Iraq had about a tenth of the world’s remaining oil reserves and put together with its neighbors, the Persian Gulf region as a whole had nearly two-thirds. Now to suggest that the Bush administration did not think about that, didn’t notice, simply isn’t credible. So, I was involved in the protests against the war, I was furious about my government’s decision to go to war and I thought, let’s see what happens next to the oil, let’s see how this plays out. So, I followed it, especially using government and industry sources. The plans were shared far more in London than they were in Basra or Baghdad at the time. It was simply through asking the question, which I thought was a fairly obvious question, what’s happening to oil that I got involved in?
AMY GOODMAN: Signs were everywhere, “Blood for oil, blood for oil.” How did you get the information? How were you following the oil trail?
GREG MUTTITT: Well, it was different at different stages. During the first 18 months or so of the occupation, I was doing things like going to oil industry conferences in London. I was reading the magazines and journals the companies use, and through those, I was building up quite a clear picture of what they wanted from Iraq. I went to Iraq for the first time in 2005, and discovered that I had much better access to information being in London than my friends and colleagues in Basra and Baghdad did. So, I started sharing the information with my Iraqi colleagues, especially in the Oil Workers Trade Union. This went on for a few years. I went to several of the meetings between the Iraqi government and international institutions such as the International Monetary Fund or with the oil companies and so on. The big get together of all the oil companies. I learned more through observing that. And then I got involved in the campaign to stop the privatization of Iraq’s oil, which was again led by the trade unions. I was in a supportive role from Britain and providing information and also political solidarity. In 2009, I started work on my book. I wanted to dig deeper while I was working on the book, so I interviewed senior officials of the U.S., British, and Iraqi governments, and I also got a hold of around 1000 government documents from the British and American governments under the Freedom of Information Act. Through all of this, I was able to tell the story of how the struggle of oil played out during the occupation.
AMY GOODMAN: Our guest is Greg Muttitt, author of “Fuel on the Fire: Oil and Politics in Occupied Iraq.” His book took about a decade of research. Naomi Klein called nothing short of a secret history of the war. Gregg Muttitt, talk about the oil law.
GREG MUTTITT: OK, well, this was really the center of the story of the struggles over oil. The oil corporations wanted to wait until there was a permanent government in Iraq so they could have secure contracts. The first permanent post Sudan government was formed in May 2006 under Nouri al-Maliki, and in the months—even the months before that—the U.S., Britain, the International Monetary Fund were saying your first priority has to be pass an oil law to give multinationals leading role in Iraq’s oil industry again for the first time since the nationalization of the 1970s. And then, this oil law was drafted very quickly after the government was formed. It was drafted in couple of months by August 2006. As well as putting multinationals in the driving seat, its other role was to deprive their contracts of parliamentary scrutiny. According to existing Iraqi law, if the government signs a contract with a company like BP or Exxon to develop an oil field, it has to show it to parliament to get the yes or no or amendments. One of the major functions of the oil law was to repeal that existing legislation and so allow the executive branch, which was of course populated by U.S. allies, to sign contracts without Parliament getting in the way. So, this was the function of the oil law, it was drafted by August 2006. The U.S. hoped it would pass very quickly without anyone knowing about it because the vast majority of Iraqis are very keen that oil stays in the Iraqi hands in the public sector. It didn’t turn out that way.
In October 2006, two months after it was drafted, the draft started to leak out. In December 2006, I attended a meeting of Iraq’s trade unions at which they decided they were going to fight the law. During the course of 2007, this became a central struggle over Iraq’s oil. As you remember, Amy, in January 2007, President Bush announced a surge; he was sending an extra troops into Iraq. Actually that was on half of a two part strategy. The troops were sent to achieve control over Iraq. The second part of the strategy was to use that control, use that influence, to pressure Iraqi politicians to achieve what they call benchmarks. These were marker of political progress. As you reported at the time, the foremost among these was getting an oil law passed. So, throughout 2007, there is constant pressure from the Bush administration on Iraqi politicians. But, at the same time, the trade unions were organizing to try and stop this oil law because they thought it was going to be a disaster for the country. That campaign spread, and because of the strength of Iraqi feeling about it, over the subsequent months, the more it was talked about, the more people opposed it and then the more it was talked about, and opposition to the oil law spread across the country. Civil society groups, both secular and religious, was talked-about in Friday sermons in mosques. And by the summer, this opposition spread into the Iraqi parliament and it became—politicians saw it as a political threat to their futures to support the oil law, and an opportunity to get one up on their rivals by joining this popular cause. The Americans had set a deadline of September 2007 to pass the oil law or face a series of consequences; cutting off aid, removing military support to the Maliki government etc. The September deadline came and the oil law wasn’t passed, and the reason the oil law was not passed was because of this grassroots civil society campaign. Now, to me, that is a very inspiring story. It’s why I feel hopeful about the future of Iraq. That operating in the most difficult circumstances imaginable, civil society was able to stop the U.S.A. of achieving its number one objective.
AMY GOODMAN: Talk then, about Libya and Syria. We only have a few minutes, but, in August of 2011, the New York Times reported “The fighting is not yet over in Tripoli, but the scramble to secure access to Libya’s oil wealth has already begun.” The article went on to name some of the oil firms in Libya including BP of Britain, Total of France, Repsol YPF of Spain, U.S. companies like Hess, ConocoPhillips, Marathon. Talk about the significance of oil politics in Libya, and then what we understand of what is happening in Syria today.
GREG MUTTITT: Beginning with Libya, about three weeks into the military intervention in April last year, there was an interview I found surprising with the British Foreign Secretary William Hague in The Times newspaper. And the interview asked him, why is it we are intervening in Libya and not in Côte d’Ivoire? At the time, Laurent Gbagbo was hanging on to power in Côte d’Ivoire and the country was descending into civil war; he’d lost the election a few months earlier. And William Hague said, in both Libya and Côte d’Ivoire we have a principled concern about democracy. The difference is, in Libya we have interests, and those interests include we don’t want terrorist training camps in the desert, we don’t want Libyan and African refugees getting into Europe and so we want to stop that flow, but most importantly, if we didn’t intervene, it would have terrible consequences for the price of oil. This is quite a contrast with how the Iraq war was talked about. When I looked at this, it seemed, in my analysis, the big concern was that it was oil behind a humanitarian concern. What they were worried about was that if Gaddafi had attacked Benghazi, as a looked like he was going to in March 2011, the international community would have felt compelled to apply sanctions to Libya. And taking about 1.5 million barrels a day of oil off the market would have constrained the market and then pushed up the oil price. So you see, it’s a humanitarian concern in front, but an oil concern behind.
AMY GOODMAN: And finally Syria?
GREG MUTTITT: On Syria, I think, what I have really learned by studying Iraq since 2003 is that a lot of the people involved in the occupation thought, genuinely believed they were acting in the interest of Iraqis. What the created was a complete disaster. The reason they created a disaster was because there were constantly U.S. interests behind it. All of the decisions were shaped by interests, even if people talked about them and thought about them in terms of, I’m sure this will help the Iraqis. The interests gave them a particular perspective of what they thought Iraqis needed and wanted. The disaster came because of U.S. interests being involved, however well-meaning some of the individuals were. And so when people call now for, we must do something in Syria. The suggestion of a military intervention, I think, it would be disastrous simply because as much as it would like to claim it is, the U.S.A. is not a neutral party in Syria anymore than it is an Iraq and it would steer the country down a route that would not serve its interests far more than the Syrians.
AMY GOODMAN: Finally, is it too simplistic to say that the difference between Iraq before and after the U.S. war with Iraq is that before, the oil was owned by the country and afterwards the oil is now owned by private corporations, or being profited off of by private corporations?
GREG MUTTITT: I’d say it is a little bit more complex than that in that the oil law was never passed in 2007. It’s still not pass today because of that` civil society campaign. Without the oil law, the existing legislation is still in force which says that contracts have to be approved by parliament. The multinationals are there, they didn’t show the contracts to parliament, so technically, they’re illegal. Now the trade unions have played a central role in fighting this fight. What it says to me is that, although, on its face it looks like a victory for big oil, it’s a temporary one, and a future Iraqi government, if they get a more representative and genuine Iraqi government—they couldn’t get a less one—it could potentially tear up the contracts and say these are not in Iraq’s interest and the companies wouldn’t have a legal come back against that.
AMY GOODMAN: I want to thank you very much, Greg Muttitt, for joining us, the author of, “Fuel on the Fire: Oil and Politics in Occupied Iraq.”
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