The truth behind the French opposition to America: French business network in Iraq

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Naively, some people believe that if the French government was so keen on opposing the American plans concerning Iraq, it was out of some humanitarian principles, (i.e. the risk that innocent people get blindly shot or bombed, etc) as if the French have the “monopoly of the heart”, to use a well known expression of former President Giscard d’Estain. Or better: As if they want to outbid over and over with the Iraqis themselves- who as an opposition force do not hide that they expect to defeat Saddam on the battle field, thanks to the American help. But the reality is different and much less “humanitarian” than candid people are prone to believe. What happened in the Security Council and in the diplomatic wings was more dictated by the “RAISON D’ETAT” than by an exclusive and astonishing attachment of the French to the survival of the Iraqi regime, and the much understandable concern for the lives of innocent folks.

Where were the French during the last decade of this unbelievable embargo imposed on the Iraqi people? What did they do to alleviate the pains of the civilians? Were they not one of the states that imposed the punitions on the people of Iraq, in full knowledge that this people could not be held responsible for the acts of its government? Could they not veto any recommendation of the Security Council that they view as not conforming with the UN chart or merely to their own conception of the international ethic? In fact, I do not know who is the more cynical: those who propose to put an end immediately to the plight of the Iraqis by means of war, or those who propose to prolong the torture by means of unlimited inspections and palavers? When you look at both stances (the British-American and the French), you can only notice that all of them are competing in zeal, with still the same effects on the Iraqi people. Embargo or war, does it really matter any more for the Iraqis? What’s the difference? In both cases, they are confronted with unnatural death, penury, poverty, and all the misery of what they have come to perceive now as an international conspiracy, at the heart of which, there are not only the main occidental powers, but also Israel. It goes without saying that the latter remains the unique beneficiary in the region of the probable dismantlement of the much-feared Iraqi regime. Even a child would tell you nowadays that Israel is overstuffed with all kinds of armaments, and still rampaging and putting the neighborhood in blood and flames, and nobody in the West cares. At the same time, the Iraqis are told: some “mighty” nations can help you (i.e. France and Russia!). Can you believe that Mr. Chirac and Mr. Putin are unable to sleep because they have the Iraqi problem on the mind? The Iraqi problem is actually the latest of Putin’s troubles, despite the $40 billion’s “oil for safety” deal, between Baghdad and Moscow. As to France, the story is much less “romantic” than the naive think.

To understand what is going on behind the curtains, here are some clues:

The sophisticated business network the French have succeeded to settling in Iraq was not born in the aftermath of the Gulf war, but many years before it. At the origin, the network concerned oil industry, trade, and armaments at once. It seems that as early as 1975, in an interview with a Lebanese journalist, Saddam called his dealings with France “the first concrete step toward the production of the Arab atomic weapon”. In September of the same year, Saddam flied into Paris for a reception offered by Prime Minister Jacques Chirac. It was not long before France, which saw billions of francs’ worth of business just over the horizon, began selling Iraq missiles, helicopters, defense electronics, and ultimately the materials and technology needed to construct a nuclear reactor. Some French journalists used to joke about the Iraqi reactor referring to it as “O’Chirac”. After Mr. Chirac approved the Osirak deal and other weapons transactions for Baghdad, he became known in certain French business circles as “Mr. Iraq”.

Thus, it was not a coincidence that in the aftermath of Desert storm, the first negotiations about oil that have been recorded gathered in May 17, 1992, Hussein Kamel – Saddam’s son in law and then Minister of industry and oil- and an adviser of Mr. Jacques Chirac for the Middle East, whose identity remained obscure. The first secretary of the Iraqi embassy in Paris had contacted the latter just a week after the beginning of the cease-fire: the deal was already in the making. In parallel to the talks that started between Paris and Baghdad about oil industry, President Mitterand was the first Western leader to launch in 1992, during a visit to Jordan and Israel, the idea of a rail road linking Haifa to Baghdad, the cost of which was evaluated at about $ 6 billion.

At the time, it was a weird idea, although the project was actually as old as the first kingdom of Iraq, headed by Faisal Ibn al Hussein. But it seems that Mitterand was aiming at two goals: 1- To acquire more an important role for his country in the Middle East future, as the USA was almost monopolizing the peace process. 2- To help creating a strong basis for the French interests in Iraq, just at the moment he had given the green light for an important investment in “Majnun” and “Omar” oil fields in southern Iraq.

The two directors of the French oil company Total-Elf who traveled to Baghdad and met the Iraqi officials, were surprised to be offered the privilege of investing in the field of Majnun island in the region confining the southern borders with Iran. According to Iraqi sources, Hussein Kamel was then just carrying out the orders of his president, who wanted the French to take the Majnun oil field for two reasons: 1- because the first step in breaking Baghdad international isolation consisted in interesting some Great companies; and 2- thus hampering the outburst of another war in a region henceforth occupied by Western interests.

Maybe there was also another factor that determined the Iraqis to deal with the French company, rather than with its European rivals, like B.P. or Shell. They actually considered ELF as the successor of ERAP- another French company that was working in the Iraqi fields in the end of the sixties and the beginning of the seventies, before it withdrew with important compensations, when the oil industry got nationalized in 1972-73. Moreover, the reputation of ELF as very influential in the French policies and its connections with numerous political personalities were not to displease the Iraqis.

The First French delegation that visited Iraq a little time after the implementation of the Cease-fire, though it included some members of Mr. Chirac’s R.P.R. – Rassemblement Pour la R�publique- was actually representing the trio that had decided of the French participation to Desert Storm: President Mitterand, Prime Minister Michel Rocard, and Foreign Minister Roland Dumas. The ELF-Aquitaine-TOTAL’s representatives then offered the Iraqis a present consisting in a stock of medical equipment, $ 1,5 million worth. Some French businessmen were interested in helping Iraq with varied materials, from engines’ spare pieces to factory tools and used machines, while some others were already offering to repair the damages caused by the French air raids during the war, or the ships forsaken in Shatt al-Arab and at the up-entrances of the Gulf.

However, the most interesting feature of this period consisted in an idea proposed by the French, called “production sharing”, which apparently raised amid the Iraqis the fear of the return to the colonial past with its international struggle about oil. The point is that the oil nationalization in 72-73, meant to the Iraqis the end of an half a century of “privileged contracts” that seemed to hijack the State’s decision for the account of some big companies. That’s why they were reluctant to accept the new proposition, although it carried a different connotation wherein, the investor – i.e. a foreigner- would collect as much profits as his funding percentage allows him to. Additionally, the French companies would hold other advantages, such as: the priority of funds investing, and the possibility of inviting other parties to take part to the funding of the project evaluated at $ 8.5 billion during the first stage of seven years.

This new approach has no match in the Iraqi history of oil business. Some Iraqi observers noticed that its magnitude consisted in its extreme flexibility while controlling a part of the national wealth, whereas it controls also the entry of other companies in the process, at a time when the country crosses a delicate passage and feels the weakness succeeding a great defeat. To be sure, the French business proposition was actually reducing all the ideological discourses about economical sovereignty since 1972 to a poor amount.

That’s why the negotiations, which started in 17 May 1992, needed a year and half to reach an agreement, signed in Baghdad by Taha Hammud (vice-Minister for oil) and the representatives of TOTAL-ELF. The agreement settled the issue, thus allowing the French to invest in the Iraqi fields, according to the notion of “production sharing”.

After the proclamation of the Oslo accords, the French tried to launch another ambitious project, concerning a pipeline linking Al-rumaila oil fields in southern Iraq to the Jordanian port of Aqaba, then to Gaza in the Palestinian self-rule area. The project was very important for the Iraqis who, despite the huge potentials of oil reserves they own, remain deprived from a sea- shore, which explains – to some extent- why they were so craving for Kuwait. If the idea of linking Gaza to Rumaila met some difficulties, the Aqaba pipeline became soon the focus of numerous parties.

In 1984, the Iraqi government was already negotiating the same project with an American company: BECHTEL. The main fear was then that Israel could any time attack and destroy the pipeline. But ten years later- in 1994- the same project became an asset in the hands of the Jordanian negotiators, who made of it a condition for signing a peace agreement with Israel. That’s why King Hussein of Jordan discussed the subject in Washington in January 1994, then with Alain Jupp�, French Foreign minister in Amman in February.

In December 1993, Baghdad raised the level of its diplomatic mission in Paris and augmented the number of its representatives. In July 1994, Paris decided to open a bureau to safeguard the French interests in Baghdad, but would soon postpone its execution, following the crisis that outburst between Iraq and Kuwait on the boundaries. Meanwhile, the Iraqi efforts to open and maintain new channels with the French political and parliamentary groups were being pursued and supervised from Geneva by Mr. Barazan al Taqriti, Saddam’s half brother, formerly head of the Iraqi intelligence, who was also said to be in close contact with Mr. Jean Charles Marchiani. The latter is known to be the trustful man of Mr. Charles Pasqua, former Minister of the interior – belonging to the same political family as Mr. Chirac: the Gaullists-; and as a former responsible of the French intelligence (SDECE) and the representative of the company Thomson, he is assumed to keep an important connection with a lot of people in the Middle East. Mr. Taqriti was also said to be helped in his efforts by some Lebanese leaders exiled – or based- in Paris, like Raymond Edde and Michel Aoun.

It is Mr. Charles Pasqua – Interior Minister in Balladur Cabinet since 1993- who reportedly gave the green light to some Iraqi officials to visit France. It is said that Pasqua struggled with the Quai d’Orsay in order to allow Mr. Tariq Aziz to fly to Paris in the fall of 1993. It seems that Pasqua was also behind the visa given to Hussein Kamel by the French Consulate in Amman, although the latter did not use it and will not have another possibility to visit France, since he was killed for treason.

But if Mr. Tariq Aziz, visiting “secretly” Paris in October 1993, has not been able to meet the top-officials -(i.e. President Mitterand, Prime Minister Edouard Balladur, and Foreign Minister Alain Jupp� have avoided such a meeting that could only increase the irritation in the relationship with the USA)-, in June 1994, the state of the French-Iraqi partnership allowed Paris to hold a symposium about oil industry and production, to which participated the Head of the Iraqi oil export company. The negotiations about selling the Iraqi oil following the end of the embargo were already underway. It seems in effect, that at that stage, Iraqi and French officials were holding weekly meetings in Baghdad, to develop their mutual understanding of the notion of “production sharing”, which was being carried out by TOTAL-ELF at the cost of $ 3.5 billion for “Nahr Omar” field, and $ 5 billion for “Majnun”.

Two remarks are worth noticing here: First, the importance of the production (estimated at 1 million 250.000 b/day) is enough significant of the strategic dimension of such a contract, that would be able to bring to the market even more than the whole production of Kuwait and United Arab Emirates prior to the Gulf crisis, as it seems. Second, and this is likely linked to the first remark, it is the French who proposed to invite American companies to the “production sharing” process, although it remains obvious that Paris would still hold the greatest part of the cake.

But if the Iraqis could only welcome the French proposition, as they were hoping that the participation of American companies would help lifting the embargo, it seems that both parties were indulging into self-illusion. Otherwise, how could they ignore the American law-enforcement forbidding any important investments in Iraqi and Iranian oil production?

Anyway, that would not be the only subject of disagreement between Paris and Washington concerning Iraq. The issue became so problematic that some observers could not help but notice that the struggle in the UN Security Council grew pregnant of French and American controversial reactions following the negotiations about oil production and exports and other trades with Iraq, such as the “airbus” deal won by the French at the expenses of “Boeing”, or the 1994’s contract signed also by the French aiming at settling 650.000 telephonic lines in Iraq, which would not be effective before the lifting of the embargo.

In this context, the rumor runs that the Iraqis used to include a special clause in their business contracts, stipulating that they would become operative only when the embargo is lifted. If this were really the case with the French and Russian companies, the rest would not be that hard to understanding.

Hichem Karoui is a writer and journalist living in Paris, France.

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