24Oct/120

REZKO, OBAMA, AND THE NADHMI AUCHI RAILROAD LINKING CHICAGO, WASHINGTON, AND BAGHDAD (Part 2 of 3)

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Guest Writer, John A. Shaw


PART 2: A SNAPSHOT OF AUCHI’S METHODS: FIXING THE CONTRACT FOR THE IRAQI CELLULAR PHONE SYSTEM

This exposure of Nadhmi Auchi’s master plan to insert himself into the American political process comes after a decade of investigation revealing a two-pronged story that (1) charts the development of a criminal conspiracy, and, at the same time, (2) describes how Auchi’s self-serving plans intersected with a normal governmental oversight function at the U.S. Department of Defense (DoD) during the Iraq War.


My office at the DoD surfaced Auchi’s central role in the largest case of corruption in Iraq reconstruction in a “preliminary” 120-pages report dated May, 2004. I labeled the report “preliminary” because I anticipated it would be fully followed-up by the DoD Inspector General’s office. Unfortunately, that did not happen.


Here is the story in brief: Auchi had been inserted into U.S. reconstruction plans for Iraq by Ahmed Chalabi, a onetime business partner of Auchi’s.  Chalabi was being promoted by a small circle of people at the Pentagon who wanted to assure pro-American leadership in post-Saddam Iraq. No one outside the circle knew anything about their specific plans, but everyone knew that Chalabi, a secular Shia with a non-sectarian agenda, was the favorite choice.  


To his unwitting Pentagon supporters, everything depended on Chalabi having the support, both political and financial, to get to the top. None of his Pentagon supporters’ actions were improper or remotely illegal. Their aim was to assure that the award of the first cellular telephone contracts ever issued in Iraq went to dependable candidates for national leadership: one for the northern (and Kurdish) area to Jalal Talibani; one for the central zone (including Baghdad) to Ibrahim al-Jaafari; and one for the southern (largely Shia) area to Ahmed Chalabi.


The contracts, worth $3 billion, would assure funding for the three Iraqi leaders. It would provide them, in Chicago-street parlance, “street money” for two years.


The telecom tender appeared, at that time, to involve only Iraqis and Iraqi money. It was, initially, meant to be an Iraqi system, built for Iraqis, by Iraqis.  But American money was ultimately involved.


Auchi was an independent facilitator, doing what he had done in Iraq, and throughout the region, his entire adult life – fixing deals.


My 2004 report established Nadhmi Auchi as a major figure in Iraqi corruption, both under the Saddam Hussein regime, and today. Information gathered by the various U.S. authorities since 2004, however, indicates that Auchi has been the central figure in Iraqi institutional corruption for the past decade.


I accidently discovered Auchi’s role in the telecom fix, but had no idea it was part of an intelligence operation. In the end, that discovery was as fateful for Auchi as was the discovery of the extent of Rezko’s role in the Pay-to-Play scheme in Illinois. Together, the two revelations threatened to destroy both legs of Auchi’s railroad.


Auchi bribed a U.S. government official involved in letting contracts for the Iraqi cellular phone system. The bribed employee’s (and Auchi’s) role was revealed by two reports I received on the same day in January, 2004.


The first was a letter from the British Ambassador to Deputy Secretary of Defense Paul Wolfowitz that asked about my investigation of the Brits who had been involved in the fix, and about whom I had spoken to Jeremy Greenstock, the British Ambassador to the CPA.


The second report was from a reliable Arab source in Baghdad. It noted a conversation with a man privy to the payoff pattern in the Ministry of Communications. The conversation fingered three people whom Auchi had paid off “to take care of” the Ministry of Communications: Haider al-Abadi, a Dawa Party member who was the Minister of Communications; Ibrahim al-Jaafari, the head of the Dawa party and putative prime minister; and someone with a name very similar to that of the American official that Auchi bribed. When given the man’s name, the source said, “Yes, yes, do you know him?” That told us we had a direct line connecting Auchi to suborning the contract letting process.


On April 10, 2004 the appointed audit firm for the CPA, BearingPoint, reported that corrupted official’s office had “few to no” reliable financial controls in place, and that all paper and electronic records were gone.  More importantly, $240 million was missing from the ministry account for which the official was responsible; half of it in Iraqi funds, and the rest in U.S. funds.  To date, no one has traced any of that money.


The bribed official was fired the following day and immediately left Iraq. He was never questioned, nor investigated, either about those funds or about the Auchi bribe.


Auchi and the corrupt U.S. official needed to discredit me and my report, so they said that I, a former Senate-confirmed Inspector General, had tried to create a sweetheart deal for a U.S. company in Southern California which was the only bidder offering more advanced American CDMA technology.  This technology was interoperable with the older French Groupe Spécial Mobile (GSM) standard prevalent in the region. I was supportive of it, not only because it used U.S. next-generation technology, but because it was secure, and hence offered a response to the tide of GSM-triggered explosive devices throughout Iraq.  Had the Southern California firm won the bidding, we would have seen hundreds, perhaps thousands, fewer IED casualties in Iraq.


The FBI spent a year and a quarter of a million dollars to establish that I had done nothing wrong, much less anything criminal, in carrying out my responsibilities in Iraq and Washington.


Auchi had acted to ensure the victory of his clients, literally at any cost, and the intelligence people wanted the older GSM standard so they could use it to easily eavesdrop on the Iraqis. The winning contracts went to Orascom, which was partially owned by Auchi, and two other newly created consortia, Asia Cell and Atheer, for whom Auchi had orchestrated the financing. All three companies used the old French GSM standard.


That Auchi was the ringmaster of the telecom fix was confirmed by Mehdi al-Rahim, a respected Iraqi banker and a member of the Iraq Communications Oversight Board reviewing the phone contracts. He was given a copy of my report in Washington shortly after it was published in 2004. “Everyone knows that Auchi was right in the middle of this,” he said.


The report on how Auchi, with the aid of the corrupt U.S. official, fixed the cellular telephone contracts illustrates how he operates on a major scale. It not only documented a quintessential Auchi deal, but its revelations resulted in his U.S. visa being revoked by the FBI.


Auchi has not been allowed to enter the U.S. since my May 2004 report. And, despite his optimistic commentary about his prospects in Chicago, Auchi knows that Rezko has made him politically radioactive there. Nevertheless, he counts on being cleansed of that radiation in January 2013. Even if Obama is not reelected, Auchi knows he can still make a lot of money in Chicago.


Auchi’s ability to fix the three Iraqi cellular phone contracts for three Iraqi politicians was the highpoint of his involvement in Iraq after the invasion. He believed it was the prelude to a similar coup in Chicago. He thought he had become untouchable, both because the false image he had propagated to court respectability in the West had never been questioned, and because his activities in the U.S. had assured his central role in the Iraqi reconstruction.


The hubris Auchi exhibited in the Iraq telecom deal, however, led to the erosion of his carefully crafted tale about his background. The investigation underlying the DoD report blew Auchi’s cover story and began to erode his status in the U.S.  Ironically, his success in Iraq may have ensured the unraveling of his U.S. activities.


At the DoD he was pursued by an outgunned Deputy Undersecretary, but in Chicago he faced an experienced U.S. Attorney in Patrick Fitzgerald who had been the Special Prosecutor in the Libby/Plame case.  It was Fitzgerald who, in pursuing the Illinois pay-to-play scandal, surfaced Antoin “Tony” Rezko as the major bagman he was.


Auchi, although prevented from entering the United States because of his central role in the largest corruption case in Iraq reconstruction, remains engaged through his network in the Chicago political scene, and through his investment in Chicago projects valued at several billion dollars.


Auchi’s success with Obama would ultimately depend on how closely identified Obama would become with Rezko and the money Rezko provided.


In the end, Auchi had a gambler’s good luck. He gambled on having the Chicago Machine on his side and won; he gambled on having an inattentive news media and won; and, he had the money he needed to gamble successfully.


The mainstream media studiously avoided any serious investigation of the extent of Obama’s ties to Rezko, or to any of the others in the local Arab-American combine, even though by 2008 Auchi had funneled nearly $200 million through Rezko into Chicago projects, and had financed the purchase of Obama’s house in 2005.


Here’s where the media failed: They looked at Obama, Rezko, and the Arab network in Chicago through the wrong end of the telescope. By the time Rezko was in trouble, Obama had become untouchable. The press wanted to believe him to be, and therefore portrayed him as, extraordinary, which he certainly was.


The press, also, wanted to believe that Rezko was the product of squalid street politics that were not worthy of Barack Obama. So they effectively ignored the confluence of Obama’s interests and those pursued by Auchi’s Arab network which helped nurture Obama.


COMING NEXT - PART 3: OBAMA – PASSENGER ON THE AUCHI CHICAGO-D.C. EXPRESS

PREVIOUSLY – Part I:  REZKO, OBAMA, AND THE NADHMI AUCHI RAILROAD LINKING CHICAGO, WASHINGTON, AND BAGHDAD (Part 1 of 3)

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About the Author:  

John A. Shaw, a former senior official of the Defense, State, and Commerce departments, served on several White House staffs. He is a specialist in international technology transfer and arms sales, and in the economic development of the Middle East.

Note: Web links were editorially added to enable readers toreadily access basic background information concerning persons, organizations, and documents.  Links do not represent the range of information available on the web concerning those topics.

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