THE CONFLICT IN IRAQ

Advocates of War Now Profit From Iraq's Reconstruction

Lobbyists, aides to senior officials and others encouraged invasion and now help firms pursue contracts. They see no conflict.

By Walter F. Roche Jr. and Ken Silverstein
Times Staff Writers

July 14, 2004

WASHINGTON — In the months and years leading up to the U.S.-led invasion of Iraq, they marched together in the vanguard of those who advocated war.

As lobbyists, public relations counselors and confidential advisors to senior federal officials, they warned against Iraqi weapons of mass destruction, praised exiled leader Ahmad Chalabi, and argued that toppling Saddam Hussein was a matter of national security and moral duty.

Now, as fighting continues in Iraq, they are collecting tens of thousands of dollars in fees for helping business clients pursue federal contracts and other financial opportunities in Iraq. For instance, a former Senate aide who helped get U.S. funds for anti-Hussein exiles who are now active in Iraqi affairs has a $175,000 deal to advise Romania on winning business in Iraq and other matters.

And the ease with which they have moved from advocating policies and advising high government officials to making money in activities linked to their policies and advice reflects the blurred lines that often exist between public and private interests in Washington. In most cases, federal conflict-of-interest laws do not apply to former officials or to people serving only as advisors.

Larry Noble, executive director of the Center for Responsive Politics, said the actions of former officials and others who serve on government advisory boards, although not illegal, can raise the appearance of conflicts of interest. "It calls into question whether the advice they give is in their own interests rather than the public interest," Noble said.

Michael Shires, a professor of public policy at Pepperdine University, disagreed. "I don't see an ethical issue there," he said. "I see individuals looking out for their own interests."

Former CIA Director R. James Woolsey is a prominent example of the phenomenon, mixing his business interests with what he contends are the country's strategic interests. He left the CIA in 1995, but he remains a senior government advisor on intelligence and national security issues, including Iraq. Meanwhile, he works for two private companies that do business in Iraq and is a partner in a company that invests in firms that provide security and anti-terrorism services.

Woolsey said in an interview that he was not directly involved with the companies' Iraq-related ventures. But as a vice president of Booz Allen Hamilton, a consulting firm, he was a featured speaker in May 2003 at a conference co-sponsored by the company at which about 80 corporate executives and others paid up to $1,100 to hear about the economic outlook and business opportunities in Iraq.

Before the war, Woolsey was a founding member of the Committee for the Liberation of Iraq, an organization set up in 2002 at the request of the White House to help build public backing for war in Iraq. He also wrote about a need for regime change and sat on the CIA advisory board and the Defense Policy Board, whose unpaid members have provided advice on Iraq and other matters to Defense Secretary Donald H. Rumsfeld.

Woolsey is part of a small group that shows with unusual clarity the interlocking nature of the way the insider system can work. Moving in the same social circles, often sitting together on government panels and working with like-minded think tanks and advocacy groups, they wrote letters to the White House urging military action in Iraq, formed organizations that pressed for invasion and pushed legislation that authorized aid to exile groups.

Since the start of the war, despite the violence and instability in Iraq, they have turned to private enterprise.

The group, in addition to Woolsey, includes:

• Neil Livingstone, a former Senate aide who has served as a Pentagon and State Department advisor and issued repeated public calls for Hussein's overthrow. He heads a Washington-based firm, GlobalOptions, that provides contacts and consulting services to companies doing business in Iraq.

• Randy Scheunemann, a former Rumsfeld advisor who helped draft the Iraq Liberation Act of 1998 authorizing $98 million in U.S. aid to Iraqi exile groups. He was the founding president of the Committee for the Liberation of Iraq. Now he's helping former Soviet Bloc states win business there.

• Margaret Bartel, who managed federal money channeled to Chalabi's exile group, the Iraqi National Congress, including funds for its prewar intelligence program on Hussein's alleged weapons of mass destruction. She now heads a Washington-area consulting firm helping would-be investors find Iraqi partners.

• K. Riva Levinson, a Washington lobbyist and public relations specialist who received federal funds to drum up prewar support for the Iraqi National Congress. She has close ties to Bartel and now helps companies open doors in Iraq, in part through her contacts with the Iraqi National Congress.

Other advocates of military action against Hussein are pursuing business opportunities in Iraq. Two ardent supporters of military action, Joe Allbaugh, who managed President Bush's 2000 campaign for the White House and later headed the Federal Emergency Management Agency, and Edward Rogers Jr., an aide to the first President Bush, recently helped set up two companies to promote business in postwar Iraq. Rogers' law firm has a $262,500 contract to represent Iraq's Kurdistan Democratic Party.

Neither Rogers nor Allbaugh has Woolsey's high profile, however.

Soon after the Sept. 11 attacks, he wrote an opinion piece in the Wall Street Journal saying a foreign state had aided Al Qaeda in preparing the strikes. He named Iraq as the leading suspect. In October 2001, Deputy Secretary of Defense Paul D. Wolfowitz sent Woolsey to London, where he hunted for evidence linking Hussein to the attacks.

At the May 2003 Washington conference, titled "Companies on the Ground: The Challenge for Business in Rebuilding Iraq," Woolsey spoke on political and diplomatic issues that might affect economic progress. He also spoke favorably about the Bush administration's decision to tilt reconstruction contracts toward U.S. firms.

In an interview, Woolsey said he saw no conflict between advocating for the war and subsequently advising companies on business in Iraq.

Booz Allen is a subcontractor on a $75-million telecommunications contract in Iraq and also has provided assistance on the administration of federal grants. Woolsey said he had had no involvement in that work.

Woolsey was interviewed at the Washington office of the Paladin Capital Group, a venture capital firm where he is a partner. Paladin invests in companies involved in homeland security and infrastructure protection, Woolsey said.

Woolsey also is a paid advisor to Livingstone's GlobalOptions. He said his own work at the firm did not involve Iraq.

Under Livingstone, Global- Options "offers a wide range of security and risk management services," according to its website.

In a 1993 opinion piece for Newsday, Livingstone wrote that the United States "should launch a massive covert program designed to remove Hussein."

In a recent interview, Livingstone said he had second thoughts about the war, primarily because of the failure to find weapons of mass destruction. But he has been a regular speaker at Iraq investment seminars.

While Livingstone has focused on opportunities for Americans, Scheunemann has concentrated on helping former Soviet Bloc states.

Scheunemann runs a Washington lobbying firm called Orion Strategies, which shares the same address as that of the Iraqi National Congress' Washington spokesman and the now-defunct Committee for the Liberation of Iraq.

Orion's clients include Romania, which signed a nine-month, $175,000 deal earlier this year. Among other things, the contract calls for Orion to promote Romania's "interests in the reconstruction of Iraq."

Scheunemann has also traveled to Latvia, which is a former Orion client, and met with a business group to discuss prospects in Iraq.

Few people advocated for the war as vigorously as Scheunemann. Just a week after Sept. 11, he joined with other conservatives who sent a letter to Bush calling for Hussein's overthrow.

In 2002, Scheunemann became the first president of the Committee for the Liberation of Iraq, which scored its biggest success last year when 10 Eastern European countries endorsed the U.S. invasion. Known as the "Vilnius 10," they showed that "Europe is united by a commitment to end Saddam's bloody regime," Scheunemann said at the time.

He declined to discuss his Iraq-related business activities, saying, "I can't help you out there."

Scheunemann, Livingstone and Woolsey played their roles in promoting war with Iraq largely in public. By contrast, Bartel and Levinson mostly operated out of the public eye.

In early 2003, Bartel became a director of Boxwood Inc., a Virginia firm set up to receive U.S. funds for the intelligence program of the Iraqi National Congress.

Today, critics in Congress say the Iraqi National Congress provided faulty information on Hussein's efforts to develop weapons of mass destruction and his ties to Osama bin Laden.

Bartel began working for the Iraqi National Congress in 2001. She was hired to monitor its use of U.S. funds after several critical government audits. After the war began, Bartel established a Virginia company, Global Positioning. According to Bartel, the firm's primary purpose is to "introduce clients to the Iraqi market, help them find potential Iraqi partners, set up meetings with government officials … and provide on-the-ground support for their business interests."

Bartel works closely with Levinson, a managing director with the Washington lobbying firm BKSH & Associates. Francis Brooke, a top Chalabi aide, said BKSH received $25,000 a month to promote the Iraqi National Congress, and Levinson "did great work on our behalf."

In 1999, Levinson was hired by the Iraqi National Congress to handle public relations. She said her contract with the congress ended last year. Before the invasion and in the early days of fighting in Iraq, Chalabi and the congress enjoyed close relations with the Bush administration, but the relationship has cooled.

Levinson told The Times: "We see no conflict of interest in using our knowledge and contacts in Iraq that we developed through our previous work with the INC to support economic development in Iraq. As a matter of fact, we see this as complementary to a shared goal to build a democratic country."