ILLEGAL OIL LINES SADDAM'S POCKETS
By Borzou Daragahi
MSNBC.com
November 1, 2002
ZAKHO, Iraq , Nov. 1 - Locals have a name for the smoothly paved road that leads to this town near the Turkish frontier: The petroleum highway. It's where thousands of truckers make their living hauling crude oil from Baghdad-controlled wells, in stark violation of U.N. sanctions on Iraq .
Tanker after tanker rolls by, bellowing diesel as they climb up the mountainous path.
"I know we're just filling Saddam Hussein's pockets," said Haji Saleh, a truck driver and Kurd, the ethnic group once subjected to chemical bombardment by Saddam in the city of Halabja . "But I have to make a living somehow. I have no choice. If I didn't drive this truck, someone else would."
The United States accuses Saddam of accruing weapons of mass destruction and hindering U.N. weapons inspection efforts. President Bush, whose administration is amassing a political and military front with the avowed aim of ousting the Iraqi leader, says the international community has already tried everything short of war to rein in the Iraq leader.
But despite Washington 's strong sway over the Kurds and Turks who traffic the Iraqi oil, little has been done to stanch the flagrant flow of crude via the Zakho border. Nothing has been done to cut off a pipeline that pumps Iraqi oil into Syria . Nothing has been done to stop an estimated 75,000 to 110,000 barrels a day flowing into Jordan . Nor has anything substantial been done to stop a regular passenger train to Syria filled with oil.
Certainly, the United States is aware of the oil smuggling. In September, Washington complained that Syria was receiving 25,000 barrels a day of smuggled oil via rail, a claim denied by Damascus .
"Iraqi oil smuggling has been a concern to U.S. and British officials for some years, partly because smuggling oil earns the Iraqi regime money, and money is the ultimate dual-use good," said Colin Rowat, an economist and expert on the Iraqi sanctions program at the University of Birmingham in Britain .
Dual-use goods is the term used by the United Nations for items that Saddam could utilize for developing banned weapons and they are prohibited under U.N. sanctions.
Iraq came under tough sanctions following its attempted annexation of Kuwait in 1990. A gathering storm of criticism that the sanctions starved Iraq 's people rather than hurt Saddam led to U.N. resolution 986, or the "oil-for-food" program, under which Iraq may annually export about $12 billion worth of oil to through a pipeline to Turkey or through the Persian Gulf. All expenditures of the oil money must be approved by the United Nations, which typically allows the money to be used for basic food needs and rebuilding Iraq 's civilian infrastructure.
Still, oil is plentiful in this part of the world, and the allure of quick cash may be too hard to resist. Everyone benefits financially from the illegal oil trade.
Under the oil-for-food program, the two Kurdish political parties who - along with the largest U.N. humanitarian operation in history - run northern Iraq receive 13 percent of Iraq 's oil income.
Still the Iraqi Kurds, landlocked and surrounded by countries vocally hostile to their 11-year experiment in self-government, have made an industry out of smuggling goods in and out of the region. There's little other work and little else for the government to tax.
Officials of the Kurdistan Democratic Party, which governs this section of the border, did not release details about the number of trucks that cross the frontier or how much money is earned. In an informal count, eight trucks drove toward the border in five minutes, each carrying between 3,000 and 6,000 gallons worth of raw petroleum. Estimates of the number of trucks run to about 1,500 a day. "It all depends on Turkey ," said Hamid Ali, a Kurdish border official. "They control how many trucks get through."
Truckers said they pay the KDP $30 in tolls to cross the border. But officials from the rival Patriotic Union of Kurdistan, which says it receives little of the money, claimed the KDP gets $300 per truck.
Throughout the 1990s, Turkey , now reeling under its worst economic recession in modern history, allowed an estimated 5,000 tons of diesel fuel trucked across its border each day, generating income for the poor, mountainous Western parts of the country. The Ankara government shut down the Zakho border to all trade shortly after the Sept. 11 attacks on the United States , but reopened it in January.
The West also has a financial incentive to allow the smuggling. "It seems to me that cracking down on the smuggling will tend to raise the price of crude, and therefore there are obviously people who are going to be not too interested in checking the provenance of oil," said Ami Isserof, director of Mideastweb.org, an Israeli- and Arab- run news and commentary website.
The West has also pretended to ignore some smuggling of oil to compensate Iraq 's pro American neighbors for the loss of trade caused by sanctions. Otherwise, the Western powers might have to pony up more foreign aid for countries like Turkey and Jordan , and even Syria , which backed the United States in its 1991 war against Iraq .
"Security Council members saw some smuggling as a cheap way of keeping the rest of the sanctions intact by reducing the losses to Iraq 's neighbors; cheap because it meant that the United Nations didn't need to find the money," said analyst Rowat.
Perhaps the Baghdad government benefits most from the trade. First and foremost, it accrues untraceable cash: the U.S. General Accounting Office estimated in a May 2002 report that Iraq has banked $4.3 billion from oil smuggling since 1997.
Iraq smuggles 75,000 to 110,000 barrels of oil per day through Jordan , 180,000 to 250,000 per day through Syria , and 40,000 to 80,000 barrels per day through Turkey , according to the report.
Secondly, the oil smuggling keeps energy-starved countries like Jordan , Syria and Turkey from meandering too far into the U.S. camp, giving them a stake in the status quo. Baghdad recently slashed prices to boost sales. " Iraq hopes that higher exports will tip the war debate in its favor, as it is buying friends with oil sales," according to the Energy Intelligence Briefing, a oil industry newsletter.
Iraq also uses the business it gets from the food-for-oil program to win friends, awarding lucrative contracts to firms in key countries such as Russia , France and China , U.N. Security Council members now among the most hesitant to support the U.S. intervention in Iraq.
Perhaps the biggest losers in the oil smuggling trade are the Kurds, who bore the full brunt of the Baghdad regime's brutality until they gained limited independence from the rest of Iraq under the terms of the U.S.-British imposed 'no-fly' zone over northern Iraq . The Kurdish experiment in self-rule was set back years by a 1994 to 1998 civil war between the two main political groups, largely over dividing the spoils of the border.
A group of truckers gathered at a roadside restaurant discussed their dilemma with candor. Yes, they realized Saddam could use the cash to buy weapons of mass destruction. Yes, they knew they could very well first ones who suffer from such weaponry. But they said they have no choice. They know no other way to make a living.
Pressed to disclose how much money he earns hauling the crude, Haji Saleh did some figuring on a napkin. After food, fuel tolls, $100 bribes to Iraqi officials and custom duties, on this trip he realizes he's made nothing.
"It all went to Turkey and Iraq ," Saleh said. "I've been on the road for eight days, and I swear to God I've just broken even. This job just barely fills our stomach. That's it. The profit all goes to Turkey . We just come and go."
[MSNBC.com contributor Borzou Daragahi is on assignment in northern Iraq .]
