The Relatively Charmed Life of Neil Bush

Despite Silverado and Voodoo, Fortune Still Smiles on the President's Brother

The Washington Post reports:

Ah, it's nice to be Neil Bush.

When you're Neil Bush, rich people from all over the world are eager to invest money in your businesses, even though your businesses have a history of crashing and burning in spectacular fashion.

When you're Neil Bush, you'll be sitting in a hotel room in Thailand or Hong Kong, minding your own business, when suddenly there's a knock at the door. You answer it and a comely woman strolls in and has sex with you.

Life sure is fun when you're Neil Bush, son of one president, brother of another.

Just how much fun was revealed in a deposition taken last March, during Bush's very nasty divorce battle. Asked by his wife's attorney whether he'd had any extramarital affairs, Bush told the story of his Asian hotel room escapades.

"Mr. Bush," said the attorney, Marshall Davis Brown, "you have to admit that it's a pretty remarkable thing for a man just to go to a hotel room door and open it and have a woman standing there and have sex with her."

"It was very unusual," Bush replied.

Actually, it wasn't that unusual. It happened at least three or four times during Bush's business trips to Asia, he said: "I don't remember the exact number."

"Were they prostitutes?" asked Brown.

"I don't -- I don't know," Neil replied.

"Did you pay them?"

"No."

Not surprisingly, the revelation made headlines around the world. Equally unsurprisingly, the sex story overshadowed the curious financial revelations that came out in the same deposition.

In 2002, for instance, Bush signed a consulting contract with Grace Semiconductor -- a Shanghai-based company managed in part by the son of former Chinese president Jiang Zemin. Bush's contractual duties consist solely of attending board meetings and discussing "business strategies." For this, he is to be paid $2 million in company stock over five years, plus $10,000 for every board meeting he attends.

"Now, you have absolutely no educational background in semiconductors, do you Mr. Bush?" Brown asked.

"That's correct," Bush responded.

Meanwhile, back home in Texas, Bush serves as co-chairman of a company called Crest Investment. Crest, he revealed in the deposition, pays him $60,000 a year to provide "miscellaneous consulting services."

"Such as?" Brown asked.

"Such as answering phone calls when Jamal Daniel, the other co-chairman, called and asked for advice," Bush replied.

Ah, it's nice to be Neil Bush, who seems to be living the lifestyle immortalized in those famous Dire Straits lyrics: "Money for nothin' and chicks for free."

Unique, Relatively Speaking

Neil Bush is the latest manifestation of a long tradition in American life -- the president's embarrassing relative.

There was Sam Houston Johnson, who used to get drunk and start blabbing to the press until his brother, Lyndon, sicced the Secret Service on him.

And Donald Nixon, who dreamed of founding a fast-food chain called Nixonburgers and who accepted, but never repaid, a $200,000 loan from billionaire Howard Hughes. His brother, Dick, had the Secret Service tap his phone.

And Billy Carter, who drank prodigious quantities of beer, authored a book called "Redneck Power" and took $200,000 from the government of Libya.

And Roger Clinton, a party animal who spent a year in prison for cocaine dealing and who later appeared in a movie called "Pumpkinhead II" playing a pol called Mayor Bubba.

But Neil Bush has surpassed them all. Bush has done something that no other American has ever accomplished: He has become the embarrassing relative of not one but two presidents.

In the late '80s and early '90s, Bush embarrassed his father, George H.W. Bush, with his shady dealings as a board member of the infamous Silverado Savings and Loan, whose collapse cost taxpayers $1 billion.

Now Bush has embarrassed his brother George W. Bush with a made-for-the-tabloids divorce that featured paternity rumors, a defamation suit and, believe it or not, allegations of voodoo.

And Bush's career as an embarrassment may not be over. At 48, he is still relatively young and, judging from his deposition, still virile and vigorous. If his brother Jeb, governor of Florida, is ever elected president, Neil could conceivably embarrass him, too, pulling off an unprecedented hat trick of presidential embarrassment.

Obviously, it's time for a mid-career retrospective on the life and work of Neil Bush.

Or maybe not. His father, mother, brothers and ex-wife all declined to be interviewed. White House spokeswoman Claire Buchan uttered a curt "no comment."

Neil also declined to be interviewed, although he agreed to respond to e-mailed questions, provided they did not pertain to his divorce. He reports that he's too involved with Ignite!, his educational software company, to pay much attention to media coverage of his misadventures.

"Seriously," he writes via e-mail, "I'm too busy being a good father and promoting Ignite! to worry about that kind of thing."

The Wheeler-Dealer

Neil Mallon Bush was born in 1955 and named after his grandfather's Yale buddy Neil Mallon, the corporate CEO who gave George H.W. Bush his first job in the Texas oil business.

The third of the five Bush children, Neil was so thoughtful and helpful that siblings dubbed him "Mr. Perfect."

But Neil had trouble reading, and a counselor at St. Albans prep school in Washington told his mother he might not graduate. His problem was dyslexia, and his mother spent countless weekends taking him to special reading lessons.

It worked. He graduated, then went to Tulane University, where he received a degree in international economics and, in 1979, an MBA. That year, while working on his father's unsuccessful campaign for the 1980 Republican presidential nomination, Neil met Sharon Smith, whom his mother later described in her memoirs as "a darling young schoolteacher from New Hampshire."

They married in 1980 and moved to Denver, where Neil got a $30,000 job negotiating mineral leases for Amoco. Denver was an oil-fueled boomtown, and soon the handsome son of the vice president was charming the swells at the soirees of Denver's social set.

In 1982, Neil and two co-workers quit and formed an oil exploration company, JNB Exploration. His partners were geologists; Neil was in charge of raising money.

"Neil knew people because of his name," one partner, Evans Nash, said later.

Among the people Neil knew were two high-powered Denver real estate barons -- Bill Walters and Ken Good. Walters was a flamboyant Rolex-wearing, Rolls-driving mogul known as "the Donald Trump of Denver." Good owned the largest home in Colorado, a $10 million mansion with a special plumbing system that pumped Scotch, gin and vodka throughout the house.

After listening to Bush's sales pitch, Walters invested $150,000 and set up a $1.75 million line of credit for JNB at a bank he owned. Good invested $10,000 and pledged loans worth $1.5 million. Good also lent Bush $100,000 to gamble in the commodities market and said Neil didn't have to pay it back unless he made money.

"It was," Bush later admitted, "an incredibly sweet deal."

He set up an office, decorated it with a bust of his father and paid himself $66,000 a year -- double his Amoco salary. But JNB floundered. In five years, the company drilled 26 wells in four states, but it never found a drop of exploitable oil. JNB would have gone bankrupt if not for the money from Walters and Good.

But Bush was able to help the men who helped him. In 1985 he joined the board of Silverado Savings and Loan, which had already lent millions to Walters and Good. Over the next three years, Silverado lent an additional $106 million to Walters and $35 million to Good, although the two men's real estate empires were collapsing.

Good used some of that money to buy JNB, although it was still losing money. He raised Bush's salary to $120,000 and awarded him a bonus of $22,000. He also hired Bush as a director of one of his companies, at a salary of $100,000.

Neither Good nor Walters ever repaid a nickel of their Silverado loans, and in 1988 Silverado went belly up, leaving U.S. taxpayers holding the bag for $1.3 billion in debts.

Picking through the wreckage, regulators from the federal Office of Thrift Supervision concluded in 1991 that Bush's deals with Good and Walters while serving on Silverado's board constituted "multiple conflicts of interest." Bush became a public symbol of the $500 billion savings and loan scandal. Protesters picketed his home and pasted mock wanted posters around Washington: "Jail Neil Bush."

Bush proclaimed his innocence, declaring at a news conference that "self-serving regulators" were persecuting him because he was the president's son. But when he appeared before the House Banking Committee in 1990, he admitted that some of his deals looked "a little fishy."

Ultimately, Bush paid $50,000 as his part of a federal lawsuit against Silverado and was reprimanded by the OTS. Good and Walters ended up declaring bankruptcy, and JNB, which had never found oil or made money, quietly perished.

Today, Bush maintains that he did nothing wrong.

"I happened to be one of hundreds of other American businessmen and women who served as an outside director on the board of a savings and loan institution that failed during the 1980s," he writes in an e-mail. "I regret that the institution's failure cost taxpayers so much money."

Strictly Business

During his high-rolling days in Denver, Neil had told reporters that he was thinking of running for Congress. At home, he spoke with his brothers about running for governor.

"They'd talk about how GW was going to run for governor of Texas and Jeb would run for governor of Florida and Neil would run for governor of Colorado," recalls Douglas Wead, a Bush family friend who served as a special assistant in the first Bush White House. "The family would have bet on Jeb, but if you just observed their personalities, you'd say Neil."

Neil was the most charming of the Bush brothers, Wead says. "He's relaxed, he's funny, he's a better speaker than anybody in the family. . . . He could easily have been a congressman."

The Silverado scandal killed Neil's dream of a political career. But, thanks to his father's friends, it had little effect on his business career.

Thomas "Lud" Ashley, an ex-congressman and bank lobbyist, "came to the rescue," Barbara Bush wrote in her memoirs, and raised money to pay Neil's legal bills.

"I'm a family friend," Ashley explains today, "and he was in real difficulty."

With Silverado and JNB both belly up, Bush started Apex Energy, a methane gas exploration company. He invested $3,000 of his own money and got $2.3 million from two companies run by his father's friend Louis Marx, heir to the Marx toy fortune.

Neil used Marx's money to pay himself a salary of $160,000, and he sold a Wyoming gas lease that he owned to Apex for $150,000. The lease proved worthless -- no methane there. In fact, Apex, like JNB, never found anything worth pumping.

After two years, Apex went broke. Bush had received more than $300,000 in salary but Marx got zip, and the Small Business Administration, which had backed Marx's investments, was left holding the empty bag.

An investigation by the House Small Business Committee found nothing "illegal or improper" but noted that a $2 million federally guaranteed investment to an applicant who risked only $3,000 of his own money seemed like "a very high leveraging of funds."

A few months after Apex crashed in 1991, Bush was rescued by another of his father's rich friends. Bill Daniels, a multimillionaire cable TV baron who raised $330,000 in 1987 for George H.W. Bush's presidential campaign, hired Neil to a $60,000 job at TransMedia Communications.

"Anyone who hires Neil Bush is going to get some heat," Daniels said at the time, "but somebody had to do it."

TransMedia was headquartered in Texas, so Bush sold his $500,000 house in Denver and moved Sharon and their three kids -- Lauren, Pierce and Ashley -- to Houston.

Peter Wehner of Colorado Business magazine called TransMedia to find out exactly what Bush would be doing for the company.

"I'm trying to find a title for him, if you want to know the truth," said Dick Barron, TransMedia's president. "He'll be learning the business, basically."

Traveling Salesman

In April 1993, shortly after leaving the White House, George H.W. Bush flew to Kuwait, accompanied by his wife, his sons Marvin and Neil, and his former secretary of state, James Baker.

The ex-president received a hero's welcome, a medal from the emir and an honorary degree from the university. After he left, Baker and Neil Bush went to work, attempting to win contracts from the Kuwaiti government. Ultimately, Bush's efforts failed to bear fruit. But over the next decade, he frequently traveled to the Middle East, Europe and Asia to negotiate deals and raise capital for various businesses. In 2000 he made $1.3 million, according to his deposition testimony -- $642,500 of it paid as a commission for introducing an Asian investor to the owners of an American high-tech company.

During his travels, he met with several Arab princes and enjoyed a private dinner with Jiang Zemin, then China's president, who serenaded Bush with a military song.

"I probably have access to people who wouldn't meet with a development-stage company," Bush told an Associated Press reporter in 2002, "but I feel I'm held to a higher standard."

For the last several years, Bush's main business interest has been Ignite!, the educational software company he co-founded in 1999. To fund Ignite!, Bush has raised $23 million from U.S. investors (including his parents), as well as businessmen from Taiwan, Japan, Kuwait, the British Virgin Islands and the United Arab Emirates, according to documents filed with the Securities and Exchange Commission.

Last year, Ignite! also entered into a partnership with a Mexican company, Grupo Carso Telecom. The partnership enabled Ignite! to lay off half of its 70 employees and outsource their jobs to Mexico.

"That's turned out to be great," says Ignite! President Ken Leonard.

But Ignite!, which pays Bush $180,000 a year, is not his only business interest. Last year, Winston Wong -- a Taiwanese businessman and an investor in Ignite! -- signed Bush to that $2 million consulting deal with Grace Semiconductor, the company that Wong founded in partnership with the Chinese government. Bush has not yet received any compensation because the contract calls for him to be paid after board meetings and, he said by e-mail, "I was unable to attend their one and only board meeting."

A spokesman for Grace declined to comment.

Kevin Phillips, historian and author of the forthcoming book "American Dynasty: Aristocracy, Fortune and the Politics of Deceit in the House of Bush," sees Neil Bush as a man who has made a career of cashing in on his famous name.

"He's incorrigible," Phillips says. "He seems to be crawling through the underbelly of crony capitalism."

Bush vehemently denies that contention. "I have never used my family name to 'cash-in,' " Bush wrote by e-mail. "Unfortunately, such ridiculous charges come with the territory of coming from a famous and public family."

Fire and Disdain

"We create these prisonlike environments," Neil Bush said, "then we take our hunter-warrior types and label them attention-deficit disordered and put them on drugs."

It was the spring of 2002 and Bush was speaking about education at Whitney High School in Cerritos, Calif., considered one of the best public schools in America. He was touting Ignite!, which was being tested there. In the audience was writer Edward Humes, taking notes for his book on Whitney, "School of Dreams," published last summer.

Ignite! is designed, Bush said, to make learning fun for "hunter-warrior" kids who don't like reading. It's a computer curriculum that uses music, graphics and animation to teach middle school kids.

The program's first course -- eighth-grade American history -- was tested over the last two years in schools in a dozen states. Available commercially for the first time this year, it is being used by about 40,000 students in 120 school districts, mostly in Texas, at a cost of about $30 per pupil.

One school that uses Ignite! is Mendez Middle, a predominantly poor and Hispanic school in Austin. After three years of using the program, says Principal Connie Barr, the number of students who passed the state's eighth-grade history test has risen from 50 percent to 87 percent. "That's incredible," says Barr. "It doesn't replace the teacher or the textbook. What it does is give the teacher another way to deliver the information."

However, Ignite! has been attacked by other educators for dumbing down history. Among its controversial aspects is a lesson that depicts the Seminole Wars in a cartoon football game -- "the Jacksons vs. the Seminoles" -- the animated Indians smashing helmets with animated white settlers. The Constitutional Convention is taught in a rap song:

It was 55 delegates from 12 states

Took one hot Philadelphia summer to create

A perfect document for their imperfect times

Franklin, Madison, Washington -- a lot of the cats

Who used to be in the Continental Congress way back.

Ignite! is working well, Bush wrote in an e-mail: "Teachers and students have given anecdotal feedback that confirms the powerful impact our program is having on student achievement, student focus and attitudes, and teacher success in reaching all of their students."

But at Whitney reviews were less laudatory. "The kids felt pretty strongly that what this was about was lowering the bar," says Humes.

Humes wasn't impressed, either. "There was a lot of rhyming and games," he says. "It reminded me of what my son uses -- but he's in kindergarten."

When Bush spoke at Whitney, several students began arguing with him.

"He was very surprised," Humes recalls. "You had to see the look on his face when one young woman got up and said she liked calculus. He said it was useless. This is the branch of mathematics that makes space travel possible, and he said it was useless."

Tabloid Heaven

Even before the voodoo story and the paternity rumor and the defamation suit about the paternity rumor, Neil Bush's divorce was a candidate for the Nasty Breakup Hall of Fame.

It all began in 2002, when Bush informed his wife -- via e-mail -- that he no longer loved her and wanted a divorce.

At least that's the way Sharon Bush told the story back when she was still talking to reporters. Neil has never discussed the divorce in public, except in that now-famous deposition, in which he described his marriage as "loveless" with "no affection" and "very little sexual activity over the past 10 or 12 years."

Sharon, 51, claimed she was shocked to learn that her husband of 22 years had taken up with Maria Andrews, 40, a volunteer helping Neil's mother, former first lady Barbara Bush, with her correspondence. Andrews is the ex-wife of a Houston oil executive and the mother of three children.

Andrews is "very pretty -- petite is the best word for her," says John Spalding, a Houston lawyer and a friend of Neil Bush's. "She's just great, and she and Neil are great together."

Sharon Bush did not want a divorce, particularly on her husband's terms, which she considered insufficiently generous. She launched a counterattack by hiring New York PR whiz Lou Colasuonno, a man who knows tabloids, having served as the editor of both the New York Post and the New York Daily News.

Colasuonno's opening gambit was a sure-fire attention-getter: In April 2003, he announced that Sharon was seeking a publisher for a tell-all book about the Bush family.

"This is a woman who has had some wonderful times with the Bushes," Colasuonno told the New York Observer. "But she has seen the dark side, too. And she intends to provide a view of the family that everyone will want to read."

Next, Colasuonno arranged -- and publicized -- a lunch date between Sharon and Kitty Kelley, the celebrity biographer from Hell, who is working on a book on the Bush dynasty.

"I learned a great deal about the Bush family from Sharon," Kelley told The Washington Post after the lunch. "She told me he's only offering $1,000 a month in support -- take it or leave it. . . . She said that when she told Neil she needs more to live on, Neil Bush said, 'Just get remarried.' Sharon was sobbing as she told me, 'Kitty, I just won't sell my body!' "

Whew! After that, Colasuonno says, Neil increased his offer considerably, and the final settlement gave Sharon about $30,000 a year in alimony, plus $750 a month for her two minor children, Pierce, 17, and Ashley, 14. (The couple's oldest child, Lauren -- a Princeton student and a fashion model -- is 19.)

But on the day the divorce was to be finalized -- April 28 -- Sharon told the judge that she wasn't sure she wanted to go through with it. "I believe in working through a marriage," she testified, "and I don't believe in divorce with three children."

Then, under oath, Sharon asked the judge to order "a DNA sampling of Maria Andrews's youngest child," a 2-year-old boy, because she "had cause for believing that it could possibly be his [Neil's] child."

The judge denied the request. The divorce became final that day, but the battle raged on.

In July, Sharon appeared on Houston's KHOU-TV News, telling her tale of woe. Somehow the station obtained a videotape of Neil Bush's deposition and aired juicy bits from his account of his Asian hotel exploits.

That upped the ante in the publicity war. Soon, Neil's friend Spalding was calling reporters with a choice morsel of his own: Sharon had yanked hair out of Neil's head, Spalding said, so she could make a voodoo doll and put a curse on her ex-husband.

"It was bizarre," Spalding says. "She literally pulled his hair and yanked it out of his head. He told me about it."

Sharon admitted doing that and also said she collected some from his hairstylist's floor. But it was not for voodoo, she told the Houston Chronicle. Neil was acting so erratically, she said, that she wanted to test the hair for signs of drug use. The tests were inconclusive, she said.

Neil responded by authorizing his lawyer to say he didn't use drugs.

At that point, it looked like the Bush divorce couldn't get much cheesier. But in September, Robert Andrews, ex-husband of Maria Andrews, sued Sharon Bush for defamation over her claims that Neil is the father of the 2-year-old. She spread the rumor, his lawsuit alleged, to news outlets, friends and "fast food restaurant employees." He demanded $850,000 in damages.

Then Sharon responded by asking the court to order Neil as well as Robert Andrews to provide DNA samples.

Then Andrews's attorney, Dale Jefferson, suggested a novel Texas-style "put-up-or-shut-up" solution: "We'll put up $850,000 and Sharon Bush can put up $850,000," Jefferson said. "And if she's right and Neil Bush is the father of that child, she gets Mr. Andrews's $850,000, and if we're right, we get her $850,000."

Then . . . no, that's enough of this folly. It's time to stop wallowing in the gutter. It's time to take the high road, to raise the sensitive questions worthy of high-minded people.

Like: How is Neil Bush holding up under the relentless onslaught of embarrassing publicity? How is the son of one president and the brother of another doing these days?

Just fine, thank you, his friends say.

"He's very optimistic and he's got very thick skin," says Spalding. "He's a very happy guy and he's in a great relationship, and he says, 'This will all blow over.' "

"He has real pluck about him," says Lud Ashley. "He keeps his chin up."

These days Bush divides his time between Texas -- home of his children and Ignite! -- and Paris, where Maria Andrews is living so her children can learn French.

"Neil is very much in love," says Rex John, a Houston PR man who is the godfather of Bush's daughter Lauren. "As his friend, I just really enjoy seeing him so happy because for so many years he was not happy."

"Neil and Maria are incredibly affectionate with each other and with friends," says Spalding's wife, Laura, who is Maria Andrews's attorney. "It's fun to watch them together because they're so in love."

Somehow, even after all his travails, it's still nice to be Neil Bush.

Iraq's Health Ministry Ordered To Stop Counting Civilian Dead From War

The AP reports:
Iraq's Health Ministry has ordered a halt to a count of civilians killed during the war and told its statistics department not to release figures compiled so far, the official who oversaw the count told The Associated Press on Wednesday.

The health minister, Dr. Khodeir Abbas, denied in an email that he had anything to do with the order, saying he didn't even know about the study.

Dr. Nagham Mohsen, the head of the ministry's statistics department, said the order was relayed to her by the ministry's director of planning, Dr. Nazar Shabandar, who said it came on behalf of Abbas. She said the U.S.-led Coalition Provisional Authority, which oversees the ministry, also wanted the counting to stop.

"We have stopped the collection of this information because our minister didn't agree with it," she said, adding: "The CPA doesn't want this to be done."

Abbas, whose secretary said he was out of the country, sent an email denying the charge.

"I have no knowledge of a civilian war casualty survey even being started by the Ministry of Health, much less stopping it," he wrote. "The CPA did not direct me to stop any such survey either."

"Plain and simple, this is false information," he added.

Despite Abbas' comments, the health ministry's civilian death toll count had been reported by news media as early as August, and the count was widely anticipated by human rights organizations. The ministry issued a preliminary figure of 1,764 deaths during the summer.

Shabandar's office said he was attending a conference in Egypt and wouldn't return for two weeks. A spokesman for the CPA said it had nothing to add to Abbas' response, which came after the CPA reached him by telephone.

The U.S. and British militaries don't count civilian casualties from their wars, saying only that they try to minimize civilian deaths.

A major investigation of Iraq's wartime civilian casualties was compiled by The Associated Press, which documented the deaths of 3,240 civilians between March 20 and April 20. That investigation, conducted in May and June, surveyed about half of Iraq's hospitals, and reported that the real number of civilian deaths was sure to be much higher.

The Health Ministry's count, based on records of all hospitals, promised to be more complete.

Saddam Hussein's regime fell April 9, and President Bush declared major combat operations over on May 1.

The ministry began its survey at the end of July, when shaky nationwide communication links began to improve. It sent letters to all hospitals and clinics in Iraq, asking them to send back details of civilians killed or wounded in the war.

Many hospitals responded with statistics, Mohsen said, but last month Shabander summoned her and told her that Abbas wanted the count halted. He also told her not to release the partial information she had already collected, she said.

"He told me, 'You should move far away from this subject,'" Mohsen said. "I don't know why."

Abbas, the minister, said he had nothing to do with the order, and suggested the study wouldn't be feasible anyway.

"It would be almost impossible to conduct such a survey, because hospitals cannot distinguish between deaths that resulted from the coalition's efforts in the war, common crime among Iraqis, or deaths resulting from Saddam's brutal regime," he wrote.

Mohsen insisted that despite communications that remain poor and incomplete record-keeping by some hospitals, the statistics she received indicated that a significant count could have been completed.

"I could do it if the CPA and our minister agree that I can," she said in an interview in English.

Under Saddam's government, the ministry counted 1,196 civilian deaths during the war, but was forced to stop as U.S. and British forces overran southern Iraqi cities. Over the summer, the ministry compiled more figures that had been sent in previously, reaching a total of 1,764.

But officials said those numbers account for only a small number of the hospitals in Iraq, and none provided statistics through the end of the war.

The number of U.S. soldiers killed in the war is well documented. The Pentagon says 115 American military personnel were killed in combat from the start of the war to May 1, when President Bush declared major combat over, and 195 since.

Iraq kept meticulous records of its soldiers killed in action but never released them publicly. Military doctors have said the Iraqi military kept "perfect" records, but burned them as the war wound down.

CIA Hunts Iraq Tie to Soviet Smallpox

For the NYTimes, Judith Miller writes:

The C.I.A. is investigating an informant's accusation that Iraq obtained a particularly virulent strain of smallpox from a Russian scientist who worked in a smallpox lab in Moscow during Soviet times, senior American officials and foreign scientists say.

The officials said several American scientists were told in August that Iraq might have obtained the mysterious strain from Nelja N. Maltseva, a virologist who worked for more than 30 years at the Research Institute for Viral Preparations in Moscow before her death two years ago.

The information came to the American government from an informant whose identity has not been disclosed. The C.I.A. considered the information reliable enough that President Bush was briefed about its implications. The attempt to verify the information is continuing.

Dr. Maltseva is known to have visited Iraq on several occasions. Intelligence officials are trying to determine whether, as the informant told them, she traveled there as recently as 1990, officials said. The institute where she worked housed what Russia said was its entire national collection of 120 strains of smallpox, and some experts fear that she may have provided the Iraqis with a version that could be resistant to vaccines and could be more easily transmitted as a biological weapon.

The possibility that Iraq possesses this strain is one of several factors that has complicated Mr. Bush's decision, expected this week, about how many Americans should be vaccinated against smallpox, a disease that was officially eradicated in 1980.

The White House is expected to announce that despite the risk of vaccine-induced illness and death, it will authorize vaccinating those most at risk in the event of a smallpox outbreak — 500,000 members of the military who could be assigned to the Middle East for a war with Iraq and 500,000 civilian medical workers.

More broadly, the Russian government's refusal to share smallpox and other lethal germ strains for study by the United States, or to answer questions about the fate of such strains, has reinforced American concerns about whether Russia has abandoned what was once the world's most ambitious covert germ weapons program.

A year ago in Crawford, Tex., Mr. Bush and Russia's president, Vladimir V. Putin, issued a statement vowing to enhance cooperation against biological terrorism. But after an initial round of visits and a flurry of optimism, American officials said Russia had resisted repeated American requests for information about the Russian smallpox strains and help in the investigation into the anthrax attacks in the United States in October 2001.

"There is information we would like the Russians to share as a partner of ours," William Winkenwerder Jr., assistant secretary of defense for health affairs, said in an interview. "Because if there are strains that present a unique problem with respect to vaccines and treatment, it is in the interests of all freedom-loving people to have as much information as possible."

Cooperation on biological terrorism was not discussed at the meeting last week between Mr. Bush and Mr. Putin in St. Petersburg, American officials said, mainly because administration officials are not certain just how willing Mr. Putin is to enhance cooperation in this delicate area. They wonder if he is not doing more because of the military's hostility to sharing the information.

"The record so far suggests he is either unable or unwilling to push the military on this front," an administration official said. "We think it may be a little of both, but we're not really sure at this point or what to do about it."

Administration officials said the C.I.A. was still trying to determine whether Dr. Maltseva traveled to Iraq in 1990, and whether she shared a sample of what might be a particularly virulent smallpox strain with Iraqi scientists.

World Health Organization records in Geneva and interviews with scientists who worked with her confirmed that Dr. Maltseva visited Iraq at least twice, in 1972 and 1973, as part of the global campaign to eradicate smallpox.

Formerly secret Soviet records also show that in 1971, she was part of a covert mission to Aralsk, a port city in what was then the Soviet republic of Kazakhstan, north of the Aral Sea, to help stop an epidemic of smallpox. The Soviet Union did not report that outbreak to world health officials, as required by regulations.

Last June, experts from the Monterey Institute of International Studies, drawing on those Kazakh records and interviews with survivors, published a report saying the epidemic was a result of open-air tests of a particularly virulent smallpox strain on Vozrozhdeniye Island in the Aral Sea.

The island, known as Renaissance Island in English, is between Kazakhstan and another Central Asian country, Uzbekistan. The United States recently spent $6 million to help both countries, which are now independent, to decontaminate anthrax that the Soviet military buried in pits on the island.

Alan P. Zelicoff, co-author of the Monterey report and a scientist at Sandia National Laboratories, said the Aralsk outbreak was a watershed because it demonstrated that the smallpox virus was more easily spread than previously thought and that there may be a vaccine-resistant strain.

The organism can indeed be made to travel long distances, city-size perhaps, and there may be a vaccine-resistant strain or one that is more communicable than garden-variety smallpox, he said in an interview.

The Monterey report led American officials to question whether America's smallpox vaccine would be effective against the Aralsk strain or whether new vaccines or drugs might be needed if the strain was used in an attack. American concern increased in recent months after the White House was told that Dr. Maltseva might have shared the Aralsk strain with Iraqi scientists in 1990, administration officials said.

David Kelly, a former United Nations weapons inspector in Iraq, said there was a "resurgence of interest" in smallpox vaccine in Iraq in 1990, "but we have never known why."

A spokesman for the Russian Research Institute for Viral Preparations declined to comment on Dr. Maltseva or her work. Her daughter, a physician in Moscow, said she had no recollection of her mother's ever going to Iraq.

Svetlana Sergeyevna Marennikova, Dr. Maltseva's deputy in the Moscow laboratory, said in an interview that Dr. Maltseva had never gone to Iraq as far as she knew.

"She worked, and then when she got sick, she took a sick leave when she was no longer able to work," she said. "I don't know about Iraq. I didn't know about a trip there. I don't think she was there. I would know."

Donald A. Henderson, a senior adviser to the Department of Health and Human Services and a leader of the smallpox eradication campaign, described Dr. Maltseva as an "outgoing, hard-working scientist." He said she had traveled widely for the W.H.O in the eradication campaign.

While the organization's records show that she visited Iran, Iraq and Syria, Dr. Henderson recalled that he had also sent her to Pakistan to follow up on an outbreak there. "She clearly enjoyed the international travel circuit," he said.

Scientists and American officials have speculated that Iraq may have tried to buy the Aralsk strain from Dr. Maltseva, whose institute, like so many other scientific labs in Russia, has fallen on hard times since the Soviet Union's collapse.

Dr. Henderson said he was deeply disappointed that Dr. Maltseva and other Russian scientists with whom he had worked closely had helped cover up outbreaks of infectious diseases that should have been reported to the W.H.O.

The Russian government has never publicly acknowledged that Aralsk outbreak or that it tested smallpox in the open air. At a World Health Organization meeting in Lyon, France, last August, officials said, Russian virologists argued privately, in response to the Monterey report and news accounts, that there was no reason to believe that the Aralsk incident was anything other than a natural outbreak and that the strain was not particularly virulent — assertions with which some American experts concur.

American officials familiar with discussions about Aralsk said Russians scientists had confirmed that Dr. Maltseva took tissue samples from Aralsk back to her Moscow lab in 1971. But Russians have insisted that the material was destroyed when Russia quietly moved its smallpox strain collection from the Moscow lab to Vector, where the collection is now stored.

Many American scientists and officials, even those who doubt that the Aralsk strain is unusually potent, are deeply skeptical that the strain was destroyed. Former Soviet germ warfare scientists have privately told American officials that the military took control of these strains when the collection was moved.

American health and defense officials have tried without success to press Russia for help in securing a sample of the strain from the Aralsk smallpox outbreak.

The American officials have also been unable to obtain information that they believe could help federal investigators with their stalled inquiry into the anthrax attacks of October 2001, in which 5 people died and at least 17 were infected

"Iraq is not America's to sell"

International law is unequivocal - Paul Bremer's economic reforms are illegal

Naomi Klein, in The Guardian, reports:

Bring Halliburton home. Cancel the contracts. Ditch the deals. Rip up the rules. Those are just a few of the suggestions for slogans that could help unify the growing movement against the occupation of Iraq. So far, activist debates have focused on whether the demand should be for a complete withdrawal of troops, or for the United States to cede power to the United Nations.

But the "troops out" debate overlooks an important fact. If every last soldier pulled out of the Gulf tomorrow and a sovereign government came to power, Iraq would still be occupied: by laws written in the interest of another country; by foreign corporations controlling its essential services; by 70% unemployment sparked by public sector layoffs.

Any movement serious about Iraqi self-determination must call not only for an end to Iraq's military occupation, but to its economic colonisation as well. That means reversing the shock therapy reforms that US occupation chief Paul Bremer has fraudulently passed off as "reconstruction", and cancelling all privatisation contracts that are flowing from these reforms.

How can such an ambitious goal be achieved? Easy: by showing that Bremer's reforms were illegal to begin with. They clearly violate the international convention governing the behaviour of occupying forces, the Hague regulations of 1907 (the companion to the 1949 Geneva conventions, both ratified by the United States), as well as the US army's own code of war.

The Hague regulations state that an occupying power must respect "unless absolutely prevented, the laws in force in the country". The coalition provisional authority has shredded that simple rule with gleeful defiance. Iraq's constitution outlaws the privatisation of key state assets, and it bars foreigners from owning Iraqi firms. No plausible argument can be made that the CPA was "absolutely prevented" from respecting those laws, and yet two months ago, the CPA overturned them unilaterally.

On September 19, Bremer enacted the now infamous Order 39. It announced that 200 Iraqi state companies would be privatised; decreed that foreign firms can retain 100% ownership of Iraqi banks, mines and factories; and allowed these firms to move 100% of their profits out of Iraq. The Economist declared the new rules a "capitalist dream".

Order 39 violated the Hague regulations in other ways as well. The convention states that occupying powers "shall be regarded only as administrator and usufructuary of public buildings, real estate, forests and agricultural estates belonging to the hostile state, and situated in the occupied country. It must safeguard the capital of these properties, and administer them in accordance with the rules of usufruct."

Bouvier's Law Dictionary defines "usufruct" (possibly the ugliest word in the English language) as an arrangement that grants one party the right to use and derive benefit from another's property "without altering the substance of the thing". Put more simply, if you are a housesitter, you can eat the food in the fridge, but you can't sell the house and turn it into condos. And yet that is just what Bremer is doing: what could more substantially alter "the substance" of a public asset than to turn it into a private one?

In case the CPA was still unclear on this detail, the US army's Law of Land Warfare states that "the occupant does not have the right of sale or unqualified use of [non-military] property". This is pretty straightforward: bombing something does not give you the right to sell it. There is every indication that the CPA is well aware of the lawlessness of its privatisation scheme. In a leaked memo written on March 26, the British attorney general, Lord Goldsmith, warned Tony Blair that "the imposition of major structural economic reforms would not be authorised by international law".

So far, most of the controversy surrounding Iraq's reconstruction has focused on the waste and corruption in the awarding of contracts. This badly misses the scope of the violation: even if the sell-off of Iraq were conducted with full transparency and open bidding, it would still be illegal for the simple reason that Iraq is not America's to sell.

The security council's recognition of the United States' and Britain's occupation authority provides no legal cover. The UN resolution passed in May specifically required the occupying powers to "comply fully with their obligations under international law including in particular the Geneva conventions of 1949 and the Hague regulations of 1907".

According to a growing number of international legal experts, that means that if the next Iraqi government decides it doesn't want to be a wholly owned subsidiary of Bechtel and Halliburton, it will have powerful legal grounds to renationalise assets that were privatised under CPA edicts.

Juliet Blanch, global head of energy and international arbitration for the huge international law firm Norton Rose, says that because Bremer's reforms directly contradict Iraq's constitution, they are "in breach of international law and are likely not enforceable". Blanch argues that the CPA "has no authority or ability to sign those [privatisation] contracts", and that a sovereign Iraqi government would have "quite a serious argument for renationalisation without paying compensation". Firms facing this type of expropriation would, according to Blanch, have "no legal remedy".

The only way out for the administration is to make sure that Iraq's next government is anything but sovereign. It must be pliant enough to ratify the CPA's illegal laws, which will then be celebrated as the happy marriage of free markets and free people. Once that happens, it will be too late: the contracts will be locked in, the deals done and the occupation of Iraq permanent.

Which is why anti-war forces must use this fast-closing window to demand that the next Iraqi government be free from the shackles of these reforms. It's too late to stop the war, but it's not too late to deny Iraq's invaders the myriad economic prizes they went to war to collect in the first place.

It's not too late to cancel the contracts and ditch the deals.

"Why The Privatization of Iraq is Illegal"

Aaron Mate on "What the US-UK's responsibilities are as occupier of Iraq":

On May 22 2003, the United Nations Security Council passed Resolution 1483, abolishing sanctions against Iraq and recognising the United States and United Kingdom as the country's occupying powers. The resolution called upon the US-UK authority to "comply fully with their obligations under international law, including in particular the Geneva Conventions of 1949 and the Hague Regulations of 1907." [1]

How has the CPA changed Iraq's economy and laws?
Among many changes, the US-UK Coalition Provisional Authority (CPA), has laid off hundreds of thousands of Iraqi workers, virtually eliminated trade tariffs and enacted laws that radically alter Iraq's economy. Order 39, decreed by CPA head Paul Bremer on September 20 2003, abolished Iraq's ban on foreign investment, allowing foreigners to own up to 100% of all sectors except natural resources. Over 200 state-owned enterprises, including electricity, telecommunications and pharmaceuticals have been privatised. Iraq's highest tax rate has been lowered from 45% to a flat rate of 15%. Although foreign ownership of land remains illegal, companies or individuals will be allowed to lease properties for up to 40 years. [2]

Are these changes legal?

These laws stand in clear violation of Iraq's constitution, as is openly admitted. The US department of commerce notes that "the Iraqi constitution prohibits foreign ownership of immovable (real) property," and "prohibits investment in, and establishment of, companies in Iraq by foreigners who are not resident citizens of Arab countries." [3]

Consider how the CPA's new laws and massive layoffs conform to its obligations under international law [4]:

· Hague Regulations

Art 43: The authority of the legitimate power having in fact passed into the hands of the occupant, the latter shall take all the measures in his power to restore, and ensure, as far as possible, public order and safety, while respecting, unless absolutely prevented, the laws in force in the country.

Art 46: Family honour and rights, the lives of persons, and private property, as well as religious convictions and practice, must be respected. Private property cannot be confiscated.

Art 47: Pillage is formally forbidden.

Art 53: An army of occupation can only take possession of cash, funds, and realisable securities which are strictly the property of the state, depots of arms, means of transport, stores and supplies, and, generally, all movable property belonging to the state which may be used for military operations. All appliances, whether on land, at sea, or in the air, adapted for the transmission of news, or for the transport of persons or things, exclusive of cases governed by naval law, depots of arms, and, generally, all kinds of munitions of war, may be seized, even if they belong to private individuals, but must be restored and compensation fixed when peace is made.

Art 55: The occupying State shall be regarded only as administrator and usufructuary of public buildings, real estate, forests, and agricultural estates belonging to the hostile State, and situated in the occupied country. It must safeguard the capital of these properties, and administer them in accordance with the rules of usufruct.

· Geneva Conventions:

Article 53: Any destruction by the occupying power of real or personal property belonging individually or collectively to private persons, or to the state, or to other public authorities, or to social or cooperative organisations, is prohibited, except where such destruction is rendered absolutely necessary by military operations.

Article 54: The occupying power may not alter the status of public officials or judges in the occupied territories, or in any way apply sanctions to or take any measures of coercion or discrimination against them, should they abstain from fulfilling their functions for reasons of conscience.

What is usufruct?

In accordance with Article 55 of the Hague Regulations, the US-UK are "regarded only as administrator and usufructuary" of Iraq's resources and immovable property, which it must administer "in accordance with the rules of usufruct." Bouvier's Law dictionary defines usufruct as: "The right of enjoying a thing, the property of which is vested in another, and to draw from the same all the profit, utility and advantage which it may produce, provided it be without altering the substance of the thing." [5]

As usufructary, the US-UK coalition would have the right to use Iraq's resources without altering or destroying the character of the resource itself. It is widely-recognised that agriculture, wherein crops can grow again and no serious effect is made on the soil or the land, is an appropriate usage of the right of usufruct. But oil is far different: the extraction of oil is the process of extracting the original resource itself, as the fossil fuels are not renewable and the character of the land from which it comes is severely altered, if not depleted. In addition, the responsibilities of usufruct can also apply to structural changes to a public resource or service. As Naomi Klein points out, "what could more substantially alter 'the substance' of a public asset than to turn it into a private one?"

Does the CPA know this already?

In a leaked March 26 memo that caused a stir in the UK, attorney general Lord Peter Goldsmith advised prime minister Blair that the invasion and subsequent occupation of Iraq was illegal. "My view is that a further security council resolution is needed to authorise imposing reform and restructuring of Iraq and its government," Lord Goldsmith wrote. He added that in his view "the imposition of major structural economic reforms would not be authorised by international law," and that "the longer the occupation of Iraq continues, and the more the tasks undertaken by an interim administration depart from the main objective [of disarming Saddam], the more difficult it will be to justify the lawfulness of the occupation." [6]

Notes

1. UN Security Council Resolution 1483, adopted May 22 2003.

2. Coalition Provisional Authority Order 39, enacted September 19 2003.

3. US Department of Commerce, "Overview of Commercial Law in Iraq".

4. Convention (IV) respecting the Laws and Customs of War on Land and its annex: Regulations concerning the Laws and Customs of War on Land (Hague Regulations). The Hague, 18 October 1907.

Convention (IV) relative to the Protection of Civilian Persons in Time of War (Geneva Conventions). Geneva, 12 August 1949.

5. Bouvier's Law Dictionary, cited in University of Tulsa Law Professor R. Dobie Langenkamp, What Happens to the Oil: International Law and the Occupation of Iraq", January 2003,

6. John Innes, "US and UK Action in post-war Iraq May be Illegal," The Scotsman, May 22, 2003.

Flat tax system imposed on Iraq

U.S. Administrator Orders 15% Rate

The Washington Post reports:

“The highest individual and corporate income tax rates for 2004 and subsequent years shall not exceed 15 percent,” Bremer wrote in Coalition Provisional Authority Order Number 37, “Tax Strategy for 2003,” issued last month.

The flat tax, long a dream of economic conservatives, is finally getting its day — not in the United States, but in Iraq. It took L. Paul Bremer, the U.S. administrator in Baghdad, no more than a stroke of the pen Sept. 15 to accomplish what eluded the likes of publisher Steve Forbes, former representative Jack Kemp (R-N.Y.), former senator Phil Gramm (R-Tex.) and former representative Richard K. Armey (R-Tex.) over the course of a decade and two presidential campaigns.

Voila, Iraq has a flat tax, and the 15 percent rate is even lower than Forbes (17 percent) and Gramm (16 percent) favored for the United States. And, unless a future Iraqi government rescinds it, the flat tax will remain long after the Americans have left.

“It’s extremely good news,” said Grover Norquist, head of Americans for Tax Reform and a Bush administration ally. Bremer’s vaguely worded edict leaves open the possibility that Iraqis could face different levels of taxation below 15 percent, but “they told me it’s a flat rate and it appears as though it’s a flat rate,” Norquist said. The tax fighter added: “It might be a hint to the rest of us.”

NO HISTORY OF PAYING TAXES IN IRAQ

Bremer’s new economic policy for Iraq will slash Saddam Hussein’s top tax rate for individuals and businesses from 45 to 15 percent. Of course, since Hussein’s government, like others in the Middle East, almost never enforced tax collection, there is no real history of paying taxes in the country.

During the more than three decades of Baath Party rule, Hussein ran a centrally controlled economy with most large businesses owned or operated by the state. The government also managed the import of most goods.

John B. Taylor, undersecretary of the Treasury for international affairs, said the Iraq flat tax was discussed before the war as preliminary planning was done with the help of some Iraqi exiles.

After major combat ended, the discussions continued with Iraqis in Baghdad, with emphasis on tax policies adopted by other countries making the transition from controlled economies. “One was Russia and subsequently Ukraine, where we heard good things after flat taxes were adopted,” Taylor said.

On Sept. 22, Bremer told the Senate Appropriations Committee: “Iraq’s new tax system is admirably straightforward. The highest marginal tax rate on personal and corporate income is 15 percent.”

Iraq’s new finance minister, Kamil Mubdir Gailani, is considered a follower of Ahmed Chalabi, the Western-oriented banker who has closely adhered to the Bush administration’s economic policies, according to one expert on the Iraqi economy. Gailani presented the new Iraq finance program, including the flat tax, at a recent international meeting.

“A piece of social engineering is being done on Iraq, but it has almost no support from other members of the U.S.-appointed Iraqi Governing Council,” said a Middle East expert who heard Gailani’s presentation.

Proponents of the flat tax have long favored this kind of tax system for Iraq. Without much of a framework to start with, Iraq “need not worry about all the political and transition problems that have made adoption of fundamental tax reform here so difficult,” Bruce Bartlett, an economist in the Reagan and first Bush administrations, wrote this spring. “It is gratifying, therefore, that leaders of the new Iraq are said to be looking at a flat rate tax system for their country.”

RUSSIA SEEN AS A MODEL FOR IRAQ

Bartlett, once an aide to Kemp and now with the National Center for Policy Analysis, said the model for Iraq should be Russia, which in 2001 set a 13 percent flat tax on individual income. The Bush administration, still disturbed by much higher tax rates here, has said it admires Russia’s flat tax. Russia “understands the importance of getting the tax structure right in your economy,” Commerce Secretary Donald L. Evans told the conservative Heritage Foundation last year.

President Bush, in Russia last year to see President Vladimir Putin, said: “The good news is that the flat tax in Russia is a good, fair tax — much more fair, by the way, than many Western countries, I might add.”

“At the previous 40 percent to 50 percent, Russian people were evading,” said one economist familiar with the area. “Now at a lower rate they are paying because the penalties are so heavy.”

Conservatives have similarly celebrated Bremer’s move in Iraq. “Such low rates will put Iraq on a par with Hong Kong and flat-tax-land Russia,” editorialist Amity Shlaes wrote in the Financial Times. “They contrast favorably with the onerous regimes of some neighbors.”

American flat-tax advocates have made little headway at home, in part because Democrats say it would disproportionately hurt lower-income Americans and because expensive tax breaks such as the deductions for mortgage interest and charitable donations are beloved in both parties. But in places such as Russia, the Baltic states and Iraq, there was no well-established tax code defended by an army of lobbyists. “Somehow, it’s easier when you start from scratch,” Norquist said.

The 15 percent rate does not take effect until January. In the meantime, Bremer has abolished all taxes except for real estate, car sales, gasoline and the pleasantly named “excellent and first class hotel and restaurant tax.” Even while leaving these Hussein-era levies in place, Bremer exempted his coalition authority, the armed forces, their contractors and humanitarian organizations. Exempting occupation personnel leaves only the Iraqis to pay taxes, as well as journalists, businesspeople and other foreigners.

Looking back at the failed attempt by presidential candidate Forbes to rally U.S. public support behind the flat tax, Gene Sperling, a senior Clinton economic adviser who is with the Council on Foreign Relations, said wryly, “If Steve Forbes does a bus tour [of Iraq] to promote it, I hope they have adequate security."

Flat tax system imposed on Iraq

U.S. Administrator Orders 15% Rate

The Washington Post reports:

“The highest individual and corporate income tax rates for 2004 and subsequent years shall not exceed 15 percent,” Bremer wrote in Coalition Provisional Authority Order Number 37, “Tax Strategy for 2003,” issued last month.

The flat tax, long a dream of economic conservatives, is finally getting its day — not in the United States, but in Iraq. It took L. Paul Bremer, the U.S. administrator in Baghdad, no more than a stroke of the pen Sept. 15 to accomplish what eluded the likes of publisher Steve Forbes, former representative Jack Kemp (R-N.Y.), former senator Phil Gramm (R-Tex.) and former representative Richard K. Armey (R-Tex.) over the course of a decade and two presidential campaigns.

Voila, Iraq has a flat tax, and the 15 percent rate is even lower than Forbes (17 percent) and Gramm (16 percent) favored for the United States. And, unless a future Iraqi government rescinds it, the flat tax will remain long after the Americans have left.

“It’s extremely good news,” said Grover Norquist, head of Americans for Tax Reform and a Bush administration ally. Bremer’s vaguely worded edict leaves open the possibility that Iraqis could face different levels of taxation below 15 percent, but “they told me it’s a flat rate and it appears as though it’s a flat rate,” Norquist said. The tax fighter added: “It might be a hint to the rest of us.”

NO HISTORY OF PAYING TAXES IN IRAQ

Bremer’s new economic policy for Iraq will slash Saddam Hussein’s top tax rate for individuals and businesses from 45 to 15 percent. Of course, since Hussein’s government, like others in the Middle East, almost never enforced tax collection, there is no real history of paying taxes in the country.

During the more than three decades of Baath Party rule, Hussein ran a centrally controlled economy with most large businesses owned or operated by the state. The government also managed the import of most goods.

John B. Taylor, undersecretary of the Treasury for international affairs, said the Iraq flat tax was discussed before the war as preliminary planning was done with the help of some Iraqi exiles.

After major combat ended, the discussions continued with Iraqis in Baghdad, with emphasis on tax policies adopted by other countries making the transition from controlled economies. “One was Russia and subsequently Ukraine, where we heard good things after flat taxes were adopted,” Taylor said.

On Sept. 22, Bremer told the Senate Appropriations Committee: “Iraq’s new tax system is admirably straightforward. The highest marginal tax rate on personal and corporate income is 15 percent.”

Iraq’s new finance minister, Kamil Mubdir Gailani, is considered a follower of Ahmed Chalabi, the Western-oriented banker who has closely adhered to the Bush administration’s economic policies, according to one expert on the Iraqi economy. Gailani presented the new Iraq finance program, including the flat tax, at a recent international meeting.

“A piece of social engineering is being done on Iraq, but it has almost no support from other members of the U.S.-appointed Iraqi Governing Council,” said a Middle East expert who heard Gailani’s presentation.

Proponents of the flat tax have long favored this kind of tax system for Iraq. Without much of a framework to start with, Iraq “need not worry about all the political and transition problems that have made adoption of fundamental tax reform here so difficult,” Bruce Bartlett, an economist in the Reagan and first Bush administrations, wrote this spring. “It is gratifying, therefore, that leaders of the new Iraq are said to be looking at a flat rate tax system for their country.”

RUSSIA SEEN AS A MODEL FOR IRAQ

Bartlett, once an aide to Kemp and now with the National Center for Policy Analysis, said the model for Iraq should be Russia, which in 2001 set a 13 percent flat tax on individual income. The Bush administration, still disturbed by much higher tax rates here, has said it admires Russia’s flat tax. Russia “understands the importance of getting the tax structure right in your economy,” Commerce Secretary Donald L. Evans told the conservative Heritage Foundation last year.

President Bush, in Russia last year to see President Vladimir Putin, said: “The good news is that the flat tax in Russia is a good, fair tax — much more fair, by the way, than many Western countries, I might add.”

“At the previous 40 percent to 50 percent, Russian people were evading,” said one economist familiar with the area. “Now at a lower rate they are paying because the penalties are so heavy.”

Conservatives have similarly celebrated Bremer’s move in Iraq. “Such low rates will put Iraq on a par with Hong Kong and flat-tax-land Russia,” editorialist Amity Shlaes wrote in the Financial Times. “They contrast favorably with the onerous regimes of some neighbors.”

American flat-tax advocates have made little headway at home, in part because Democrats say it would disproportionately hurt lower-income Americans and because expensive tax breaks such as the deductions for mortgage interest and charitable donations are beloved in both parties. But in places such as Russia, the Baltic states and Iraq, there was no well-established tax code defended by an army of lobbyists. “Somehow, it’s easier when you start from scratch,” Norquist said.

The 15 percent rate does not take effect until January. In the meantime, Bremer has abolished all taxes except for real estate, car sales, gasoline and the pleasantly named “excellent and first class hotel and restaurant tax.” Even while leaving these Hussein-era levies in place, Bremer exempted his coalition authority, the armed forces, their contractors and humanitarian organizations. Exempting occupation personnel leaves only the Iraqis to pay taxes, as well as journalists, businesspeople and other foreigners.

Looking back at the failed attempt by presidential candidate Forbes to rally U.S. public support behind the flat tax, Gene Sperling, a senior Clinton economic adviser who is with the Council on Foreign Relations, said wryly, “If Steve Forbes does a bus tour [of Iraq] to promote it, I hope they have adequate security."

Washington Insiders' New Firm Consults on Contracts in Iraq

The NYTimes reports:

A group of businessmen linked by their close ties to President Bush, his family and his administration have set up a consulting firm to advise companies that want to do business in Iraq, including those seeking pieces of taxpayer-financed reconstruction projects.

The firm, New Bridge Strategies, is headed by Joe M. Allbaugh, Mr. Bush's campaign manager in 2000 and the director of the Federal Emergency Management Agency until March. Other directors include Edward M. Rogers Jr., vice chairman, and Lanny Griffith, lobbyists who were assistants to the first President George Bush and now have close ties to the White House.

At a time when the administration seeks Congressional approval for $20.3 billion to rebuild Iraq, part of an $87 billion package for military and other spending in Iraq and Afghanistan, the company's Web site, www.newbridgestrategies.com, says, "The opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq."

The site calls attention to the links between the company's directors and the two Bush administrations by noting, for example, that Mr. Allbaugh, the chairman, was "chief of staff to then-Gov. Bush of Texas and was the national campaign manager for the Bush-Cheney 2000 presidential campaign."

The president of the company, John Howland, said in a telephone interview that it did not intend to seek any United States government contracts itself, but might be a middleman to advise other companies that seek taxpayer-financed business. The main focus, Mr. Howland said, would be to advise companies that seek opportunities in the private sector in Iraq, including licenses to market products there. The existence of the company was first reported in National Journal, a weekly magazine of government and politics.

Mr. Howland said the company was not trying to promote its political connections. He said that although Mr. Allbaugh, for example, had spent most of his career "in the political arena, there's a lot of cross-pollination between that world and the one that exists in Iraq today."

As part of the administration's postwar work in Iraq, the government has awarded hundreds of millions of dollars in contracts to American businesses. Those contracts, some without competitive bidding, have included more than $500 million to support troops and extinguish oil field fires for Kellogg, Brown & Root, a subsidiary of Halliburton, which Vice President Dick Cheney led from 1995 until 2000.

Of the $3.9 billion a month that the administration is spending on military operations in Iraq, up to one-third may go to contractors who provide food, housing and other services, some military budget experts said. A spokesman for the Pentagon said today that the military could not provide an estimate of the breakdown.

Administration officials, including L. Paul Bremer III, the top American official in Iraq, have said all future contracts will be issued only as a result of competitive bidding. Already, the Web site for the Coalition Provisional Authority, http://cpa-iraq.org/, lists 36 recent solicitations, including those for contractors who might sell new AK-47 assault rifles, nine-millimeter ammunition and other goods for new army and security forces.

New Bridge Strategies was established in May and recently began full-fledged operations, including opening an office in Iraq, its officials said. They added that a decision by the Governing Council of Iraq to allow foreign companies to establish 100 percent ownership of businesses in Iraq, an unusual arrangement in the Mideast, had added to the attractiveness of the market.

Mr. Howland is a principal of Crest Investment in Houston and was president of American Rice, once a major exporter to Iraq. Richard Burt, ambassador to Germany in the Reagan administration and a former assistant secretary of state, and Lord Powell, a member of the British House of Lords and an important military and foreign-policy adviser to Prime Minister Margaret Thatcher, are among the 10 principals.

Mr. Allbaugh, the chairman, spent most of his career in Texas politics before Mr. Bush appointed him to head the federal disaster agency. Mr. Allbaugh, who now heads his own consulting firm here, did not return calls to his office today.

Mr. Rogers, the vice chairman who was a deputy assistant to the first President Bush and an executive assistant to the White House chief of staff, is also vice chairman of Barbour Griffith & Rogers, one of the best-connected Republican lobbying firms in the capital. Mr. Rogers founded it in 1991 with Haley Barbour, who became chairman of the Republican National Committee and is now running for governor of Mississippi.

Shortly after leaving the White House, Mr. Rogers was publicly rebuked by the first President Bush after he signed a $600,000 contract to represent a Saudi, Sheik Kamal Adham, who was a main figure under scrutiny in a case that involved the Bank of Commerce and Credit International. Mr. Rogers canceled his contract to represent the sheik, former head of Saudi intelligence.

Mr. Griffith, a director of the new company, is chief operating officer of Barbour Griffith & Rogers, which he joined in 1993. He was special assistant for intergovernmental affairs to the first President Bush and later worked under him as an assistant secretary of education.

Until November, Mr. Rogers's wife, Edwina, was associate director of the National Economic Council at the White House. Reached by telephone today, Mr. Rogers said he did not want to speak for the record and referred a reporter to Mr. Howland.

The company Web site says the company was "created specifically with the aim of assisting clients to evaluate and take advantage of business opportunities in the Middle East following the conclusion of the U.S.-led war in Iraq."

American To Oversee Iraqi Oil Industry

The US is preparing to install an American chairman on a planned management team of the Iraqi oil industry, providing further ammunition to critics who have questioned the Bush administration's agenda in the Middle East.

The Guardian reports:
The administration is planning to structure the potentially vast Iraqi oil industry like a US corporation, with a chairman and chief executive and a 15-strong board of international advisers.

According to a report in the Wall Street Journal, it has lined up the former chief executive of the US division of Royal Dutch/Shell, Philip Carroll, to take the job of chairman.

Large scale decisions on investment, capital spending and production are likely to need the approval of the advisory board, which will act like a board of directors. The day-to-day management team will be vetted by US officials and is likely to be made up of existing and expatriate Iraqi oil officials.

The structure is likely to anger opponents of the administration who argue that the US is wielding too much power in Iraq.

By involving non-Iraqis, the US could also expose itself to the accusation that it is attempting to take control of the industry and open the door to foreign investment by major western oil companies - a perception the Bush administration is keen to avoid.

The Middle East has, since the early-to-mid-1970s, largely closed the door on foreign oil firms - but contracts have been awarded to engineering and construction firms such as Bechtel, which was recently handed a $600m (£380m) commission in Iraq by the US Agency for International Development.

US and Iraqi engineers have resumed modest oil production in the south of the country, in fields close to Basra.

The other major field in the north, near Kirkuk, has yet to be restarted, but is expected to begin pumping oil in the next few days. The Basra fields produced 60% of Iraq's pre-war production of around 2.5m barrels a day.

The US is pushing for an end to economic sanctions to allow the oil to be freely exported.

A handful of Iraqi oil officials have been attempting to restore some order to the country's energy infrastructure and have been meeting regularly with the US military in Baghdad. The US has been eager to get the cooperation of the skilled Iraqi oil administration, but an attempt to impose a structure on the industry with outside involvement could cause friction.

The oil minister in the ousted Saddam regime, Amer Mohammed Rasheed, is on the US's most-wanted list.

Iraq, with 112bn barrels of proven reserves, is second only to Saudi Arabia, and has the potential to become a superpower in the oil industry. Experts believe that with billions of dollars of investment in the nation's crippled infrastructure it could produce up to 6m barrels a day within five or six years. There are believed to be 200bn barrels of probable reserves.

The oil beginning to pump in Iraq is being used for domestic purposes. Once exports are up and running again, US and British officials have said the aim is to put the proceeds into a fund to pay for the reconstruction of Iraq. But details of the fund, including who would administer it, have been scant.

The new management team and part of the advisory board are expected to be named next week. The chief executive would play a similar role to the former oil minister and would represent Iraq at meetings of Opec, the organisation of oil exporting nations. The position of vice chairman is expected to be filled by Fadhil Othman, who led Iraq's oil marketing group before Saddam came to power 24 years ago.

Thamir Gadhban, a senior oil ministry official working to restore order to the industry in Baghdad, told the Journal that he expected the chief executive to come from the ranks of the existing hierarchy. "The Iraqi oil industry is not a new one, and there are experienced people in the ministry of oil and its organisations," he said.

Profile of Army Chief Sidelined By Rumsfeld

Scorned General's Tactics Proved Right

The Guardian reports:

This has been a terrible week at the Pentagon: the worst since the building itself was attacked more than 18 months ago. But as his limo drew up to fetch him last night, one of the most senior figures in the building might just have permitted himself the thin smile of a vindicated man.

His name in General Eric Shinseki. And at a time when generals - whether on active or pundit duty - are the hottest showbiz properties in the world, hardly anyone knows who he is.

Officially, he is Tommy Franks's superior, head of the United States army, a member of the mighty joint chiefs, and two months away from what ought to be honoured retirement at the end of a military career stretching back to the Vietnam war.
But for the past two years Gen Shinseki has been in total eclipse after what appears to have been the most spectacular bust-up with his civilian bosses, in particular Donald Rumsfeld, the defence secretary.

Hardly any of this the reached public domain until last month when Gen Shinseki told a congressional committee that he thought an occupying force in the hundreds of thousands would be required to police postwar Iraq. Mr Rumsfeld publicly repudiated him, saying he was "far off the mark".

In semi-private, the Pentagon's civilian leadership was far more scathing. A "senior administration official" told the Village Voice newspaper that Gen Shinseki's remark was "bullshit from a Clintonite enamoured of using the army for peacekeeping and not winning wars".

Then the general said it again. "It could be as high as several hundred thousand," he told another committee. "We all hope it is something less." Most of the media were too distracted by the build-up to war to notice. Serious analysts, however, were staggered by the insubordination.

This appears to have been round two of another, more immediately relevant, dispute about how many troops are needed to win this war. In this case, the military prevailed over the original civilian notion that fewer than 100,000 could do it. As even more soldiers rush to the Gulf to bring the number closer to 300,000, the original Rumsfeld plan looks in hindsight to be what the army said at the time: a recipe for possible catastrophe.

The full reality on the ground may not become known until Saddam Hussein has fallen, but no one can now seriously believe - as many top Pentagon civilians appear to have done a week ago - that the main problem for an occupying force will be what to do with all the floral gifts.

The origins of the Shinseki-Rumsfeld war long predate any mention of Iraq. There are many ironies to it, but the most bitter seems to be that the general has found himself characterised as an obstacle to progress. This is improbable on the most personal level. He is a Japanese-American (as is his wife), born in Hawaii in 1942 when his parents were officially enemy aliens.

He was inspired to join the army by the example of uncles who fought for the US then and eradicated the perception that they might be traitors. In Vietnam, "Ric" Shinseki was terribly injured twice - losing a foot the second time - yet he persisted in the army.

He came into office in June 1999 with a clear vision for "transformation" and talked passionately about the army's need to adjust from thinking about traditional enemies to what he called "complicators", including both terrorists and the then little-known phrase "weapons of mass destruction". Gen Shinseki might thus have relished the arrival of a Republican team equally committed to change.

Unfortunately, the two sides had very different ideas about what the words meant. The general wanted a new kind of army, one that could combine the adaptability of light infantry and the power of heavily mechanised forces. His new bosses had other ideas. "They had pre-decided what transformation meant," said one Pentagon source. "It meant more from space, more from air and it didn't involve the army much. That was the essence of the conflict."

This erupted over the Crusader mobile artillery system, which Mr Rumsfeld has scrapped. Gen Shinseki told Congress a year ago it would have saved lives during Operation Anaconda in Afghanistan. By then he had already been turned into a lame duck ("castrated", according to the same Pentagon source) by the apparently unprecedented Rumsfeld decision to announce his successor 18 months in advance.

He seems to have been caught in a classic bind: distrusted by his subordinates for being too radical and by his bosses for being too conservative.

On Japanese-American chatlines, he is characterised as a victim of racism. Certainly in that community he is an authentic hero: "One of the most gracious, soft-spoken, low-key individuals you could meet with four stars on his shoulder," according to Kristine Manami of the Japanese-American Citizens' League.

Put it all together: a nice man, a wounded veteran - and maybe right when it mattered. Despite the allegations, his politics are unknown. But if he is a Democrat and chooses to go after one of Hawaii's Senate seats, he might have a platform for some very tasty revenge indeed.

U.S. Invasion of Iraq 'Inevitable'

The United States says American forces will enter Iraq to search for weapons of mass destruction even if President Saddam Hussein complies with an ultimatum to leave.

The BBC reports:
President George W Bush's spokesman Ari Fleischer said that allied troops would go into the country "no matter what", but warned the Iraqi leader that if he did not leave it would be his "final mistake".

Saddam Hussein, has flatly rejected Mr Bush's ultimatum to go into exile within 48 hours or face war.

A statement from a cabinet meeting chaired by the Iraqi president said Iraq and all its people were "fully ready to confront the invading aggressors and repel them".

Iraqis prepare

US Secretary of State Colin Powell earlier said 45 nations had joined Mr Bush's "coalition of the willing" - 30 had promised concrete support whilst 15 preferred to remain unnamed at the moment.

Ahead of the expected US-led bombing, which could start as early as 0100 GMT on Thursday with the expiry of Mr Bush's ultimatum, all United Nations inspectors have now left Iraq.

Saddam Hussein's defiance was echoed by Iraqi Foreign Minister Naji Sabri who denounced Mr Bush's as "a war criminal" and accused Washington of trying to "push the United Nations to suicide".

Washington "wanted to use the UN like an office to issue a permit to go to war," Mr Sabri said.

He also criticised the UN's decision to withdraw it staff from Iraq, saying it ran contrary to the world body's responsibilities and had "paved the way for American aggression".

Reporting from the Iraqi capital Baghdad, the BBC's Paul Wood says Iraqis are making final preparations for war - mainly buying food and fuel.

In other developments:

UK Prime Minister Tony Blair makes a passionate plea for support in parliament, following the third resignation of a government member.

Another US ally, Spain, will not send combat troops to Iraq, Prime Minister Jose Maria Aznar tells parliament.

Turkey's Cabinet meets to reconsider putting forward a parliamentary motion allowing US troops on its soil and granting US aircraft the right to use Turkish airspace to launch an attack on Iraq.

More foreign diplomats leave Baghdad.

Mr Bush's ultimatum has received widespread international criticism, with countries seeking a peaceful outcome to the crisis condemning Washington's decision to abandon diplomacy and questioning the legality of starting a war.
In his strongest statement yet on the Iraq crisis, Pope John Paul II warned the leaders of the forces gathered against Iraq that they face a grave responsibility before God if they go to war.

However, in an apparent softening of its position, France, one of the staunchest opponents of conflict, said that if Iraq uses weapons of mass destruction it may consider assisting the war effort.

"If Saddam Hussein were to use chemical and biological weapons, this would change the situation completely and immediately for the French Government," France's ambassador to the US, Jean-David Levitte, said.

Defiant leader

Mr Bush's ultimatum to Saddam Hussein and his two sons - Uday and Qusay - was issued during a key speech to the American people from the White House.

But apparently unmoved, the Iraqi leader was shown on state television in a military uniform, chairing a joint meeting of the ruling Ba'ath Party and the decision-making body, the Revolution Command Council.

"Iraq does not choose its path on the orders of a foreigner and does not choose its leaders according to decrees from Washington, London or Tel Aviv, but through the will of the great Iraqi people," the statement from the meeting said.

The Iraqi leader's elder son Uday went on to call on Mr Bush "to leave power with his family".

"Any aggression against Iraq will make them [the Americans] regret their tragic fate and the wives and mothers of the Americans who fight us will cry tears of blood. They should not think themselves safe anywhere in Iraq or abroad," a statement from his office said.

Our correspondent in Baghdad says there is feverish speculation about what last-minute offer Saddam Hussein might make to try to avert the US-UK invasion.

But with the departure of the weapons inspectors, the people of Baghdad know the waiting is almost over, he says.

Trust Tony's Judgment

For The Guardian, former President Bill Clinton writes:

Last October, when I spoke at the Labour conference in Blackpool, I supported the efforts of President Bush and Prime Minister Blair to renew efforts to eliminate Saddam Hussein's weapons of mass destruction, and to try to accomplish this through the UN.

In November, the UN security council adopted unanimously resolution 1441, giving Saddam a "final opportunity" to disarm, after 12 years of defying UN resolutions requiring him to do so. The resolution made it clear that continued sanctions were not sufficient and that continued defiance would lead to serious consequences.

The credit for 1441 belongs in large measure to Blair, who saw it as a chance to disarm Saddam in a way that strengthened the UN and preserved the Atlantic alliance. Unfortunately, the consensus behind 1441 has unravelled. Saddam has destroyed some missiles but beyond that he has done only what he thinks is necessary to keep the UN divided on the use of force. The really important issues relating to chemical and biological weapons remain unresolved.

In the face of the foot dragging, hawks in America have been pushing for an immediate attack on Iraq. Some of them want regime change for reasons other than disarmament, and, therefore, they have discredited the inspection process from the beginning; they did not want it to succeed. Because military action probably will require only a few days, they believe the world community will quickly unite on rebuilding Iraq as soon as Saddam is deposed.

On the other side, France, Germany and Russia are adamantly opposed to the use of force or imposing any ultimatum on Saddam as long as the inspectors are working. They believe that, at least as long as the inspectors are there, Iraq will not use or give away its chemical and biological stocks, and therefore, no matter how unhelpful Saddam is, he does not pose a threat sufficient to justify invasion. After 150,000 US forces were deployed to the Gulf, they concluded the US was not willing to give inspections a chance anyway. The problem with their position is that only the threat of force from the US and the UK got inspectors back into Iraq in the first place. Without a credible threat of force, Saddam will not disarm.

Once again, Blair stepped into the breach, with a last-ditch proposal to restore unity to the UN and disarm Saddam without military action. He secured US support for a new UN resolution that would require Saddam to meet dead lines, within a reasonable time, in four important areas, including accounting for his biological and chemical weapons and allowing Iraqi scientists to leave the country for interviews. Under the proposed resolution, failure to comply with this deadline would justify the use of force to depose Saddam.

Russia and France opposed this resolution and said they would veto it, because inspections are proceeding, weapons are being destroyed and there is therefore no need for a force ultimatum. Essentially they have decided Iraq presents no threat even if it never disarms, at least as long as inspectors are there.

The veto threat did not help the diplomacy. It's too bad, because if a majority of the security council had adopted the Blair approach, Saddam would have had no room for further evasion and he still might have disarmed without invasion and bloodshed. Now, it appears that force will be used to disarm and depose him.

As Blair has said, in war there will be civilian was well as military casualties. There is, too, as both Britain and America agree, some risk of Saddam using or transferring his weapons to terrorists. There is as well the possibility that more angry young Muslims can be recruited to terrorism. But if we leave Iraq with chemical and biological weapons, after 12 years of defiance, there is a considerable risk that one day these weapons will fall into the wrong hands and put many more lives at risk than will be lost in overthrowing Saddam.

I wish that Russia and France had supported Blair's resolution. Then, Hans Blix and his inspectors would have been given more time and supprt for their work. But that's not where we are. Blair is in a position not of his own making, because Iraq and other nations were unwilling to follow the logic of 1441.

In the post-cold war world, America and Britain have been in tough positions before: in 1998, when others wanted to lift sanctions on Iraq and we said no; in 1999 when we went into Kosovo to stop ethnic cleansing. In each case, there were voices of dissent. But the British-American partnership and the progress of the world were preserved. Now in another difficult spot, Prime Minister Blair will have to do what he believes to be right. I trust him to do that and hope that Labor MPs and the British people will too.

Republic Or Empire?

Joseph Wilson, chargé d'affaires at the US Embassy in Baghdad during Desert Shield, was the last US diplomat to meet with Saddam Hussein. He is an adjunct scholar at the Middle East Institute in Washington, DC.

For the Nation, he writes, "Iraq is the linchpin for a broader assault on the region":As the senior American diplomat in Baghdad during Desert Shield, I advocated a muscular US response to Saddam's brutal annexation of Kuwait in flagrant violation of the United Nations charter. Only the credible threat of force could hope to reverse his invasion. Our in-your-face strategy secured the release of the 150 American "human shields"--hostages--but ultimately it took war to drive Iraq from Kuwait. I was disconsolate at the failure of diplomacy, but Desert Storm was necessitated by Saddam's intransigence, it was sanctioned by the UN and it was conducted with a broad international military coalition. The goal was explicit and focused; war was the last resort.

The upcoming military operation also has one objective, though different from the several offered by the Bush Administration. This war is not about weapons of mass destruction. The intrusive inspections are disrupting Saddam's programs, as even the Administration has acknowledged. Nor is it about terrorism. Virtually all agree war will spawn more terrorism, not less. It is not even about liberation of an oppressed people. Killing innocent Iraqi civilians in a full frontal assault is hardly the only or best way to liberate a people. The underlying objective of this war is the imposition of a Pax Americana on the region and installation of vassal regimes that will control restive populations.

Without the firing of a single cruise missile, the Administration has already established a massive footprint in the Gulf and Southwest Asia from which to project power. US generals, admirals and diplomats have crisscrossed the region like modern-day proconsuls, cajoling fragile governments to permit American access and operations from their territories.



Bases have been established as stepping stones to Afghanistan and Iraq, but also as tripwires in countries that fear their neighbors. Northern Kuwait has been ceded to American forces and a significant military presence established in Bahrain, Saudi Arabia, Qatar, the United Arab Emirates and Oman. The over-the-horizon posture of a decade ago has given way to boots on the ground and forward command headquarters. Nations in the region, having contracted with the United States for their security umbrella, will now listen when Washington tells them to tailor policies and curb anti-Western dissent. Hegemony in the Arab nations of the Gulf has been achieved.

Meanwhile, Saddam might well squirm, but even without an invasion, he's finished. He is surrounded, foreigners are swarming through his palaces, and as Colin Powell so compellingly showed at the UN, we are watching and we are listening. International will to disarm Iraq will not wane as it did in the 1990s, for the simple reason that George W. Bush keeps challenging the organization to remain relevant by keeping pressure on Saddam. Nations that worry that, as John le Carré puts it, "America has entered one of its periods of historical madness" will not want to jettison the one institution that, absent a competing military power, might constrain US ambition.

Then what's the point of this new American imperialism? The neoconservatives with a stranglehold on the foreign policy of the Republican Party, a party that traditionally eschewed foreign military adventures, want to go beyond expanding US global influence to force revolutionary change on the region. American pre-eminence in the Gulf is necessary but not sufficient for the hawks. Nothing short of conquest, occupation and imposition of handpicked leaders on a vanquished population will suffice. Iraq is the linchpin for this broader assault on the region. The new imperialists will not rest until governments that ape our worldview are implanted throughout the region, a breathtakingly ambitious undertaking, smacking of hubris in the extreme. Arabs who complain about American-supported antidemocratic regimes today will find us in even more direct control tomorrow. The leader of the future in the Arab world will look a lot more like Pakistan's Pervez Musharraf than Thomas Jefferson.

There is a huge risk of overreach in this tack. The projection of influence and power through the use of force will breed resistance in the Arab world that will sorely test our political will and stamina. Passion for independence is as great in the Arab world as it is elsewhere. The hawks compare this mission to Japan and Germany after World War II. It could easily look like Lebanon, Somalia and Northern Ireland instead.

Our global leadership will be undermined as fear gives way to resentment and strategies to weaken our stranglehold. American businessmen already complain about hostility when overseas, and Arabs speak openly of boycotting American products. Foreign capital is fleeing American stocks and bonds; the United States is no longer a friendly destination for international investors. For a borrow-and-spend Administration, as this one is, the effects on our economic growth will be felt for a long time to come. Essential trust has been seriously damaged and will be difficult to repair.

Even in the unlikely event that war does not come to pass, the would-be imperialists have achieved much of what they sought, some of it good. It is encouraging that the international community is looking hard at terrorism and the proliferation of weapons of mass destruction. But the upcoming battle for Baghdad and the lengthy occupation of Iraq will utterly undermine any steps forward. And with the costs to our military, our treasury and our international standing, we will be forced to learn whether our republican roots and traditions can accommodate the Administration's imperial ambitions. It may be a bitter lesson.