Mideast Roundup

February 9, 2004

Iraq's Black Economy

Jailbird Saddam’s Overseas Profits Roll in, Lubricate Guerrilla War

On March 19, 2003 — just hours before American bombers unleashed their “shock and awe” raids over Baghdad - three unmarked Iraqi military trucks pulled up at the heavily guarded compound of the Iraqi National Bank in the capital. Uniformed officers leaped out, marched into the bank and presented written orders signed by Saddam Hussein for the bank’s directors to hand over $920 million and 90 million euros in cash, worth in all the nifty sum of $1 billion.

The Great Bank Heist made The New York Times. But some of the more revealing details have only now begun to emerge. For instance, Saddam handwrote his cash demand on a plain sheet of paper and signed it in pencil. That sheet was among the documents US forces found in the deposed ruler’s spider hole, when they captured him on December 12.

The stack of paper found with him shed no light on the whereabouts of the ousted ruler’s weapons of mass destruction. But, once the simple codes were cracked, some of the documents revealed a great deal about the money he had socked away and the recipients of powers of attorney to ensure him access to the cash.

Other documents in the pile, according to DEBKA-Net-Weekly’s intelligence sources, lifted the lid off the clandestine workings of the deep-hush 14th Directorate — Office of Special Operations — of the Dawairat al Mukhabarat al-Amah, or Department of General Intelligence.

The 14th Directorate, known also as N-14, was responsible for running agents on clandestine and sensitive special operations outside the country — particularly assassinations. Its main training facility was located at Salman Pak, 12 miles (19 km) southeast of Baghdad and was one of the most important and largest in the Mukhabarat. N-14 orchestrated the failed assassination of former President George Bush during a visit to Kuwait in April 1993 and the 1994 assassination of the Iraqi dissident Talib Al Suheil in Beirut. Joint operations were sometimes staged with the Iranian opposition group Mujahideen Khalq, with selected officers drilled for specific “black operations”.

Agents of the 14th Directorate invested long hours in acquiring language and orientation skills for blending into the countries of their missions.

Assassins turned financial wardens

The invasion of Iraq necessitated an overhaul in the 14th Directorate’s functions. The captured documents show them in their new capacity as guardians of the deposed dictator’s fortune, trustees for his worldwide financial and business empire with responsibility for remitting profits as per preset directives. These professional killers call now on their thorough training to pose “behind enemy lines” in smart suits as non-Iraqi businessmen living under the false identities registered in their Saudi, US, British, Syrian or Egyptian passports.

One such Syrian businessman recently turned up at the national bank of Syria with a power of attorney note for $1.1billion of Iraqi funds on deposit there. The note, passed on to the Americans, proved to have been written with the “Saddam pencil.” But the “Syrian businessman”, presumed until then to divide his time between Frankfurt, Munich, Geneva and Damascus, had disappeared.

When asked by chief US administrator in Iraq, Paul Bremer, and other top US officials to hand over the cash looted from Iraq, Syria balked, saying in a politely worded message: “Saddam is in your custody. We are transferring to you a copy of the power of attorney he gave to the ŒSyrian businessman’, whom we do not know. If you can show us a more recent power of attorney from Saddam Hussein, we can compare signatures and act on your prisoner’s instructions. Without the right documentation, we cannot help you.”

Before converting the old currency with Saddam’s portrait to new dinar notes, Bremer and US experts studied statistics from Iraqi banks and leading banking institutions around the world to try and calculate how much was involved. The figure they came up with was four trillion dinars ($2.85 billion).

Their estimate was far too modest. The amount Iraqis rushed to trade in had soared to 6.3 trillion dinars, the equivalent of $4.5 billion, by the January 15 deadline for handing in old notes for new. It then turned out that around 40 percent of the cash in circulation in Iraq was in the hands of pro-Saddam elements, specifically N-14 operatives.

According to DEBKA-Net-Weekly’s sources in Baghdad, US and Iraqi economic planners took it for granted that the excess funds were black market banknotes ordinary Iraqis had squirreled away under their mattresses.

They were wrong. No one in the country had believed the Saddam currency. They put their trust in foreign cash - euros, yens and Australian dollars for preference. This discovery was made as post-war Iraqis turned into big spenders and it came from an unexpected source: American and Japanese carmakers who are enjoying boom sales in the newly-liberated country. Since early May, the keys of more than a million new vehicles, worth more than $5 billion, have been handed to eager customers in the main cities of Baghdad, Kirkuk, Mosul, Najaf and Karbala. These purchases rarely go through the banks; most are made in foreign cash on the nail. American and Japanese carmakers barely keep pace with the apparently inexhaustible demand for shiny new vehicles. Dealerships and showrooms are opening in the cities at a brisk rate.

Over the past two months, the dinar has strengthened sharply, gaining more than 30 percent against the dollar as the exchange rate has gone from more than 2,000 to around 1,400.

Iraqis binge on free food coupons

A senior Iraqi banking official explained the newfound affluence up and down Iraq to DEBKA-Net-Weekly: “The provisional government is committed for the time being to feeding 25 million Iraqis gratis. Saddam’s system of food stamps and virtually free water and fuel goes on uninterrupted by the war. The only thing that has changed is the standard of services and the diversity of consumer products available. This situation clearly cannot go on much longer if the economy is to be rebuilt on a healthy footing.”

However, an even more damaging malaise needs to be addressed. According to DEBKA-Net-Weekly’s sources, Bremer’s team has concluded that a stable economy and realistic Iraqi exchange rate will remain elusive as long as Saddam’s agents maintain their iron grip on the cash in circulation and the captured dictator continues to control vast investment capital overseas. At the same time, ordinary Iraqis continued to hoard black market foreign currency.

Even if a sovereign government is installed in Baghdad without hitch and a general election goes smoothly, the new regime will have little control over the economy.

DEBKA-Net-Weekly’s intelligence sources have obtained more information expanding on this week’s report in DEBKAfile (regarding Saddam Hussein’s private currency printing enterprise.

It now appears that rather than running a private mint, Saddam, his sons and the commander of the 14th Directorate enjoyed free access to a sealed annex of the national mint and creamed off supplies for the slush funds of the presidential bureau and secret service chiefs. These sums were never officially recorded or counted in determining Iraq’s gross domestic product. No one but Saddam knows exactly how much was run off in the sealed annex or its destinations. The result was the creation of two Iraqi economies — one official, the other black.

Financial experts assume that most of the illegal notes left the country to be invested in overseas business operations or deposited in secret accounts. Today, 15 percent to 20 percent of the profits are estimated as returning to Iraq to defray the costs of running a guerrilla war against the US-led coalition.

No one knows in which projects Saddam’s stash is invested, the size of the profits generated or the amounts N-14 operatives are redirecting to guerrilla operations. It could take years to trace these funds and their movements. But the fighting groups loyal to the deposed dictator are clearly in command of an almost unlimited war chest to oil their operations.

However, five key people are suspected by US investigators of holding short cuts to this information, according to DEBKA-Net-Weekly’s intelligence sources — three in Syria and two in Lebanon. The members of this tight group handled money transfers on behalf of the fugitive Iraqi regime leaders and are the only people who know the identities of the 14th Directorate operatives overseeing Saddam’s financial empire.

They are Syrian defense minister Mustafa Tlas, his son Faris Tlas — who was also personally involved in hiding Iraq’s weapons of mass destruction — Baghdi Hanif, son of the the late general Adnan Hanif who was commander of the presidential guard under Bashar’s father, Hafez Assad, Lebanese president Emil Lahoud’s son and Tawil Arselan, a Lebanese Druse leader. The three Syrians rose to eminence as powers in the land mainly by acting as Saddam Hussein’s facilitators in his illegal oil, weapons and cash transactions. Since the Iraqi ruler was overthrown, the trio of strongmen controls the pumping of cash, fighters and arms in the opposite direction — from Syria into Iraq, to support the anti-American guerrilla war.

The flurry around Saddam’s deposits in Syria and the discovery of the power of attorney in the hands of a “Syrian businessman” have prompted Saddam’s eldest daughter Raghed Kamal to change her plans. On January 16, DEBKA-Net-Weekly 141 reported her request to relocate from Amman to Paris and re-establish the Iraqi Baath party. Now Saddam’s daughter has applied for permission to move to Damascus instead of the French capital.

Neither Jordan’s King Abdullah nor Syrian president Bashar Assad, who turned down a previous request, has so far given her an answer.


Sharon's Gaza Plan

Recipe for Political Crisis Before Diplomatic Momentum

Ariel Sharon’s shock announcement of plans to evacuate 17 of the 21 Jewish settlements of the Gaza Strip has damaged the standing of his government coalition and credibility without netting any of the diplomatic rewards he hoped for.

A revolt is brewing in his own Likud party together with threatened legislative action to force a national referendum before a single red roof shingle is removed from the heavily fortified and guarded Jewish communities in the Gaza Strip. Pro-settlement coalition partners threaten to quit and take the government’s majority with them.

Labor’s 80-year-old newly-elected leader Shimon Peres promises Sharon a parliamentary safety net to make up for a lost majority. But the senior opposition party is sorely fragmented on this as on every other issue and may decline to fall in behind the new leader.

Sharon, for his part, as erstwhile godfather of the settlement movement, faces hard questions. He is ducking them by whispering to his confidants, who are spreading the word, that actual evacuation is not imminent. Bringing the issue into the open, he explains, was designed to achieve three modest goals:

1.
To force diplomatic momentum on the Palestinian prime minister Ahmed Qureia and draw him into talks in the teeth of Yasser Arafat’s obdurate objections. DEBKA-Net-Weekly’s Palestinian sources point out that even if a meeting can be set up — possibly next week — it will get nowhere because Abu Ala will show up empty-handed and is powerless to offer even the smallest steps to rein in Palestinian terrorists plotting suicide attacks on Israelis from their Gaza Strip and West Bank bases. Instead, Quriea hopes Sharon will come up with goodwill gestures for shoring up his tenuous hold on the Palestinian premiership.

2.
Sharon is anxious to present the White House on his thrice-postponed next trip with a substantial step showing he is working hard to initiate diplomatic movement to break the stalemate with the Palestinians. His meeting with Qureia may not amount to much, but it may let the Palestinians off the Clause One hook of the stalled Middle East “road map”, which requires the dismantling of terrorist organizations as the pre-condition for progress towards the next clause, Israel’s military withdrawal to positions held on the West Bank and Gaza Strip prior to the confrontation launched by the Palestinians in September 2000.

DEBKA-Net-Weekly’s Jerusalem sources confirm that for the first time Sharon is willing to move on to circumvent the insuperable hurdle of Clause One, accepting that the Palestinian prime minister is powerless to implement a crackdown on Palestinian terrorism and Israel and the US have got exactly nowhere by cracking the whip over his head.

Therefore, the Israeli prime minister has confided to close associates, his initiative on the Gaza settlements appears to present the only hope for a return to the peace track. He also foresees a much smaller evacuation of Jewish communities — no more than 10 — on the West Bank, but only in the framework of a final-status peace accord with the Palestinians.

3.
Sharon badly needs a diversion from the bribery scandal hanging over his and his sons' heads. Legal experts do not see enough evidence in the hands of the public prosecution to indict the prime minister, unless new facts come out. However, he is working under a cloud of suspicion and innuendo that severely damages his credibility and places all his actions in question.

The current of mistrust blowing in from Washington since the Iraq war in place of President George W. Bush’s warm friendship is even more damaging. It means that Sharon has lost one of his proudest assets as prime minister, mutual understanding and backing to the hilt from Washington.

Mistrust in Washington

Jewish leaders in the United States have told DEBKA-Net-Weekly that the US president is concerned that Sharon will take moves that put him in an untenable diplomatic and military position. Israel’s controversial security fence in the West Bank is a case in point. Bush and his close advisers and cabinet ministers stand firmly against the project. They don’t believe it will stop suicide bombers because too many Palestinians — especially in the Jerusalem area — live west of the fence near Israeli population centers. In any case, the Palestinians will simply lob mortars or missiles over the barrier.

But more importantly, Bush is certain Sharon is exploiting the fence’s route to annex large chunks of the West Bank marked in the road map as the territories of a future Palestinian state.

Sharon, deferring to this concern, has pretty well halted construction on the barrier at the northern end, despite the loud outcry at home that the gaps leave the population exposed to terrorist infiltrations. Only 120 km (70 miles) of the planned 600 km (360 mile)-route is standing.

But the Israeli leader is hurt and affronted by the change of face in the White House. He feels he deserves better after adjusting his key policies to the wishes and interests of its current tenant. On the vital issue of the war on terrorism and on foreign and economic policies as well, Sharon has kowtowed to Bush rather than Israeli opinion. In deference to Washington, he has left Yasser Arafat unharmed and refrained from meting out the punishment accorded Hamas to Arafat’s personal terrorist militia, the Tanzim and its suicide arm, al Aqsa Martyrs Brigades.

Now, three years and a half years into the Israeli-Palestinian war, Sharon finds the Brigades aligning with the extremist Hamas, Islamic Jihad and Hizballah, groups that take their orders from headquarters in Damascus and Teheran. The result: even if Arafat is gone tomorrow, his life’s work, a network of suicide killers, will go on, perpetuating a trail of death and destruction that diplomatic initiatives and military action alike are powerless to halt .

Terror masters safe

Israel appears to be condemned to living with suicide terrorism for a very long time.

This model is replicated in Iraq, where the Americans are not acting to stem the influx of Arab fighters, weapons and funds entering from Syria and Lebanon to fight US troops in Iraq. The same thinking prevents Israel from striking at the men ordering mass killers to attack Israeli population centers or uprooting their strongholds.

Israel’s economic policies are likewise circumscribed. Directives from the World Bank and the US Treasury force Sharon and his finance minister, Benjamin Netanyahu, to slash spending mercilessly, hitting lower-income Israelis — the Likud’s core constituency — the hardest. The income differential between Israel’s top and bottom earners is the widest in the world. Tens of thousands of municipal workers and other civil servants have not drawn wages for between 6 to 10 months and are closing down essential services with countrywide strikes. This kind of US pressure is also deeply resented.

In the current climate of distrust between Jerusalem and Washington, some US officials appears to suspect Sharon of releasing his Gaza evacuation plan to cash in on progress on the Palestinian track as an economic lever. They think Sharon is looking to Washington to foot the bill for resettling evicted settlers.

DEBKA-Net-Weekly’s sources in Washington and Jerusalem describe this climate as the background for the frequent postponement of Sharon’s visit to Washington.

Our sources report that several of Sharon’s close advisers are also critical of the tactics behind Sharon’s initiative on Gaza and above all its timing. “Had you put this on the table at the right moment, you might have induced the Hamas to accept a ceasefire. Now it is a huge concession for nothing and Bush has again delayed your visit. It won’t take place before late March.”

But Sharon is pinning his future strategy on the withdrawal from the Gaza Strip as the arch-stone of his disengagement initiative. He believes that once American leaders are fully apprised of his plan and its potential for releasing the clogged diplomatic flow, understanding and friendly relations will be restored. Deputy prime minister Ehud Olmert was dispatched Wednesday night to outline the initiative to secretary of state Colin Powell. Thursday night, he was due to call on vice president Richard Cheney. His next briefing stop will be at 10 Downing Street, London.


Iran

1. Ayatollahs Want Regime Change in Washington

They have decided they don’t particularly care which Democratic candidate is elected US president in November so long as George W. Bush is prevented from spending another four years in the Oval Office.

As this issue went to press, first reports reached DEBKA-Net-Weekly’s sources in Tehran of a failed attempt to assassinate the senior Iraqi Shiite cleric, Ayatollah Ali Sistani in Najef. This attempt was part of Tehran’s strategy to loosen US control in Baghdad and test Washington’s responses. (See Step 3 of Iran’s master plan below.)

This strategy is complex and innovative.

For the first time, Iranians will be working actively on behalf of whichever presidential contender is selected by the Democratic Party according to a detailed master plan.

In 1980, many political analysts attributed Democratic president Jimmy Carter’s failure to win a second term and the Republican Ronald Reagan’s election to Carter’s inability to negotiate the freedom of 52 Americans held hostage in the Tehran embassy. Gary Sick, a White House aide during the hostage crisis, has alleged that Reagan’s campaign chief and future CIA director, William Casey, was in Iran in early 1980 for secret negotiations on delaying the hostages’ release until after the presidential election.

Iran was unhappy when the Democrats’ Bill Clinton took office in 1993, although his administration proved very accommodating toward the Islamic Republic. Iran now feels it missed a golden opportunity by failing to respond to then-secretary of state Madeleine Albright’s rapprochement feeler that came in the form of a public apology for the role the United States played in bringing the shah to power in 1953.

Now, the Iranians fear American military action will come down on them hard if they stand by their refusal to scrap their nuclear weapons program. Saddam Hussein’s fate is a scary precedent. Therefore, to prevent this peril they have convinced themselves that Bush must be defeated and have drawn up a comprehensive game plan to this end.

Co-authors of the plan are, according to DEBKA-Net-Weekly’s exclusive sources in Tehran: former foreign minister Ali-Akbar Velayati, Revolutionary Guards commander Yahya Rahim-Safavi and his deputy Mohammad Baqer Zolghadr, Revolutionary Guards chief in the holy town of Qom, Hojjat-Ol-Eslam Zol-Nour, national security council secretary Hassan Rouhani (who led Iran’s nuclear talks) and Mohsen Rezai, secretary of the Expediency Council.

The plan was drawn up under the eyes of supreme leader Ali Khamenei, Expediency Council chairman Akbar Hashemi Rafsanjani and President Mohammed Khatami.

Tehran’s master plan for Bush’s downfall

1.
Iran will rally Muslim and African-American voter support for the Democratic candidate and work to bring out the Muslim and Black vote. At first, terrorist attacks were weighed, but it was decided that bloodshed in the United States would backfire and boost support for the president. Plenty of Iranian-sponsored violence is plotted in other parts of the world.

2.
Just before the US election, Iran will instigate a row of “mega-attacks” to inflict maximum casualties among US troops in Iraq. Tehran hopes for hundreds or even thousands of dead and wounded. American command centers and Navy ships docked in Iraqi ports or on-station in the Persian Gulf will also be targeted.

3.
Ayatollah Ali Sistani, Iraq’s Shiite spiritual leader will be assassinated. The blame will be laid on the United States in order to stir up Shiites in Iraq and worldwide for revenge attacks against US targets. The Iranians believe that Sistani’s removal will yield the added dividend of liquidating Tehran’s foremost political-religious rival, who is revered by his followers and suspected moreover of striking secret pacts with the United States to cooperate in charting Iraq’s future.

4.
Iran will unleash a sweeping guerrilla offensive against US soldiers in Afghanistan and its pro-American president Hamid Karzai. There too the objective is heavy American losses and a graphic demonstration to American voters of how far their president has failed to put down the armed resistance to the post-Taliban regime.

5.
US interests in Saudi Arabia will be subjected to mega-attacks on the pattern of the 1996 Khobar Towers bombing that killed 19 US air force personnel and maimed hundreds.

6.
Iran will offer favors to European leaders and fat contracts to European firms in return for stepping up their invective against the Bush administration’s foreign policies.

7.
Iran will sponsor strikes against undercover US forces attached to military bases in Turkey.

Iran’s worldwide assets

To spearhead its campaign to sabotage the Bush run for re-election, Tehran is staging an ingathering of its agents, operatives, proxies and allied troops for strikes at America’s most vulnerable points.

Iranian agents are inside America disseminating their gospel in the mosques, religious schools and seminaries of the Muslim and African-American communities.

As we reported in our last issue, Iran recently dispatched hundreds of its best agents to Iraq. The melt easily among the 50,000 or so Iranians in Iraq at any given time. They are also helping to smuggle into the country operatives of al Qaeda and other radical Islamic groups once the Islamic Republic’s deadly rivals for the crown of the Muslim world. Now they are all fighting the common enemy together. Several hundred more non-Iraqi agents have been sent into Iraq via the porous Syria frontier.

Some of Tehran’s undercover agents in Pakistan have been ordered to link up with Al Qaeda in the mountainous southeastern region of Afghanistan; others, to join up with Al Qaeda in the Kandahar region, Kabul and the Shiite Herat enclave of western Afghanistan, where underground cells await operational orders.

A large group of expatriate Sunni Iraqis loyal to Saddam Hussein who fled to Iran are being formed into a militia, trained in guerrilla warfare and sent back home. These and other resistance fighters are supplied by Iran with shoulder-held anti-aircraft missiles for use against US helicopters and aircraft.

In Turkey, Iran is working hand in glove with local radical Muslim groups and nurturing the Kurdistan Workers Party, the terrorist PKK, and other violent groups, who also gather information for Tehran on the locations of US troops at Turkish bases.

At home, Iranian officials have assured senior Al Qaeda fugitives to whom they have given sanctuary that they will not be surrendered to the United States or extradited to their native countries. They will continue to be pampered guests of the Islamic Republic. Tehran may put out word of secret trials of certain al Qaeda operatives, but DEBKA-Net-Weekly’s counter-terrorism sources say it will be no more than a charade. None of their names will be released and they will remain free to carry on with their usual terror pursuits.

2. No Hope for the Reformist Cause

The seekers of democratic reforms in Iran are still hoping for a miracle that will lift the ban the hard line Guardian Council clamped down on thousands of their candidates in the February 20 parliamentary election. The coming days are critical. However, DEBKA-Net-Weekly’s Iran experts believe they are deluding themselves and their cause is lost.

The government spokesman Abdollah Ramezan-Zadeh announced Wednesday, February 4, that elections would take place on time. The hard line supreme ruler Ayatollah Ali Khamenei declared there must be no postponements and any parties disturbing the progress of voting would be put on trial as offenders against Islam.

The reformist leaders understood what this means: not only had thousands of their members been barred from running for election, but if they complained too loudly they faced imprisonment.

One of the most radical members of the regime, Ayatollah Mesbah-Yazdi, said this week: “When the enemy stands ready to attack with sword unsheathed, repelling him takes precedent over any religious edict.” This cleric, who was one of the initiators of the fatwa ordering Muslims to wage jihad against America, views the 120 Majlis deputies who resigned in protest against turning the elections into a farce, as “enemies with unsheathed swords.” He does not hide his conviction that all 120 take their orders directly from George W. Bush, noting that in his last speech the US president again emphasized his resolve to promote democracy in the Middle East.

Reading the writing on the wall, the 83 pro-reform deputies who have been holding a sit-down protest outside parliament since January 11, quietly announced on Wednesday that their protest was over. They did not dare invite reporters and photographers to record the event.

Khamenei made an apparent concession by permitting the information office headed by an ally of Khatami, Hojateslam Ali Youness, to pass final ruling on the credentials of electoral candidates. However, Youness will not dare reverse the ban against the more than 2,000 candidates pronounced wanting in Islamic faith and in loyalty to the Islamic Republic.

In order to still protesting voices from the United States and around the world against the harsh distortion of a parliamentary election, DEBKA-Net-Weekly’s sources in Tehran report that the government passed a quiet word to Washington that the next Majlis, the most radical ever, will recommend opening a dialogue with the United States.

Welcoming signals have been flashed by the Bush administration. On a recent visit to Tokyo, American deputy secretary of state Richard Armitage asked Japanese officials to discreetly test the ground in Iran on the resumption of relations. The Japanese foreign minister was received warmly in Tehran a few weeks ago although Tokyo supports Washington’s insistence that Iran abandon its nuclear programs.

In the fuss over Iran’s election, international attention has been diverted from the debate the Majlis was to have held to ratify Iran’s signature on the Additional Protocol of the Nuclear Non-Proliferation Treaty. The incumbent house is unlikely to get around to this in its remaining two weeks before elections.

The heads of the Vienna-based nuclear watchdog insist that there is nothing to worry about and that a team of international inspectors is continuing its work in Iran and will soon be ready to submit a report to the agency’s board of directors meeting at the end of this month.

But, according to our sources, the Iranians are taking full advantage of the election furor to move forward with their scheme for a nuclear weapon.


HOT POINTS
(that you may have missed in DEBKAfile Round-the-Clock)
A Digest of the Week’s Exclusives

1 February: Two huge bomb explosions were detonated Sunday, February 1, at the very moment that Iraq’s Kurds joined their leaders for a mass celebration at the headquarters of their two parties in the north Iraqi town of Arbil. The crowds had gathered to mark the Muslim Feast of the Sacrifice and the passing of their archenemy Saddam Hussein.

The carnage was unimaginable. The death toll rose fast towards 70 with more than 200 injured. According to DEBKAfile’s sources in Kurdistan and Washington, PUK leader Talal Jalabani talking later to senior US officials - believed to include visiting US Pentagon second-in-command Paul Wolfowitz - bluntly accused Turkish intelligence of orchestrating the massacre with the aim of wiping out the entire Iraqi Kurdish leadership at a single stroke.

Kurdish PM Baram Salah repeated the allegation during a visit to White House that day.

Kurdish sources declared al the Qaeda-linked Ansar al Islam lacked the resources and capabilities for mounting an operation of such magnitude and precision.

Among the dead are Sami Abdul Rahman, Dep. PM of the Kurdish region and his two sons, and Medhi Khoshnau, Dep. Governor of Arbil Province.

On their recent visit to Washington, Turkish prime minister Tayyep Erdogan and foreign minister Abdullah Gul voiced concern over the generous measure of autonomy Iraq’s Kurds had been promised as America’s primary allies in the new Iraq. The American responses were seen as leading inevitably to near-Kurdish independence, creating a model in Iraq that threatened to inflame Turkey’s own Kurdish minority.

Kurdish leaders later denied accusing Turkish intelligence and the Turkish prime minister denied every carrying out such outrages.

2 February: President George W. Bush will this week bow to election-year pressures from Democrats and his own Republicans alike and sign an executive order to investigate US intelligence failings regarding Saddam Hussein’s weapons of mass destruction on the eve of war. Both his senior war partners, the Australian and British prime ministers, face the same public clamor ever since WMD hunter Dr. David Kay resigned, declaring there were probably no stockpiles in Iraq and “we were all wrong.”

At the same time, the CIA and other intelligence bodies accused of flawed performance do not look particularly dismayed by the prospect of facing these probes. They point to the cause of the political flap, Dr Kay, as contradicting himself more than once in the numerous interviews he has given since he quit as head of the Iraq Survey Group.

In the last 24 hours, DEBKAfile went back to its most reliable intelligence sources in the US and the Middle East, some of whom were actively involved in the subject before and during the Iraq war. They all stuck to their guns. As they have consistently informed DEBKAfile and DEBKA-Net-Weekly, Saddam Hussein’s unconventional weapons programs were present on the eve of the American-led invasion and quantities of forbidden materials were spirited out to Syria. They confirm that US intelligence, as well as Dr Kay, were all provided with Syrian maps marked with the coordinates of the secret weapons storage sites at Qaratshuk south of the Syrian town of Al Qamishli near the place where the Iraqi, Syrian and Turkish frontiers converge; between Al Qamishli and Az Zawr, and under the ground of the Lebanese Beqaa Valley.

These transfers were first revealed by DEBKAfile and DEBKA-Net-Weekly in February 2003 a month before the war and confirmed now again to DEBKAfile by its sources, one whom stressed: “Dr. Kay’s job gave him access to satellite photos of the convoys and the input of instruments used by spy planes to identify dangerous substances and tracked them to their underground nests. The movement of chemical and biological substances from Iraq to Syria was precisely recorded.”

On January 25, Dr Kay admitted to The Telegraph’s Con Coughlin “ we know from some of the interrogations of former Iraqi officials that a lot of material went to Syria before the war, including some components of Saddam’s WMD program.”

Yet in later interviews he turned vague, claiming there was no way of knowing what those convoys contained because of the lack of Syrian cooperation.

Dr. Kay’s ambiguities have enabled interested politicians to drop the “probable” for his views on the absence of stockpiles and transmute “no stockpiles”, to “no WMD,” deeply eroding public confidence in US credibility for going to war.

By the same token, no connection is drawn between the Iraqi WMD issue and the grounding this week of transatlantic flights from Europe to America by credible intelligence of an al Qaeda plot. If minute quantities of weaponized biological and chemical substances dropped by Osama bin Laden’s killers from the air are menacing enough to trigger a major alert, why would Saddam need stockpiles to pose an imminent threat to world security and his immediate neighbors? Would not a couple of test tubes serve his purpose? Two: Where did al Qaeda get hold of the WMD presumed to be in its possession and who trained its operatives in their use?

Once again, DEBKAfile’s senior intelligence sources recall earlier revelations. The ex-Jordanian terror master Mussab al Zarqawi is key director of al Qaeda’s chemical, biological and radioactive warfare program. In late 2000, we reported him operating WMD laboratories under the supervision of Iraqi intelligence in the northern Iraqi town of Bayara. Zarqawi is and was the embodiment of the link between Saddam and al Qaeda going back four years.

4 February: Ariel Sharon this week dropped a political bombshell: a plan to evacuate 17 of Israel’s 21 settlements in the Gaza Strip and transfer their populations to communities yet to be established in the Halutza sand dunes of the northern Negev. The prime minister’s spin doctors are presenting the evacuation scheme as a first step in a one-way plan to disengage from the Palestinians that will also entail the removal of several settlements inside the West Bank. This plan, if feasible, would draw substantial popular support.

However, in nearly three years in office, Sharon has made little progress in resolving the unending conflict with the Palestinians; neither has he excelled in creative diplomatic thinking. Even the security fence project undertaken tardily to keep suicide bombers from crossing in from the West Bank is at a standstill leaving yawning gaps at its most vulnerable points, the Sharon plain north of Tel Aviv, the Lod vicinity of Ben Gurion international airport and Jerusalem — all requiring deviations from the pre-1967 Green Line to which the Bush administration is opposed.

Even so, Sharon no longer tops the White House’s list of wanted guests. In the view of DEBKAfile’s political analysts, Sharon has missed the boat of America’s post-Iraq War regional strategy and the upheavals it has wrought in the Arab world. Seeing Israeli mired in the Palestinian quagmire, the Bush administration has moved on shifting its Middle East road map focus and promise of a Palestinian state to the weighty questions of how much autonomy to allow Iraq’s Kurds and Shiites. Sharon’s disengagement-cum-settlement evacuation plan has no buyers in Washington for three reasons:

1.
The Bush administration wants the burden of supporting the Palestinian economy to be borne by Israel, which rules out disengagement and security fences.

2.
Egypt and Jordan fear that the Sharon blueprint would send swarms of unemployed Palestinians over into their countries.

3.
The Likud prime minister has been severely jolted by the bribes scandals hanging over his head and problems with holding his coalition and even party together. Bush has no intention of pinning key diplomatic moves on unstable political forces. That consideration alone would have sufficed to red-flag Sharon’s proposals in Washington.

At the same time, albeit for a virtually impossible price, Sharon has a slim chance of regaining some of his lost standing with the Bush administration and its acceptance of a revised disengagement plan, under the following circumstances:

A.
If Muammer Qaddafi, in a bid for a welcome to the real world, decided to establish diplomatic relations with Israel, pulling the rest of North Africa, including Tunisia, after him.

B.
If, as we reported on January 24, Europe and the Saudis pressed ahead with an initiative for bringing Israel into the European Union and NATO as a full member in return for its withdrawal to pre-1967 war lines and a settlement evacuation plan.

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